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What Makes Them Tick? Employee Motives and Firm Innovation

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Author Info
Henry Sauermann
Wesley M. Cohen
Abstract

We examine the impact of individual-level motives upon innovative effort and performance in firms. Drawing from economics and social psychology, we develop a model of the impact of individuals' motives and incentives upon their innovative effort and performance. Using data on over 11,000 industrial scientists and engineers (SESTAT 2003), we find that individuals' motives have significant effects upon innovative effort and performance. These effects vary significantly, however, by the particular kind of motive (e.g., desire for intellectual challenge vs. pay). We also find that intrinsic and extrinsic motives affect innovative performance even when controlling for effort, suggesting that motives affect not only the level of individual effort, but also its quality. Overall, intrinsic motives, particularly the desire for intellectual challenge, appear to benefit innovation more than extrinsic motives such as pay.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14443.

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Date of creation: Oct 2008
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Handle: RePEc:nbr:nberwo:14443

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Find related papers by JEL classification:
O3 - Economic Development, Technological Change, and Growth - - Technological Change
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. George A. Akerlof & Rachel E. Kranton, 2005. "Identity and the Economics of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 9-32, Winter. [Downloadable!] (restricted)
  2. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June. [Downloadable!]
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  4. Paula E. Stephan, 1996. "The Economics of Science," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1199-1235, September. [Downloadable!] (restricted)
  5. Camerer, Colin F. & Hogarth, Robin M., 1999. "The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework," Working Papers 1059, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
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  7. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March. [Downloadable!] (restricted)
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  9. Kevin Murdock, 2002. "Intrinsic Motivation and Optimal Incentive Contracts," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 650-671, Winter.
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  11. Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67, pages 297. [Downloadable!] (restricted)
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  1. John P. WALSH & NAGAOKA Sadao, 2009. "Who Invents?: Evidence from the Japan-U.S. inventor survey," Discussion papers 09034, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
  2. KURODA Sachiko & YAMAMOTO Isamu, 2009. "How are Hours Worked and Wages Affected by Labor Regulations?: The white-collar exemption and 'name-only managers' in Japan," Discussion papers 09031, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
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