Rewards and performance: A comparison across creative and routine tasks

Susanne Neckermann, Arne Jonas Warnke, Christiane Bradler
2014 Academy of Management Proceedings  
Motivating employees to be creative is an important challenge for many firms. A large literature documents how employee performance can be fostered by explicit and implicit rewards in simple routine tasks. This paper investigates whether rewards are similarly effective in enhancing creative performance as a substantial psychological literature suggests that rewards may undermine intrinsic motivation, and thus lower creative output. We report results from a real-effort lab experiment with more
more » ... eriment with more than 1000 subjects that studies the impact of two types of monetary rewards, a performance-dependent tournament prize and a performance-independent wage gift, and their impact on creative as well as purely effort-based, routine performance. The design allows us to study whether the effectiveness of monetary rewards depend on the nature of the task and the performance contingency of the reward. Our results show that routine as well as creative task performance significantly increase in response to the tournament incentive. A wage gift triggers reciprocity of subjects in the routine task but not in the creative task. We explored this with additional treatments and find that reciprocal behavior emerges in the creative task if subjects receive information on the value of their ideas and can control the transfer of benefits to the principal. This suggests that agents reciprocity is sensitive to the transparency of principal's surplus. Important implications for human resource management are discussed. JEL Classification: C91, D03, J33, M52
doi:10.5465/ambpp.2014.14335abstract fatcat:sdk5f3jervd37milpmv6lg5sdi