Final answer:
Yes, it's true that performance-based reward systems can sometimes lead to unexpected negative effects on employee behavior, by reducing intrinsic motivation and causing issues related to perceived fairness. These systems must be carefully designed and implemented to avoid such unintended outcomes.
Step-by-step explanation:
The statement that performance-based reward systems sometimes have an unexpected and undesirable effect on employee behaviours is true. Such systems, while designed to motivate and increase productivity, can also lead to negative consequences such as reduced intrinsic motivation, especially when the rewards are expected as opposed to when they come as a surprise. Physical rewards like money can decrease intrinsic motivation more than intangible rewards like praise. The concept of procedural justice is also important, as perceptions of fairness in the processes can greatly influence employee reactions and behaviors, such as the increased rate of stealing among those who felt they were treated unjustly.
Additionally, various effects like the Hawthorne effect show that attention from researchers can alter the behavior of subjects, which is another angle from which performance-based systems can have unexpected effects. Moreover, extrinsic motivators can influence the dynamics within a group or organization, potentially leading to the demotivation of certain members when incentives are altered or seen as unfair.