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What Makes Them Tick? Employee Motives and Firm Innovation

Management Science, Vol. 65, No, 12, pp. 2134-2153

33 Pages Posted: 1 Jul 2010 Last revised: 29 Oct 2015

Henry Sauermann

ESMT European School of Management and Technology; National Bureau of Economic Research (NBER)

Wesley M. Cohen

Duke University - Fuqua School of Business; Duke University - Department of Economics; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative

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Date Written: July 26, 2010

Abstract

Economists studying innovation and technological change have made significant progress towards understanding firms’ profit incentives as drivers of innovation. However, innovative performance in firms should also depend heavily on the pecuniary and nonpecuniary motives of the individuals actually working in research and development within firms. Using data on over 1,700 PhD scientists and engineers, we examine the relationships between individuals’ motives (e.g., desire for intellectual challenge, income, or responsibility) and their innovative performance. We find that motives matter, but different motives have very different effects: Motives regarding intellectual challenge, independence, and money have a strong positive relationship with innovative output while motives regarding job security and responsibility tend to have a negative relationship.

We also explore possible mechanisms underlying the observed relationships between motives and performance. While hours worked (“quantity of effort”) have a strong positive effect on performance, motives appear to affect innovative performance primarily via other dimensions of effort (“character of effort”). Finally, we find some evidence that the role of motives differs in upstream research versus downstream development.

Keywords: innovation, motives, intrinsic motivation, extrinsic motivation, effort, patents

JEL Classification: O3, O38 O31, O32

Suggested Citation

Sauermann, Henry and Cohen, Wesley M., What Makes Them Tick? Employee Motives and Firm Innovation (July 26, 2010). Management Science, Vol. 65, No, 12, pp. 2134-2153. Available at SSRN: https://ssrn.com/abstract=1632629

Henry Sauermann (Contact Author)

ESMT European School of Management and Technology ( email )

Schlossplatz 1
10117 Berlin
Germany

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Wesley M. Cohen

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-4072 (Phone)
919-681-6245 (Fax)

Duke University - Department of Economics

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

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