Detrimental Effects of Performance-Related Pay in the Public Sector?

On the Need for a Broader Theoretical Perspective

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    Performance-related pay has been a key ingredient in New Public Management reforms. Nevertheless, the research presented here indicates some adverse effects of such incentives. These incentives may impair an initial motivation to work and change the norms that guide behavior. An issue which in particular has been given insufficient attention is fairness. Findings drawn from experimental economics supported by field studies demonstrate that perceived unfairness may have important negative effects on performance. The implication of a broader perspective in the analysis of performance-related pay in the public sector is that such a pay system, contrary to its aim, may have detrimental effects on performance.
    Original languageEnglish
    JournalPublic Organization Review
    Volume13
    Issue number1
    Pages (from-to)21-35
    Number of pages15
    ISSN1566-7170
    DOIs
    Publication statusPublished - 2013

    Cite this

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    title = "Detrimental Effects of Performance-Related Pay in the Public Sector?: On the Need for a Broader Theoretical Perspective",
    abstract = "Performance-related pay has been a key ingredient in New Public Management reforms. Nevertheless, the research presented here indicates some adverse effects of such incentives. These incentives may impair an initial motivation to work and change the norms that guide behavior. An issue which in particular has been given insufficient attention is fairness. Findings drawn from experimental economics supported by field studies demonstrate that perceived unfairness may have important negative effects on performance. The implication of a broader perspective in the analysis of performance-related pay in the public sector is that such a pay system, contrary to its aim, may have detrimental effects on performance.",
    keywords = "Performance pay , Public management, Motivation, Performance, Experimental economics, Fairness",
    author = "Kirsten Bregn",
    year = "2013",
    doi = "10.1007/s11115-012-0191-x",
    language = "English",
    volume = "13",
    pages = "21--35",
    journal = "Public Organization Review",
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    publisher = "Springer New York LLC",
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    Detrimental Effects of Performance-Related Pay in the Public Sector? On the Need for a Broader Theoretical Perspective. / Bregn, Kirsten.

    In: Public Organization Review, Vol. 13, No. 1, 2013, p. 21-35.

    Research output: Contribution to journalJournal articleResearchpeer-review

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    AB - Performance-related pay has been a key ingredient in New Public Management reforms. Nevertheless, the research presented here indicates some adverse effects of such incentives. These incentives may impair an initial motivation to work and change the norms that guide behavior. An issue which in particular has been given insufficient attention is fairness. Findings drawn from experimental economics supported by field studies demonstrate that perceived unfairness may have important negative effects on performance. The implication of a broader perspective in the analysis of performance-related pay in the public sector is that such a pay system, contrary to its aim, may have detrimental effects on performance.

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    KW - Motivation

    KW - Performance

    KW - Experimental economics

    KW - Fairness

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    DO - 10.1007/s11115-012-0191-x

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