Behavioral Ambidexterity: The Impact of Incentive Schemes on Productivity, Motivation, and Performance of Employees in Commercial Banks

Abstract

Human resource management systems may serve as an antecedent that enables firms to develop a context for ambidexterity—an ability to pursue contradictory processes (exploitation versus exploration) within the same firm. The aim of this article is to examine the impact of motivation‐enhancing HR practices on the productivity, motivation, and performance of commercial bank employees to promote and attain contextual ambidexterity within the organization. The theoretical model presented in this article shows how ex‐ante incentives (incentives based on past performance) and ex‐post incentives (incentives based on future performance) affect productivity, motivation, and performance of employees. The results are tested empirically by analyzing real quarterly data of commercial bank employees in Israel. The main results show that workers with relatively high abilities might take advantage of both ex‐ante and ex‐post incentives. In contrast, workers with relatively low ability are unable to take advantage of both incentive schemes. Our findings indicate that motivation‐enhancing HR practices such as financial incentives significantly influence the productivity and performance of employees. Our study contributes to the ambidexterity literature by examining how motivation‐enhancing human resource (HR) practices such as incentive schemes make employees feel the sense of stretch that is essential in building an ambidextrous organization. © 2015 Wiley Periodicals, Inc.