As I’ve noted in previous columns, the nonregular workforce is an increasing part of many organizations. Even if you have mostly regular full-time employees, the effects of the emerging ecosystem outside regular employment are profound.
These disciplines can provide great value to decisions about nonregular employment sources, but there is also a vital role for talent leaders to play, bringing expertise about human behavior and organizational effectiveness to these decisions.
A prominent alternative is crowdsourcing through contests. Platforms such as Innocentive, Tongal and Topcoder are prominent examples of using contests with incentives to create software code and online advertising and media such as logos and website features.
Innovation contests are particularly interesting because they are designed to amplify the quantity of ideas produced, as well as engage the crowd in evaluating and combining them into new ideas.
However, the rewards and incentives often actually work at cross-purposes to these objectives, and some fundamental principles from traditional employment performance and incentives can make a big difference to their effectiveness.
A 2014 article by Arvind Malhotra and Ann Majchrzak in California Management Review noted that innovation challenges too often result in solutions that fail to have “competitive advantage potential.” That means the solutions fail to “provide new strategies and alternatives that can help the company differentiate itself from competitors.”
This is not a reason to abandon crowd-based innovation challenges. It requires participants to integrate their knowledge with others, not simply share and rank their ideas. They noted that such contests must motivate participants to share by posting ideas, examples, facts and trade-offs highlight the best quality by voting on posts and promoting others’ comments; and combining ideas by creating solutions from putting ideas together from multiple sources and posts.
Their research showed how carefully constructed performance management and incentive systems can enhance the performance on online innovation challenges. They conducted experiments in which they varied the performance instructions and incentives provided to crowd-based participants.
Less successful challenges received conventional instructions that emphasized posting, tweaking others’ ideas, being encouraging and not critical, and voting on whether you liked an idea.
The more successful group received knowledge integration instructions that emphasized posting ideas designed to stimulate others, comment in ways that modify others’ knowledge, integrate with other knowledge to form complete solutions, and vote based on whether an idea was useful in solving the challenge.
The research also revealed valuable changes to incentives. Typical contests award money for the ideas receiving the most votes from the crowd or experts. The experimenters replaced the conventional “Top Contributor Board,” based on the number of ideas contributed, with a “Top Collaborator Board,” based on developing, highlighting and combining others’ contributions into new ideas.
Top collaborators received similar cash awards ($75 to $300) as well as opportunities to meet with expert judges, recognition certificates and sponsor apparel.
Collaboration-focused performance and incentive changes produced better results. Those contests generated more comments and votes per participant, and the clients rated the solutions significantly higher for their likely contribution to new strategies and offerings.
The researchers also found that when participants were asked to label their contributions as either “facts,” “trade-offs,” “examples” and “seeds,” the per-participant average of top-level posts was nearly three times higher. The average of comments was two times higher; the number of votes was four times higher; and the number of solutions was two times higher.
Enlisting a workforce through a crowdsourced context may seem exotic compared with regular full-time employees, but the value of careful attention to performance management principles is just as valuable.