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How do you get your employees to be innovative?

Graphic: Brains thinking.You’re the boss of a department. Work’s chugging along just like always, but you know there’s room to improve and do things better. So how do you motivate your team to innovate and thus help your organization thrive?

You could pay each individual more, says University of Toronto PhD candidate Bruce Curran, but the best outcomes come from group incentives such as stock ownership, profit sharing and better employee benefits. Simply offering a bonus or raise won’t do – the employee could then only focus on the predictable steps necessary to achieve the reward, whereas group incentives encourage more risk-taking and teamwork.

Curran, from U of T’s Centre for Industrial Relations and Human Resources, along with Scott Walsworth from the University of Saskatchewan, recently published an article that examined seven years of data from the Canadian Workplace and Employee Survey via Statistics Canada. The results came from telephone interviews with senior management officials at thousands of workplaces from 1999 to 2006. Curran and Walsworth limited their study to 3,000 workplaces with 10 or more employees.

The researchers define innovation broadly: it could be activities that lead to a new product offering or result in a new production process. For example, an innovative group effort could consist of a team of software engineers programming a new piece of computer software, or a group process improvement such as a customer service team at a call centre creating and implementing an improvement in handling calls from customers.

“Innovation is becoming increasingly important for organizations,” says Curran. “This research can be used by human resource practitioners to structure compensation packages that encourage innovative outcomes.”

From the findings, Curran suggests that group incentives can get employees to take more risks together.

“Groups can justify taking risks,” he says. “Certain incentive plans can tolerate early failures so that employees can employ trial-and-error towards a success. Additionally, working collaboratively may motivate members to develop norms and goals in order to improve the group’s innovative activity, as well as contribute to long-term commitment to the organization, which may lead to greater willingness to exert efforts to be innovative.”

Besides these options, Curran says if a workplace wants to encourage their employees to be more inventive, they can also put more emphasis on early training.

“We found that training breadth and intensity also had a significant impact on a workplace’s innovative output,” he says.

Curran and Walsworth’s article “Can you pay employees to innovate? Evidence from the Canadian private sector” was published in the Human Resource Management Journal.