Promoting Radical Innovation Through Performance-Based Rewards: The Mediating Role of Knowledge Acquisition and Innovative Work Behavior

The purpose of this paper is to study the effect of performance-based rewards on radical innovation. In doing so, it explores the role of knowledge acquisition and innovative work behavior (IWB) as possible mechanisms that underlie the relationship between performance-based rewards and radical innovation. The subsequent effect of IWB on promoting radical innovation is explored. The study employs data from 235 unit managers in manufacturing and technology firms in Jordan. Structural equation modeling was used to test for reliability, validity, and the hypothesized relationships. The results indicate that performance-based rewards positively affect knowledge acquisition. In addition, knowledge acquisition mediates the link between performance-based rewards and IWB. IWB is also significant and positive in promoting radical innovation. This paper is one of the first to examine how radical innovation can be promoted through IWB. It offers insights into and contributions to the literature on the role of performance-based rewards in driving radical innovation through the mediating effect of knowledge acquisition and the subsequent impact of IWB on radical innovation.