Performance evaluation and creativity: Balancing originality and usefulness

摘要

Innovation requires creative ideas, which are both original and useful. Usefulness is crucial for ideas to be implemented and turn into innovation. We examine how performance evaluation helps balance both dimensions. In a laboratory experiment, creators generate words, which users and jurors rate for creativity. Users use the words to write texts, whereas jurors do not use them. Creators’ pay depends either on user or juror ratings. Creators take their evaluators’ perspective and accommodate their preferences. Our findings highlight the instrumental role of the evaluator in motivating creativity. It suggests that firms involve users in performance evaluation to facilitate innovation.