Intelligent-Failure Reward System

What it measures

Measures the extent to which an NPD project employs an incentive system that rewards employees for developing, testing, and codifying knowledge from new product ideas regardless of the immediate success or failure of those activities. In contrast to conventional reward systems that penalise failure, an intelligent-failure reward system removes disincentives against experimentation and actively encourages employees to use available resources in service of customer knowledge development activities. Items are administered with respect to a specific recent NPD project in which the respondent participated.

Response format

5-point Likert scale

Scale items

• In this project, individuals were rewarded for developing new ideas, regardless of the eventual success/failure of these ideas.
• In this project, individuals were rewarded for testing new ideas, regardless of the eventual success/failure of these tests.
• In this project, individuals were rewarded for codifying the knowledge that was created from idea development and testing, regardless of the success or failure of these ideas.

Full scale items shown. Always cite the original source when using this scale in research.

Usage notes & scoring

Construct reliability = .83. Item loadings: .81, .88, .80 (all t > 13, p < .01). Functions as a significant moderator of the relationship between provision of resource slack and customer knowledge development (interaction β = .19, p < .05): the positive effect of resource slack on CKD was significantly stronger when an intelligent-failure reward system was present (b = .43, p < .01) than when it was absent (b = .11, p < .10). Main effect on customer knowledge development also significant (β = .21, p < .05), indicating direct facilitation of learning-oriented NPD processes.

Recommended companion scales

Citation

Joshi, A. W., & Sharma, S. (2004). Customer knowledge development: Antecedents and impact on new product performance. Journal of Marketing, 68(4), 47–59.

Keywords