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A Field Experiment in Motivating Employee Ideas

Author

Listed:
  • Gibbs, Michael

    (University of Chicago)

  • Neckermann, Susanne

    (Erasmus University Rotterdam)

  • Siemroth, Christoph

    (University of Essex)

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," IZA Discussion Papers 8096, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8096
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. 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.
    3. Cirera, Xavier & Martins-Neto, Antonio Soares, 2023. "Do innovative firms pay higher wages? Micro-level evidence from Brazil," Research Policy, Elsevier, vol. 52(1).
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. Florian Englmaier & Stefan Grimm & Dominik Grothe & David Schindler & Simeon Schudy, 2024. "The Effect of Incentives in Nonroutine Analytical Team Tasks," Journal of Political Economy, University of Chicago Press, vol. 132(8), pages 2695-2747.
    10. Gibbs, Michael, 2021. "Job Design, Learning & Intrinsic Motivation," IZA Discussion Papers 14285, Institute of Labor Economics (IZA).
    11. 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.
    12. 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).
    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.

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    More about this item

    Keywords

    innovation; creativity; intrinsic motivation; incentives;
    All these keywords.

    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

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