Measuring and Motivating Quantity, Creativity, or Both

Posted: 2 Nov 2007

See all articles by Steven J. Kachelmeier

Steven J. Kachelmeier

University of Texas at Austin

Bernhard Erich Reichert

Virginia Commonwealth University

Michael G. Williamson

University of Illinois at Urbana-Champaign - Department of Accountancy

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Abstract

We examine how worker productivity differs when compensation is based on quantity, creativity, or the product of both measures. In an experiment in which participants design rebus puzzles, we find that combining quantity and creativity measures in a creativity-weighted pay scheme results in creativity-weighted productivity scores that are significantly lower than those generated by participants with quantity incentives alone. Follow up analysis indicates that relative to participants in the quantity-only condition, participants in the creativity-weighted condition produce approximately the same number of high-creativity puzzles, but produce significantly fewer puzzles overall. Thus, while participants rewarded for creativity-weighted output tend to restrict their production to high-creativity efforts, they are unable to translate this focus into a greater volume of high-creativity output. Implications address a possible explanation for firms' reluctance to incorporate creativity measures within multi dimensional performance measurement systems, notwithstanding published suggestions to do so.

Keywords: managerial accounting, incentives, creativity

JEL Classification: M40, M46, J33

Suggested Citation

Kachelmeier, Steven J. and Reichert, Bernhard Erich and Williamson, Michael G., Measuring and Motivating Quantity, Creativity, or Both. Journal of Accounting Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1025971

Steven J. Kachelmeier

University of Texas at Austin ( email )

Department of Accounting
2110 Speedway, Mail Stop B6400
Austin, TX 78712
United States
512-471-3517 (Phone)
512-471-3904 (Fax)

Bernhard Erich Reichert (Contact Author)

Virginia Commonwealth University ( email )

Richmond, VA
United States

Michael G. Williamson

University of Illinois at Urbana-Champaign - Department of Accountancy ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

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