Final answer:
The choice between intrinsic and extrinsic rewards can significantly affect employee behavior, often reducing intrinsic motivation when extrinsic rewards are expected. The overjustification effect demonstrates how this dynamic can lead to a change in one's motivation towards an activity once it is linked with external compensation.
Step-by-step explanation:
The statement that the choice of intrinsic or extrinsic reward has little effect on employee behavior is false. Studies show that physical reinforcement, such as money, can have different impacts on an individual compared to verbal reinforcement, like praise.
For example, tangible rewards like money might reduce intrinsic motivation, while intangible rewards, such as praise, may affect it less or even potentially increase it. Particularly, extrinsic rewards might undermine intrinsic motivation if the reward is expected, leading to the overjustification effect where the motivation for an interest-driven task diminishes.
However, intrinsic motivation can sometimes persist or be increased by extrinsic rewards if they are unexpected or presented as a surprise. Furthermore, concepts like the overjustification effect exemplify how intrinsic motivation can be diminished when an external reward is involved, as seen with Odessa's declining interest in baking once her hobby became her paid job.