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Do Incentive Systems Spur Work Motivation of Inventors in High Tech Firms ? A Group-Based Perspective

  • Nathalie Lazaric

    (GREDEG CNRS
    University of Nice Sophia Antipolis)

  • Alain Raybaut

    (GREDEG CNRS
    University of Nice Sophia Antipolis)

In this paper, we explore with a model the potential tensions between the incentive system of groups of inventors and knowledge diversity in a high tech firm. We show that, when all groups are rewarded and able to interact freely with their peers, extrinsic and intrinsic motives are mutually self-reinforcing, leading to crowding in effects. As a result, the level of created knowledge increases in each group, reinforcing the diversity of the firm’s knowledge base. By contrast, competitive rewards and constrained autonomy are likely to produce motivating effects in a small number of groups, limiting knowledge creation to the firm’s core competencies. In this case, the firm can suffer from crowding out effects by the other groups, leading eventually to the extinction of creation in their fields and reduced diversity in the long run. The results are illustrated with empirical findings from a case study of a French high tech firm.

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Paper provided by Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis in its series GREDEG Working Papers with number 2013-40.

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Length: 34 pages
Date of creation: Oct 2013
Date of revision:
Publication status: Forthcoming in Journal of Evolutionary Economics
Handle: RePEc:gre:wpaper:2013-40
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  1. Olivier DUPOUËT (BETA UMR CNRS 7522) & Murat YILDIZOGLU (IFReDE-E3i), 2003. "Organizational performance in hierarchies and communities of practice," Cahiers du GRES (2002-2009) 2003-06, Groupement de Recherches Economiques et Sociales.
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