Utilitarianism or romanticism: the effect of rewards on employees' innovative behaviour

Abstract

PurposeThe aim of this paper is to empirically explore the relationship between human resource rewards management and innovative behaviours, particularly between the utilitarianism and romanticism reward approaches and employee creativity in the workplace.Design/methodology/approachThe paper adopts a quantitative approach. After analysing construct validity and reliability, the study empirically tests its hypotheses by performing a multi‐regression analysis with a sample of 216 individuals.FindingsThe study reaches three main conclusions. First, tangible extrinsic rewards affect the innovative behaviour of employees in an “inverse‐U” shape. Second, intrinsic motivations have a substantially positive impact on the innovative behaviour of employees. And third, extrinsic rewards and intrinsic motivations have positive interaction effects on individual creativity at the workplace.Originality/valueThe paper focuses on the theoretical battle between the utilitarianism and the romanticism perspective of human resource reward approaches toward employees' creativity. Based on examination of the main effects of monetary incentives and intrinsic reward practices respectively, the study highlights a complementary view to explore a positive interaction between the two reward configurations, and to exploit a total reward system for facilitating individual innovative behaviours.

Perceptions of HRM and their effect on dimensions of innovative work behaviour: Evidence from a manufacturing firm

“…We did not study rewards as such, rather the fairness of the compensation system, but our findings are consistent with what we know from literature on intrinsic and extrinsic motivation. Rewards imply an extrinsic motivator, and these may imply an attention shift to economic gains and a detrimental effect on proactive innovative behaviour, given that employees may experience reduced autonomy and self-motivation by extrinsic rewards (Deci & Ryan, 1985;Zhou et al, 2011). Contrary to what we had expected, training and development opportunities were found to have a negative effect on idea generation.…”

“…Some scholars have studied the effect of compensation on innovation by focusing on specific compensation systems, such as those geared towards incentivizing innovation (e.g. Jiang et al, 2012;Zhou, Zhang, & Montoro-Sanchez, 2011) or offering performance-based pay (e.g. Beugelsdijk, 2008).…”

The Relationships among Human Resource Management Practices, Organizational Commitment, and Knowledge Management Processes: A Structural Equation Modeling Approach

“…Reward systems usually serve several purposes which include attracting, retaining, and motivating employees. (Zhou et al, 2011). In addition, researchers such as Yap et al (2009) found that reward systems have a positive impact on employee performance.…”

Human Resources and Innovative Behaviour: Improving Nursing Performance

“…Kinnie, Hutchinson, Purcell, Rayton, and Swart (2005) argue that the attitudes of employees towards HRM are important because attitudes drive discretionary behaviour, such as innovative behaviour. However, only a few studies (e.g., Sanders, Moorkamp, Torka, Groeneveld, & Groeneveld, 2010;Veenendaal & Bondarouk, 2015;Zhou, Zhang, & Montoro-Sánchez, 2011) have examined links between employee attitudes about human resource (HR) factors and the innovative behaviour of employees.…”