Variables that moderate the impact of incentives on knowledge sharing behaviour

Organisations often seek to promote knowledge sharing behaviours by providing incentives and rewards such as positive performance evaluations or salary increases. These are described as “extrinsic rewards” because they come from outside the employee, in contrast to “intrinsic rewards” from within the employee such as the personal satisfaction and meaning in carrying out tasks.

However, in a recent Maastricht University bachelor thesis¹, Johann Mathis Dührsen advises that:

Implementing rewards cost organisations substantial amounts of time and money. But the simple assumptions that a rewarded behaviour will occur more often does not seem to hold: Numerous studies examining extrinsic rewards have come to contradicting conclusions on whether they promote knowledge sharing

Dührsen suggests that these mixed results could be due to moderators acting on the reward-performance relationship, and in his thesis sets out to advance discussion in this regard.  To identify potential moderators and their impacts, he carried out an unsystematic narrative literature review.

The literature review identified three moderators:

• The influence of performance type on reward efficacy
• The influence of performance salience on reward efficacy
• The influence of motivation crowding on reward efficacy

Performance type and motivation crowding were found to have a sufficient number of studies to be evaluated, and performance salience was included due to it potentially being a mediator of performance type and motivation crowding.

Findings

The influence of performance type

• Performance criteria differ in how much they emphasise quantity or quality: Quantity-dependent tasks … involve clearly measurable goals, and performance on these tasks varies based on how frequently they are attained. Conversely, when a task is given quality-dependent criteria, results vary along a spectrum of value or intensity.

• Extrinsic motivation was observed to have a stronger impact on quantity-dependent tasks and intrinsic motivation to be more important for quality-dependent tasks.

• Under the assumption that complex tasks are more likely to be quality-dependent and mundane tasks more quantity-dependent, this possibly implies task complexity as a moderator. For simple actions that do not have a wide range of quality, like reporting explicit information or feedback forms, extrinsic incentives may be more efficacious, while tasks with a wide quality range like problem-solving of organisational issues may not profit as much from external rewards.

• Considering that the transfer of implicit knowledge is more likely to be a task with a wide quality-range as compared to the transfer of explicit information, the type of knowledge should also be considered.

The influence of performance salience

• [We can] differentiate between directly performance-salient incentives (DPS) and indirectly performance-salient incentives (IPS). DPS incentives are linked closely and in a straightforward manner to performance (“if-then-rewards”), … IPS incentives, in opposition, have a more inexplicit link to performance. [For example g]ood performance may increase the base-rate salary due to promotions, but this incentive is less immediately and less reliably linked to current performance.

• When tasks have directly performance-salient incentives,the relationship between intrinsic motivation and performance is weaker than under indirectly performance-salient ones … this may be so because directly performance-salient incentives compete more so with intrinsic motivation for being immediate driving factors of performance.

• Practitioners aiming to promote knowledge sharing may thus prefer incentives with a softer performance-salience when the targeted task is heavily dependent on intrinsic motivation. This seems to be more so the case for quality-dependent tasks.

• Regarding the two concepts of performance type (quantity-or quality-dependent) and performance salience of the reward (direct and indirect) there is a possibility that they are conceptually similar or may correlate: A quantity-dependent performance, because it is more likely to be separable into chunks and non-ambiguously measurable, may more often have a directly performance-salient reward assigned to it.

• The creation of an unambivalent link between performance and reward, which is a defining characteristic of the directly performance-salient reward, is greatly facilitated by the performance being quantity-dependent. Vice-versa, rewards for quality-dependent performance would more likely be indirectly performance-salient, because precisely mapping rewards to quality of performance is likely harder due to several criteria being involved or their subjectivity.

The influence of motivation crowding

• [T]here is some evidence for motivational “crowding out” to affect the link between incentives and performance due to incentives lowering intrinsic motivation or weakening the relationship between intrinsic motivation and knowledge sharing behaviour.

• Some previously discussed results … may support the overjustification account of motivation crowding: It proposes that a reward makes agents “forget” about how intrinsically motivating a task is; their attitude to the task is more so driven by the extrinsic reward. Further the overjustification account is a plausible explanation of why the performance salience of the reward affects the overall impact of the reward: The more performance-salient the reward, the more strongly it is on an agent’s mind, and hence the quicker the agent would “forget” about how intrinsically rewarding the task is.

• [P]erformance salience moderates the relationship between intrinsic motivation and performance. That the overjustification account fits well with these two findings gives it credibility. If salience of a reward impacts how much it drives behaviour, this might imply that extrinsic rewards can not only “crowd out” intrinsic motivation, but also other extrinsic motivation.

• Given that several studies show results as predicted by motivation crowding theory, … it may be worthwhile for practitioners to address the effect. However, since no mechanism of motivation crowding is conclusively proven or strongly indicated by data, deriving concrete advice is likely premature.

• Given that SDT [self-determination theory] has received a profound amount of support from research and has been validated in a variety of settings, including corporate ones, taking actions regarding the SDT account of motivation crowding theory is unlikely to have negative consequences. This would include the reframing of rewards so that they are perceived as not infringing on personal autonomy and as feedback.

Adopting a more complex model

In concluding, Dührsen offers the following advice:

If practitioners and researchers seek to learn how to promote knowledge sharing with incentives, they likely need to abandon the behaviourist paradigm that rewarded behaviours will always increase in frequency and adopt a more complex model of human motivation.

Header image source: Clker-Free-Vector-Images on Pixabay, Public Domain.

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Also published on Medium.