This study investigates the impact of institutional reward systems related to ownership of inventions on employees’ creativity. We argue that due to differences in legal regulations across countries, inventors from different nationalities may hold distinct expectations regarding whether their innovative ideas should be owned by them or their organization, and how they should be compensated for transferring the ownership to their employer. Misalignments in expected and actual rewards can impact inventors’ creative output by influencing perceptions of psychological ownership and fairness. Using a unique dataset from a multinational corporation, our findings indicate that inventors who anticipate being rewarded for transferring ownership of their creative ideas but receive no reward—those perceiving removed ownership rights—are less likely to generate creative ideas. In contrast, inventors who do not expect such a reward but receive it—those perceiving an attribution of ownership rights—are more likely to generate creative ideas. We also find that the negative impact associated with the removal of ownership rights is more pronounced for female inventors compared to their male counterparts while the positive impact associated with the attribution of ownership rights is higher for male inventors. Our study contributes to psychological ownership, fairness, and gender literatures, and underscores the importance of organizations designing their institutional reward systems thoughtfully to foster creativity.