In two experiments, we examine whether performance-contingent incentives facilitate the creative process by enhancing the initial preparation that precedes creative incubation. The defining characteristic of both experiments is a second-stage task that is separated in time from the first-stage implementation of different incentive schemes. In Experiment 1, the second stage takes place ten days after we implement conditions with quantity incentives, high-creativity incentives, incentives with a minimum-creativity threshold, and a fixed-pay control condition. In Experiment 2, we test the effects of incentives with an incubation period of 20 minutes, during which an experimenter escorts participants on a walk between compensated work periods. In both experiments, we find that participants with quantity incentives outperform the high-creativity production of their fixed-pay counterparts only in the second-stage task. Mediation analyses suggest that quantity-incentivized participants' propensity to try more divergent ideas in the first stage sparks their creativity advantage in the second stage.

Prior research documents that providing relative performance information (RPI) motivates employees to increase effort; however, a potential downside of RPI is that it also motivates employees to distort their effort allocations between tasks such that it can be detrimental to overall firm performance. This study investigates via an experiment how the informativeness of RPI affects employees' effort allocations and performance in a multitask environment. We investigate the informativeness of two RPI design choices that are observed in practice: detail level and temporal aggregation. Regarding detail level, firms may provide each employee's performance ranking on tasks, which is less informative than providing the actual performance score of each employee. Regarding temporal aggregation, firms may provide RPI that is reset each period, which is less informative than RPI that is based on cumulative performance. We find RPI detail level and temporal aggregation interact to influence effort distortion. Specifically, we find that, compared to reset RPI, cumulative RPI leads to greater distortion of effort away from firm‐preferred allocations and that this effect is magnified when RPI provides actual performance scores rather than performance rankings. Finally, high levels of effort distortion hurt overall performance, thereby demonstrating the potentially detrimental effect of effort distortion on performance. Results of our study enhance our understanding of how firms can use their control over the design of RPI to enhance its usefulness in directing employees' effort in multitask environments by highlighting the role that informativeness of information can have on employee behavior.