Rewarding employee inventions in corporations

Abstract

PurposeReasonable remuneration of employee inventions is a controversial issue causing court litigations among employees and employers in many countries. The paper aims to shed light on the missing economic interpretation of the reasonable remuneration of employee inventions. Specifically, it focuses on the concept of “reasonability” at the issue.Design/methodology/approachIn an empirical qualitative multiple case-study setting, the paper explores inductively Czech corporate employee inventors' remuneration systems, using typological analysis and M. Weber's interpretative theoretical construct of “ideal type.”FindingsAt the first level, reasonability is a function of multi-amount rewarding, a certain level of total remuneration and identifiable benefits being a decisive factor. Additionally, the reasonability is conceptualised as a function of two dimensions – timing/risk and benefit–reward relation. At the second level, the reasonability is interpreted as a concept balancing seven points of view: timing, materiality, equity, risk management, transparency, system costs and exactness. At the third level, the paper offers an optimal remuneration system like the one that optimises developed seven-criterion framework.Research limitations/implicationsEven if analysed within one-country and nine-company context, the insights are generalisable across a broader sample of countries with statutory rules for employee inventions. Studying more cases may enrich the findings. The findings are based merely on a rational perspective and do not deal with psychological aspects of employees.Practical implicationsThe results may be helpful for intellectual property or R&D managers in building or reorganising employee invention remuneration systems within corporations. The developed seven-criteria model can serve as a discussion framework; the suggested optimal system as a reference point. The results may serve as well to consultants, judges or other parties involved in currently growing employee–employer controversies and litigations. The analysis may fuel public policy decisions, too.Originality/valueThe paper brings unique and detailed empirical insights into the issue of employee inventions. It offers a complex multi-perspective (employee/employer) framework through which the reasonability can be discussed and suggests an optimal system, which can serve as a reference point.