Content area
Full text
Herman Aguinis is the Avram Tucker Distinguished Scholar and Professor of Management at George Washington University School of Business. Prior to joining The George Washington University School of Business (GWSB), he was the John F. Mee Chair of Management and the Founding and Managing Director of the Institute for Global Organizational Effectiveness in the Kelley School of Business, Indiana University. In addition, he has been a visiting scholar at universities in the People’s Republic of China (Beijing and Hong Kong), Malaysia, Singapore, Argentina, France, Spain, Puerto Rico, Australia, and South Africa. He earned his PhD in industrial and organizational psychology from the University at Albany, State University of New York. He has been elected to serve as Academy of Management Program Chair Elect, Program Chair, President Elect, President, and Past President during 2018-2023.
Is it too simplistic to suggest that reward is the best way to encourage innovation and creativity amongst a workforce?
This is a great question and, coincidentally, I wrote about this issue extensively in the fourth edition of my Performance Management book, which was just published (Aguinis, 2019). Hicks Waldron, former CEO of cosmetics giant Avon, in an eloquent statement, explained why rewards are so important: “It took me 30 years to figure out that people don’t do what you ask them to do; they do what you pay them to do.” So, yes, if the goal is to encourage innovation and creativity, these behaviors should be rewarded. For example, Procter & Gamble (P&G), the world’s largest consumer products company, has a strategic goal of appealing “to the heart and caring about human needs,” which requires a great deal of creativity and imagination on the part of employees. So, the performance management systems rewards these behaviors explicitly. Consider a situation in P&G Brazil, where P&G feared a shutdown due to decreased business volume. Low-income consumers were the fastest-growing segment of the population, but P&G’s global premium products were too expensive for this market segment. Local P&G teams decided to...