Effects of positive incentive and negative incentive in knowledge transfer: carrot and stick

Purpose Employees play a central role in firms’ knowledge transferal, but knowledge-sharing brings significant costs for employees. Thus, this study aims to explore the components of firms’ incentive systems and how these influence employees’ knowledge-sharing, and also to test whether employees’ knowledge-sharing intentions transform into better knowledge transfer performance at the firm level. Design/methodology/approach This study collected data in China, and 219 usable questionnaires were collected. Then, this study used a structure equation model by LISREL for hypotheses testing. Findings This study finds that positive economic incentives, positive relational incentives and negative relational incentives all increase employees’ knowledge-sharing intentions, contributing to firms’ improved knowledge-transfer performance. Thus, both positive and negative incentives and both economic and relational incentives exert influences on employees’ knowledge-sharing activities. Practical implications Because employees have both material and emotional needs and always want to approach good things and avoid bad things, firms should take measures to make their incentive systems more comprehensive. Then, employees can be motivated to share their knowledge effectively. Originality/value Existing studies have mainly explored the effects of positive economic incentives on knowledge transferal. Because individuals have both a promotion self-regulatory focus associated with an approach motivation and a prevention self-regulatory focus associated with an avoidance motivation, and because they have both material and emotional needs, this study classifies incentives into three types and confirms their effectiveness for motivating employees to share knowledge.