Final answer:
True, developing a reward system that addresses salient employee needs is essential as it's the basis for ensuring that it aligns with what is motivating to them and encourages desired behavior.
Step-by-step explanation:
The initial statement that "the first step in designing a reward system that will produce the behavior the organization needs is to develop rewards that address salient employee needs" is indeed true. This principle is foundational because for a reward system to be effective, it must align with what employees find motivating. The concept of shaping, as developed by Skinner in his operant conditioning experiments, supports this by suggesting that behaviors should be rewarded in successive steps to approximate the target behavior.
Furthermore, aspects such as effort and compensation highlight that employees should be rewarded commensurate with the effort they expend and the costs they incur. In the context of intrinsic versus extrinsic motivation, tangible rewards such as money can sometimes diminish intrinsic motivation. However, if extrinsic rewards are unexpected, they can maintain or even enhance intrinsic motivation. Hence, a well-designed reward system will carefully balance these elements to maintain employee motivation and encourage desirable behaviors.