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Business Creativity & Innovation

Creativity – How Should We Reward It?

Rewarding CreativityIt is widely thought that  intrinsic motivation has the greatest effect on creativity and that extrinsic motivation has a detrimental effect. One wonders, is this really true?

In the workplace we find that employees fully apply their skills and expertise and devote more time and energy when they are challenged or curious. This intrinsic motivation thus has a direct effect on the creative outcomes that we are looking for. So in order to get more and better ‘creative outcomes’ we should reward teh behaviour that helps create them. Right?

Many organisations do attempt to  use rewards such as money or recognition to stimulate creativity in employees. Psychologists in particular, argue that this may actually have a detrimental effect. Put simply, motivation can be thought of having two components, extrinsic and extrinsic (instead of being two separate types of motivation). They can be of differing magnitudes so that one component can dominate. Creative behaviour is stimulated by intrinsic motivation but if a large monetary reward is offered this will ‘drown out’ the intrinsic component. The effect is twofold. Firstly the wrong sort of motivation is being applied and secondly employees will begin to associate creative outcomes with extrinsic and not intrinsic motivation. Employees get the wrong idea and management do not get the creative outcomes they desire.

Think about other outcomes that depend on intrinsic motivation such as volunteering for charitable organisations. Offering significant rewards does not significantly increase output but does link output to monetary gain in the eyes of staff.

Common sense tells us that it should be possible to get the right blend of intrinsic and extrinsic motivation but this will depend on the type of people that we are trying to motivate and the types of jobs that they do. Research suggests that monetary rewards do actually work for employees that have routine jobs. These are typically jobs where employees have little or no personal control. A reward system acts as a sort of feedback mechanism, telling such employees that their contributions are valued and enhancing their feelings of control.

If employees are already feeling motivated and with a degree of personal control then monetary rewards may act as a distraction and cause a loss of focus. It is therefore clear that monetary reward systems do not suit everybody. We could be wasting our money!

If it matters what types of job people undertake, does it matter what sort of behaviour we are trying to stimulate? In short the answer is yes. If original, high quality ideas are rewarded, employees are more likely to come up with high quality ideas in subsequent tasks. On the other hand, if any kind of ideas is rewarded, employees tend not to engage themselves fully in the generation of further creative ideas, lowering the ‘quality’ of their creativity.

In conclusion, it seems that the effect of rewarding creativity with money or recognition is more complicated than we think. In the right conditions, creativity can be stimulated using extrinsic rewards. Yet extrinsic rewards can lower the creativity of highly motivated employees working on challenging and complex tasks e.g. employees working  in research or innovation programmes.

We must be cautious when designing systems targeted at increasing organisational creativity. The reward system must be matched to the job at hand (especially the degree of complexity) and the types of people who work on those jobs, as well as the type of creativity that the organisation so desperately needs.

One thought on “Creativity – How Should We Reward It?

  1. Definitely agree with rewarding creativity, but more importantly not just with finance. I think if people are encouraged to innovate within a company then they’ll feel a sense of ownership that could be far more rewarding!

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