A Fistful of Dollars: Are Financial Rewards a Suitable Management Practice for Distributed Models of Innovation?

Abstract

How can firms engaged in distributed innovation attract external volunteers and direct their efforts efficiently and effectively? Extant research proposes financial rewards as suitable management practice, maintaining that extrinsic financial rewards and intrinsic motivation have a unidimensionally positive effect on volunteers' motivation. In contrast, using the same theory underlying these studies, we argue that the effect of payment is far more complex. To do so, we introduce the concept of payment norms as a moderator of the effect of payment on motivation. Conducting a scenario experiment with open source software developers, we find that intrinsic motivation decreases for individuals with norms against payment, and that self‐determination mediates this effect. Furthermore, payment has a direct positive effect on total motivation, but not for individuals with strong norms for payment. Our findings help explain conflicting earlier results on motivation crowding and contribute to the debate on how to manage external volunteers in distributed innovation settings.

Open government objectives and participation motivations

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A Re-Explication of Social Norms, Ten Years Later

“…In this article, we first update an idea we brought up in 2005—the distinction between collective norms and perceived norms—that has been the subject of a number of articles (Alexy & Leitner, ; Carcioppolo & Jensen, ; Chia, ; Jensen & Bute, ; Lippman & Campbell, ; Mabry & Mackert, ; Park, Jung, & Lee, ; Reeves & Orpinas, ; Shulman & Levine, ; Storey & Kaggwa, ). Conducting a brief review of the literature on the use of the theory of normative social behavior (TNSB; Rimal & Real, ), we then categorize the growing list of moderators in the relationship between descriptive norms and behaviors.…”

Motivating the Established, Deterring the NewwThe Divergent Effect of Platform Competition on Member Contributions in Digital Mapping Communities

“…Various disciplines have contributed to this body of knowledge (Raasch et al, 2013), including scholars in economics (Boudreau and Jeppesen, 2015;Zhang and Zhu, 2011), information systems (Bagozzi and Dholakia, 2006;Fershtman and Gandal, 2007;Kane and Ransbotham, 2016;Kraut et al, 2012;Ren et al, 2012;Stewart and Gosain, 2006) and organizational theory (Alexy et al, 2013;Gallus, 2016;Jeppesen and Frederiksen, 2006;Lakhani and Wolf, 2005;Shah, 2006). They draw upon different motivational theories, e.g., of selfdetermination (Ryan and Deci, 2000), social identity (Tajfel et al, 1971), self-concept (Leonard et al, 1999), and norms (Alexy and Leitner, 2011)) to explain why individuals contribute to different forms of communitybased knowledge production (e.g., knowledge platforms (Nagaraj, 2017a;Nov, 2007), ideation initiatives (Bayus, 2013;Dahlander and Piezunka, 2014), free and open-source software (Greenstein and Zhu, 2012;Lerner and Tirole, 2002)). Our focus is on research that examines why people start contributing as well as on research that examines why people continue to contribute.…”