Abstract
Holmstrom-Milgrom model is a simplified model proposed for the purpose of simplifying analysis based on the general mathematical model of principal agent. In this study, the influence of intrinsic motivation and extrinsic incentive is fully taken into account, and the parametric principal-agent model is formed by parameter extension of the model. This model is used to conduct empirical study and verification on the relationship between extrinsic incentive, intrinsic motivation and employee innovation performance. The empirical results show that, intrinsic motivation is positively correlated with employee innovation performance, and extrinsic incentive is positively correlated with intrinsic motivation. In addition to the coordination relationship, other extrinsic incentives exert no significant and direct effect on employee innovation performance. The indirect effect of extrinsic incentive relies on the intrinsic motivation, which serves as an intermediary role and between extrinsic incentive and employee innovation performance. This study enriches the existing theoretical research and provides reference for enterprises to effectively implement incentive mechanism.
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