Abstract:

Owing to their distinctive focus on novelty and usefulness, radical creativity and incremental creativity may have different psychological antecedents. Drawing on cognitive evaluation theory and learned industriousness theory perspective, we conducted an empirical study concerning with the relationship between pay for performance (PFP) and employees’ intrinsic motivation and radical creativity as well as extrinsic motivation and incremental creativity. We also examined whether these relations were moderated by transformational leadership and transactional leadership. Data were collected from 364 dyads of employees and their immediate supervisors in 24 enterprises. The questionnaire for employee included PFP, intrinsic motivation, extrinsic motivation, transformational leadership, transactional leadership, willingness to take risks, organizational identification, and job complexity. Employee creativity was rated by their immediate supervisors. Theoretical hypotheses were tested by hierarchal regression analysis. Results of analyzing the matched sample showed that the relationships between PFP and both intrinsic motivation and radical creativity were nonsignificant, and the relationships between PFP and both extrinsic motivation and incremental creativity were positive; where transformational leadership was high, PFP was positively related to intrinsic motivation and radical creativity, whereas where transformational leadership was low, those relationships were negative; transactional leadership augmented PFP’s direct positive effect on extrinsic motivation and indirect positive effect on incremental creativity. Extending previous studies, this research demonstrated that PFP has a unique influence on radical creativity and incremental creativity, the result clarified the relationship between extrinsic reward and employee creativity in workplace from a new perspective. Second, by examining the mediating effect of intrinsic motivation and extrinsic motivation, the results contributed to our understanding on the mechanism through which PFP influence radical creativity and incremental creativity. Finally, through investigating the moderating effect of transformational leadership and transactional leadership, we confirmed that there are distinct bounded conditions of the effect of PFP on employees’ radical creativity and incremental creativity. Findings broaden understanding of the processes by which and the conditions under which PFP may promote or inhibit employees’ radical creativity and incremental creativity. Furthermore, the results also revealed that cognitive evaluation theory was more suitable for explaining the relationship between PFP and radical creativity, whereas learned industriousness theory could predict the PFP-incremental creativity relation more precisely.

Key words: pay for performance, radical creativity, incremental creativity, motivation, leadership