Final answer:
Extrinsic rewards often fail to motivate employees because they can undermine intrinsic motivation, particularly if these rewards are expected. Not all extrinsic rewards negatively impact motivation, as unexpected rewards and praise may not have the same detrimental effects as tangible rewards like money.
Step-by-step explanation:
Extrinsic Rewards and Employee Motivation
Extrinsic rewards can fail to motivate employees for several reasons. One of the primary issues is that extrinsic rewards may undermine intrinsic motivation. Intrinsic motivation relates to doing something because it is inherently interesting or enjoyable, while extrinsic motivation includes external incentives like money or praise. When individuals expect an extrinsic reward, they might experience a reduction in intrinsic motivation for the task. This is due to the overjustification effect, where the presence of extrinsic rewards can lead to a reliance on them and diminish the initial personal enjoyment or satisfaction derived from the activity.
Not all extrinsic rewards are detrimental to intrinsic motivation. Unexpected rewards and verbal praise have been shown to have less of a negative impact on intrinsic motivation compared to tangible rewards like money. Therefore, it is not that employees are generally uninterested in rewards, but rather that the type of rewards and the context in which they are given can influence how these rewards impact motivation.
Moreover, extrinsic rewards are not always financial in nature, but can also include praise, certificates, or other forms of recognition. However, if these rewards become predictable or are perceived as entitlements rather than genuine appreciation for effort, they may lose their effectiveness.