Participants in crowdsourcing contests know it is highly unlikely they will ever be rewarded for their hard work and the solutions they come up with. As a result, the outcomes are often poor, much to the chagrin of the posting company. A NEOMA researcher, Mehdi Bagherzadeh, was part of a team that set out to tackle this problem: their study demonstrates the benefits of offering participants a reward of their own choosing.

The aim of crowdsourcing is to match one party’s needs with another party’s ideas. Sixty percent of firms in the United States turn to crowdsourcing to resolve miscellaneous problems. In short, it is the most popular open-innovation mechanism across the pond. On the one hand, innovation-hungry companies are keen to stay one step ahead of the game. They run open calls for contributions from a wide range of individuals via dedicated platforms or their own websites. On the other, potential contributors are on stand-by to respond to these requests in exchange for compensation if the proposed solution turns out to be a success.

In a crowdsourcing competition, one actor (often a business) reaps the benefit of the work, creativity or knowledge of the crowd, and retains only the best. In this winner-takes-all philosophy, however, there is only one person who goes home with the top prize at the end of the contest. Crowdsourcing participants give their time and do a job without any guarantee in return. Given the many uncertainties, the solutions put forward are often poor. Organisations are looking at how they can personalise rewards to motivate a crowd they know nothing about as a way to secure better results. What if the answer was to give participants the opportunity to choose their own reward? The study conducted by NEOMA’s Mehdi Bagherzadeh and his colleagues examined this very issue.

Candidates have never been so motivated

One explanation for crowdsourcing’s mixed results is that there is a mismatch between the rewards on offer and what really stimulates the individuals who contribute. To understand this, we need to go back to the basics of motivation. In the 1970s, the US psychologists Edward Decy and Richard Ryan called attention to two types of motivation: “intrinsic” motivation is when you do something for the fun of it; “extrinsic” is bound up with the pursuit of financial reward or recognition. And yet, most crowdsourcing contests only leverage extrinsic motivations, i.e. money is used to compensate the winners.

The researchers were aware that it is simply not possible for everyone to be offered a custom-built reward. Nevertheless, they did test a more inclusive alternative: a flexible payout system targeting the two kinds of motivation where participants choose their own winnings. The authors then conducted an experiment during a live contest. Some participants were given an opportunity to choose their preferred incentive: a 100% monetary reward or a fraction of the same amount combined with a certificate, job opening and invitation to join the jury board in future campaigns. The other contributors were not given a choice of reward.

Participants who were allowed to select their preferred incentive allocated 300% more time (on average) to coming up with their solution than the second group! In other words, contributors who could choose their own incentive option were willing to put in more effort and ultimately generate better solutions.

Positive feeling of autonomy

What impact does the freedom to choose actually have on the quality of work submitted? Letting potential contributors decide their incentive gives a boost to one of the three fundamental psychological needs that underpin our motivation: autonomy (based on the theory of self-determination developed by Deci and Ryan in the 1980s). When contributors choose a reward they find interesting at the outset, they regain a sense of being in control of their own targets. In addition, autonomous individuals feel a greater responsibility for the quality of their work.

The research found that giving participants the freedom to choose their reward should not be a Cornelian dilemma for a company. Firms have been inclined until now to trade on the amount of the monetary incentives on offer to make their contests more attractive. This method can work with participants who are motivated by compensation. Nevertheless, the authors recommend systematizing flexible incentives when the aim of the contest is to pull in high-quality answers. This approach stimulates different sources of motivation in potential contributors with a positive impact on the value of the proposed solutions.

Find out more

Ehsan Noorzad Moghaddam, Alireza Aliahmadi, Mehdi Bagherzadeh, Stefan Markovic, Milena Micevski, Fatemeh Saghafi, Let me choose what I want: The influence of incentive choice flexibility on the quality of crowdsourcing solutions to innovation problems, Technovation, Volume 120, 2023, https://doi.org/10.1016/j.technovation.2022.102679