Driving Innovation: Reviewing the Role of Rewards

Abstract

The role of rewards in promoting innovation has received considerable attention in both theory and practice. The fact that rewards have a positive impact on promoting innovation is well established. However, this relationship is complex since different types of rewards are suited for various kinds and stages of innovation. Further, an alternate view undermines the role of rewards in promoting innovation. Through an exhaustive literature review, this study illustrates the complex relationship between rewards and innovation as well as the role of rewards in promoting innovation. This analysis throws light on the utility of various rewarding practices in promoting innovation. Thus, understanding the complexities of rewards systems for engaging talents in processes of creativity and innovation reflects the needs to design rewards systems, which strategically and ethically fits any organizational entity. Hence, both theorists and practitioners need a more holistic approach in designing a dynamic rewards system that encompasses issues of role, timing and magnitude of the rewards in order to drive innovation.