Detrimental Effects of Performance-Related Pay in the Public Sector? On the Need for a Broader Theoretical Perspective

Bregn, Kirsten

doi:10.1007/s11115-012-0191-x

Cited by 22 publications

(35 citation statements)

References 74 publications

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“…However, compensation systems can either hinder or enhance organizational performance (Condrey, Facer II, and Llorens 2012). PRP is an appeal to the self-interest of workers to improve performance because if the benefits of making more (or different) efforts exceed the costs associated with doing so, they will change their behavior accordingly (Bregn 2013).…”

Section: Performance-related Pay In the Public Sector General Issues mentioning

confidence: 99%

“…Goal setting theory was refined in a number of ways through the expectancy theory, whose main argument is that motivation depends on whether the outcomes hold psychological value or "valence" for the individual (Suff et al 2007). Therefore, employee effort is determined by valence, i.e., the value of the expected outcome (pecuniary as well as non-pecuniary) associated with a given choice of effort (Bregn 2013).…”

Section: Performance-related Pay In the Public Sector General Issues mentioning

confidence: 99%

“…Their commitment is more related to intrinsic rewards (such as self-determination, personal enthusiasm, altruism, reputation, job satisfaction) than to extrinsic rewards (such as salaries or monetary reward) (Anderfuhren-Biget et al 2010;Georgellis, Iossa, and Tabvuma 2011;Lee and Wilkins 2011). When employees are intrinsically motivated by public service, PRP might harm an initial motivation to perform well in a job (Bregn 2013). Public managers are intrinsically motivated; thus, a pay incentive will not necessarily stimulate them to perform better (Jobome 2006).…”

Section: Public Service Motivation and Stewardship Approachesmentioning

confidence: 99%

“…Their findings were mixed, with PRP scheme effectiveness often dependent on scheme design and organizational context. Several authors argue that PRP may not produce the desired results in the public sector (see, e.g., Christensen, Paarlberg, and Perry 2017;Bellé 2015;Bregn 2013;Brewer and Walker 2013;Langbein 2010;Ritz, Brewer, and Neumann 2016;Weibel et al 2010). Motivation and pay are more likely to be substitutes than complements in the public sector; therefore, PRP may have unintended adverse consequences and more analyses of the relationship between performance and pay are necessary in this sector (Langbein 2010).National Health Service (NHS) Foundation Trusts (FTs) are autonomous public sector organizations within the NHS and provide over half of all NHS hospital, mental health, and ambulance services in England.…”

mentioning

confidence: 99%

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Stewards in an “Odd” Kingdom: Performance and Remuneration of the Boards of Directors of NHS Foundation Trusts

García‐Lacalle

Royo

Yetano

2018

International Public Management Journal

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Performance measures and rewards are becoming commonplace in public sector organizations. This paper studies the implementation of performance-related pay (PRP) mechanisms in the boards of directors of the Foundation Trusts (FTs) of the National Health Service (NHS) in England and analyzes whether their remuneration is linked to organizational performance using qualitative and quantitative analyses (structural equation model). FTs operate in a favorable context for implementing PRP to remunerate executive directors. Our results show that many FTs have not implemented PRP and hardly any report having payed bonuses. However, most of them disclose that they carry out some kind of performance appraisal. These results indicate both reluctance to and difficulties in adopting PRP in public sector entities. Results also suggest that executive directors of NHS FTs are stewards in an "odd" kingdom that uses performance ratings to evaluate organizations, blaming directors when ratings are bad, but with no rewards when good performance is achieved. STEWARDS IN AN "ODD" KINGDOM. PERFORMANCE AND REMUNERATION OF THE BOARDS OF DIRECTORS OF NHS FOUNDATION TRUSTS.conducted a review of the literature on the effectiveness and value for money of PRP in the UK public sector. Their findings were mixed, with PRP scheme effectiveness often dependent on scheme design and organizational context. Several authors argue that PRP may not produce the desired results in the public sector (see, e.g., Christensen, Paarlberg, and Perry 2017;Bellé 2015;Bregn 2013;Brewer and Walker 2013;Langbein 2010;Ritz, Brewer, and Neumann 2016;Weibel et al. 2010). Motivation and pay are more likely to be substitutes than complements in the public sector; therefore, PRP may have unintended adverse consequences and more analyses of the relationship between performance and pay are necessary in this sector (Langbein 2010).National Health Service (NHS) Foundation Trusts (FTs) are autonomous public sector organizations within the NHS and provide over half of all NHS hospital, mental health, and ambulance services in England. Monitor, an independent public agency, regulates the FTs and monitors their performance using a defined and specific set of performance measures. FTs provide a suitable environment in which to study the implementation of PRP, for three reasons. First, Monitor backs the implementation of some type of PRP mechanism. Second, the top management teams of the FTs are structured in boards of directors. Third, their performance is assessed with specific performance measures which are periodically disclosed and, thus, easy to track. This paper has two objectives. First, to study the level of implementation of PRP mechanisms to remunerate the boards of directors of the FTs. For this purpose, we review the remuneration sections of the annual reports published by the FTs. Second, to study whether the remuneration of the directors, in particular the executive directors, is linked to the performance of these organizations. For this purpose, we use the structural...

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Section: Performance-related Pay In the Public Sector General Issues mentioning

confidence: 99%

Section: Performance-related Pay In the Public Sector General Issues mentioning

confidence: 99%

Section: Public Service Motivation and Stewardship Approachesmentioning

confidence: 99%

mentioning

confidence: 99%

See 2 more Smart Citations

Stewards in an “Odd” Kingdom: Performance and Remuneration of the Boards of Directors of NHS Foundation Trusts

García‐Lacalle

Royo

Yetano

2018

International Public Management Journal

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“…While some researchers expect that extrinsic and intrinsic incentives are additive in their effect on enhancing work performance (Porter & Lawler, 1968;Vroom, 1964), others point out that extrinsic rewards may diminish the influence of PSM on inducing desirable organizational behavior (Bregn, 2012;Forest, 2008;Moynihan, 2010). While some researchers expect that extrinsic and intrinsic incentives are additive in their effect on enhancing work performance (Porter & Lawler, 1968;Vroom, 1964), others point out that extrinsic rewards may diminish the influence of PSM on inducing desirable organizational behavior (Bregn, 2012;Forest, 2008;Moynihan, 2010).…”

Section: Discussionmentioning

confidence: 99%

Citizen Participation in Local Government Decision Making

Huang

Feeney

2015

Review of Public Personnel Administration

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Engaging the public in government decision making is an important value and priority in a democratic society. Although there is research investigating public perceptions of citizen participation opportunities and efforts, little research focuses on understanding the motivations that public managers have to encourage citizen participation. This research seeks to understand the ways in which public managers' motivations are related to engaging the public in organizational decision making. We use data from two national surveys of U.S. local government managers conducted in 2010 and 2012 to investigate the extent to which performance-based rewards and public service motivation (PSM) contribute to citizen participation in government decision making and examine the ways in which the relationship between PSM and citizen participation is moderated by performance-based rewards and mediated by value congruence.The results indicate that performance-based rewards are negatively related to citizen participation in government decision making whereas PSM is positively related to citizen participation both directly and indirectly through person-organization value congruence.

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Diversity and people management

Bratton¹

2015

Introduction to Work and Organizational Behaviour

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Detrimental Effects of Performance-Related Pay in the Public Sector? On the Need for a Broader Theoretical Perspective

Cited by 22 publications

References 74 publications

Stewards in an “Odd” Kingdom: Performance and Remuneration of the Boards of Directors of NHS Foundation Trusts

Stewards in an “Odd” Kingdom: Performance and Remuneration of the Boards of Directors of NHS Foundation Trusts

Citizen Participation in Local Government Decision Making

Diversity and people management

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