Incentive framing and problem recognition:
The mediating role of regulatory focus
Master thesis, Human Resource Management & Organizational Behavior Department University of Groningen, Faculty of Economics and Business
July 1, 2018 STEFAN HANEKAMP Student number: 3253422 Netelbosje 2, Postbus 800, 9700 AV Groningen, The Netherlands
e-mail: s.j.hanekamp@student.rug.nl
Supervisor/ university E.A. van der Lans Supervisor/ field of study
Human Resource Management & Organizational Behaviour
ABSTRACT
Problem recognition, the first phase of the creative problem-solving process, is crucial for organizations to be successful. Creative problem solving has been a popular topic of many studies. Nevertheless, the majority focused on idea generation, but little is known about how, why and when problems are being recognized. Problem recognition influences the sequential phases in the creative problem-solving process. Therefore, the present research investigates the role of incentive framing and the mediating role of regulatory focus (i.e. promotion and prevention focus) on problem recognition. To test these relationships a laboratory experiment was conducted (N = 285 students). Our findings show that positive incentive framing is not associated with increased recognition of positive informational cues (e.g., problem cue) through employee promotion focus. Also, negative incentive framing is not associated with increased recognition of negative problem cues through employee prevention focus. Lastly, we proposed that personality traits moderate the relationship between regulatory focus (i.e. promotion and prevention focus) and problem recognition. Nevertheless, our findings show that only extraversion influences the interaction between regulatory focus (i.e., promotion focus) and problem recognition. The theoretical and practical implications will be discussed at the end of this study.
INTRODUCTION
“The first step in solving a problem is to recognize that it does exist”
– Zig Ziglar.
Zig Ziglar is a famous America author, salesperson, and motivational speaker in the United States. His famous one-liner represents an important aspect in today’s life. Today, every person deals with complex and ill-structured problems in their working and private life. Aproblem is the gap between the present state and the desired or undesired alternative state (Basadur, Ellspermann, & Evans, 1994; Simon & Newell, 1971). Many researchers have investigated the processes of how to deal with ill-structured problems (Brophy, 1998; Herman & Reiter-Palmon, 2011; Liu, Jiang, Shalley, Keem, & Zhou, 2016; Pretz, Naples, & Sternberg, 2003; Reiter-Palmon & Robinson, 2009). However, most researchers focused on idea generation for solving problems, whereas little is known about the problem recognition process (Herman & Reiter-Palmon, 2011; Pretz et al., 2003).
engage in the creative problem solving process is still unclear (Higgins, 1997; Liu et al., 2016; Shah et al., 1998). Furthermore, individuals differ in the way they recognize problems, because they respond differently to informational cues (e.g., problem cue) (Ciuchta, Letwin, Stevenson, & McMahon, 2016). Therefore, we argue that it is utmost important to improve the overall understanding of how we can motivate and regulate employees to engage in problem recognition.
The use of incentives is still a widely used method to motivate and regulate employees’ behavior towards their goal attainment (Higgins, 1997; Shah et al., 1998). Incentives can be framed differently and two ways are known as accomplishment incentive and safety incentives (Higgins, 1997, 1998; Shah et al., 1998). Based on the incentive framing theory and Regulatory Focus Theory, we argue that incentive framing (i.e., accomplishment and safety) will influence the problem recognition process of an individual through their regulatory focus. Specifically, we propose that accomplishment incentives trigger individuals towards a state of eagerness (i.e., promotion focus) which influences their perspective in terms of opportunities towards the problem recognition process. In contrast, safety incentives trigger individuals’ vigilance state (i.e., prevention focus) whereby their perspective will fixate on threats and harmful changes of the current situation in the problem recognition process that must be avoided (Higgins, 1997, 1998; Shah et al., 1998).
promotion focus and problem recognition and might weaken the relationship between prevention focus and problem recognition.
In this study, we propose that incentive framing will influence the way employees recognize problems through the regulatory focus they adopt. In addition, we propose that the Big Five personality traits will moderate the relationship between regulatory focus and problem recognition. Thereby, this research aims to contribute to the literature on creative problem solving. Especially, this study will contribute to the extant theory about problem recognition and how employees can be regulated differently in this process in relation to different outcomes (i.e., opportunities and threats) through their regulatory focus (i.e., promotion focus and prevention focus). Furthermore, this research contributes to the literature on the use of incentive framing and its relationship with regulatory focus and problem recognition. First, previous research has shown that incentive framing influences the regulatory focus individuals adopt (Higgins, 1997). However, the strategic inclination an individual has through the regulatory focus has been investigated in several processes of the creative solving process (i.e. problem construction (Reiter-Palmon et al., 1998); idea generation (Friedman & Förster, 2001; Lam & Chiu, 2002); and idea evaluation (Herman & Reiter-Palmon, 2011). However, about the direct relation with problem recognition little is known. Last, this research contributes to the literature on the Big Five and its effect on the relationship between an individual’s regulatory focus and problem recognition. Previous research focused on personality traits as antecedents of Regulatory Focus Theory (Lanaj et al., 2012) or argued that traits creativity enhances the ability to successful problem solving (Pretz et al., 2003). Nevertheless, little is known about the influence of personality traits on the regulatory focus an individual has in the problem recognition process.
organization. In general, when putting more emphasis on the earlier stage of the creative problem-solving process (i.e., problem recognition), organizations can improve the quality and efficiency of their problem-solving process.
This paper will be structured in the following way. First, we will discuss the key definitions of incentives framing, Regulatory Focus Theory, problem recognition and the Big Five personality traits. Second, the relationships between the definitions will be explained through hypotheses and a conceptual model (appendix A). Third, the method and results will be presented. Last, the findings, implications, and limitations and further research directions will be discussed.
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THEORETICAL BACKGROUND Incentive framing and Regulatory Focus Theory
The use of incentives is still a widely used method to motivate employees in organizations. Shah et al. (2008) define two different types of incentives that are framed differently, also known as incentive framing: accomplishment (gain) and safety (loss). An accomplishment incentive is framed with the underlying strategy to focus on progress and gains that matches with the desired goal. In contrast, safety incentives are framed in a way whereby mismatches are emphasized. Previous research has different conclusions about the use of incentives and the effectiveness to motivate individuals (Huber, 1985; Locke, Bryan, & Kendall, 1968 Pritchard & Curts, 1973). An important issue about the use of incentives is the congruence with the goals and/or needs of an individual (Brendl & Higgins, 1996; Shah et al., 1998; Vroom, 1964). The selective responsivity and/or goal strength, whereby a type of incentive can regulate the stimulation of an individual to take action, plays an important role (Higgins, 1997, 1998; Shah et al., 1998). Through incentive framing, the underlying strategy to goal attainment can be influenced, and therefore, might be the regulatory system of an individual.
explains in what way individuals are motivated, it concerns the source and strength of their emotional experience, and can give a clarification for their attitude and behavior (Higgins, 1997). The theory is based on the ‘hedonic principle’ which states that people want to approach pleasure and avoid pain. Nevertheless, Higgins (1998) states that the hedonic principle only explains that individuals have different motivational principles but does not clarify the operationalization. Regulating the pleasure and pain can be explained by Regulatory Focus Theory that distinguishes two different regulatory systems: promotion focus and prevention focus. Individuals with a promotion focus are more focused on growth, have a positive perspective on reaching their goals, frame their end states into gains or non-gains and create a strategy by making progress and achieve matches. The state that an individual obtains through promotion focus is a state of eagerness. Prevention focused individuals frame their end states in losses and non-losses and create a strategy by being cautious and avoid mismatches (Higgins, 1997, 1998). Prevention focused individuals are in a state of vigilance. The difference between promotion and prevention foci is that promotion focused individuals want to make progress towards a desired end state and prevention focused individuals want to avoid the undesired end state (Higgins, 1998). Regulatory Focus Theory (Higgins, 1997, 1998) relates ideal self-guide with promotion focus and ought self-guide with prevention focus. A regulatory system of an individual is the process whereby the individual searches for alignment with his/her end state (i.e., goals and needs). The desired end-states of the self-discrepancy theory (Higgins, 1987), also known as: ‘self-guides’, are defined in two different types: ideal self-guide and ought self-guide (Higgins, 1997, 1998). The ideal self-guide is related with end states that represents hopes, wishes, and aspirations that individuals have, or others have for them. Ought self-guide can be duties, obligations, and responsibilities that are important in the behavior of the individual. Furthermore, Higgins (1997, 1998) distinguishes two different levels of regulatory focus: chronic and situational level. The chronic regulatory focus is inhibited in the individual and developed over a long period of time, whereas the situational regulatory focus initiates on a short-term event that triggers an individual to obtain a self-regulation system.
strengthens the underlying strategy to avoiding mismatches. Markus and Wurf (1987) introduced the ‘working self-concept’ which explains that someone’s chronic regulatory focus can shift due to a response to a strong problem cue. This concept might be applicable to the use of incentive framing. When a prevention focused individual is exposed to a strong accomplishment incentive framing, a shift might occur in the chronic regulatory focus on a temporary basis. The shift from chronic promotion focus could also occur when an individual who has a chronic prevention focus is exposed to a strong accomplishment incentive. We argue that the use of accomplishment incentives might lead to an eagerness state (i.e., promotion focus) and the use of safety incentives might lead to a vigilance state (i.e., prevention focus) (Higgins, 1997, 1998; Shah et al., 1998). In turn, we propose that the regulatory focus of an individual might influence the sensitivity of attention towards problem cues in his/her environment (Ciuchta et al., 2016). We suggest that incentive framing might influence the problem recognition of an individual (i.e., opportunities and threats) in their environment through his/her regulatory focus (i.e., promotion focus and prevention focus).
Problem recognition
it is most likely to have a creative solution, because the creation of the problem is executed in an unconventional way of thinking. Problem recognition only refers to problem discovery and problem creation. Nevertheless, given that presented problems do require to be recognized, this does not occur in the process of an individual when it is presented to them (Pretz et al., 2003). Furthermore, as stated, a problem can be defined as a the gap between the present state and the desired or undesired alternative state (Basadur et al., 1994; Simon & Newell, 1971), and that gap can be classified into two categories (i.e., well-structured and ill-structured problems) (Pretz et al., 2003). Well-structured problems have a clear goal, solution path, and the information about the obstacles is known. In general, discovering a solution for a well-structured problem is not complicated, because it can be divided into more smaller problems. An example of a well-structured problem could be a mathematical exercise which can be divided in several smaller problems and calculated in a structured way. Compared to well-structured problems, finding a solution for structured problems is a more complex task. An example for an ill-structured problem can be creating a new company strategy because there is no clear structure to solve this problem and it can change constantly. Ill-structured problems have an unclear solution path and the (un)desirable end state is vague and can be interpreted in different ways (e.g., opportunities vs. threats). This interpretation depends on the perspective of the problem solver and has an effect on setting the desired and undesired state and the path towards achieving these states (Pretz et al., 2003; Reiter-Palmon & Illies, 2004). Therefore, we will focus in this study on ill-structured problems, because the problem recognition stage is essential for dealing with ill-structured problems and will have a positive impact on the later stages of the creative problem solving process in terms of accuracy and efficiency (Pretz et al., 2003).
regulatory focus of an individual might influence the sensitivity of attention towards the same problem cues in his/her environment (Ciuchta et al., 2016). In addition, Pretz et al. (2003) acknowledge that individual differences are different outcomes in the problem-solving process. Therefore, we suggest that employees regulatory focus affects the problem recognition process. More specifically, an employee that has a promotion focus will be more sensitive towards opportunities when interpreting a problem cue. Promotion focused employees want to fill the gap between the current state and the desired end state by making progress and look for matches to achieve this (Higgins, 1997). In contrast, employees who are prevention focused will be more sensitive towards threats when interpreting a problem cue. Prevention focused employees want to move away from the undesired state and want to be safe in the current state by avoiding mismatches (Higgins, 1997). Based on this, we propose that incentive framing (i.e. accomplishment or safety) will influence the problem recognition process through individuals’ regulatory focus. Accomplishment incentives will result in employee recognition in terms of opportunities through employee promotion focus. Safety incentives will result in employee recognition in terms of threats through employee prevention focus.
Hypothesis 1: Incentive framing influences an employee’s problem recognition through employee regulatory focus. Specifically, positive incentive framing (i.e., accomplishment incentive) results in recognizing problems in terms of opportunity through employee promotion focus (H1a), whereas negative incentive framing (i.e., safety incentive) results in recognizing problems in term of threats through employee prevention focus (H1b).
Moderating effect of the Big Five personality traits
Besides the potential influence of incentive framing on problem recognition through the individual’s regulatory focus, individual traits might have an effect on someone’s regulatory focus. Wallace and Chen (2006) state that the work-specific regulatory focus is caused by personality and situational events. Differences in personality can cause a difference in attaining a promotion focus or a prevention focus state on situational level. This can be explained by the interaction between the regulatory focus on chronic and situational level (Haws, Kelly, Bearden, & Dholakia, 2012). Depending on the strength of the stimuli from the environment to attain a motivational state (i.e., promotion and prevention) and the strength of an individual’s regulatory on chronic level (i.e., personality), will lead to attaining the motivational state that is more present at that moment. Therefore, we want to investigate if personality traits (i.e., Big Five Personality Traits) can affect an individual’s situational regulatory focus which might result in obtaining a different perspective of an individual during the problem recognition process. More specifically, whether personality traits will strengthen or weaken the relationship between an individual’s regulatory focus and the problem recognition process in terms of recognizing opportunities and threats.
situational variables on the self-regulation of individuals. They concluded that situational and personal variables indeed interact with each other and influence the regulatory system of the individual. In addition, Higgins et al. (2008) stated that differences in intensity of different traits serve as strategic channels for the regulatory focus. We use the Big Five Personality Traits (Big Five) to examine the influence of personality traits on the relation between an individual’s regulatory focus and his/her problem recognition process. The Big Five is a valuable taxonomy of personality (Barrick & Mount, 1991).
The Big Five distinguishes five different personality traits: openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism (Rothmann, & Coetzer, 2003). We decided to focus on conscientiousness and extraversion and therefore the other traits are excluded. Individuals who score high on conscientiousness are proactive in planning, organizing, and accomplishing tasks. These individuals have a high amount of self-control, discipline, and are determined. Nevertheless, high scores on conscientiousness can also have a negative side and those individuals can be seen as annoying punctiliousness, display workaholic and perfectionistic behavior (Rothmann & Coetzer, 2003). In addition, extraverted persons have a high energy level and a positive perspective in life. Individuals with a higher score on extraversion are very active, social, assertive, and like to talk with other persons. The opposite of extraverted individuals are introverted individuals who tend to be more independent, less need of social contact, and silent (Rothmann & Coetzer, 2003).
anxiety. Therefore, high levels of extraversion will increase the eagerness state of the individual who is promotion focused. The eagerness state will increase, because the behavior of extraverted people supports the eagerness state by jumping in to situation, being proactive, and optimistic to move towards the desired end state. The enhancement of the eagerness state increases the perspective to positive information cues in recognizing problems that are translated into opportunities. In relation to prevention focus, extraversion will decrease the state of vigilance and will lead to a less sensitive perspective towards negative problem cues in the environment. This can be explained by that excitement-seeking is a facet of extraversion which tends to be taking risks. In contrast, prevention focused individuals are in a state of vigilance and want to avoid risk. To conclude, we expect a moderation effect of conscientiousness and extraversion in the relationship between regulatory focus (i.e. promotion focus and prevention focus) and problem recognition. Based on this expectation, we propose the following hypotheses:
Hypothesis 2a: Conscientiousness moderates the relationship between promotion focus and problem recognition such that when conscientiousness is high, the relationship between promotion focus and problem recognition will be strengthened.
Hypothesis 2b: Conscientiousness moderates the relationship between prevention focus and problem recognition such that when conscientiousness is high, the relationship between promotion focus and problem recognition will be strengthened.
Hypothesis 2c: Extraversion moderates the relationship between promotion focus and problem recognition such that when extraversion is high, the relationship between promotion focus and
problem recognition will be strengthened.
Overall, we want to examine if incentive framing (i.e. accomplishment or safety) will influence the problem recognition process through the individual’s regulatory focus whereby accomplishment incentives will result in employee recognition in terms of opportunities through employee promotion focus and safety incentives will result in employee recognition in terms of threats through employee prevention focus. Additionally, we expect a moderation effect of conscientiousness and extraversion in the relationship between regulatory focus (i.e. promotion focus and prevention focus) and problem recognition. Based on these effects, hypothesis 3 is stated as follows:
Hypothesis 3: The indirect relationship between incentive framing and employee problem recognition is mediated by the employee’s situational regulatory focus (i.e., promotion focus and prevention focus) and moderated by conscientiousness and extraversion for the path from the employee’s situational regulatory focus (i.e., promotion focus and prevention focus) to employee problem recognition.
METHODOLOGY Participants and design
To test the hypotheses, a lab experiment among two-hundred-and-eighty-five undergraduate students at the Faculty of Economics and Business of the University of Groningen was conducted. The students received a compensation (course credits or money: between € 0, - and € 2, -) for participation. The study was conducted in English to avoid exclusion of participants of another nationality. At first, participants received a brief explanation that they worked in a company and that we were curious about their personal preferences regarding reaching their goals in specific situations. The participants were randomly assigned to one of the two conditions (accomplishment incentive vs safety incentive).
Administration (15.1%), International Business (20.9%) Economics and Business Economics (25.3%), Human Resource Management (6.2%), Marketing (7.6%), Psychology (4.0%), and others (20.9%). Lastly, 14.2% of the participants study in their first year of their Bachelor, 33.8% in their second year, 25.3% in their third year, 21.3% in their first year Masters, and 5.3% in their second-year masters. Procedures
to rate the eight different signals on importance and they had to choose which signals they wished to interpret. When they had chosen the signals, participants got 10 minutes to give their interpretation.
After reading this message, participants had to give a summary of the message in a textbox and they were forwarded to the same message, so they could read it again. Next, the participants rated the signals using a 5-point scale (1 = very unimportant to 5 = very important) and made a choice between the signals for the interpretation exercise. The next message gave an explanation about the interpretation exercise with a neutral signal and four interpretation examples (two promotion focus and two prevention focus). With the interpretation exercise participants were asked to write their interpretations about the neutral signals that they had chosen. After this exercise, participants were asked to fill in the measures of Situational Regulatory Focus, task liking, Chronic Regulatory Focus, Big Five Personality Traits), demographics, and the realness of the manipulation
After finishing the five questionnaires, participants were asked to fill in their demographic information. Furthermore, participants rated the realness of the incentive system using a 5-point Likert scale (1 = fake to 5 = real). At the end of the experiment participants were debriefed and thanked for participation. Finally, they were asked to return to the experimenter and received their bonus.
Manipulation
Incentive framing. Incentive framing was manipulated based on the experiment of Shah et al.
(2009). Participants were randomly assigned to the positive incentive framing manipulation or the negative incentive manipulation. In the positive incentive framing manipulation (N =121) participants were told that they initiate with € 0, - and for every point they receive this amount is increased with € 0.25, which implies that performing well would increase their reward with a maximum amount of € 2, -. In the negative incentive framing condition (N =104) participants started with an amount of € 2, - and for every point that they lose, their rewards would be decreased with € 0.25, -. This implies performing poorly would decrease their award to € 0, -.
Measures
Situational Regulatory Focus (appendix C): To measure situational regulatory focus, we used
questions for promotion focus and three questions for prevention focus. Participants rated each statement based on the following instruction: “While choosing and interpreting the signals …”: Promotion focus was measured by three items: 1) “I enthusiastically embraced all opportunities.” 2) “I was eager to use all possible ways or means.”, and 3) “I was eager to take all necessary actions.” (α = .80). Promotion focus was measured by three items: 1) “I was concerned with making mistakes.”, 2) “I was cautious about going down the wrong road.”, and 3) “I was vigilant and played it safe.” (α = .77).
Big Five personality traits (appendix D): To assess the Big Five personality traits, we employed
the scale items developed by John and Srivastava (1999) using a 7-point Likert scale (1 = strongly disagree to 7 = strongly agree), participants rated each marker, five per trait, of the Big Five factors based on the following instruction: “I see myself as someone who is …”. Agreeableness was measured by five items: 1) Sympathetic, 2) Kind, 3) Understanding, 4) Warm, and 5) Gentle (α = .82). The scale for conscientiousness included the following five items: 6) Organized, 7) Planner, 8) Thorough, 9) Efficient, and 10) Responsible (α = .73). Neuroticism was assessed by five items: 11) Tense, 12) Anxious, 13); Nervous, 14) Moody, and 15) Worried (α = .82). The extraversion scale was composed of five items: 16) Assertive, 17) Active, 18) Energetic, 19) Outgoing, and 20) Talkative (α = .81). Last, openness to experience was measured by the following five items: 21) Wide interests, 22) Fantastical, 23) Intelligent, 24) Original, and 25) Insightful (α = .64).
Problem recognition. To measure problem recognition, the eight neutral signals that were
selected and interpreted per participant were analyzed and categorized in opportunities and threats. Signals that tended to be ambiguous were analyzed a second time and categorized in opportunities, threats, neutral tended to opportunity, neutral tended to threats, not interpretable, and need more information. The signals that were not interpretable, needed more information, tended to opportunities and threats were deleted, because this did not influence the results for the hypotheses. Afterwards the variable problem recognition was computed by dividing the amount of opportunities of a signal by the total amount of interpretations a participant had given per signal.
Control variables
statements, using a 5-point Likert scale (1 = strongly disagree to 7 = strongly agree) in total, nine questions for promotion focus (α = .80) and nine questions for prevention focus (α = .89). Previous research suggested that gender, age, nationality, and Regulatory Focus (chronic) are the most important variables that can influence situational regulatory focus and problem recognition. Thus, these variables were included as control variables in further analyses to exclude other effects. (Haws et al., 2012; Henning et al., 2009; Hmieleski & Baron, 2008; Wallace & Chen, 2006)
Descriptive analyses
Table 1 (appendix B) provides the descriptive statistics and intercorrelations including means, standard deviations, and correlations. First, the relationship between incentive framing1 and problem recognition is positively, but not significantly, correlated (r = .04, p > .10). Second, the relationship between incentive framing and situational promotion focus was positively, but insignificantly correlated (r = .05, p > .10), whereas the relationship between situational incentive framing and prevention focus was negatively correlated and not significant (r = -.07, p > .10). Lastly, the relation between situational promotion focus and problem recognition was positively correlated and not significant (r = -.07, p > .10), whereas situational prevention focus was positively correlated with problem recognition and the effect was also not significant (r = .10, p > .10). Conscientiousness was significantly and positively correlated with situational promotion focus (r = .16, p < .05), and was positively and highly significantly correlated with problem recognition (r = -.21, p < .01).
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Hypotheses testing
First, a Levene’s test was performed to check the main effect between incentive framing and problem recognition. The Levene’s test indicated equal variances (F = 1.88, p > .10). Afterwards, an independent
1 safety incentive framing was coded as 0 and accomplishment incentive framing was coded as 1. Afterwards,
t-test checked the results between the participants that were manipulated by the accomplishment incentive and safety incentive framing. There was not a significant difference in the scores for positive incentive framing (M = .62, SD = .24) and negative incentive framing (M = .60, SD = .21), t(223) = -.545, p > .10.
To test the hypotheses, we used the PROCESS macro by Hayes (2013). All products are mean centered before performing the analyses. We performed three analyses: 1) we regressed incentive framing on problem recognition2 with situational regulatory focus as a mediator between this relation while we controlled for age, gender, nationality, and chronic regulatory focus. We repeated the above-mentioned model with 2) conscientiousness as a moderator on the relation between situational regulatory focus and problem recognition and afterwards we performed the same regression with 3) extraversion as a moderator on the same relationship. Table 2 (appendix A) gives an overview of the results of the regression analyses.
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Incentive framing. situational regulatory focus and problem recognition (Hypothesis 1). The first hypothesis stated that incentive framing influences employee problem recognition through employee regulatory focus. To be more specific, Hypothesis 1a stated that positive incentive framing (i.e., accomplishment incentive) results in problem recognition in terms of opportunities through employee promotion focus. The relationship between incentive framing and situational promotion focus was positive, but not significant (β = .07, t(.432) = .15, p > .10). Furthermore, the relationship between situational promotion focus and problem recognition was negatively related, and the effect was marginally significant (β = -.02, t(-1.543) = .01, p < .10). Unexpectedly, the direct effect of incentive framing on problem recognition is positively related, but not significant (β = .01, t(.382) = .03, p > .10). Lastly, we did not find a significant mediation effect with problem recognition as the dependent variable (β = -.00. CI = (-.01, .00)). Therefore, H1a was not supported.
Second, Hypothesis 1b stated that negative incentive framing (i.e., safety incentive) results in the perspective towards the problem in term of threats through employee prevention focus. The relationship between incentive framing and prevention focus was negative and not significant (β = -.25, t(-1.504) = .17, p > .10). Additionally, situational prevention focus was positively related with problem recognition, but not significant (β = .01, t(1.112) = .01, p > .10). Furthermore, the mediation effect of situational prevention focus with problem recognition was negatively and not significant (β= -.00. CI (-.02. .00). Therefore, hypotheses H1b is not supported.
Conscientiousness and extraversion as moderators (hypothesis 2). Hypothesis 2a stated conscientiousness moderates the relationship between promotion focus and problem recognition such that when consciousness is high, rather than low, the relationship between promotion focus and problem recognition will be strengthened. However, we did not find evidence for this moderation effect. The interaction between promotion focus and conscientiousness was negatively and not significant (β = -.01, t(-.488) = .02, p > .10). Therefore, H2a is not supported.
Hypothesis 2b stated that conscientiousness moderates the relationship between prevention focus and problem recognition such that when consciousness is high. the relationship between promotion focus and problem recognition will be strengthened. Nevertheless, our evidence did not show a significant interaction between prevention focus and conscientiousness (β = .02, t(1.402) = .01, p > .10). Therefore, H2b is not supported.
Hypothesis 2c stated that extraversion moderates the relationship between promotion focus and problem recognition such that when extraversion is high, the relationship between promotion focus and problem recognition will be strengthened. Nevertheless, H2c is not supported. The interaction effect of promotion focus and extraversion was negatively and partially significant (β = -.03, t(-1.854) = .01, p < .10). Therefore, H2c is not supported.
Hypothesis 3 stated that incentive framing (i.e., accomplishment and safety) results in an employees’ problem recognition in terms of opportunities and threats through an employees’ regulatory focus (i.e., promotion and prevention) whereby the personality traits (i.e., conscientiousness and extraversion) moderates the relationship between regulatory focus (i.e., promotion and prevention) and problem recognition (i.e., opportunities and threats). Following from above mentioned results we did not find a moderated mediation effect. Therefore, H3 is not supported. Additionally, we conducted a mediation regression to check the direct effect of an employees’ regulatory focus (chronic) on problem recognition, which is mediated by an employees’ regulatory focus (state). This analysis is conducted, because we wanted to exclude the assumption that only our manipulation (i.e., incentive framing) was ineffective.
Supplementary analyses
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DISCUSSION
In the present research, we suggested that the relationship between incentive framing (i.e., positive and negative) and problem recognition (i.e., opportunities and threats) is mediated by situational regulatory focus (i.e., promotion focus and prevention focus). In more detail, we predicted that positive incentive framing (i.e., accomplishment incentive) results in the perspective towards the problems in terms of opportunity through employee promotion focus (Hypothesis 1a), whereas negative incentive framing (i.e., safety incentive) results in the perspective towards the problem in term of threats through employee prevention focus (Hypothesis 1b). By conducting a laboratory experiment data is gathered to examine the suggested hypotheses. Both direct effects (i.e., positive and negative incentive framing) were not significant and therefore H1a and H1b were not supported. This can be explained by the following that the regulatory fit of the participants was not congruent. The regulatory focus is in fit when an individual’s regulatory focus is in line with the way how his/her goal is framed (Brendl & Higgins, 1996; Shah et al., 1998; Vroom, 1964). A misfit between can have detrimental effects for the individual in terms of performance and motivation (Petrou, Demerouti, & Häfner, 2015).
Furthermore, we suggested that the relationship between situational regulatory focus and problem recognition is moderated by conscientiousness and extraversion. More precisely, with a high level of conscientiousness the relationship between promotion focus and problem recognition will be strengthened (Hypothesis 2a), and with a high level of conscientiousness the relationship between prevention focus and problem recognition will be strengthened (Hypothesis 2b). Additionally, we suggested that when extraversion is high the relationship between promotion focus and problem recognition will be strengthened (Hypothesis 2c). In contrast, the interaction effect of situational promotion focus and extraversion was significant, but negatively related with problem recognition and is in contrast with H2c. Nevertheless, the results of this research are not the first research with contrary results. Henning et al. (2009) suggested that individuals who are extraverted are excitement-seeking which is more promotion focus than prevention focus. The results of their research revealed that extraversion was positively safety attitudes and un risk propensity. Henning et al. (2009) argued that this could be, because extraverted people feel a higher responsibility for the well-being of others in terms of safety and this could also be the case in our study, because we used the questionnaire by John and Srivastava (1999) which does not include a facet with excitement-seeking. Therefore, we only analyzed the social aspect of extraversion. During interpreting the neutral signals, participants who are highly extraverted could give more emphasis on the social aspect and the consequences of certain events. The chance of a positively relationship with safety attitudes is higher, because we excluded excitement seeking in our questionnaire which is more accomplishment attitudes. Therefore, the argument that Henning et al. (2009) uses that extraverted people feel a higher responsibility for the well-being of others in terms of safety can be the case in our study.
Theoretical Implications. The present study contributes to the literature on creative problem solving. We gave emphasis on the first phase of the creative problem-solving process (i.e., problem
recognition). Specifically, our research extents the theory about problem recognition and its
about the effectiveness of incentive framing in motivating and regulating the foci of individuals (Higgins, 1997; Shah et al., 1998). This study revealed that incentive framing (i.e., accomplishment and safety) did not influence the regulatory focus of an individual.
Second, we explored new insights about an employees’ regulatory focus in the problem recognition process. The majority of the research investigated the underlying processes of an individual’s regulatory focus on several processes of the creative solving process (i.e. problem construction (Reiter-Palmon et al., 1998); idea generation (Friedman & Förster, 2001; Lam & Chiu, 2002); and idea evaluation (Herman & Reiter-Palmon, 2011), but about the direct relation with problem recognition little is known. This study revealed that high promotion focused individuals can be more sensitive towards threats in comparison with less promotion focused individuals. According Ciuchta et al. (2016) individuals with a promotion focus are more likely to focus on positive informational cues in terms of opportunities, whereas individuals with a prevention focus will focus more on negative informational cues in terms of threats. Thus, this study unfolded a different and contrary outcome in comparison with previous research.
individuals with a higher level of extraversions focus lesser on opportunities than individuals who score obtain a lower score on extraversion.
Last, we contribute to the to the literature about the existence of regulatory fit (Brendl & Higgins, 1996; Shah et al., 1998; Vroom, 1964). Our study confirms the regulatory fit, because individuals with a high chronic promotion focus scored high on situational promotion focus in comparison with individuals with a low chronic promotion focus. Additionally, individuals with a high chornic prevention focus scored higher on situational prevention focus in comparison with individuals with a low chornic prevention focus.
Practical Implications. Besides the theoretical implications as presented above, the research findings present also practical implications. Nowadays, organizations face many ill-structured problems, but the problem recognition phase is not a popular topic to give emphasis on. Through this study, organizations become more aware about the positive consequences when focusing on problem recognition. Our theory gives more insight about the possibility to stimulate and regulate (e.g. using incentive framing systems) employees to initiate in the problem recognition process. Furthermore, we give insight why and how employees approach problem situations with an emphasis on ill-structured problems. With this knowledge management can take advantage, for example when conducting an opportunity and threat analysis, to stimulate and regulate their employees to take action.
In addition, chronic regulatory focus and the situational regulatory focus of an individual might influence the problem recognition process. As earlier mentioned, the regulatory fit of an individual has a positive effect on the motivational strength and performance of an individual. When an organization knows the chronic regulatory focus of an individual, goals and targets can be set with a situational regulatory focus that is congruent to increase the performance and motivational strength.
Lastly, non-Dutch participants scored higher on promotion focus and prevention focus in comparison with Dutch participants. Regarding to the problem recognition process. This could implicate that diversity is an important aspect in the problem recognition phase. A higher level of promotion focus or prevention focus can lead to a stronger effect on the outcome in the problem recognition process depending on the desired or undesired end state. This present research revealed that non-Dutch participants were more focused on opportunities than Dutch participants.
Limitation and future directions. Overall this study contains several limitations that could influence the results and can give direction to future research for improvement. First, the sample of this study only consists out of students. This study was meant to examine the effect of incentive framing on problem recognition through an individuals’ regulatory focus in the context of ill-structured problems. Ill-structured problems are more present in an organizational environment and more realistic in comparison with an environment of a university. Additionally, the context of the experiment and the neutral signals were developed to trigger a realistic scenario. Nevertheless, it could be that due to the laboratory setting participants perceived the experiment as unrealistic which can influence the results of the study. Therefore, we suggest to do research in the field instead of in an experimental setting.
not expect that the bonus system was real. The following question, using a 5-point scale (1 = fake to 7 = real), was implemented after the first trail to check the opinion of the participants: “To what extend did you think the incentive system was real during the task while you were performing”. Eventually 30.4% said fake, 23% slightly fake, 14.1% were neutral, 22.2% slightly real, and 10.4% real. Third, participants who participated in this experiment had to execute another experiment first. This experiment contained a manipulation that was fake, and participants were told that the second part contained a business simulation that did not exist. Last, Schwager and Rothermund (2013) introduced the ”counter-regulation principle”, whereby the motivational focus of an individual (i.e., gains or losses) can automatically influence the allocation of his or her attention towards the opposite emotional force of their current affective-motivational state (Schwager & Rothermund, 2013). After conducting an experiment with a manipulation that tries to influence the motivational focus (i.e., promotion focus and prevention focus) of an individual, it can be interesting to check if the allocation towards the opposite emotional force is triggered due to the manipulation.
Moreover, there could be a possibility that during the experiment the participants shift their regulatory focus when interpreting the neutral signals that influences the outcome between the regulatory focus and the problem recognition process. There could be several causes for an individual to change their situational regulatory focus (Johnson, Smith, Wallace, Hill, & Baron, 2015; Lee, Aaker, & Gardner, 2000). Markus and Wurf (1987), call the shift in situational regulatory focus the ‘working self-concept’. The working self-concept consists out of the understanding of your own identity, but it can shift continually of knowledge that is available on a given moment (Markus & Wurf, 1987). This can lead to different perceptions (i.e., opportunity or threat) of an individual in different context towards a neutral informational cue. Future research could try to minimize this effect during the conducting an experiment.
the identification of the signals would be clearer. Lastly, the absence of a concrete performance indicator is another limitation of this study. Participants were told that based on their performance they could earn an amount of money between € 0, - and € 2, -. This description of performance is very broad whereby every participant could give another meaning towards performance which influences the output of problem recognition.
Last, the regulatory fit in the problem recognition context is an interesting topic to implement in future research. The regulatory fit could be a moderator variable on the relation between incentive framing and problem recognition to check the effectiveness of congruent and incongruent regulatory fit for the outcome problem recognition. It is important that a concrete performance indicator is present such as quality or originality in the problem recognition context. These indicators tend to be highly important in the entire problem solving process (Reiter-Palmon & Illies, 2004). The chance for an incongruent regulatory fit can be very high to occur. For example, nationality is an important aspect that already can influence the effect of situational regulatory focus. For example eastern individuals are more likely to be prevention focused in comparison with western individuals who tend to be more promotion focus on chronical level (Lee et al., 2000)
CONCLUSION
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APPENDIX A
Notes. N = 225. Standard Errors between parentheses. † p < .10. * p <.05. ** p <.01. Promotion Focus Prevention Focus Promotion Focus Prevention
Focus Conscientiousness Extraversion Conscientiousness Extraversion
Model 1a Model 1b Model 2a Model 2b Model 3 Model 4 Model 4a Model 4b Model 5a Model 5b
Intercept 2.45 (.98)* 4.26 (1.07)** 2.43 (.98)* 4.31 (1.07)** .48 (.19) .47 (.20) .64 (.20) .46 (.19) .64 (.21) .46 (.20)
Intercept MM-Model Conscientiousness 2.45 (.98)* -2.31 (.98)*
Intercept MM-Model Extraversion 4.26 (1.07)** .53 (1.07)**
Gender -.03 (.16) -.34 (.17)* -.04 (.16) -.32 (.17)† .08 (.03)* .08 (.03)* .06 (.03)* .07 (.03) .06 (.03)* .07 (.03)* Age .00 (.03) -.03 (.03) .00 (.03) -.02 (.03) -.00 (.01) -.01 (.01) -.00 (.00) .00 (.00) -.01 (.01) -.01 (.01) Nationality .11 (.06)† .24 (.07)** .11 (.06)† .24 (.07)** .02 (.01)† .02 (.01) .02 (.01) .02 (.01) .02 (.01) .02 (.08)† CRF Pro .34 (.01)* -.21 (.15) .34 (.13) -.21 (.15) .02 (.03) .03 (.03) .00 (.03) .02 (.03) .00 (.03) .02 (.03) CRF Pre .00 (.07) .27 (.08)** .01 (.07) .28 (.08)** .00 (.01) -.00 (.01) -.00 (.01) -.00 (.01) -.01 (.01) -.00 (.01) Incentive Framing .07 (.15) -.25 (.17) .01 (.03) .00 (.03) .00 (.03) .00 (.03) .00 (.03)
Situational Promotion Focus -.02 (.01) -.03 (.01)† -.02 (.01) -.03 (.01)† -.01 (.01)
Situational Prevention Focus .01 (.01) .01 (.01) .02 (.01) .01 (.01) .02 (.01)
Conscientiousness .05 (.02)** .05 (.02)
Extraversion .02 (.02) .02 (.02)
Situational Promotion Focus x Conscientiousness .00 (.02)
Situational Prevention Focus x Conscientiousness .01 (.01)
Situational Promotion Focus x Extraversion -.03 (.01)
Situational Prevention Focus x Extraversion .00 (.01)†
R2 .06 .13 .06 .08 .06 .08 .10 .08 .11 .10
Δ R2 .00 .02 .02 .04 .02 .01 .02
Conditional Indirect Effects
Situational Promotion Focus Situational Prevention Focus
APPENDIX D
Big Five personality traits questionnaire (John and Srivastava, 1999).
Here are a number of characteristics that may or may not apply to you. For example, do you agree that you are someone who likes to spend time with others? Please write a number next to each statement to indicate the extent to which you agree or disagree with that statement.
1 2 3 4 5 6 7
Strongly disagree
Strongly agree
I see myself as someone who is …
Big Five Dimensions Facet (and correlated trait adjective) Agreeableness 1. Sympathetic 2. Kind 3. Understanding 4. Warm 5. Gentle Conscientiousness 6. Organized 7. Planner 8. Thorough 9. Efficient 10. Responsible Neuroticism 11. Tense 12. Anxious 13. Nervous 14. Moody 15. Worried Extraversion 16. Assertive 17. Active 18. Energetic 19. Outgoing 20. Talkative Openness to experience 21. Wide interests
22. Fantastical 23. Intelligent 24. Original 25. Insightful
APPENDIX E Regulatory Focus (chronic) questionnaire
Please indicate the extent to which you agree with the following statements regarding these approaches.
1 2 3 4 5
Strongly disagree Strongly agree
In life, people differ in the things they want to attain and strive for. Please indicate whether gaining the following things is important to you and a goal that you constantly strive for.
In life, I constantly strive to... − Gain desirable outcomes − Gain advantages
− Maximize positive outcomes
Some people have a need to develop themselves, whereas others have less need to progress or change as a person. Using the following statements, please indicate whether advancing yourself is a goal that you constantly strive for
In life, I constantly strive to... − Grow as a person − Develop personally − Improve myself
Ideals represent things in life that people may ultimately aim for. Using the following statements, please indicate whether pursuing your ideals is a goal that you constantly strive for.
In life, people may be preoccupied with avoiding undesirable or negative outcomes. These negative outcomes represent things that may worsen your current situation. Using the following statements, please indicate whether avoiding undesirable or negative outcomes is a goal that you constantly strive for.
In life, I constantly strive to... − Avoid undesirable outcomes − Minimize negative outcomes − Minimize losses
In life, people may be preoccupied with being secure. Security needs have to do with a preference for safe situations. Using the following statements, please indicate whether being secure is a goal that you constantly strive for.
In life, I constantly strive to... − Avoid insecurity − Avoid danger − Avoid risks
In life, people may be preoccupied with meeting their responsibilities placed upon them by themselves, other people, or the larger society. Using the following statements, please indicate whether meeting your responsibilities is a goal that you constantly strive for.
In life, I constantly strive to...
− Stay within my duties and obligations − Adhere to the rules
