A Field Experiment in Motivating Employee Ideas

45 Pages Posted: 7 Apr 2014 Last revised: 18 Jul 2016

Michael Gibbs

University of Chicago Booth School of Business; Institute for the Study of Labor (IZA)

Susanne Neckermann

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Christoph Siemroth

University of Essex - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: December 16, 2015

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.

Keywords: Innovation, creativity, intrinsic motivation, incentives, performance measurement

JEL Classification: C93, J24, M52, O32

Suggested Citation

Gibbs, Michael and Neckermann, Susanne and Siemroth, Christoph, A Field Experiment in Motivating Employee Ideas (December 16, 2015). Review of Economics and Statistics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2420965 or http://dx.doi.org/10.2139/ssrn.2420965

Michael Gibbs (Contact Author)

University of Chicago Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Susanne Neckermann

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Christoph Siemroth

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

HOME PAGE: http://sites.google.com/site/csiemroth/

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