Reward system design and group creativity: An experimental investigation

Research output: Contribution to journalArticle

Abstract

In an environment where three-person groups develop a creative solution to an important problem, we examine whether the efficacy of either individual- or groupbased creativity-contingent incentives depends on whether they take the piece-rate or tournament form. We predict and find that group (intergroup) tournament pay increases group cohesion and collaborative efforts, which ultimately lead to a more creative group solution, relative to group piece-rate pay. While individual (intragroup) tournament pay increases individual efforts, we find that it does not enhance the creativity of group solutions relative to individual piece-rate pay. Our results advance the burgeoning management accounting literature on creativity-contingent incentives by demonstrating that reward systems are more likely to promote group creativity through collaborative efforts rather than independent individual efforts. We also provide important insights into when and why tournament pay can boost group creativity in organizations. In doing so, we contribute to a better understanding of observations from practice suggesting that organizations valuing creativity often induce intergroup competition.

Original languageEnglish (US)
Pages (from-to)1885-1911
Number of pages27
JournalAccounting Review
Volume87
Issue number6
DOIs
StatePublished - Nov 1 2012

Fingerprint

Creativity
Reward system
System design
Tournament
Piece rate
Intergroup
Incentives
Group cohesion
Management accounting
Efficacy

Keywords

  • Creativity-contingent incentives
  • Group creativity
  • Reward system design
  • Tournaments

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

Cite this

Reward system design and group creativity : An experimental investigation. / Chen, Clara Xiaoling; Williamson, Michael G.; Zhou, Flora H.

In: Accounting Review, Vol. 87, No. 6, 01.11.2012, p. 1885-1911.

Research output: Contribution to journalArticle

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