Incentives and Innovative Propensity

Abstract

The paper explores how firms can promote new idea generation through staff motivation, by introducing incentives. Incentives can spur an evolution in the staff attitude from "productive" behaviours (result achievement) to "innovative" and "cooperative" behaviours which make the difference for idea generation. However, the impact of individual and group incentives on the individual innovative propensity of R & D professionals is still unclear, with a huge debate in the literature on the role of extrinsic and intrinsic incentives and motivation. The paper tries to shed lights on this topic by identifying intermediate motivational factors as well as other organisational elements that moderate the main relation between incentives and innovative propensity. The empirical part of the paper is a qualitative study consisting in the analysis of case studies. The results show that intrinsic incentives and motivation, in the form of acknowledgement and actual implementation of ideas of innovators, are the main factors that positively affect innovative propensity. The group dimension in rewarding and the overlapping of regulation and personal goals are also very important. The main organisational characteristics that positively moderate the relation between incentives and innovative propensity are managerial support, task stability and width of role.