Abstract

http://ssrn.com/abstract=1586924
 
 

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Reward System Design and Group Creativity: An Experimental Investigation


Clara Xiaoling Chen


University of Illinois at Urbana-Champaign - Department of Accountancy

Michael G. Williamson


University of Texas at Austin - Red McCombs School of Business

Flora H. Zhou


University of Illinois at Urbana-Champaign

2012

Accounting Review, Vol. 87, No. 6, 2012

Abstract:     
In an environment where three-person groups develop a creative solution to an important problem, we examine whether the efficacy of either individual or group-based creativity-contingent incentives depends on whether they take the piece-rate or tournament form. We predict and find that group (intergroup) tournament pay increases group cohesion and collaborative efforts, which ultimately lead to a more creative group solution relative to group piece-rate pay. While individual (intragroup) tournament pay increases individual efforts, we find that it does not enhance the creativity of group solutions relative to individual piece-rate pay. Our results advance the burgeoning management accounting literature on creativity-contingent incentives by demonstrating that reward systems are more likely to promote group creativity through collaborative efforts rather than independent individual efforts. We also provide important insights into when and why tournament pay can boost group creativity in organizations. In doing so, we contribute to a better understanding of observations from practice suggesting that organizations valuing creativity often induce intergroup competition.

Keywords: Reward System Design, Incentives, Creativity, Groups, Tournaments

JEL Classification: M41, M52

Accepted Paper Series


Not Available For Download

Date posted: April 9, 2010 ; Last revised: September 21, 2012

Suggested Citation

Chen, Clara Xiaoling and Williamson, Michael G. and Zhou, Flora H., Reward System Design and Group Creativity: An Experimental Investigation (2012). Accounting Review, Vol. 87, No. 6, 2012. Available at SSRN: http://ssrn.com/abstract=1586924 or http://dx.doi.org/10.2139/ssrn.1586924

Contact Information

Clara Xiaoling Chen (Contact Author)
University of Illinois at Urbana-Champaign - Department of Accountancy ( email )
1206 South Sixth Street
Champaign, IL 61820
United States
Michael G. Williamson
University of Texas at Austin - Red McCombs School of Business ( email )
Austin, TX 78712
United States
512-471-5529 (Phone)
Flora H. Zhou
University of Illinois at Urbana-Champaign ( email )
601 E John St
1206 S. Sixth Street
Champaign, IL 61820
United States
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