INNOVATIVE EMPLOYEES? INTRINSIC MOTIVATION IS JUST NOT ENOUGH!

INNOVATIVE EMPLOYEES? INTRINSIC MOTIVATION

IS JUST NOT ENOUGH!

The effects of employees’ work intrinsic motivation on their innovative behavior and

the moderating effect of perceived support for innovation

Master Thesis MSc. BA, Specialization Human Resource Management University of Groningen, Faculty of Economics and Business

January, 2011 LORENA P. CAPURRO N. Student number: 1832603 Constant Nefkensstraat 5B 5613 ME Eindhoven Tel: +31 - (0)6 - 55533468 Email: lcapurro@gmail.com Supervisor RUG: Frouke de Poel

INNOVATIVE EMPLOYEES? INTRINSIC MOTIVATION IS JUST NOT ENOUGH! The effects of employees’ work intrinsic motivation on their innovative behavior and the

moderating effect of perceived support for innovation

ABSTRACT

The purpose of this study was, through the application of questionnaires to Dutch companies’ employees, to determine whether individual’s work intrinsic motivation and perceived support for innovation are positively related to innovative behavior. Perceived support for innovation was also tested for a positive moderating effect between work intrinsic motivation and innovative behavior. Innovative behavior turned out to be, as expected, positively affected by the intrinsic motivation of an individual. This confirms the importance for innovation-oriented organizations to focus on the type of individuals they include in their work force. Perceived support for innovation however, was found not to have a significant direct effect on innovative behavior, but it did show a positive moderating effect in the relationship between intrinsic motivation and innovative behavior. This suggests that intrinsically motivated employees will take advantage and value the efforts made by their organization to support innovation, provided that these efforts are in fact perceived by the employee.

1 INTRODUCTION

“In the future, the innovation performance of a country is likely to be even more crucial to its future economic and social development” states the Organisation for Economic Co-operation and Development (OECD, 2005). According to this institution, innovation has become one of the main drivers of economic expansion and social welfare in developed countries (OECD, 2005). When looking at some OECD’s figures, it is the industry which performs more than 50% of a country’s innovation activities (OECD, 2010), making clear the high relevance of the industry in a country’s innovation attempts. It is also commonly agreed that innovation is a major player for companies in their need to adapt to constantly changing environments, in order to survive and stay competitive. Even in financially difficult times, when economic resources are especially scarce, companies agree that they need to keep encouraging innovation but now targeted towards strategic areas that will “potentially function as economic multipliers” (The network for European Techno-Economic Policy Support, 2007).

Innovation has demonstrated to be of such importance for both countries and organizations that vast literature exists covering the topic of innovation in work environments (e.g. West & Farr, 1990a). For example, studies on innovation aim to deliver insight on how to produce not only financial benefits to organizations, but also how to generate the knowledge which in turn would enhance people’s health and well-being (West & Farr, 1990b).

When realizing how relevant it is for organizations to innovate, a reasonable question would be, where does innovation come from? Although it is recognized that organizational innovation is “more than the sum of its individual parts” (Staw, 1990, p. 295), it is still considered to start with employees’ contribution (Staw, 1990) and largely depends on the extra efforts these employees are willing to undertake outside the daily management of an institution (Scott, 1981). But what is then needed for employees to behave innovatively? For years researchers have realized the value of innovative behavior and therefore they have been continuously studying the factors that make an individual innovative (e.g. Jafri, 2010).

2 Innovating implies, besides the creation of ideas, the promotion and the seeking for support for implementing the ideas (West & Farr, 1990b). Because it is innovation (and not solely creativity) that has the potential for the development of industries and countries, it is now needed to take a step further and find out whether intrinsic motivation is indeed enhancing employees’ innovative behavior.

Besides the internal factors that can lead an individual to behave innovatively, we should not forget that an employee acts within a work environment. Researchers agree that the work climate in which the employee is immersed plays a central role as an antecedent of creativity and innovation (Fischer & Farr, 1985; Hulsheger, Anderson & Salgado, 2009; Kanter, 1985; West & Rickards, 1999). Nevertheless, it is not well established in literature whether a specific climate of support for innovation in fact prompts individuals to behave innovatively. Although West, Hirst, Richter and Shipton (2004) suggest intrinsic motivation and “climate for innovation” as relevant variables for encouraging teams to innovate, their research remains only theoretical and falls short when considering the effect of this supporting climate on employees’ innovative behavior when they are already intrinsically motivated. It is now time to find this out in order to help management understand that it can very well improve its company´s innovation potential by promoting employees’ contribution to innovation (Staw, 1990).

3 THEORETICAL FRAMEWORK

Intrinsic Motivation and Innovative Behavior

Among the huge amount of organizational research, work motivation has been the focus of the largest proportion (Baron, 1991). The high interest in understanding motivation suggests, and supports, the extensive benefits that a motivated workforce can provide to its organization (Tremblay, Blanchard, Taylor, Pelletier & Villeneuve, 2009).

According to Self-determination Theory (Gagné & Deci, 2005) work motivation is composed of various dimensions, of which intrinsic motivation is defined as the most autonomous type, namely the type of motivation which makes individuals work because they have interest in performing the job, they feel involved with or curious about it, find it exciting or satisfying, or presents a personal challenge (Amabile, 1997). Researchers specifically recognize the high value of intrinsic motivation for it is the type of motivation that leads to the most positive effects (Vallerand & Ratelle, 2002 as cited in Tremblay et al., 2009). Some of the benefits of intrinsic motivation for an individual - and in turn for an organization - are better job performance, employee engagement, lower turnover (Gagné & Forest, 2008) and creativity (Amabile, Hill, Hennessey & Tighe, 1994). Amabile (1988) suggests that intrinsic motivation is fundamental because even if an individual may have the personal capabilities for doing his or her job and therefore could be able to do it, it depends on the level of intrinsic motivation what he or she will do in fact.

4 Although many examples can be found in research supporting the idea that intrinsic motivation is an antecedent of creativity in individuals (e.g. Amabile, 1983; Amabile, 1997; Crutchfield, 1962; Hennessey & Amabile, 1988; Woodman et al., 1993; Zhang & Bartol, 2010), research has neglected to find the link between intrinsic motivation and innovative behavior, a criterion that as I discussed earlier, has proved to be of utmost relevance for companies’ competitiveness, especially during the last years. And although creativity is an important step for behaving innovatively, for an organization to actually innovate it is fundamental that its employees do not only stay in that first step but further promote and realize a creative idea.

So, if individuals have interest in performing their jobs, feel involved with it and feel it as a personal challenge, i.e. are intrinsically motivated towards their job, I propose that they will not only generate and develop the ideas to solve the challenges or improve the job, but will also act upon the challenge of promoting and realizing the new ideas, by being persistent (Bandura, 1997 as cited in Runco, 2006) and investing “substantial and demanding efforts” (Janssen, 2004, p. 202). In short, I go a step further than previous research and propose that an intrinsically motivated individual, besides behaving creatively, will be also motivated to promote and realize his or her novel ideas, or in other words will show innovative behavior.

This leads to my first hypothesis:

Hypothesis 1: An individual’s level of intrinsic motivation is positively related to his or her level of innovative behavior.

Perceived Support for Innovation and Innovative Behavior

5 ideas (Amabile, 1997). Cummings (1965) in turn, states that the possibility of cross-fertilizing different experts’ ideas encourages and supports innovation.

Researchers have suggested that a perceived climate of support for innovation is an antecedent of innovation (Amabile, 1983; Hulsheger et al., 2009; Kanter, 1985; Siegel & Kaemmerer, 1978; West, 1990). Agreeing with that premise and taking into consideration that in general a “climate represents signals individuals receive concerning organizational expectations for behavior and potential outcomes of behavior” (Scott & Bruce, 1994, p. 582), it is also possible to expect that a climate of support for innovation will encourage individuals to behave innovatively. This means that if employees perceive their work environment as open to change and promoting innovation, and that there is sufficient supply of innovation-relevant resources such as time, training and funding, the individual will perceive the support for innovation and therefore will be more prone to take risks and champion innovation (Gumusluoglu & Ilsev, 2009)1.

Several studies have found empirical support for a relationship between perceived support for innovation and creativity, i.e. the first step of the innovative behavior process. For example Parnes and Meadow (1959) showed in their study that people will develop more original and useful ideas if they perceive that they are allowed and encouraged to do so. Baer and Frese (2003) suggest also that “employees working in an organization that provides a personally non-threatening and supportive climate should be more likely to take the risk of proposing a new idea” (p. 50). In this research, I go a step further and propose that when an employee feels that his or her organization or work group supports innovation, he or she will be more likely to also promote his or her ideas and make use of the resources available towards idea realization.

This is how I reach the following hypothesis:

Hypothesis 2: An individual’s perception of support for innovation is positively related to his or her level of innovative behavior.

1

6 Moderating Effect of Perceived Support for Innovation on the Relationship Between Work Intrinsic Motivation and Innovative Behavior

In the previous paragraphs I have established the potential direct effects that employees’ intrinsic motivation and perceived support for innovation have on their innovative behavior. But innovative behavior in employees can be influenced both by personal characteristics and work environment factors (West & Rickards, 1999). If we take a look at the previous definitions, we can distinguish the intrinsic motivation as an individual characteristic of the person (Amabile et al., 1994; Broedling, 1977) that can have a great influence on an individual’s innovative efforts. In turn, perceived support for innovation is related to the climate in which the individual works (Siegel & Kaemmerer, 1978) and has also shown to be positive and strongly related to innovation (Amabile, 1983; Kanter, 1985; Siegel & Kaemmerer, 1978; West, 1990), in contrast for example to extrinsic motivators (Amabile, 1983, 1988). Recognizing that individuals are affected by both factors, in this study I also paid attention to the potential effect that individuals’ perception of support for innovation has on their innovative behavior when interacting with their intrinsic motivation. Employees will perceive a supportive environment, for example, when free sharing of opinions is valued (Bower, 1965), when the organization is interested in developing and adapting to new ideas, is open to change (Siegel & Kaemmerer, 1978) and when there is time, people interaction, expert support and resources available (Anderson & West, 1998) for innovating. The joint effect of intrinsic motivation and support for innovation is expected because when there is a climate where innovative efforts are valued, encouraged and provided with resources, intrinsically motivated individuals (and thus with already a tendency to show innovative behavior) will use this supportive platform to express more freely their creativity and as a more fertile ground where to promote and implement their new ideas. An environment of support for innovation will help employees more fruitfully share their new ideas and projects (Steiner, 1965). Hence, when considering the interaction of intrinsic motivation and perceived support for innovation, an individual´s innovative behavior will be more effective and enhanced.

7 placing both individual characteristics and environmental influence together as I propose in this study. In fact, the deficiency in research concerning this interaction has been claimed by King (1990).

Based on the above I propose my third hypothesis:

Hypothesis 3: Perceived support for innovation moderates the relationship between work intrinsic motivation and innovative behavior. That is, the higher the perceived support for innovation, the greater the positive effect of work intrinsic motivation on innovative behavior.

8 METHODS

Sample and procedure

The participants of this survey are employees working in different organizations which were randomly approached. The objective was to reach individuals with different profiles (demographics, education, etc.) who were carrying out different working activities. In this way, I could measure the construct of innovative behavior in its broad definition, and not only in relation to the innovation that is generated in R&D environments (Santamaría, Nieto & Barge-Gil, 2009).

The sample composition was 69.1% male and 30.9% female, with an average age of 39.7 years old (S.D.=10.9). Most respondents’ educational level corresponded to the Dutch HBO (higher applied education, 39.5%), followed by MBO (senior secondary vocational education and training, 27.2%) with the majority having either an economics or business related educational background (37%) or technical (17.3%). Considering the diversity of the sample, it was quite striking that the greater part of the respondents had been working only between 0 and 5 years in their current company (60.5%) and between 1 and 5 years in their current function (59.3%). In total, 118 individuals belonging to 13 companies located in The Netherlands were approached of which 81 responded the survey (68.6% response rate).

The data was collected through an online self-rated questionnaire. Each respondent received a personal code to enter the online survey, assuring the high confidentiality of their answers.

Measures

The items measured in the survey were taken and/or modified from published scales.

Work intrinsic motivation. The intrinsic motivation factor of Tremblay et al.’s (2009) work

9

Perceived support for innovation. This eight item scale was used to measure employees’

perceived support for innovation. Four of its items were taken from Siegel and Kaemmerer’s (1978) support for innovation scale (e.g. “Assistance in developing new ideas is readily available”, “People in this organization are always searching for fresh, new ways of looking at problems”). The other four items were taken from the support for innovation factor of Anderson and West’s (1998) Team Climate Inventory (e.g. “Members of this organization provide and share resources to help in the application of new ideas”, “People in this organization provide practical support for new ideas and their application”). Since Anderson and West’s (1998) scale was defined to measure team level attributes, I modified the items using the words “organization” or “people in this organization” instead of “team” or “team members”, respectively. These items were self-rated on a 5-point Likert scale anchored by 1=“Totally disagree” and 5=“Totally agree”. The Cronbach’s alpha for support for innovation was .91.

Innovative behavior. This variable was measured using Janssen’s (2000) innovative work

behavior scale. It was composed by three items measuring idea generation, three referring to idea promotion, and three relating to idea realization behaviors, where individuals had to self-report the presence of different work innovative behaviors (e.g. “Generate original solutions for problems”, “Mobilizing support for innovative ideas”). These items were rated by using a 5-point Likert scale anchored by 1=“Not at all” and 5=“Very much”. The Cronbach’s alpha for innovative behavior was .88.

Control variables. The socio-demographic variables age and level of education were treated as

control variables in order to isolate any potential influence on the relationships of interest. Organizational tenure (in months) was also included as a longer tenure is expected to lead to more commitment to the status quo and therefore hinder innovation (Bantel & Jackson, 1989). However, after analyzing the sample’s organizational tenure, this control variable seemed to be more valuable for isolating the possible effect that the opposite, a short tenure, might have on innovative behavior.

Data Analysis

Exploratory factor analysis. Before testing my hypotheses I performed an exploratory factor

10 for sphericity, the three factors arose with significant good fit index (χ2 [190]=876.23, p=.00). Thus it was possible for me to confirm the validity of the three measures I had applied.

Moderation analysis. I performed a three-step hierarchical multiple regression with the objective

of testing the hypotheses I had previously presented. In the first step, I searched for evidence on how much variance of an individual’s innovative behavior is explained by the control variables (age, level of education and organizational tenure). In step 2, I added and searched for the variance explained by the independent variables work intrinsic motivation and perceived support for innovation. In the last step, I added a product term calculated between work intrinsic motivation and perceived support for innovation with the purpose of testing my interaction hypothesis. After obtaining initial support for the interaction hypothesis, I later performed a post-hoc analysis, with the goal of finding support for the effect that intrinsic motivation has on innovative behavior for different levels of support for innovation.

Common method variance analysis. One concern that arises from the fact that I measured all the

11 RESULTS

The means, standard deviations and correlations for the variables relevant for this research are shown in Table 1.

TABLE 1

Mean (M), standard deviation (SD), and correlations matrix for the study variables

Variable M SD 1 2 3 4 5 6 1. Age 39.74 10.96 - 2. Educational level 6.09 1.75 -.25* - 3. Organizational tenure (months) 93.51 104.21 .49** -.21 - 4. Intrinsic motivation 3.77 .69 -.18 -.08 .05 - 5. Support for innovation 3.37 .72 -.29** -.09 .03 .45** - 6. Innovative behavior 3.44 .57 -.01 -.07 .14 .28* .14 - ** p < .01, * p < .05

When looking at the previous table some significant correlations arise, such as between age and organizational tenure (r=.49; p<.01), age and perceived support for innovation (r=-.29; p<.01), intrinsic motivation and perceived support for innovation (r=.45; p<.01) and age and educational level (r=-.25; p<.05). However, and although some of these correlations could have been expected, none of them is considered substantial (r>.60) and therefore multicollinearity cannot be regarded as a problem within this model.

12 TABLE 2

Results of the three steps hierarchical regression analysis Innovative Behavior Variables Step 1 (b) Step 2 (b) Step 3 (b) Age -.05 .00 -.01 Educational Level .05 .07 .06 Organizational Tenure .11 .08 .09 Intrinsic Motivation .15** .19***

Support for Innovation .02 .01

Interaction variable .13**

R2 .04 .11 .16

∆R2 .04 .07* .05**

*** p < .01, ** p < .05, *p<.10

When looking at the coefficients of the regression, it can be seen that all control variables have non-significant and quite low coefficients, with only organizational tenure showing a higher coefficient (b=.11, n.s). Nevertheless, considering that it is not significant and that the coefficients in this step do not contribute much to the variance of the model (∆R2=.04, n.s.), it is possible to say that it has no relevant effect on the dependent variable.

13 Step 3 provides a further significant explanation of the variance in the dependent variable in an extra 4.6% (∆R2=.05, p<.05) thanks to the moderating effect of perceived support for innovation on the relationship between intrinsic motivation and innovative behavior. The interaction coefficient proves to be positive and significant (b=.13, p<.05), which provides support for the expected effect and thus for Hypothesis 3. Thus, when there is a high perceived support for innovation, the positive effect of work intrinsic motivation on innovative behavior is even higher.

I have so far found support for the existence of a significant effect of the moderator support for innovation on the relationship between my predictor and my dependent variable, or in other words that the effect of intrinsic motivation on innovative behavior varies at different levels of support for innovation. In order to test whether the relationship between intrinsic motivation and innovative behavior is significant for high levels of support for innovation (Holmbeck, 2002) I have performed a post-hoc probing of the moderation effect of support for innovation. The illustration is shown in Figure 2.

FIGURE 2

Post-Hoc Probing of Support for Innovation’s moderation effect

3 3,5 4

Low Intrinsic Motivation High Intrinsic Motivation

In n o v a ti v e B eh a v io r

Low Support for Innovation

High Support for Innovation

14 significantly different from zero. This then provides full support for my Hypothesis 3 which suggests that when perceived support for innovation is high, innovative behavior tends to be higher at higher levels of intrinsic motivation (b=.28, p<.01). On the contrary, for low levels of perceived support for innovation, innovative behavior tends to be lower at lower levels of intrinsic motivation, but with no statistical significance (b=.10, n.s.).

DISCUSSION

The purpose of this study was to explore the effect that intrinsic motivation - as a personal characteristic - and perceived support for innovation - as a work environment factor - have on an individual’s innovative behavior. Although a lot of research has been performed on the relationship of these variables with creativity, today’s organizational needs go beyond just the development of new ideas. Particularly due to the changing and depressed economy observed during the last years, it is now when innovation proves more essential for organizations, in their attempt to adapt to changing conditions (Dervitsiotis, 2010).

15 by an employee is limited solely to his or her work boundaries or job domain, the potential for other colleagues to resist the change is quite low. On the contrary, if the innovation has a larger scale and involves more people in the organization, there will be more resistance potential against the innovative ideas. In summary, the more “radical rather than incremental, core-directed rather than peripheral, and large-scale rather than small-scale in nature” (Janssen et al., 2004, p. 132), the more potential opposition the innovative employee will face when wanting to implement an idea. Based on the above, it is possible to argue that in order for the innovation to have more possibilities to be implemented, it would be needed for the innovative employee to first, be able to recognize the problem that is hampering the implementation of the idea and second, find a way to involve the resisting colleagues’ views and interests in the implementation process (Janssen et al. 2004). This however, implies that when faced with resistance, the innovative employee does not only need to show innovative behavior, but also needs considerable “cognitive and socio-political efforts” (Janssen, 2004, p. 201), which makes the implementation of ideas a much more demanding and thus challenging process for both the employee and the work group as a whole.

16 organizational climate of support for innovation is not perceived as such, producing a high variance in the behavior of different employees and thus work teams.

17 Strengths, Limitations and Future Research

One of the strong points of this study is the breadth of diversity of my sample. Although all companies are located in The Netherlands, the sample includes both national and multinational organizations. Furthermore, the sample includes organizations of various sizes and levels of innovativeness. The employees in turn, belong to different functions and businesses. The results obtained by using this diverse sample thus allow me to draw highly generalizable results, which make the findings useful for any kind of company. However, the size of the sample (81 individuals) may have been insufficient to reach a satisfactory level of reliability.

18 perception of support for innovation when it is measured as an organizational variable versus a team variable. The researcher will also be able to evaluate if there is indeed high variance between teams belonging to the same organization. In other words, it would be possible to identify whether individuals belonging to the same team perceive a similar level of support for innovation coming from within the team and a different level of support for innovation coming from the organization.

Practical Implications

The outcomes of this research are most important for organizations interested in continuously innovating, including not only product innovative companies but organizations aiming at improving their processes and procedures, with the goal of becoming every time more efficient and competitive.

19 and Gilson (2004) in turn, address the issue of keeping employees motivated by suggesting to place an intrinsically motivated employee in a job where she or he fits the “task demands and…[the] work context” (p. 46). Researchers also suggest matching these innovative employees with autonomous (Sauermann & Cohen, 2010) and enriched (Farr, 1990) jobs or jobs that require highly creative individuals (Shalley & Gilson, 2004).

After intrinsically motivated employees have been selected and placed in jobs matching their motivation, and in order to enhance their current innovative behavior (as my model suggests), it is important that organizations provide clear and significant support for innovation. Jiménez-Jiménez and Sanz-Valle (2008) propose in their study that some HRM practices that support innovation within organizations are for example “flexibility in job definition, autonomy, employee participation, communication, teamwork, training…” (p. 1216). These practices, together with support from the executive (Chandler et al., 2000) and the provision of time and resources to develop and implement new ideas (Amabile, 1997) provide the foundation for employees to behave innovatively. It is important to remember that not only practical support has to be present, but also the clear communication of the practices and their intended outcomes. If not widely and properly communicated within and throughout the different organizational levels, these supportive practices could not be perceived by the employees and therefore could become inefficient or worse, a waste of valuable resources.

Conclusion

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26 APPENDIX 1

Factor Analysis - Rotated Component Matrix

Component

1 2 3

This organization is always moving toward the development of new answers .753

Assistance in developing new ideas is readily available .786

This organization is open and responsive to change .775

People in this organization are always searching for fresh, new ways of looking at .753 In this organization we take the time needed to develop new ideas .703 People in this organization co-operate in order to help develop and apply new ideas .796 Members of this organization provide and share resources to help in the application of .800 People in this organization provide practical support for new ideas and their application .842

Because I derive much pleasure from learning new things. .757

For the satisfaction I experience from taking on interesting challenges .764 For the satisfaction I experience when I am successful at doing difficult tasks. .694

Transforming innovative ideas into useful applications. .737

Introducing innovative ideas into the work environment in a systematic way. .652

Evaluating the utility of innovative ideas. .512

Creating new ideas for improvements. .707

Searching out new working-methods, techniques, or instruments. .834

Generating original solutions for problems. .674

Mobilizing support for innovative ideas. .735

Acquiring approval for innovative ideas. .764

27 APPENDIX 2

Results of the hierarchical regression analysis for the

Post-Hoc Probing of Support for Innovation’s moderation effect (+1 SD) Innovative Behavior Variables Step 1 (b) Step 2 (b) Step 3 (b) Age -.05 .00 -.01 Educational Level .05 .07 .06 Organizational Tenure .11 .08 .09 Intrinsic Motivation .15** .28***

Support for Innovation (+1 SD) .02 .01

Interaction variable .13**

R2 .04 .11 .16

∆R2 .04 .07* .05**

28 APPENDIX 3

Results of the hierarchical regression analysis for the

Post-Hoc Probing of Support for Innovation’s moderation effect (-1 SD) Innovative Behavior Variables Step 1 (b) Step 2 (b) Step 3 (b) Age -.05 .00 -.01 Educational Level .05 .07 .06 Organizational Tenure .11 .08 .09 Intrinsic Motivation .15** .10

Support for Innovation (-1 SD) .02 .01

Interaction variable .13**

R2 .04 .11 .16

∆R2 .04 .07* .05**