IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/14096.html
   My bibliography  Save this paper

A field experiment in motivating employee ideas

Author

Listed:
  • Gibbs, Michael
  • Neckermann, Susanne
  • Siemroth, Christoph

Abstract

We study the effects of a field experiment designed to motivate employee ideas, at a large technology company. Employees were encouraged to submit ideas on process and product improvements via an online system. In the experiment, the company randomized 19 account teams into treatment and control groups. Employees in treatment teams received rewards if their ideas were approved. Nothing changed for employees in control teams. Our main finding is that rewards substantially increased the quality of ideas submitted. Further, rewards increased participation in the suggestion system, but decreased the number of ideas per participating employee, with zero net effect on the total quantity of ideas. The broader participation base persisted even after the reward was discontinued, suggesting habituation. We find no evidence for motivational crowding out. Our findings suggest that rewards can improve innovation and creativity, and that there may be a tradeoff between the quantity and quality of ideas.

Suggested Citation

  • Gibbs, Michael & Neckermann, Susanne & Siemroth, Christoph, 2014. "A field experiment in motivating employee ideas," ZEW Discussion Papers 14-096, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:14096
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/103746/1/803512228.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    2. Florian Ederer & Gustavo Manso, 2013. "Is Pay for Performance Detrimental to Innovation?," Management Science, INFORMS, vol. 59(7), pages 1496-1513, July.
    3. Pierre Azoulay & Joshua S. Graff Zivin & Gustavo Manso, 2011. "Incentives and creativity: evidence from the academic life sciences," RAND Journal of Economics, RAND Corporation, vol. 42(3), pages 527-554, September.
    4. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-755, September.
    5. Jean Tirole & Roland Bénabou, 2006. "Incentives and Prosocial Behavior," American Economic Review, American Economic Association, vol. 96(5), pages 1652-1678, December.
    6. Katharina Eckartz & Oliver Kirchkamp & Daniel Schunk, 2012. "How do Incentives affect Creativity?," Jena Economics Research Papers 2012-068, Friedrich-Schiller-University Jena.
    7. Charness, Gary & Grieco, Daniela, 2013. "Individual Creativity, Ex-ante Goals and Financial Incentives," University of California at Santa Barbara, Economics Working Paper Series qt4mr6p1d5, Department of Economics, UC Santa Barbara.
    8. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    9. Olivier Toubia, 2006. "Idea Generation, Creativity, and Incentives," Marketing Science, INFORMS, vol. 25(5), pages 411-425, September.
    10. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    11. Henry Sauermann & Wesley M. Cohen, 2010. "What Makes Them Tick? Employee Motives and Firm Innovation," Management Science, INFORMS, vol. 56(12), pages 2134-2153, December.
    12. Bruno S. Frey & Reto Jegen, 2001. "Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
    13. Dan Ariely & Uri Gneezy & George Loewenstein & Nina Mazar, 2009. "Large Stakes and Big Mistakes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(2), pages 451-469.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Florian Englmaier & Stefan Grimm & Dominik Grothe & David Schindler & Simeon Schudy, 2018. "The Effect of Incentives in Non-Routine Analytical Team Tasks," CESifo Working Paper Series 6903, CESifo.
    2. Gosnell, Greer & Metcalfe, Robert & List, John A, 2016. "A new approach to an age-old problem: solving externalities by incenting workers directly," LSE Research Online Documents on Economics 84331, London School of Economics and Political Science, LSE Library.
    3. Andrea Blasco & Olivia S. Jung & Karim R. Lakhani & Michael Menietti, 2016. "Motivating Effort In Contributing to Public Goods Inside Organizations: Field Experimental Evidence," NBER Working Papers 22189, National Bureau of Economic Research, Inc.
    4. Englmaier, Florian & Grimm, Stefan & Schindler, David & Schudy, Simeon, 2018. "The Effect of Incentives in Non-Routine Analytical Team Tasks – Evidence from a Field Experiment," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168286, Verein für Socialpolitik / German Economic Association.
    5. Cirera, Xavier & Martins-Neto, Antonio Soares, 2023. "Do innovative firms pay higher wages? Micro-level evidence from Brazil," Research Policy, Elsevier, vol. 52(1).
    6. Michael Gibbs & Friederike Mengel & Christoph Siemroth, 2023. "Work from Home and Productivity: Evidence from Personnel and Analytics Data on Information Technology Professionals," Journal of Political Economy Microeconomics, University of Chicago Press, vol. 1(1), pages 7-41.
    7. Gibbs, Michael, 2021. "Job Design, Learning & Intrinsic Motivation," IZA Discussion Papers 14285, Institute of Labor Economics (IZA).
    8. Manthei, Kathrin & Sliwka, Dirk & Vogelsang, Timo, 2017. "Performance Pay May Not Raise Performance – A Cautionary Tale Based On Evidence from Large Scale Field Experiments in a Retail Chain," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168287, Verein für Socialpolitik / German Economic Association.
    9. Rigtering, J.P.C. (Coen) & Weitzel, G.U. (Utz) & Muehlfeld, K. (Katrin), 2019. "Increasing quantity without compromising quality: How managerial framing affects intrapreneurship," Journal of Business Venturing, Elsevier, vol. 34(2), pages 224-241.
    10. Florian Englmaier & Stefan Grimm & Dominik Grothe & David Schindler & Simeon Schudy, 2021. "The Value of Leadership: Evidence from a Large-Scale Field Experiment," CESifo Working Paper Series 9273, CESifo.
    11. Manthei, Kathrin & Sliwka, Dirk & Vogelsang, Timo, 2018. "Performance Pay and Prior Learning: Evidence from a Retail Chain," IZA Discussion Papers 11859, Institute of Labor Economics (IZA).
    12. Lakshminarayana Nittala & Sanjiv Erat & Vish Krishnan, 2022. "Designing internal innovation contests," Production and Operations Management, Production and Operations Management Society, vol. 31(5), pages 1963-1976, May.
    13. ACCLASSATO HOUENSOU, Denis & SENOU, Melain Modeste, 2019. "Incentive scheme and productivity in microfinance institutions in Benin," MPRA Paper 95379, University Library of Munich, Germany, revised 02 Aug 2019.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Timothy Gubler & Ian Larkin & Lamar Pierce, 2016. "Motivational Spillovers from Awards: Crowding Out in a Multitasking Environment," Organization Science, INFORMS, vol. 27(2), pages 286-303, April.
    2. Bradler, Christiane & Neckermann, Susanne & Warnke, Arne Jonas, 2016. "Incentivizing creativity: A large-scale experiment with tournaments and gifts," ZEW Discussion Papers 16-040, ZEW - Leibniz Centre for European Economic Research.
    3. Florian Englmaier & Stefan Grimm & Dominik Grothe & David Schindler & Simeon Schudy, 2018. "The Effect of Incentives in Non-Routine Analytical Team Tasks," CESifo Working Paper Series 6903, CESifo.
    4. Giuseppe Attanasi & Michela Chessa & Sara Gil-Gallen & Patrick Llerena, 2021. "A survey on experimental elicitation of creativity in economics," Revue d'économie industrielle, De Boeck Université, vol. 0(2), pages 273-324.
    5. Byun, Seong, 2022. "The role of intrinsic incentives and corporate culture in motivating innovation," Journal of Banking & Finance, Elsevier, vol. 134(C).
    6. Rebitzer, James B. & Taylor, Lowell J., 2011. "Extrinsic Rewards and Intrinsic Motives: Standard and Behavioral Approaches to Agency and Labor Markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 8, pages 701-772, Elsevier.
    7. Florian Englmaier & Stefan Grimm & Dominik Grothe & David Schindler & Simeon Schudy, 2021. "The Efficacy of Tournaments for Non-Routine Team Tasks," CESifo Working Paper Series 9189, CESifo.
    8. Katharina Laske & Marina Schroeder, 2016. "Quantity, Quality, and Originality: The Effects of Incentives on Creativity," Cologne Graduate School Working Paper Series 07-01, Cologne Graduate School in Management, Economics and Social Sciences.
    9. Yanez-Pagans, Patricia, 2013. "Cash for Cooperation? Payments for Ecosystem Services and Common Property Management in Mexico," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151294, Agricultural and Applied Economics Association.
    10. ONISHI Koichiro & OWAN Hideo & NAGAOKA Sadao, 2015. "Monetary Incentives for Corporate Inventors: Intrinsic motivation, project selection and inventive performance," Discussion papers 15071, Research Institute of Economy, Trade and Industry (RIETI).
    11. Samuel Bowles & Sandra Polania-Reyes, 2011. "Economic incentives and social preferences: substitutes or complements?," Department of Economics University of Siena 617, Department of Economics, University of Siena.
    12. Huber, Laura Rosendahl & Sloof, Randolph & Van Praag, Mirjam, 2017. "The effect of incentives on sustainable behavior: evidence from a field experiment," Labour Economics, Elsevier, vol. 45(C), pages 92-106.
    13. Bruno S. Frey & Susanne Neckermann, 2005. "Auszeichnungen: Ein Vernachl�ssigter Anreiz," IEW - Working Papers 254, Institute for Empirical Research in Economics - University of Zurich.
    14. Jing Wang & Gen Li & Kai-Lung Hui, 2022. "Monetary Incentives and Knowledge Spillover: Evidence from a Natural Experiment," Management Science, INFORMS, vol. 68(5), pages 3549-3572, May.
    15. Englmaier, Florian & Grimm, Stefan & Schindler, David & Schudy, Simeon, 2018. "The Effect of Incentives in Non-Routine Analytical Team Tasks – Evidence from a Field Experiment," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168286, Verein für Socialpolitik / German Economic Association.
    16. Elliott Ash & W. Bentley MacLeod, 2015. "Intrinsic Motivation in Public Service: Theory and Evidence from State Supreme Courts," Journal of Law and Economics, University of Chicago Press, vol. 58(4).
    17. Andrei Bremzen & Elena Khokhlova & Anton Suvorov & Jeroen van de Ven, 2015. "Bad News: An Experimental Study on the Informational Effects Of Rewards," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 55-70, March.
    18. Martin Chalkley, 2012. "Contracts, Information and Incentives in Health Care," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, Second Edition, chapter 22, Edward Elgar Publishing.
    19. Michael T. Rauh & Giulio Seccia, 2010. "Agency and Anxiety," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(1), pages 87-116, March.
      • Michael T. Rauh & Giulio Seccia, 2006. "Agency and Anxiety," Working Papers 2006-02, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    20. Cecere, Grazia & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Waste prevention and social preferences: the role of intrinsic and extrinsic motivations," Ecological Economics, Elsevier, vol. 107(C), pages 163-176.

    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:14096. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.