Pay‐for‐prominence: The (un)intended consequences of monetary incentives on employees' networks and attrition

Abstract Research Summary We introduce the concept of pay‐for‐prominence , a system where employees are monetarily incentivized to become knowledge hubs in the intrafirm network and examine its effects on employees' networks and attrition. Integrating social network theory with relational incentives theory, we argue that pay‐for‐prominence motivates strategic networking behaviors that lead to the emergence of prominent connectors. However, these changes are associated with higher attrition as employees are preoccupied with networking, thus suggesting a trade‐off between enhanced connectivity in the short term and the risk of network fragmentation in the long term. Using a field quasi‐experiment in a multinational firm, we show that organizations can successfully incentivize employees' network prominence, but doing so may produce unintended consequences. Managerial Summary We examine the impact of using monetary incentives to encourage employees to become knowledge hubs in the workplace informal network—a term we label pay‐for‐prominence. We find that offering monetary rewards based on network metrics encourages employees to broaden their connections, enhancing knowledge flows within the firm. However, employees who become more socially prominent experience higher attrition than those who do not, as they become preoccupied with networking. Therefore, while incentivizing networking can improve knowledge sharing, it also requires careful management to avoid unintended consequences, such as the exit of key players that could cause fragmentation of the social network. Managers should weigh the benefits of increased connectivity against the risks of fragmentation when designing incentive programs aimed at fostering informal networks.