Vita-def Ltd is a pharmaceuticals company. In the past, research scientists working at Vitadef have been rewarded based on their proven scientific expertise. Salaries of these scientists are based on their educational qualifications and the number of research papers published in scientific journals. Recently, an outside director made the following criticism: We have the most highly trained scientists in our industry. Evidence of their training and creativity is provided by the number of research publications they generate. However, the knowledge and creativity are not translating into patentable inventions and increased sales for this company. Our organisation has the lowest rate of new product introduction in our industry, and we have one of the largest research and development teams. These people are too concerned with getting articles published. We need these people to have more interest in generating ideas that have commercial potential. This is a profit-seeking organisation, not a university research laboratory.

Required:

1. The board of directors has ordered the president of Vita-def to increase the rate of successful new products developed, and the time devoted to new product development. Suggest a specific compensation scheme for the research scientists that would address the directors concerns, using expectancy theory to inform your answer.

2. Provide one (1) effectiveness measure that would help you assess how well the strategy you outlined in Part (1) is working, and explain why you have chosen it.