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Author: Wei Cai Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This study examines how the design of incentive contracts for tasks defined as workers' official responsibilities (i.e., standard tasks) influences workers' propensity to engage in employee-initiated innovation (EII). EII corresponds to innovation activities that are not formally assigned to workers but are nonetheless encouraged and considered to be important for the company's success. Like other extra-role behaviors, EII is difficult to incentivize directly. Therefore, it is important to understand whether and how explicit incentive contracts designed for the workers' standard tasks may indirectly influence their EII activity. We use field data from a manufacturing company that uses a dedicated information system to track workers' EII idea submissions. We find theory-consistent evidence that, compared to workers receiving fixed pay, employees rewarded for their standard tasks with variable compensation contracts exhibit a lower propensity to engage in EII. This result is concentrated among ideas benefiting other constituents and activities beyond the proponents' standard task (i.e., broad-scope ideas). In contrast, we find no difference attributable to standard task incentive design in the proposal of innovation ideas narrowly focused on the proponent's standard task (i.e., narrow-scope ideas). Our findings suggest that variable pay narrows employees' conceptual focus around the standard task and hinders employee engagement in broad-scope innovation activities compared to fixed compensation contracts. We contribute to the literature on incentives for innovation by showing that standard task compensation contracts have spillover effects on EII behavior. We also contribute to the nascent literature on EII by showing that innovation types, defined based on their relation with the proponent's standard task, matter. Our results are relevant for practitioners in that managers relying on variable pay contracts to incentivize standard task performance should expect lower employee engagement in broad-scope EII.
Author: Wei Cai Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This study examines how the design of incentive contracts for tasks defined as workers' official responsibilities (i.e., standard tasks) influences workers' propensity to engage in employee-initiated innovation (EII). EII corresponds to innovation activities that are not formally assigned to workers but are nonetheless encouraged and considered to be important for the company's success. Like other extra-role behaviors, EII is difficult to incentivize directly. Therefore, it is important to understand whether and how explicit incentive contracts designed for the workers' standard tasks may indirectly influence their EII activity. We use field data from a manufacturing company that uses a dedicated information system to track workers' EII idea submissions. We find theory-consistent evidence that, compared to workers receiving fixed pay, employees rewarded for their standard tasks with variable compensation contracts exhibit a lower propensity to engage in EII. This result is concentrated among ideas benefiting other constituents and activities beyond the proponents' standard task (i.e., broad-scope ideas). In contrast, we find no difference attributable to standard task incentive design in the proposal of innovation ideas narrowly focused on the proponent's standard task (i.e., narrow-scope ideas). Our findings suggest that variable pay narrows employees' conceptual focus around the standard task and hinders employee engagement in broad-scope innovation activities compared to fixed compensation contracts. We contribute to the literature on incentives for innovation by showing that standard task compensation contracts have spillover effects on EII behavior. We also contribute to the nascent literature on EII by showing that innovation types, defined based on their relation with the proponent's standard task, matter. Our results are relevant for practitioners in that managers relying on variable pay contracts to incentivize standard task performance should expect lower employee engagement in broad-scope EII.
Author: Wei Cai (Doctoral student) Publisher: ISBN: Category : Languages : en Pages : 41
Book Description
Organizations often struggle with motivating employees to develop innovative ideas that may benefit the firm, especially when the standard tasks for which employees are measured and incentivized do not explicitly include innovation. Prior analytical research posits that low-powered incentives can motivate employees to generate creative ideas by diverting their attention away from fixating on performance measures associated with their standard tasks included in the incentive contract. Using data from a company that underwent an exogenous change in its employee incentive contract design towards low-powered incentives, we examine whether the design of incentive contracts for the standard tasks influences employee-initiated innovation activities. We find that employees under fixed-pay contracts are more likely to pursue innovation ideas that are valuable to the firm relative to employees under variable-pay contracts. Moreover, such efforts are concentrated on innovation ideas that are not specific to the standard task performed by the proposing employee but are applicable to issues of greater breadth for the firm and/or with a long-term view. Our findings contribute to the literature on incentives for innovation by showing how contract structure can motivate unplanned employee-initiated innovation activities that are difficult to contract upon ex ante.
Author: Wei Cai Publisher: ISBN: Category : Languages : en Pages : 53
Book Description
Organizations often empower employees at all levels to propose innovation ideas that rely on their first-hand knowledge of their standard task (i.e. employee-initiated innovation). Many, however, struggle with motivating employees to develop innovative ideas that may benefit the firm, especially when the standard tasks for which employees are hired, measured and incentivized do not explicitly include innovation. Prior analytical research posits that low-powered incentives can motivate employees to pursue innovation opportunities by reducing the pressure to deliver on performance measures associated with their standard tasks included in the incentive contract. Using data from a Chinese manufacturing company where employment contracts for standard tasks exhibit significant variation in terms of composition of fixed and variable components of pay, we examine whether the structure of incentive contracts for the standard tasks influences employees' propensity to engage in innovation activities. We find that employees under fixed-pay contracts are more likely to engage in innovation ideas benefiting the firm relative to employees under variable-pay contracts. Moreover, such efforts are concentrated on innovation ideas that are not specific to the standard task performed by the proposing employee, but are applicable to issues of greater breadth for the firm and/or with a long term view. We perform a battery of additional tests to rule out endogeneity concerns, to validate the robustness of our findings, and to examine the impact of contract structure on important organizational outcomes. Our results contribute to the literature on the effectiveness of using low-powered incentives to encourage unplanned employee-initiated innovation activities that are difficult to contract upon ex ante.
Author: Lukas Weniger Publisher: GRIN Verlag ISBN: 3346180921 Category : Business & Economics Languages : en Pages : 71
Book Description
Master's Thesis from the year 2019 in the subject Business economics - Business Management, Corporate Governance, grade: 1,7, Berlin School of Economics and Law, language: English, abstract: Incentive systems can contribute to the best possible exploitation of the employee’s abilities. A new way of setting those incentives and motivating employees is gamification. Gamification is defined as the application of game mechanics to a non-game setting, such as the business environment. Companies have discovered game-like incentives for motivating their employees, and now, this paper tries to create a gamified incentive system for motivating employees in the early stage of the innovation process. Innovation creates value, strengthens the market position and creates competitive advantages. Therefore innovation is widely seen as a critical source for economic success for companies. However, at the same time, innovation is expensive. For example, in 2018 alone, Apple invested as much as 14,24 billion dollars on research and development. This represented around 46% of their total operating expenses and approximately 2,6% of their total revenues. These costs are making it vital for companies to ensure the efficient use of innovation resources. This efficiency is largely determined by the competence, creativity and motivation of the employees working in the area of in research and development (R&D). Thus, companies have to generate adequate motivation in employees to deliver their innovative ideas, obtain a patent and develop the patentable idea into profitable innovation. Human resource (HR) management practices are considered as an essential instrument to fulfil this task. However, standard pay-for-performance schemes, which only reward short-term financial success, are not suitable for fulfilling this task in the innovation process, because innovation processes are likely to fail as they contain a high degree of uncertainty. In standard schemes, this failure would result in penalties by a lower compensation or a possible termination of the contract. This punishment has the potential to harm the innovative behaviour of employees. A company that wants to encourage innovation must design incentive systems that free employees to take risks, experiments and discover what practices and technologies are the most effective. These unique characteristics of innovation processes are the reason why analysing incentive systems in the context of innovation processes is of particular interest. Especially since incentive systems are considered as essential for ensuring the efficiency of innovation processes, as employees adapt their behaviour to these systems.
Author: Eva I. Hoppe-Fischer Publisher: Springer ISBN: 3658241330 Category : Business & Economics Languages : en Pages : 217
Book Description
Contract theory, which emphasizes the importance of unverifiable actions and private information, has been a highly active field of research in microeconomics in the last decades. This thesis is divided into two parts. Part I consists of three chapters that study contract-theoretic models which are motivated by the classic procurement problem of a principal who wants an agent to deliver a certain good or service. In such models it is typically assumed that decision makers are interested in their own monetary payoffs only. Moreover, they have unlimited cognitive abilities and behave in a perfectly rational way. Yet, in practice people often do not behave this way. While empirical research is very difficult in contract theory, laboratory experiments have recently turned out to be an important source of data. In Part II, three experimental studies are presented that investigate contract-theoretic problems brought up in Part I.
Author: Edward B. Roberts Publisher: Forgotten Books ISBN: 9780666180346 Category : Reference Languages : en Pages : 48
Book Description
Excerpt from Effects of Incentive Contracts in Research and Development: A Preliminary Research Report In the past several years an effort has originated in the Defense Department (and followed by other government agencies) to discourage the use of cost-p1us=fixed fee (cpff) contracts and substitute contractual incentive arrangements. This effort supposedly relies upon the profit motive to reduce requirements for direct government control and to stim ulate better contractor performance and cost estimating. Incentive type contracts are not new in government contracting. Production contracts have been awarded on a fixed price basis for many years. The fixed price contract provides maximum correlation of contract profits with contract cost, and in theory might offer maximum cost incentive. How ever the use of incentive arrangements on r&d contracts is the novel feature of the dod (and nasa) programs of the past several years. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.
Author: Edward Baer Roberts Publisher: Hardpress Publishing ISBN: 9781314916812 Category : Languages : en Pages : 58
Book Description
Unlike some other reproductions of classic texts (1) We have not used OCR(Optical Character Recognition), as this leads to bad quality books with introduced typos. (2) In books where there are images such as portraits, maps, sketches etc We have endeavoured to keep the quality of these images, so they represent accurately the original artefact. Although occasionally there may be certain imperfections with these old texts, we feel they deserve to be made available for future generations to enjoy.
Author: Yeon-Koo Che Publisher: ISBN: Category : Languages : en Pages : 55
Book Description
The procurement of an innovation involves motivating a research effort to generate a new idea and then implementing that idea efficiently. If research efforts are unverifiable and implementation costs are private information, a trade-off arises between the two objectives. The optimal mechanism resolves the tradeoff via two instruments: a monetary prize and a contract to implement the project. The optimal mechanism favors the innovator in contract allocation when the value of innovation is above a certain threshold, and handicaps the innovator in contract allocation when the value of innovation is below that threshold. A monetary prize is employed as an additional incentive but only when the value of innovation is sufficiently high.
Author: Wei Cai
Author: Wei Cai
Author: Wei Cai (Doctoral student)
Author: Wei Cai
Author: Lukas Weniger
Author: Eva I. Hoppe-Fischer
Author: Edward B. Roberts
Author: Edward Baer Roberts
Author: Yeon-Koo Che
Author: Joel S. Demski
Author: Edward Baer Roberts