Roughly translates to "your promised reward is merely a fictitious motivator". Popularized by the game "Portal" (found on Half-Life 2's "Orange Box" game release for PC, X-Box 360, and PS3). During the game, an electronic voice encourages you to solve intricate puzzles using [cake] as a motivating perk. When you have "broken out" of the game's initial testing phase (from threat of death), you find scrawls on walls of the innards of the testing center warning you that "the cake is a lie".
> Employee #1: Yo, Dave, manager says we will probably get a promotion if we meet the sales expectations for this quarter.
> Employee #2: Yeah, so, don't get your hopes up on that one, Ed. The cake is a lie.
> Employee #1: Really, aw crap.