The Interplay of Monetary Rewards, Expectations, and Ideation Quality: An Empirical Analysis

Document Type : Research Paper

Authors

1 Department of Technology Entrepreneurship, Faculty of Entrepreneurship, University of Tehran, Tehran, Iran

2 Faculty of Entrepreneurship

3 Department of Machine Intelligence and Robotics, Faculty of Electrical and Computer Engineering, University of Tehran, Tehran, Iran.

4 3. Department of Corporate Entrepreneurship, Faculty of Entrepreneurship, University of Tehran, Tehran, Iran

Abstract

Objective: This research aims to delve into the intricate relationship between monetary rewards, expectations, and the quality of ideation. Traditional views in economics and management often posit a direct, positive correlation between monetary incentives and improved performance outcomes. However, recent insights from behavioral economics suggest this relationship may be more complex than previously understood. The primary purpose of this study is to explore how monetary rewards influence the quality of ideation, particularly in a professional setting, and to examine the mediating role of expectations in this dynamic. The study seeks to bridge the gap in understanding how reward systems impact creative ideation and whether expectations alter this impact.
 
Method: The methodology adopted for this study is experimental in nature, involving a sample of 109 professionals from the information and communication technology sector in China. Participants were engaged in a computerized ideation test; wherein monetary bonuses were awarded at random intervals. The design of the experiment was rooted in Gassmann's business model, which provided a structured framework for idea generation and assessment.
To collect data, a comprehensive questionnaire was used to gather demographic and control variable information from participants. This was followed by the ideation process, where participants' ideas were evaluated based on originality, novelty, feasibility, and potential economic value, using a 7-point Likert scale. The experts involved in the evaluation process ensured a robust assessment of ideation quality.
The research employed a post-test method to mitigate potential biases such as training and fatigue effects, commonly observed in within-subject designs. A between-subjects design was chosen to further minimize confounding factors, ensuring any observed differences in ideation quality were attributable to the intervention (monetary rewards).
Data analysis was conducted using SmartPLS software, utilizing Partial Least Squares (PLS) path modeling. This advanced statistical technique is particularly suited for new technology research due to its ability to model composites and factors, account for various forms of measurement error, and test entire theories.
 
Results: The study’s findings present a nuanced view of the relationship between monetary rewards, expectations, and ideation quality. Key results include:
Negative Correlation Between Reward and Ideation Quality: A significant, negative correlation was observed between monetary rewards and the quality of ideation, contradicting many traditional economic theories. This suggests that higher levels of monetary rewards are associated with lower levels of ideation quality.
Role of Expectation as a Mediator: Expectation emerged as a crucial mediating factor in the reward-ideation quality relationship. While the indirect relationship through expectation was found to be weak, its presence induced significant changes in the direct path between reward and ideation quality.
Statistical Significance and Practical Implications: The R2 value for ideation quality was found to be 0.263, indicating that a significant portion of the variance in ideation quality is explained by the independent variables in the model. This finding has substantial implications for human resource practices in organizations, especially in technology-driven industries.
 
Conclusion: In conclusion, this study offers significant insights into the complex dynamics of monetary rewards, expectations, and ideation quality. It challenges the conventional wisdom that monetary rewards invariably lead to improved performance, particularly in creative tasks. The findings underscore the importance of understanding the psychological and behavioral nuances that govern employee motivation and performance, especially in contexts where creativity and innovation are crucial.
The study suggests that organizations need to rethink their reward structures, considering the potential demotivating effects of monetary incentives on creative performance. A more holistic approach, acknowledging the role of expectations and intrinsic motivation, may be more effective in fostering a conducive environment for innovation. This research opens avenues for further exploration into how best to structure reward systems that enhance, rather than inhibit, creative ideation and performance.

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Main Subjects

References

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