The effects of joint reward system in new product development

Purpose – This study purports to examine the effects of a joint reward system (JRS) under a new product development (NPD) setting by identifying four neglected aspects of JRS that contains a procedural view (participation of reward decision and reward contingent on NPD phases) and a monetary view (risk-free to participate and over-reward incentive) in a conceptual model, and then to empirically test their effects on knowledge sharing and NPD performance. Design/methodology/approach – Using regression analysis, the proposed model was tested on 233 valid respondents (112 in R&D, 50 in marketing, and 71 in manufacturing), including 92 from electronics firms, 87 from semiconductor firms, 29 from biotechnology firms, and 25 from pharmaceutical firms in Taiwan. Findings – The results indicated that risk-free to NPD project members is the most salient aspect of JRS on knowledge sharing and NPD performance. Joint determination of reward allocation was found to be a favorable JRS for only marketing and NPD performance. Rewards contingent on NPD phases have shown conflicting results between R&D and marketing. No relationship was found for over-reward incentive on knowledge sharing and NPD performance. Despite the mixed effects of JRS, knowledge sharing is a strong predictor of NPD performance. Originality/value – This study extends understanding of the complexities of rewards on knowledge sharing and NPD success by decomposing and testing four unique aspects of JRS, which sheds a new light on NPD researches.