Rewarding good ideas in the public sector – a good idea?

[Originally published on the Australian Government Public Sector Innovation Network under a Creative Commons 3.0 BY AU licence]

Is it a good idea to reward good ideas in the public sector?

Variations of this question come up in conversation quite often so I thought it would be worth putting forward some ideas and my view on this question.

The short answer is – probably not, particularly if it is a financial reward. Other forms of recognition are generally going to be a better option.

Now, this is a personal view – as usual there are lots of caveats about what works for different organisations and different settings at different times, but in my experience there are a number of issues which I think make financially rewarding innovation tricky.

The longer answer relates to the following questions:

    • Why do people innovate?
    • What/which ideas would be rewarded?
    • When would the idea be rewarded?
    • Who would be rewarded?
    • How would they be rewarded?
    • Will the reward be effective?

Why do people innovate?

I highly recommend at taking a look at the talk by Dan Pink on motivation – basically financial incentives aren’t a great motivator for people coming up with new ideas. A lot of the relevant motivation is to do with intrinsic/internal drivers, rather than financial recognition. Feedback and engagement is more important. Think about a good idea that you have had – did you have it because of a financial incentive, or because you were trying to solve a problem or to make something better?

What/which ideas would be rewarded?

Innovation thrives on lots and lots of ideas. In some ways it is a brutal process – lots of ideas will be discarded and dismissed! Leaving only a few that can be tested, explored, implemented and then committed to. Which ideas would you financially reward, and which ideas would be regarded as either incremental/process improvement/business as usual type ideas that are expected as part of people’s roles? If the idea comes from outside of the organisation, what then? If the idea came from outside of the organisation and was then adapted, what then? If the idea evolves and changes and is worked on to be better, what then?

When would the idea be rewarded?

Ideas are only one part of the innovation process – there’s a lot between an idea and a successful innovation. Do you reward the idea when it is put forward? When it has gone through the initial business case processes or when it has gotten sign-off/approvals? When it has been tested? When it is, or has been, implemented? What if it doesn’t work as expected/hoped?

Who would be rewarded?

Innovation is a social process, and in the public sector I have never seen an idea that has gotten anywhere through the efforts of one single person (or even just one team). If there is a reward, who do you reward? Only the person who came up with the idea? What about the people they collaborated with to make the idea better? (And if they haven’t collaborated with others to make the idea better, might it be because they don’t want others to share in the reward/credit for the idea?) What about the people who helped implement the idea?

How would they be rewarded?

In the public sector there are generally tight rules as to how you can financially reward people – what instrument would you use to provide the financial reward to people? The idea might lead to $x amount of savings or benefits – is the reward going to be somehow commensurate or a set amount? What if one idea creates ten times the benefits of another idea – does the reward differ between ideas? The benefits may not be financial, directly measurable or result in benefits within your organisation (i.e. they help stakeholders or another agency) – what does that then mean for rewarding the idea?

Will the reward be effective?

A successful innovation will require different contributions and different skill sets over the life of the idea – the danger of a financial reward for ideas is that puts the emphasis on the front end of the innovation process (idea generation), which is not usually the weakest part.

Introducing rewards may also create complications for future innovation processes – what will it do for the incentives and the support for innovation in the future? Someone might expect to rewarded for their good idea, and become resentful if they aren’t. Someone else might not contribute because they think their contribution wasn’t rewarded last time when it should have been, so why are they going to contribute this time?

How should ideas be received then?

None of this necessarily rules out a financial reward for good ideas and for innovation, it just points to some of the complications that should be considered before doing so (for instance an exception might be where there is a competition/challenge-led innovation process, and the organisation is after the best ideas for a particular problem). Nor does it rule out other types of reward.

But if a reward is decided as not being the best way to go, what might organisations do instead?

The answer will (and should) depend on your organisation, its goals, its context and its people. But at its heart I would suggest the strategy should be about recognition – and not only recognition of the ‘good’ ideas or the ideas that work, but also celebration of the valiant attempts, honourable ‘failures’ or the wild ideas that help people think in a different way.

Many public sector organisations already have recognition frameworks that can be built on for this purpose.

Are there any good examples of recognition frameworks for innovation that you know of in the public sector?