Which statement best describes how financial rewards influence motivation, according to the material?

• A. They always demotivate employees.
• B. They have no effect on motivation.
• C. They can encourage productivity and attract skilled staff.
• D. They decrease loyalty.

Answer: (C)

Financial rewards act as extrinsic motivators that can boost effort when they are tied to clear performance targets, making employees more productive and helping the organization attract and retain skilled staff with competitive pay. This aligns with the idea that pay and bonuses signal that hard work is valued and can directly influence behavior, especially in roles where output, targets, or quality can be measured. The point is not that money always works in every situation, but that, in the right design, rewards can encourage higher performance and help recruit talented people. In contrast, statements that say pay has no effect, always demotivates, or always reduces loyalty ignore the evidence that pay can significantly influence motivation when perceived as fair and linked to achievement, though poorly designed schemes can lessen their impact.