How Financial Incentives can Encourage Creative Ideas and Innovation

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How Financial Incentives can Encourage Creative Ideas and Innovation
Anneke Zwart, Student (University), Netherlands, Member

Research has often suggested that external, financial rewards do not work well in terms of developing creative ideas and innovations. Offering them may even undermine intrinsic motivation. However, according to Gibs, Neckermann and Siemroth (2014) financial rewards CAN work. Even for innovation and for generating creative ideas. Whether or not it fosters performance depends on the circumstances under which the financial rewards are given. WHEN ARE FINANCIAL INCENTIVES CONDUCIVE TO INNOVATION? So, what are these circumstances under which financial rewards can be beneficial for companies? A research among among 19 teams in Asian IT services company awarded so-called structured incentives: awarding points for a creative idea or innovation, with the opportunity to obtain more points depending on the quality of the idea (assessed by clients rating the ideas). Although the number of ideas handed in per employee decreased, the structured incentives did increase the quality of the ideas (...) Read more? Sign up for free
 

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How Non-Financial Incentives Trigger Innovative Behavior
MUCHERWA NGONI, Student (University), Zimbabwe, Member

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