Employees’ Invention Compensation Plan as a Determinant of Patent Quality and Quantity: Findings of Inventor Survey in Korea

The current paper attempts to explore the employees’ inventor compensation plan in Korea using a comprehensive data set of Korean inventor survey findings in 2009. It aims to empirically examine the effect of the compensation plan on the innovations of Korean inventors. This paper finds found that the compensation plan has a positive link with inventors’ performance; in particular, the high rate of compensation increases the quality of innovation. Furthermore, this paper extends its discussion to non-monetary compensation types as well as monetary compensation. By examining the inventors’ various preferences for invention compensation, we found find that the inventors of the private firms with greater preference for monetary compensation produce more patents, whereas those with greater preference for advantages in career produce more valuable innovationspatents. Second, inventors employed in public organizations with preferences for self-satisfaction by technical proof are more likely to conduct research on more advanced and challenging technologies. This implies that employees’ invention compensation plan has room for further discussion on the types of non-monetary as well as monetary compensation.