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  • 1.  Extrinsic Rewards, Intrinsic Motivation, and New Product Development Performance

    Posted 04-15-2021 22:22
    The subject JPIM article is about using intrinsic vs extrinsic rewards for new product development teams. And more specifically, when it comes to extrinsic motivators, which types are the best for managers to use to bring out the most creativity in employees performance on new product dev projects.

    When it comes to fostering creative performance among new product development (NPD) teams, intrinsic motivators (enjoyment, freedom, power, challenge) are most critical to bring about behaviors that result in the most creative performance. The article questions and dives deep into the role extrinsic motivators play on the creative performance of NPD teams. More specifically, the effects of financial vs non-financial (praise, recognition, social rewards) on NPD teams. Managers of NPD teams don't want their teams to be focused on the outcome and more on the creative process. Having financial rewards affects the teams immediate behaviors and narrows their thinking to be outcome minded. Non-financial extrinsic motivators such as recognition, have low effect on immediate behaviors and have more future oriented utility. The desired outcome is to encourage NPD teams to develop their own goals and regulate their own behaviors semi‐autonomously, and motivate creativity to a greater degree. Financial rewards in the context of NPD can hinder team creative processes and are perceived as controlling and shift the focus from the task itself to the outcome.

    However, for other parts of an organization, such as sales or purchasing, financial motivators, in theory, should have a more positive effect on those teams where focus is more put on outcomes than creative processes.

    Graduate Admissions
    Oakland University

  • 2.  RE: Extrinsic Rewards, Intrinsic Motivation, and New Product Development Performance

    Posted 04-16-2021 15:13

    In my experience, there are serious external barriers to creativity in the traditional ways that companies measure product development teams' performance.  New frameworks like Rapid Learning Cycles (RLC) provide developers with latitude to learn and adapt without sacrificing  financial or schedule goals.  The RLC framework has proven itself for hardware product development across a spectrum of industries.


    John Farnbach, Principal

    Boulder CO USA

    +1 303-448-9852


  • 3.  RE: Extrinsic Rewards, Intrinsic Motivation, and New Product Development Performance

    Posted 04-16-2021 22:00
    Hi Chris, 

    I found the JPIM article, "Extrinsic Rewards, Intrinsic Motivation, and New Product Development Performance" by Dr. Stacey L. Malek, Dr. Shikhar Sarin, and Dr. Christophe Haon to be quite interesting. As you mentioned, the JPIM article talked about how managers can bring out creativity among new product development (NPD) teams through extrinsic rewards (e.g. financial, recognition, and social) as well as intrinsic motivation (e.g. inherent interest). Below are some of the hypotheses stated in the article: 

    H1: Financial rewards are negatively related to intrinsic task motivation. 
    H2: Recognition rewards are positively related to intrinsic task motivation. 
    H3: Social rewards are positively related to intrinsic task motivation. 

    Although, I am not in the NPD space, a mentor of mine is in the NPD space in the healthcare industry. When it comes to managing his team (the product development team), he has always told his team that fostering creative performance is more imperative to individual, team, and organizational success than financial rewards. With that being said, I agree that financial rewards can cause individuals, teams, and organizations to become outcome minded. In addition, I believe that recognition rewards (e.g. formal recognition from your upper management) and social rewards (e.g. team dinners, picnics, get-togethers, etc.) not only foster creative performance, but can amplify intrinsic motivation (e.g. inherent interest). Moreover, the JPIM article stated, "H1-H3 explored the relationship between the three types of extrinsic rewards and intrinsic task motivation. Results indicate that financial rewards have a negative relationship with intrinsic motivation (Y= -.24; p ≤ .05), whereas recognition and social rewards have a positive relationship with intrinsic motivation (Y= .25; p ≤ .05 and Y= .31; p ≤ .001, respectively). Therefore, H1, H2, and H3 find support" (Malek et al., 15). Ultimately, if managers want to inspire and foster creative performance in terms of their NPD teams, they should employ recognition and social rewards as opposed to financial rewards.

    Thank you for sharing! 

    Jessica Rotzoll

    Jessica Rotzoll
    Oakland University