Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96712
Authors: 
Gibbs, Michael
Neckermann, Susanne
Siemroth, Christoph
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Paper 8096
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.
Subjects: 
innovation
creativity
intrinsic motivation
incentives
JEL: 
C93
J24
M52
O32
Document Type: 
Working Paper

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