Final answer:
Achievable goals and fairness in reward distribution boost the positive effects of financial incentives on employee motivation by ensuring clear expectations and a fair process.
Step-by-step explanation:
Specific, achievable goals and perceived fairness in earning opportunities can significantly enhance the positive impact of financial incentives on employee motivation. When goals are clear and achievable, employees know what is expected of them and can measure their progress, which directly ties their efforts to the reward system. Moreover, the perception of fairness in both the process and the distribution of rewards contributes to employee satisfaction and motivation—when employees feel fairly treated, they are more likely to be engaged and motivated to excel in their tasks.
Financial incentives that are unexpected can maintain intrinsic motivation, while expected rewards can diminish it. Ensuring that efforts and costs are adequately compensated increases the sense of justice among employees. According to research, tangible rewards like financial incentives can have a more substantial impact on motivation compared to intangible rewards such as praise, but this impact can be positive or negative depending on factors like expectation and fairness.