Incentive systems can contribute to the best possible exploitation of the employee’s abilities. A new way of setting those incentives and motivating employees is gamification. Gamification is defined as the application of game mechanics to a non-game setting, such as the business environment. Companies have discovered game-like incentives for motivating their employees, and now, this paper tries to create a gamified incentive system for motivating employees in the early stage of the innovation process.
Innovation creates value, strengthens the market position and creates competitive advantages. Therefore innovation is widely seen as a critical source for economic success for companies. However, at the same time, innovation is expensive. For example, in 2018 alone, Apple invested as much as 14,24 billion dollars on research and development. This represented around 46% of their total operating expenses and approximately 2,6% of their total revenues. These costs are making it vital for companies to ensure the efficient use of innovation resources.
This efficiency is largely determined by the competence, creativity and motivation of the employees working in the area of in research and development (R&D). Thus, companies have to generate adequate motivation in employees to deliver their innovative ideas, obtain a patent and develop the patentable idea into profitable innovation. Human resource (HR) management practices are considered as an essential instrument to fulfil this task.
However, standard pay-for-performance schemes, which only reward short-term financial success, are not suitable for fulfilling this task in the innovation process, because innovation processes are likely to fail as they contain a high degree of uncertainty. In standard schemes, this failure would result in penalties by a lower compensation or a possible termination of the contract. This punishment has the potential to harm the innovative behaviour of employees. A company that wants to encourage innovation must design incentive systems that free employees to take risks, experiments and discover what practices and technologies are the most effective.
These unique characteristics of innovation processes are the reason why analysing incentive systems in the context of innovation processes is of particular interest. Especially since incentive systems are considered as essential for ensuring the efficiency of innovation processes, as employees adapt their behaviour to these systems.
Table of Contents
1. Introduction
1.1 Motivation
1.2 Structure and method
2. The problem of incentives in innovation processes
2.1 Identification of innovation processes
2.1.1 Overview of innovation
2.1.2 Typical stages in innovation processes
2.2 Incentive systems in innovation processes
2.2.1 Preference deficits: Principal-agent theory
2.2.2 Basic requirements of incentive systems
2.3 Incentive relevant characteristics of innovation processes
2.3.1 Motivational structures
2.3.2 Creativity
2.3.3 Teamwork
2.3.4 Measuring performance
3. The gamified incentive system for the early stage of the innovation process
3.1 Play
3.2 Game mechanics
3.3 Game mechanics and play in incentive systems for innovation processes
3.3.1 Basic requirements
3.3.2 Innovation process requirements
4. Research design and methods
4.1 Data collection
4.1.1 Quasi-experiment – The gamified incentive system
4.1.2 Survey
4.1.3 Interview
4.2 Data analysis, findings and interpretation
4.3 Research limitations
5. Conclusion
Objectives and Topics
This master thesis aims to design and evaluate a gamified incentive system specifically for the early stage of innovation processes, where traditional pay-for-performance schemes often fail due to high uncertainty and the need for creativity. The central research question investigates whether gamification principles can effectively support motivation, teamwork, and creativity among employees involved in generating and evaluating new ideas.
- Theoretical analysis of incentive systems within innovation processes using principal-agent theory.
- Evaluation of core innovation factors: motivation, creativity, teamwork, and performance measurement.
- Application of gamification elements (e.g., game points, scoreboards, and social points) to non-game business settings.
- Empirical analysis through a quasi-experiment conducted with students to measure the impact of gamified mechanics.
Excerpt from the book
2.3.1 Motivational structures
In trying to influence the effort and work of employees in innovation processes, many management concerns are in the area of motivating them. Especially since the motivation of the employees has a strong influence on the outcome of the innovation process. Therefore, understanding the employees motivation is vital for designing a gamified incentive system.
For this, it is essential to understand what motivation is and how it can be influenced. Motivation is a directed urge for action that arises from individual and situational factors. Individual factors are motives or needs, while situational factors are incentives that can activate a motive. This psychological correlation is exploited through incentives in innovation processes. Several situational factors are combined for promoting the employee’s motivation and influencing their innovative behaviour (see figure 5). Therefore, it is essential to outline the forms of motivation and their influence on the innovation process.
Summary of Chapters
1. Introduction: Presents the motivation for the thesis, outlining the need for better incentive systems in innovation and defining the research questions regarding gamification.
2. The problem of incentives in innovation processes: Discusses the theoretical foundations of innovation, the limitations of standard incentive schemes via principal-agent theory, and key characteristics of the innovation process like creativity and teamwork.
3. The gamified incentive system for the early stage of the innovation process: Explores gamification as a solution, defining play and game mechanics and their alignment with the previously established requirements for innovation processes.
4. Research design and methods: Details the quasi-experimental study, including data collection via surveys and interviews to empirically analyze the impact of the gamified system.
5. Conclusion: Summarizes the findings, confirming a positive correlation between game mechanics and essential innovation factors, and provides suggestions for future research.
Keywords
Gamification, Innovation Process, Incentive Systems, Motivation, Creativity, Teamwork, Principal-Agent Theory, Quasi-experiment, Performance Measurement, Game Mechanics, Early Stage, Intrinsic Motivation, Extrinsic Motivation, Business Innovation, Idea Generation.
Frequently Asked Questions
What is the core focus of this thesis?
The thesis explores whether gamification can serve as an effective incentive system to motivate employees during the early, creative stages of innovation processes, where traditional reward schemes often fall short.
What are the primary thematic fields covered?
The key themes include innovation management, incentive system design, human motivation theory (intrinsic vs. extrinsic), teamwork dynamics in innovation, and the practical application of game mechanics in business.
What is the main objective or research question?
The primary goals are to determine if gamification is suitable for designing an incentive system for early-stage innovation and if these mechanics can support key performance factors like motivation, creativity, and teamwork.
Which scientific methods are applied?
The research utilizes a literature review to establish a theoretical framework and a quasi-experimental approach involving a simulated innovation process, analyzed through both quantitative surveys and qualitative interviews.
What is covered in the main section of the work?
The main section identifies specific requirements for incentive systems based on innovation characteristics, explains the mechanics of gamification, and evaluates how these mechanics meet those requirements in a practical, simulated experiment.
Which keywords best characterize this work?
The essential terms include gamification, innovation process, incentive systems, motivation, creativity, teamwork, and performance measurement.
How does the principal-agent theory relate to the innovation process?
The theory helps explain performance deficits due to information asymmetries and conflicting interests, highlighting why traditional "pay-for-performance" schemes are often unsuitable for the high-uncertainty nature of innovation.
What is the role of "play" in this gamified system?
Play acts as a catalyst for innovation by satisfying human needs for autonomy, competence, and relatedness, which in turn fosters motivation and helps overcome the rigid hierarchies found in traditional business environments.
What were the main findings of the quasi-experiment?
The study suggests a positive correlation between specific game mechanics—such as points and scoreboards—and the engagement, motivation, and communication levels of participants in the simulated innovation task.
- Arbeit zitieren
- Lukas Weniger (Autor:in), 2019, Designing incentives in innovations processes. Gamification as an approach for creating an incentive system for the early stage of the innovation process, München, GRIN Verlag, https://www.grin.com/document/535508
