Open-ended customer feedback : the mediating effect of intrinsic motivation on open-ended customer feedback and creativity

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UNIVERSITEIT VAN AMSTERDAM

Open-ended Customer Feedback: The Mediating Effect of Intrinsic

Motivation on Open-ended Customer Feedback and Creativity

Master Thesis

Student: Wouter Antonius Bernard Soer Student number: 10659366

6/30/2014

Msc. in Business Studies – Leadership & Management Track Universiteit van Amsterdam

Under supervision of: Daniel J. Sligte

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Abstract

This thesis offers new insights into the field of creativity by exploring the influence of open-ended customer feedback on employee creativity. Compliments, complaints and suggestions were found to be the fundamental elements of open-ended feedback. A survey, that included new survey items, was developed to test open-ended customer feedback on the ideas, products and services of employees. I hypothesized that (1) open-ended customer feedback leads to employee creativity, (2) open-ended feedback leads to intrinsic motivation, (3) intrinsic motivation leads to employee creativity, and (4) intrinsic motivation mediates the relationship between open-ended customer feedback and employee creativity. In total 62 respondents participated in this research and the results showed that open-ended customer feedback led to employee creativity. In detail, compliments and suggestions were both strongly and positively related to employee creativity. In contrast, complaints had a weak and negative relation to employee creativity. The findings also demonstrated a positive relation between open-ended customer feedback and intrinsic motivation. Specifically, compliments were strongly and positively related to intrinsic motivation. However, suggestions and complaints had a weak positive relation to intrinsic motivation. Next to this, intrinsic motivation showed to have a positive effect on creativity. Lastly, open-ended customer feedback was positively related to employee creativity and this relationship was mediated by intrinsic motivation. I also discuss the implications of these results and suggest fields of interest that might be used for future research.

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Introduction

In today’s business environment, firms that are capable of introducing novelties to the market seem to have a competitive advantage over their rivals. In these businesses, creative employees often develop original ideas. Within the organization, supervisors and coworkers provide them with useful feedback. This influences the extent to which workers perform creatively (Zhou et al., 2008). However, information from outside the company, such as customer feedback, can also contain useful and interesting insights on creative ideas, products or services of employees. Until now, open-ended customer feedback’s effect on employee creativity has not been examined in detail.

Customer feedback can be collected in a closed-ended and open-ended manner. To provide an example of closed-ended feedback I introduce a scenario on the lately renewed Apple TV, a product that transfers digital content from a computer to the television. Employees of this organization could use closed-ended customer feedback to collect information on the perceived quality of the product by asking customers: ‘How do you perceive the quality of the Apple TV?’ If the respondents can only choose from pre-selected options, it would provide the employees with well-structured, clear and straightforward feedback. Yet, to provide employees with feedback that goes beyond its initial scope and advance creative and adequate insights, open-ended customer feedback seems a potent form of feedback gathering.

An example of open-ended customer feedback that led to high employee creativity is Google Glass. This high-tech product is designed for personal usage and is a wearable device. It looks like ordinary glasses but has several features that enable you to browse the internet, check emails, take pictures or shoot videos. Because this product has recently been used by a different audience, new insights came across. To illustrate this I will describe a recent case. Doctors at the Ohio State’s Wexner Medical Center use Google Glass to shoot videos of

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4 surgeries they perform. They broadcast these videos live to any desired medical specialist around the globe in order to get assistance (Medicalcenter.osu.edu, 2013). Based on these materials, other specialists can analyze and judge the footage to provide the operating doctor with a second opinion during a difficult procedure. To analyze and judge the material at its upper best, the doctors want to receive footage of a higher quality. Therefore, they suggest upgrading the product with a camera of a higher resolution. This open-ended feedback of doctors on the Google Glass provided Google with useful information to improve their product and helped designing new ones. The employees of Google have developed a High Dynamic Range (HDR) software update for the camera to increase the quality of the images (Google.com), while keeping the weight of the device at a low level. In general, due to context differences customers experience interesting and potentially useful insights on products, services or ideas. Not only in this extreme scenario, but in many cases, customers can provide information that inspire employees to become more creative and trigger them to engage in creative new ideas.

Employees that are engaged in producing creative new ideas provide the organization with useful new information. Oldham & Cummings (1996, p. 607) indicate “when employees perform creatively, they suggest novel and useful products, ideas, or procedures that provide an organization with important raw material for subsequent development and possible implementation”. Grant & Berry (2011) emphasize that creativity is enhanced when considering others’ perspective. Customers provide a different perspective, since they suggest useful ideas (Di Gangi, Wasko & Hooker, 2012) and give feedback on highly novel products (Löfqvist, 2010). By giving feedback their insights are shared with workers at the company. Open-ended customer feedback can be useful in collecting customer feedback, capturing knowledge and providing a different perspective. So far, the influence of open-ended customer feedback on the creativity of employees is unstudied. Understanding this can be

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5 useful in determining whether open-ended customer feedback leads to creativity. Afore the research question is announced, an overview will be given of the literature.

Literature Review

Organizations capable of understanding and satisfying the needs of customers are considered to have a key competence in improving their sustainable competitive advantage (Awuah, 2006). To understand the needs of their customers organizations are increasingly interested in what customers desire. To anticipate on the needs of customers they collect customer feedback. It is essential to gather information that is close to the actual experience of customers. Open-ended customer feedback is assumed to provide information with deeper customer insights. Therefore I will discuss open-ended customer feedback in the following paragraph.

Open-ended customer feedback

In general, the information an agent provides with regard to aspects of a person’s performance or understanding is defined as feedback (Hattie & Timperly, 2007). An agent, such as a supervisor or coworker, provides feedback on generated ideas or solutions (Zhou, 1998). This form of feedback is described as competence feedback. To facilitate performance Amabile (1983) argues the use of competence feedback. Zhou (1998) contributes to this by stating that this particular feedback relates to the extent an idea or solution is perceived as useful or creative. Employees receive competence feedback from their direct work environment, such as coworkers or supervisors, with regard to their performance. However, Fodor & Carver (2000) suggest that different environments provide diverse types of feedbacks on performance. Thus, feedback is argued to differ among the different actors in the environment of an employee.

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6 Employees receiving supportive feedback from a supervisor could lead to a higher creative performance (George & Zhou, 2003). This type of supportive feedback, which differs from competence feedback, relates to developmental feedback of supervisors. It is used to provide workers with helpful information to improve performance (Zhou, 2003). Besides receiving feedback from supervisors and coworkers, people look for other signs in their environment that provide them with information on how they are doing (Ashford & Cummings, 1983). Next to feedback from their direct work environment the employees could learn from feedback received from other stakeholders (i.e. customers) leading to improved organizational performance (Caemmerer & Wilson, 2006). This emphasizes the effect of customer feedback on organization performance. What if open-ended customer feedback follows the same pattern for creativity? Is it possible that customers provide employees with feedback that includes essential information on ideas, products or services?

Customer feedback points out quality issues or suggestions for improvement (Sampson, 1998). Customer feedback opens up a different source of feedback and is better accessible with the use of internet (Opuko, 2006). According to Tzokas and Saren (2004) feedback can assist a company in gathering knowledge about customers to develop capacities that enables the organization to improve performance. Caemmerer & Wilson (2008) consider customer feedback an important aspect for service-orientated organizations because this can improve the employee-customer relationship and the quality of services in general. Customer feedback is, according to the authors, important to measure and could improve organizational learning.

To measure the quality of ideas, products or services, organizations use both qualitative (i.e. in-depth interviews) and quantitative measurement tools, such as surveys. In general, quantitative measurements tools are considered to collect information from a large target group. Donelly et al. (1995) argue that these measurement tools lack depth.

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Closed-7 ended feedback is typically collected by measurement mechanisms that use pre-selected answering options, such as ‘I agree’ or ‘I don’t agree’, on suggested topics of interest initiated by an organization. The collected feedback does not point out specific problematic aspects or their improvements (Stone & Banks, 1997). Customer information gathered in a closed-ended manner therefore provides information of customers on adduced topics giving clear, straightforward and structured information that contains customer data without much depth (Donelly et al., 1995) or suggestions for improvements (Stone & Banks, 1997). Hoffman & Bateson (1997) suggest in their research that a multitude of customer feedback methods or approaches is useful for a thorough measurement, collection, and analysis of feedback. Until now researchers did not pay much attention to the information that can be collected in an open-ended way. This might be useful in gaining more depth and could lead to improved customer feedback.

Open-ended customer feedback can be collected by conducting, for example, interviews or surveys, but can also be provided in a spontaneous setting. This form of feedback contains complaints, compliments and suggestions (Wirtz & Tomlin, 2000). Barlow (1996) explains that complaints need to be considered ‘gifts’ since they provide information that can be supportive to the development of an organization. In addition, complaints can be defined as a source of feedback that indicate the gap between the higher expected quality and lower received quality of products, services or ideas from the perspective of customers.

On the other hand, compliments are difficult to identify since they are subjectively perceived. Yet, they represent a potent form of feedback to organizations and individuals (Kraft & Martin, 2001). I define compliments as an evaluation of the received quality of a product, service or idea by customers that is equal to or higher than the expected quality.

Suggestions in customer feedback direct to the evaluation of the context or content of products, services or idea by customers that include information for future adjustments.

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Open-8 ended customer feedback points out a different perspective and elaborates employees with interesting insights.

In general, I define open-ended customer feedback as a source of information either formed into a complaint, compliment or suggestion that describes the evaluation of the received quality of a product, service or idea compared to their expected perception of the quality. Since this research focusses on information flows between customer and employees, the above mentioned forms of open-ended customer feedback are considered to be verbal or written. Non-verbal feedback (i.e. smiling or establishing eye contact) contains little specific information to be considered useful for this particular research.

So, open-ended customer feedback is considered to contain a complaint, compliment or suggestion (Wirtz & Tomlin, 2000) that collects data, either by initiation of the firms, its employees or by spontaneous interaction, which contains information of the perceived quality of a product, service or idea. These three forms of open-ended feedback represent potentially useful information to employees. In this thesis open-ended customer feedback is suggested to lead to higher creativity. However this relationship is unexplored and needs further introduction. Therefore I will first discuss creativity more elaborately in the following paragraph.

Creativity

Creativity is a complex concept that Amabile (1996) explains as; ‘the production of novel and useful ideas in any domain’. The complexity lies in the fact that creativity is often intertwined with innovation. Although creativity and innovation are related they cannot be used as substitutes in this thesis. Therefore a clear distinction will be made here by stating that innovation is the implementation of creative ideas in an organization (DiLiello, Houghton, & Dawley, 2011). Creativity concerns the production of ideas and not the organizational implementation. To define creativity in the context of this thesis a closer look is given at the

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9 creativity of employees.

The creativity of individual employees can lead to improvements in organizational performance (Gotsi et al., 2010). It can be stated that employees are the starting point (Zhou & George, 2001) of the production of new and creative ideas (Shalley et al., 2004). Creative ideas can be used by employees to achieve functional goals, such as solving problems (Roskes, de Dreu & Nijstad, 2012). In order for employees to think creatively Cushenbery & Hunter (2011) suggest it is required to break from norms and change the way of doing everyday things. Challenging the status quo by stimulating the intellect is what creative thinking requires, but does this make an employee want to act creatively and how can it be measured?

A creative action is not likely to occur when the expected consequences of this action are not more preferred than routine work or familiar behavior (Ford & Gioia, 1995). Therefore, Ford (1996) notes that individual creativity starts as personal and deliberate choice. Many individual creative processes are not directly observable by others (DiLiello, Houghton, & Dawley, 2011). According to Amabile (1982) assessments of creativity are based on subjective judgments. In addition, Shalley (2009) argues that workers are in the best position to judge their own creative performance because they see their own input. For that reason, a preferable measurement for the creativity of employees might be perceived or self-reported creativity (Hocevar & Bachelor, 1989). Although it seems plausible to assume that this approach includes common method bias there is no scientific evidence that supports this direct link (Thomas & Feldman, 2012). The personal perception of an employee is therefore a useful method to measure creativity.

As described above, creativity is hard to recognize for outsiders except when the employee is working hard to impress supervisors or coworkers. These employees desire to get noticed and receive confirmation of their superiors or peers (Janssen, 2000). For outsiders it is

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10 not easy to determine the three major fields that Amabile (1996) describes as creativity. According to the author creative thinking, expertise and task motivation have overlapping fields that together form creativity (see: Appendix A). The aspects in this creativity model are influenced by personal and work environment factors. Recent literature suggests that increased creative self-efficacy, a personal factor, has a direct relation to employee creativity (Tierney & Farmer, 2002). In addition work environments factors, such as growth need strength, work context and job complexity, have a direct impact on employee creativity (Shalley, Gilson, & Blum, 2009). Also the study by Shalley et al. (2009) emphasizes the influence of contextual factors on creative thinking.

So, creativity of employees is the production of novel and useful ideas in any domain (Amabile, 1996) at an individual level, being the starting point (Zhou & George, 2001) of new and creative ideas (Shalley et al., 2004). Performing a creative action requires consequences that are more desirable than familiar behavior (Ford & Gioa, 1995). Since creativity is not always directly observable by others and its assessment is subjectively judged, self-perceived and self-reported creativity (Shalley et al., 2009) might be useful to measure the creativity of employees. Employees are expected to be most creative when they experience a high level of intrinsic motivation (Oldham & Cummings, 1996). Without this source of motivation a person is not able to perform a task or performing tasks beyond its extrinsic goals (Amabile, 1996). When the personal motivation is high it is more feasible that the employee will show greater creativity. Therefore, I argue that intrinsic motivation of employees is an essential factor leading to creativity. In the following part I will discuss intrinsic motivation more elaborately.

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11 Intrinsic Motivation

The motivation of employees is best described when considering the state of mind of the employees themselves. Intrinsic motivation is needed in the mindset of an employee to achieve a certain task or perform a job beyond its extrinsic goals (Amabile, 1996). Goals are a concrete cognitive illustration of a desired or undesired result that serves as guidance for a person’s behavior (Austin & Vancouver, 1996). From a psychological point of view, intrinsic motivation leads to engaging in activities or tasks without being rewarded besides the act itself (Deci & Cascio, 1972). According to Menota & Siu (2003) the activity is often perceived as interesting, challenging, involving, and satisfying. These aspects trigger employees to get involved in the activities they enjoy. The performed tasks or activities are to some extent rewards themselves. An employee can be influenced by its work environment, such as supervisors or coworkers, to demonstrate this particular behavior.

Supervisors, an actor in the work environment, can enhance the intrinsic motivation of employees by showing supportive behavior towards the autonomy of an employee (Pelletier & Vallerand, 1996). A supervisor that demonstrates encouraging behavior is argued to increase the intrinsic motivation of an employee (Deci, Nezlek & Scheinman, 1981). External events in the world of an employee have an indirect effect on intrinsic motivation (Deci & Ryan, 1985). Persons that perceive events from outside as supportive have a higher level of intrinsic motivation. On the other hand, controlling behavior of supervisors has a contrary effect on the level of intrinsic motivation (Deci & Ryan, 1985). Thus, intrinsic motivation is related to external events or actors in the work environment of the employee that can be influenced positively by showing supportive behavior.

According to Cacioppo, Petty, Feinstein, & Jarvis (1996) people that are intrinsically motivated are in need for cognition. They are also naturally seeking, acquiring, thinking about, and reflecting back on information to understand relationships and events in their

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12 world. Stimulation of cognitive information based on intrinsic motivation is considered important in becoming more creative (Grant & Berry, 2011). The authors state that intrinsic motivation leads to curiosity and interests in learning which broadens their cognitive flexibility and openness to complexity. These personal competences are based on the self-determination theory. This theory makes sense of human motivation and personality,

emphasizing the importance of humans' evolved inner resources for personality development and behavioral self-regulation (Ryan & Deci, 2000). Grant & Berry (2011) argue that creative persons require necessary competences (i.e. curiosity, openness to complexity and cognitive flexibility) to perform creatively and these competences are more likely to be acquired by showing great effort (Amabile, 1996)

Intrinsic motivation is argued by Grant & Berry (2011) to increase creativity (Grant & Berry, 2011) but is also used in other studies as explaining variable for other variables. Researchers have used intrinsic motivation as mediator (Vallerand & Reid, 1984; Coelho et al., 2011) and intervening variable (Zhang & Bartol, 2010) in their studies. Determinants that lead to intrinsic motivation are more commonly studied in sports (Gillet et al, 2010; Amarose & Horn, 2000) than in business related studies. Feedback is one of the variables that is studied in sports and is argued to influence intrinsic motivation (Badami et al (2011). The authors argue that feedback on positive performances increases the intrinsic motivation of athletes. As described afore, Vallerand and Reid (1984) discuss a mediation model that explains perceived competence. The authors explain the mediation role of intrinsic motivation on verbal feedback and perceived competence. Until now, few studies have considered the effect of feedback on intrinsic motivation or creativity in a business setting. Although business, sports and education are not similar on a surface level they show a lot of parallels (i.e. competiveness, hard work, achieving goals, and teamwork) and can provide us with new insights. Grant & Berry (2011) argue that intrinsic motivation and creativity are enhanced when considering

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13 others’ perspectives. Open-ended feedback from customers provides this “out of the box” perspective.

Thus, participating in an activity without being rewarded for it (Deci & Cascio, 1972), besides the interesting, challenging, involving and satisfying feeling that provides the act itself (Menota & Siu, 2003) is what intrinsic motivation entails. It gets jobs done beyond its extrinsic goals (Amabile, 1996). Intrinsic motivation of employees leads to creativity, due to curiosity and interests in learning, which broadens the cognitive flexibility and openness to complexity (Grant & Berry, 2011). In sports related studies, feedback leads to intrinsic motivation of individuals (Badami et al, 2011). In business research this it is not often examined. I see this as an opportunity to use open-ended customer feedback to enhance intrinsic motivation that leads to increased creativity. I expect that this relationship follows the same pattern as the study performed by Vallerand & Reid (1984) with intrinsic motivation as mediator. But to establish it as such the research gap need to be explained first. Therefore, I will explain this in further detail in the next section.

Gap and Research Question

Throughout the years, studies have identified several individual and contextual factors that directly influenced the creativity of employees. Tierney & Farmer (2002) showed that creative self-efficacy directly effects employee creativity. Shaley, Gilson & Blum (2009) argued the direct impact of work environments factors, such as growth need strength, work context and job complexity, on employee creativity. In addition, a study by Grant & Berry (2011) described that creativity and intrinsic motivation are enhanced when considering others’ perspectives. Furthermore, Amabile (1996) and Oldham & Cummings (1996) showed that intrinsic motivation of employees leads to creativity. However, none of them explain the effect of open-ended customer feedback on employee creativity. Fundin & Bergman (2003)

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14 focus in their study on the feedback of current customers in the development of new products. They include complaints on current products and services in their measurement method to find the effect on new product developments. Not taken into account are suggestions and compliments, the effects on intrinsic motivation of employees or employee creativity.

Thus, the relationship between intrinsic motivation and creativity is studied in multiple researches (e.g. Amabile, 1996; Oldham & Cummings, 1996; Grant & Berry, 2011). Yet, the relation between open-ended customer feedback and intrinsic motivation is still unstudied. The relationship between open-ended customer feedback and employee creativity is unexplored. This thesis will not only investigate the individual relationship between open-ended customer feedback and creativity but it will also analyze the mediating effect of intrinsic motivation on the relationship between open-ended feedback and employee creativity. To investigate this, the following research question is established;

What is the relation between open-ended customer feedback and employee creativity? And what role does intrinsic motivation play in this equation?

Throughout the following section the expected contribution will be explained.

Expected Contribution

This thesis offers two contributions to the field of creativity that extend previous studies on the creativity of employees. The most notable are (1) giving insights on how employees perceive open-ended customer feedback as a contributor to their intrinsic motivation and (2) identifying open-ended customer feedback as an actor for employee creativity. Open-ended customer feedback can lead to intrinsic motivation, because compliments, complaints and suggestions can boost the level of motivation of employees. I

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15 assume that complaints and suggestions might enact the creativity of employees providing them with useful insights, converting this input into creative output. Compliments can confirm the creativity of employees in earlier ideas, products or services that enables them to produce new creative work. Therefore, open-ended customer feedback is expected to directly or indirectly lead to higher employee creativity. Additionally, this thesis will provide a contribution to the field of feedback by providing a thorough definition of open-ended customer feedback and describing its relevance to creativity.

From a practical perspective this thesis could assist managers in motivating employees to perform creative activities by providing them with open-ended customer feedback. So, open-ended customer feedback can lead to intrinsic motivation and, as a consequence, to creativity of employees. Thus this explorative research can be both of practical and scientific use.

In the following section a conceptual model will be established, explaining the relationships between the variables.

Conceptual model

The conceptual model explains the relationship between open-ended customer feedback and the creativity of employees. Intrinsic motivation is the mediating variable that influences the aforementioned relationship. In this particular model open-ended customer feedback is the independent variable, employee creativity the dependent variable, and intrinsic motivation the mediating variable (Figure 1). I expect this model to follow the same pattern as Vallerand & George’s (1984) model.

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H1

H2(a,b,c) H3

H4

Figure 1.

In the next paragraph I will explain the hypotheses.

Hypotheses

To test the relationship between the variables that were previously mentioned in the conceptual model this research establishes several hypotheses.

Perspective taking offers different insights and allows information to flow between different stakeholders. Grant & Berry (2011) argue that creativity can be enhanced when considering others’ perspective. I predict that open-ended customer feedback provides an interesting point of view and encourages employees to increase creativity.

Hypothesis 1: There is a positive relation between open-ended customer feedback and employee creativity

Barlow (1996) explains that complaints need to be considered as ‘gifts’ since they provide information on which an organization can build further. Complaints can include information

Employee creativity Intrinsic motivation Open-ended customer feedback (complaints, compliments, suggestions)

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17 that is potentially loaded with useful insights on the ideas, products or services of employees. I predict that complaints provide employees of interesting information that increases their intrinsic motivation.

Hypothesis 2(a): There is a positive relation between complaints and intrinsic motivation.

Compliments represent a potent form of feedback to organizations and individuals (Kraft & Martin, 2001). Encouraging behavior of persons how manage employees is argued to increase the level of intrinsic motivation (Deci, Nezlek & Scheinman, 1981). Customers can give compliments on an idea, service or product. In this way customers express their appreciation, increasing the intrinsic motivation of employees. So, the prediction is that compliments increase the intrinsic motivation of employees.

Hypothesis 2(b): There is a positive relation between compliments and intrinsic motivation.

Suggestions in customer feedback direct to the context or content of ideas, services or products. Different suggestions offer a broader scope and can therefore provide employees with useful insights. Thus, I predict that suggestions increase the intrinsic motivation of employees.

Hypothesis 2(c): There is a positive relation between suggestions and intrinsic motivation.

Grant & Berry (2011) argue that intrinsic motivation leads to creativity. The intrinsic motivation of employees allows workers to think more creatively, because it stimulates curiosity and interests in learning. Therefore, I expect that intrinsic motivation positively relates to the creativity of employees.

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18 Hypothesis 3: Intrinsic motivation positively relates to the creativity of employees.

Open-ended customer feedback can include useful information that increases the intrinsic motivation of employees. Grant & Berry (2011) emphasize enhanced intrinsic motivation and creativity when considering others’ perspective. Since intrinsic motivation is expected to lead to creativity, I expect that intrinsic motivation mediates the relationship between open-ended customer feedback and employee creativity. Therefore I predict the following:

Hypothesis 4: The positive relationship between open-ended customer feedback and employee creativity is mediated by intrinsic motivation.

After having established the hypotheses it is important to set up a research design. This will be explained in further detail in the following section.

Methods

Research Setting, Participants and Procedures

This explorative research tested the hypotheses by using a web-based survey. This survey is filled out by an adequate sample to be representative and generalizable. A sample of 60 employees is considered to be sufficient and realizable. The employees have received, recently or in the past, open-ended customer feedback (complaints, compliments, or suggestions) on their creative ideas, products or services. When participating in this survey participants are notified with the purpose of this research and a confidentiality statement. The surveys are established in Dutch. I have translated the original questions from English to Dutch to increase the response rate and make the participant more confident in answering the questions. The translations are checked by a professor of the University of Amsterdam and

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19 two students with a master degree in Business. All three persons are highly qualified in both languages.

The respondents in this particular research were 62 employees working in multiple industries and held diverse functions, such as junior consultant, accountant, and cashier. They participated in a survey that was part of a research to investigate the creativity of employees, their intrinsic motivation and received open-ended feedback from costumers. The surveys were distributed by mail to an initial list of 30 potential participants. Each of them was asked to send the mail forward to other potential respondents and report back to the researcher how many were approached. In total, 115 potential participants were approached. They were all instructed to fill out the online survey in Qualtrics. The link to this program was provided in the mail. The respondents were guaranteed confidentiality and informed of their anonymous participation.

The survey included items of open-ended customer feedback, creativity (Zhou et al., 2008) and intrinsic motivation (McAuley et al., 1989). The employees filled out the questions corresponding with items of the independent variable and dependent variables. The participants started answering the items that concerned open-ended customer feedback. Since open-ended customer feedback covered 3 elements, the questions about compliments were asked first. The next questions that participants had to fill out were related to customer complaints. The last items on open-ended feedback dealt with suggestions of customers. In the remainder of the survey the participants had to fill out questions that concerned creativity and intrinsic motivation. Also, demographic items were included. In total, I received 62 complete and usable surveys. The overall response rate was 53.9 percent. The average age of the employees was 27.39 years old (ranging from 20 to 56 years), the average company tenure was 4.26 years (ranging from 0.3 to 27 years) and the average job tenure was 2.86 years (ranging from 0.3 to 24 years). The sample consisted of 29 female (46.8%) and 33 male

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20 (53.2%) respondents. The most frequently reported level of education was “university” (53.8%) and “higher education” (26.2%). Responses could vary from “high school degree” to “university”.

Next I will describe the measurements that are used to conduct this research.

Measures

The measures of this research included new measurement items that tested open-ended customer feedback. Detailed information on the individual items is explained in Appendix B. This research also made use of two reputable methods (Zhou et al., 2008; McAuley et al., 1989), the specific items of these methods are also established in Appendix B.

Open-ended customer feedback. To measure open-ended customer feedback new items were developed that covered compliments, complaints and suggestions. In this multidimensional measurement device three items are included to address open-ended customer feedback. Sample items for compliments include: “I experience compliments of customers on my ideas, products or services”, example questions for complaints were: “my ideas, products or services generate complaints’ and an example of the suggestion items was: “I receive new plans from customers for ideas, products or services”. Participants reported their choice on a 7 point Likert scale with (1) being “never” and (7) “very much”. To ensure that the participants were useful for this research I started the survey with a question that tested whether the participant had customer contact. By doing this I made sure that the participant had the opportunity to receive customer feedback. If the answer was ‘no’ the participants had no contact with customers and were guided to the end of the survey. In total, 4 participants answered ‘no’ to the first question. Participants that answered ‘yes’ could continue with the remainder of the questions. As my model described I was interested in the respondents that

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21 received compliments, complaints, and suggestions on their ideas, products, and services. To have more detailed information on the content of the items I added two questions that were of contribution to indicate the amount of open-ended feedback for each element of open-ended customer feedback. These questions needed to be filled out by indicating the estimated amount of received compliments, complaints or suggestions. Participant were able to answer this in a multiple selection box that included amounts ranging from (1) “0” to (7) “25 or more”. The follow-up question concerned the percentage of earlier indicated amount that needed to be assigned to compliments, complaints, or suggestions. The participants were told to fill out there estimation in constant sum boxes that had a total of 100%. These specific questions allowed me to check if the feedback related to ideas, products or services.

Creativity. To test creativity I used the self-perceived creativity of employees. Five items were selected from Zhou et al. (2008) to measure self-perceived creativity. The authors covered a before and after scenario. I selected the items that matched with the before scenario. These items are considered most appropriate for this research and are therefore used in the survey. Participants were able to answer the question on a 7 point Likert scale ranging from 1 (much less frequently) to 7 (much more frequently). The participants reported how often they exhibited five behaviors. Sample items were “I come up with new and practical ideas to improve performance” and “I suggest new and better ways of performing work tasks.”

Intrinsic motivation. For measuring intrinsic motivation of employees I made use of Intrinsic Motivation Inventory (IMI) by McAuley et al. (1989). The participants’ subjective experience related to the creative ideas, products or services is addressed by the IMI. I made use of a multidimensional measurement device that has been used in several studies to measure intrinsic motivation. A nine-item questionnaire consisted of the interest/enjoyment, perceived competence, and effort/importance subscales of the IMI was slightly adapted for this study. I

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22 only changed the topic of interest to receive more precise information. Three items from each subscale reflected employees’ general level of interest/enjoyment, perceived competence, and effort/importance. Each item can be reported in a 5 point Likert scale with (1) being “strongly disagree” and (5) “strongly agree”. In specific, the following example items are used: “Participating in or initiating creative ideas, products or services were fun to do”. Also, three counter indicative items were included. An example question was: “Working on a creative idea, product or service was an activity that I couldn’t do very well”.

Control variables. During the survey I also asked the participants to fill out a few demographic questions. This allowed me to control for gender (1=male, 2=female), age (in years) and education (1=secondary school to 5= university).

Missing Values and Recoding Values

The majority of all quantitative studies have not mentioned how they handled missing data (Harel, Zimmerman & Dekhtyar, 2008). Yet, this is considered important and according to Myers (2011) a Hotdeck imputation is a statistically valid method to handle missing data. In this particular research the collected data contained a few missing values in the variables. A Hotdeck analysis was performed in SPSS to impute new values.

Items that belonged to intrinsic motivation included three variables that were counter indicative items. I have changed the values of these items to increase the consistency between definition and values. Values were initially (1) strongly agree to (5) strongly disagree. I have changed them into (1) strongly disagree to (5) strongly agree.

In order to test for correlation I made several dummy variables. I recoded gender and education. I have made the following changes. Gender was recoded into male with the following coding: 1 = Male, 0 = Female. Education was renamed into University with the

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23 following coding: 1= University, 0 = Others. The same was done for the other education levels. Higher education had the following recoding: 1 = Higher Education, 0 = Others. Intermediate had the recoding: 1 = Intermediate, 0 = Others and Secondary school was recoded into: 1 = Secondary school, 0 = Others. There were no participants with lower school. So, no recoding was needed for that particular level of education. It is also not included in the correlation matrix.

Factor Analysis

A factor analysis was conducted for open-ended feedback, intrinsic motivation, and creativity. The variable open-ended feedback had three components with a larger eigenvalue than 1. These three components explained 82,791 % of the variance. The first two components of intrinsic motivation had eigenvalues larger than 1. Both components explained 61.66% of the variance. The employee creativity items had one component that has a larger eigenvalue than 1. This component explained 76, 1 % of the total variance.

For the interpretability of the factors I found no low loadings (<0.3). However, items of intrinsic motivation were associated with cross loadings. I had to delete 3 items, after which they led to higher loadings for the 6 remaining items.

Reliability

After performing a reliability analysis it can be concluded that the internal consistency of the variables is high. The variables open-ended customer feedback (α=0.788), creativity (α=0.864), and intrinsic motivation (α=0.916) showed high reliabilities.

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24

Results

Table 1 shows the means, standard deviations and correlations. The correlations between the variables are shown below the diagonal.

Open-ended customer feedback led to creativity. As shown by the results in table 1, the main effect among open-ended feedback and creativity is moderately correlated (r=0.559). It showed that a high level of open-ended customer feedback received by employees led to higher creativity (p<0.01). To specify this, I found that compliments and creativity correlated moderately (r=0.574). Compliments significantly predicted creativity (p<0.01). Employees that received compliments have a higher degree of creativity. Suggestions demonstrated a correlating effect on creativity (r=0.426). Suggestions predicted creativity significantly (p<0.01). On the other hand, complaints did not show a correlating effect on creativity (r=0.109). Therefore, employees were not encouraged by complaints to perform creatively.

Open-ended customer feedback led to intrinsic motivation. The interaction between open-ended customer feedback and intrinsic motivation is moderately correlated (r=0.569). Open-ended customer feedback predicted intrinsic motivation significantly (p<0.01). In addition, I found that compliments showed a highly correlating effect on intrinsic motivation (r=0.753). Compliments predicted intrinsic motivation significantly (p<0.01). Workers that received a higher level of compliments had a stronger intrinsic motivation. Suggestions demonstrated a nearly similar effect, it showed a high correlation among suggestions and intrinsic motivation (r=0.699). This relation among suggestions and intrinsic motivation was predicted significantly (p<0.01). However, complaints did not correlate with intrinsic motivation (r=0.044). Therefore, complaints were not explanatory for intrinsic motivation.

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25 Intrinsic motivation led to creativity. I found a correlating effect of intrinsic motivation on creativity (r=0.673). Intrinsic motivation predicted creativity significantly (p<0.01). A high level of open-ended customer feedback led to higher intrinsic motivation.

Intrinsic motivation mediated open-ended customer feedback and employee creativity. This relationship is tested by using a Process regression analysis that checked for a mediating effect of intrinsic motivation on open-ended customer feedback and creativity. Intrinsic motivation was found to be a mediator on open-ended customer feedback and employee creativity. I have described this process more elaborately in the next part were the hypotheses are tested.

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27 Hypothesis testing. Hypothesis 1 stated that open-ended customer feedback leads to employee creativity. To test the first hypothesis I made use of a regression analysis. It can be stated that there is a significant relation between open-ended customer feedback and employee creativity β = 0. 569, t = 5.364, p < .05. It can be stated that open-ended customer feedback led to employee creativity. Therefore, hypothesis 1 can be accepted.

Hypothesis 2a described that compliments lead to intrinsic motivation. I have unchained the variable open-ended feedback into three separate variables and performed a regression analysis. Hypothesis 2a can be supported since there is a significant relation between compliments and intrinsic motivation β = 0. 631, t = 6.382, p < .05. Hypothesis 2a is therefore supported and accepted. It can be stated that compliments led to higher intrinsic motivation.

Hypotheses 2b stated that complaints lead to intrinsic motivation. I have performed a regression analysis to test this hypothesis. The hypothesis is rejected because the relation was not significantly predicted β = -0.070, t = -0.748, p > .05. Complaints did not explain intrinsic motivation.

Hypothesis 2c described that suggestions lead to intrinsic motivation. This hypothesis is also tested by a regression analysis. The hypothesis was rejected because suggestions and intrinsic motivation was not significantly predicted β = 0.192, t = 1.962, p > .05. It can be stated that suggestions were not leading to intrinsic motivation.

Hypothesis 3 stated that intrinsic motivation positively relates to employee creativity. This hypothesis is fully supported since intrinsic motivation and employee creativity is significantly predicted β = 0. 525, t = 4.685, p < .05. Employees with a high level of intrinsic motivation showed increased creativity.

Hypothesis 4 argued that the positive relationship between open-ended customer feedback and employee creativity is mediated by intrinsic motivation. As previously

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28 described I performed a Process analysis. It seemed that there is only partial support for hypothesis 4. Compliments and suggestions correlated positively and significantly with creativity. However, complaints showed a very low positive correlation with creativity. The Process analysis checked for a mediating effect of intrinsic motivation on open-ended customer feedback and creativity. Open-ended customer feedback shows a direct effect on creativity (B=0.4069) predicting a significant interaction (p<0.01). Furthermore, open-ended feedback demonstrated an indirect effect on creativity, mediated by intrinsic motivation (B=0.471) and predicted significantly (p<0.01). This is also confirmed by the lower (0.1985) and higher confidence interval (0.8083) of the indirect effect. The mediating effect of intrinsic motivation is therefore fully supported. The performed Process analysis can be found in the Appendix B (Figure E).

The control variables did not show a correlation with the other variables and are not significant predicted (p>0.05). To test the model for regression I entered open-ended feedback, intrinsic motivation, and creativity into the regression analysis. I have modelled the main effects into a clear and straightforward model (figure 2).

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29 Main effects of regression.

β = 0. 569, t = 5.364, p < .05 β = 0.525, t = 4.685, p < .05

β = 0.260, t = 2.323, p < .05

Figure 2.

The research question is therefore scientifically answered by stating that there is a positive direct relationship between open-ended feedback and creativity, with intrinsic motivation as mediator.

In the following section I will provide the discussion of this thesis.

Discussion

Although customer feedback was connected to the development of new products (Fundin & Bergman, 2003) this was the first exploratory research that investigated the relation between open-ended customer feedback and employee creativity. My findings confirmed that open-ended customer feedback makes a difference in the creative performance of employees. Compliments and suggestions were strongly and positively related to creativity.

Open-ended customer feedback Intrinsic motivation Employee creativity

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30 They explained the supportive behavior of customers towards the ideas, products or services of employees. These findings were coherent with the earlier findings of George & Zhou (2003), although in a different setting, stating that a supportive context can increase creativity. Complaints are found to have a positive but weak effect on employee creativity.

Open-ended customer feedback was found to have a positive effect on intrinsic motivation. In specific, compliments are highly positively related to intrinsic motivation. Employees were more motivated when they received feedback that confirmed their creativity. These results bear a striking resemblance to the findings of Janssen (2000). It seemed that workers desire recognition for their creative input. Suggestions are considered to be positively related to intrinsic motivation however did not have a significant relation. The low level of intrinsic motivation of employees after receiving complaints on their ideas, products or services showed similarities to the results of Deci & Ryan (1985). The authors described the negative influence of controlling behaviors on intrinsic motivation. These assumptions are similar to my findings on the relationship between open-ended feedback (complaints) and intrinsic motivation. The complaints of customers on the ideas, products or services of employees seemed to be a weak motivator for employees. Barlow (1996) described complaints as a gift that could lead to organization performance. However this is not the case for intrinsic motivation. This can be explained by the fact that employees tend to search for confirmation (Janssen, 2000) and if this recognition is not granted by their customers it seems not to motivate them.

Intrinsic motivation was positively related to employee creativity. This result showed to be similar to the findings of Amabile (1996) and Oldham & Cummings (1996). They both argued that intrinsic motivation leads to creativity. Intrinsic motivation was described to be associated with curiosity (Grant & Berry, 2011). I have not investigated this particular topic in detail, but it seems that these are related. The questions in this research were based on creative

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31 ideas, products or services of employees. Improvements to their work seem to trigger their curiosity. Future research could be performed by investigating the relationship between open-ended customer feedback and curiosity.

The main finding of this thesis demonstrated that open-ended customer feedback led to employee creativity. Intrinsic motivation was found to mediate this relationship leading to a higher degree of creativity. These results were never discovered in literature and provide a new perspective on feedback and creativity. Open-ended customer feedback entails forms of feedback (compliments and suggestions) that drive employee creativity. The way customers communicate their (dis)satisfaction or suggestions determine the further effect on employee creativity. If customers want to help employees in improving their work, it seems best to modify their feedback into a compliment. In this way customers are more likely to see creative results out of their feedback.

In general, organizations are eager to find out what their customers desire and are always on a quest to introduce a novelty to stay ahead of the competition. These firms can initiate multiple feedback tools that collect and measure the needs of customers and introduce programs that stimulate employees to produce creative ideas. However, the interpretation of the feedback by the employees is highly important to perform tasks and to motivate employees. Therefore, if firms aim to retrieve creative output from customer feedback, it is essential that firms communicate this feedback as compliments or suggestions to their employees. This could improve their ideas, products or services and could be beneficial to customers, employees and firms.

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32

Conclusions

The creative behavior of employees is dependent on external factors that influence their actions. Throughout this research I have indicated a contextual factor that acts outside the boundaries of the organization. Many workers have daily contact with their customers and are interested in how they perceive the quality of their ideas, products or services. To understand this relationship I have analyzed open-ended customer feedback on the ideas, products and services of employees. Compliments and suggestions were found to have a strong and positive effect on employee creativity. This supportive behavior of customers increased creative output. In contrast, complaints showed to have a weak effect on employee creativity.

The motivation of an employee to perform a certain job needs to come from a person’s inside. The mindset of a worker is highly important in achieving a goal. Higher intrinsic motivation led to performing tasks exceeding its initial goals and created new ideas. This thesis showed support for increased employee creativity when workers were provided with open-ended customer feedback that contained compliments. This external factor can influence the mindset of workers. The employees can build upon the insights that are enclosed in this specific feedback and are intrinsic stimulated to perform creative activities when their ideas, products or services are complimented by customers. Complaints and suggestions had a positive but weaker effect on intrinsic motivation. Intrinsic motivation turned out to have a positive and strong relation to employee creativity. The main finding of this research was that open-ended customer feedback led to employee creativity. This relationship was mediated by intrinsic motivation resulting into a higher degree of employee creativity. Thus, open-ended customer feedback is a contextual factor, which acts outside the boundaries of the firms, and influences intrinsic motivation and employee creativity.

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33 In the following section I will describe the implications of this research.

Implications

To provide this thesis of a critical view I have identified a few implications. First of all, the findings in this research suggest that individual employees react positively to compliments leading to intrinsic motivation and creativity. I must state that the capabilities of the person, as stated by Grant & Berry (2011), determine whether this is translated into creative activities. This research is performed on a high percentage of respondents (53.8%) that enjoyed a university education. Cognitive stimulants are required to acquire the skills to perform creative activities (Amabile, 1996), which is more likely to be trained when being highly educated. Therefore the representation of translating open-ended customer into new creative ideas is higher by employees that went to university. The use of a snowball sampling technique seems highly related to this implication. This technique is highly dependent on the network of the researcher. Therefore a different sampling technique could decrease the change of biasing the results.

Secondly, the relatively low amount of participants in this research (N=62) can lead to biased results. A larger sample could lead to results that are more representative and generalizable. Also, outliers have a relatively lower influence on the results when the sample is larger.

The third implication is the fact that this survey made use of a measurement that was based on self-perceived employee creativity. Although, Thomas & Feldman (2012) found no scientific evidence for assuming that this measurement is biased, it seemed that measuring employee creativity by making use of a supervisor-employee dyad would have provided this thesis of different results and could have reduced common bias.

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34 implication the results. This could have shown whether there was a significant difference between the means of the variables. A causality test is recommended when performing further research.

In the last section of this thesis I will describe a few recommendations that can be used for future research.

Recommendations

This thesis has shown the effect of open-ended customer feedback on employee creativity. This feedback includes several aspects that concern the needs of customers. A measurement tool for open-ended customer feedback can be developed that combines measuring new insights for future development and customer needs. This can improve organizational creativity and customer satisfaction.

Future work can be performed in developing the newly established items measure open-ended customer feedback. I have only included complaints, compliments and suggestions. It seems plausible that there are multiple other forms of feedback that can capture open-ended feedback.

Currently, feedback is often collected by using internet feedback tools. It might be interesting to look into open-ended customer feedback that is transferred by the web. This is not specifically tested in this research and could lead to interesting insights.

As stated in the implications, self-perceived creativity might lead to biased results. It seems useful for future research to make use of a measurement tool that tries to measure the creativity of employees from the perspective of the supervisor or coworker.

Future research might recognize different psychological processes, such as self-confidence. What would the role of self-confidence be in the relationship between intrinsic

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35 motivation and employee creativity? I believe that self-confidence is an important factor for an employee to perform creatively. Open-ended customer feedback can also be included in the equation. Compliments might be a contextual influence that interacts with self-confidence. This can be useful to motivate employees and provide them confidence to produce creative output.

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Appendix A

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43 Appendix B Model Summary Mo del R R Squa re Adjuste d R Square Std. Error of the Estimat e Change Statistics R Square Change F Chan ge df1 df2 Sig. F Change 1 .706 a .499 .482 .82349 .499 29.39 0 2 59 .000

a. Predictors: (Constant), OPENMEAN, INTRINSICmean1 Figure B. ANOVAa Model Sum of Squares df Mean Square F Sig. 1 Regression 39.861 2 19.931 29.390 .000b Residual 40.010 59 .678 Total 79.871 61

a. Dependent Variable: CREAMEAN

b. Predictors: (Constant), OPENMEAN, INTRINSICmean1 Figure C.

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45 Figure D.

Process Analysis.

Run MATRIX procedure:

***************** PROCESS Procedure for SPSS Release 2.11 **************** Written by Andrew F. Hayes, Ph.D. www.afhayes.com

Documentation available in Hayes (2013). www.guilford.com/p/hayes3 ************************************************************************** Model = 4

Open-ended customer feedback : the mediating effect of intrinsic motivation on open-ended customer feedback and creativity