Template-Type: ReDIF-Paper 1.0
Author-Name:  Henrique M. Barros
Author-Name-First: Henrique M.
Author-Name-Last: Barros
Author-Name:  Sergio G. Lazzarini
Author-Name-First: Sergio G.
Author-Name-Last: Lazzarini
Title: Meritocracy and Innovation: Is There a Link? Empirical Evidence from Firms in Brazil
Abstract:  We investigate whether meritocracy affects firms’ innovation performance. More specifically, we empirically evaluate the prediction that the use of higher performance-based pay and promotion should lead to a higher percentage of firm revenues coming from innovations in products and services. To test this prediction, we employ a survey of 370 Brazilian firms in a broad range of industries. Our two-stage regressions, devised to account for potential endogeneity, indicate that while the use of performance-based promotion strongly affects innovation, the effect of contingent pay is marginal. Apparently, the long-term feature of promotion-based meritocracy is more effective to tap into individuals’ creativity than is short-term pay. Our study sheds light on the debate about how organizational practices can affect the innovative potential of firms.
Length:  32 pages
Creation-Date:  2009
Order-URL: https://repositorio.insper.edu.br/handle/11224/5754
File-URL: https://repositorio.insper.edu.br/handle/11224/5754
File-Format: text/html
File-Function: Full text
Number: 072
Handle: RePEc:aap:wpaper:072