Exploring the Interaction of Incentives and Benefits on New Product Performance

Abstract

This study investigates how to optimize compensation strategies by balancing incentives and benefits to achieve superior new product performance. Grounded in resource orchestration theory, this research proposes that firms should properly configure incentives and benefits for successful new product development. Survey data were collected from China to test the theoretical model. The results reveal that while incentives positively correlate with subjective new product performance, they are negatively associated with objective new product performance, despite a positive relationship between subjective and objective new product outcomes. Moreover, we uncover a significant negative interaction between incentives and benefits on objective new product performance. This result indicates that firms can maximize the sales contribution of new product programs by designing compensation strategies with low incentives paired with high benefits.