Incentives and their dynamics in public sector performance management systems

We use the principal‐agent model as a focal theoretical frame for synthesizing what we know, both theoretically and empirically, about the design and dynamics of the implementation of performance management systems in the public sector. In this context, we review the growing body of evidence about how performance measurement and incentive systems function in practice and how individuals and organizations respond and adapt to them over time, drawing primarily on examples from performance measurement systems in public education and social welfare programs. We also describe a dynamic framework for performance measurement systems that takes into account strategic behavior of individuals over time, learning about production functions and individual responses, accountability pressures, and the use of information about the relationship of measured performance to value added. Implications are discussed and recommendations derived for improving public sector performance measurement systems. © 2010 by the Association for Public Policy Analysis and Management.     

How is the Use of Performance Information Related to Performance of Public Sector Professionals? Evidence from the Field of Academic Research

There is inconclusive evidence as to how performance management is actually related to performance, particularly in subfields of the public sector where professional work prevails. We propose that the association between the use of performance information and performance of public sector professionals varies with the targets of management control. We test our hypotheses in the field of academic research, a prime example of professionalism in the public sector. The overall results of an online survey with 1,976 observations suggest that performance management is positively related to publication performance when performance information is used for the control of input targets. In contrast, we find negative associations of performance information with performance when used to control output targets. Public managers in professional fields should consider these countervailing relationships when they compose and use control systems.     

Public Service Motivation: A Test of the Job Attraction–Selection–Attrition Model

ABSTRACT

Public service motivation (PSM) research suggests that PSM influences employee sector choice, yet relatively little research examines how time moderates this relationship. In this research we examine public service motivation among private and public sector lawyers. Using survey data that measure sector of employment at multiple time periods, we investigate the stability of the relationship between individual reward orientations and sector employment choice over time. Our findings suggest that while PSM may not clearly predict the employment sector of a respondent's first job, it does increase the likelihood that a respondent's subsequent job is in the public sector.     

Comparing Affective Commitment in the Public and Private Sectors: A Comprehensive Test of Multiple Mediation Effects

Employees’ organizational commitment is associated with a number of positive outcomes, such as employee motivation, job satisfaction, productivity, and retention. But previous research has suggested that there may be important sector differences in both commitment and its explanations, yet results are very mixed. We study sector differences in affective organizational commitment among 1,043 public and private office workers who perform very similar tasks across sectors, testing the influence of factors thought to explain commitment and expected to vary between the sectors. We propose that the mixed results are due to different variables mediating the relationship between sector and organizational commitment. Conducting a multiple mediation analysis, we find that more hierarchy negatively mediates the relationship between public sector employment and organizational commitment. On the other hand, the relationship between public sector employment and organizational commitment is positively mediated by public service motivation and participatory management. This highlights the importance of not only studying simple sector differences, but also including relevant individual and organizational-level variables that can explain the mechanisms behind such differences.     

Public Service Motivation,Organizational Social Capital,and Knowledge Sharing in the Korean Public Sector

This article investigates whether public service motivation (PSM) and organizational social capital predict knowledge sharing in the public sector. The hypothesized relationships in the proposed model are verified with the online survey data of 506 public employees in Korea. The test results show that the two dimensions of PSM (attraction to public service and commitment to public values) and the trust component of organizational social capital are both positively related to knowledge sharing in the Korean public sector, and that the associability component of organizational social capital is indirectly associated with knowledge sharing through its influence on PSM. The article discusses the ways that PSM and organizational social capital may contribute to overcome the social dilemma of knowledge sharing in public organizations. It also suggests that there is need for further research on the individual dimensions of the PSM construct.     

Goal Setting and Performance Management in the Public Sector

ABSTRACT

The public sector in North America as well as parts of Europe is increasingly adopting a performance management system that includes goal setting, coaching, and the evaluation of an employee on goal attainment. The purpose of this article is three-fold. First, the extant literature on goal setting for individual employees is summarized in terms of its applicability to the public sector. Second, the importance of context to goal setting and performance management in the United States and Italy is discussed. Third, coaching techniques, based on theory and empirical evidence, for increasing the probability of goal attainment by public sector employees are examined.     

Participative Management and Job Satisfaction: Lessons for Management Leadership

Researchers and practitioners in both the public and private sectors agree that participative management improves employees' job satisfaction. Public agencies have also turned to strategic planning to enhance government performance and accountability. This study explores the relationship between participative management in the context of the strategic planning and job satisfaction in local government agencies. The results of multiple regression analysis show that managers' use of a participative management style and employees' perceptions of participative strategic planning processes are positively associated with high levels of job satisfaction. The study also finds that effective supervisory communications in the context of the strategic planning process are positively associated with high levels of job satisfaction. The study suggests that participative management that incorporates effective supervisory communications can enhance employees' job satisfaction. In this regard, organizational leaders in the public sector should emphasize changing organizational culture from the traditional pattern of hierarchical structure to participative management and empowerment.     

The political economy of an African public enterprise: A longitudinal case study of the administrative and economic operations of the Sierra Leone Port Organization

In most of the post-colonial states of sub-Saharan Africa, both the size of the state bureaucracy has grown and its functions proliferated. Whatever the economic rationale of public sector organizations, they do not exist and operate in a social and political vacuum. This paper argues that they are typically an integral part of a patron clientelist political and economic system on which the foundations of government sometimes depend. The consequences for the economic performance of public sector organizations arising out of this socio-political context is now widely recognized in the growing literature on African public enterprise. Contributions to this discussion, however, have tended to be dominated by economists and public administration specialists who have generally adopted a technocratic problem solution approach. In isolating their analyses of the performance of African parastatals from an appraisal of the role of the state, this approach fails to situate adequately the problem of performance in its proper context. This paper provides a case study which examines the administrative and economic operations of the Sierra Leone Port Organization in the colonial and post-colonial states. In arguing that problems of performance of African public sector organizations also require political solutions this discussion extends the discussion beyond a technocratic focus.     

Public Service Motivation and Attraction to Public Versus Private Sector Employment: Academic Field of Study as Moderator?

ABSTRACT

Despite extensive public service motivation (PSM) research, our knowledge of PSM's influence on individuals’ sector employment preferences is limited. Few studies examine this relationship by suitable research designs, and the empirical findings are mixed. Using a sample of 718 Danish students of economics, political science, and law, this article tests (1) the relationship between PSM and attraction to public versus private sector employment and (2) the moderating effect on this relationship of students’ academic field of study. Overall, results underscore the multidimensionality of the PSM construct, as the PSM dimension of “public interest” is positively associated with attraction to public sector employment and negatively associated with attraction to private sector employment, while the PSM dimension of “compassion” is unrelated to both. Importantly, however, moderation analyses reveal notable correlation differences across students’ academic fields. Implications of these findings are discussed in the context of prior and future research.     

More Similarities or More Differences? Comparing Public and Nonprofit Managers’ Job Motivations

Existing research on career motivations tends to focus either on the difference between private and public organizations or on the difference between nonprofit and for‐profit firms. Although commonalities exist, the literature suggests that there also are many differences in what motivates public and nonprofit employees. Employing data from the National Administrative Studies Project III, this research examines how seven motivational aspects correlate with the choice between public and nonprofit employment. The authors find that managers who value advancement opportunities, a pension and retirement plan, and the ability to serve the public in their jobs are more likely to accept a job in the public sector, whereas managers who value family‐friendly policies and increased responsibility are more likely to accept a position in the nonprofit sector. Participation in volunteering is positively associated with nonprofit employment. The authors suggest a possible link between volunteering and the unique nonprofit motivation that is differentiated from public service motivation.     

Sector Differences in Employee’s Perceived Importance of Income and Job Security: Can These be Found Across the Contexts of Countries,Cultures, and Occupations?

Most empirical research has shown that people working in the public sector perceive job security as more important than people working in the private sector, while the inverse is the case for job income. However, it is not known if these relationships hold globally while controlling for occupation and national context. We combine ISSP data from respondents in 25 countries with Hofstede’s cultural dimensions and World Bank data to examine whether the previous generally accepted claims hold while taking into account workers’ occupation, as well as national, cultural, and economic conditions. We find evidence that even when taking into account all these factors, government workers place a higher value on job security than private workers, but contrary to the generally accepted claim, we find no statistically significant difference between government and private workers in their high-income motives when taking the occupation and national context into the models.     

Not All Bad News After All? Exploring the Relationship Between Citizens’ Use of Online Mass Media for Government Information and Trust in Government

Mass media coverage of government is often blamed for inciting anti-public sector sentiment. Yet there have been few empirical assessments of these claims. To address this gap in the literature, this study examines whether relationships between citizens’ expectations of public sector performance, satisfaction with public services, and levels of trust in government vary according to their use of online mass media for information about government. Using data collected in 2012 from a survey of 1,100 Seoul citizens, we find that greater use of online mass media to obtain information about government reinforces negative relationships between (1) expectations of public sector performance and satisfaction with public services, and (2) expectations of public sector performance and trust in government. Moreover, the size and strength of the negative indirect relationship between expectations of public sector performance and trust in government increase as respondents use online mass media more frequently for information about government.     

Efficiency,Incentives, and Transformational Leadership: Understanding Collaboration Preferences in the Public Sector

In the public sector, participant attitudes are an important determinant of the success of inter-organizational collaboration initiatives. In this study, a model of employee willingness to collaborate is proposed in which the influence of transformational leadership is determined in part by the performance orientation of the organizational context in which it is enacted. The theoretical model is tested empirically using survey data collected from public employees in South Korea and regression-based Monte Carlo simulation. The analysis suggests that the effect of transformational leadership is amplified by an organization’s emphasis on internal efficiency and its use of performance-based incentives, factors that themselves have independent positive and negative effects, respectively, on attitudes about collaboration. This study links transformational leadership to an increasingly necessary process in the public sector and highlights its context-dependent influence. Implications of the findings are discussed, including the notion that the efficacy of tactics adopted to support inter-organizational collaboration may be a function of their consistency with the realities of established organizational policies and processes.     

公共部门绩效评估:来自发展中国家的经验

在过去的几年中,公共部门绩效评估的理念在很多发展中国家日渐盛行。但是,由于发展中国家的公共部门软弱无力,法律框架不一致,公共服务提供的数量和质量不足,以及问责机制不完善等因素,导致公共部门绩效评估变得愈加复杂,且充满挑战。因此,总结和分析发展中国家公共部门实施绩效测量系统所取得的经验和教训,提出更具指导性的建议就显得尤其重要。基于此,本文以菲律宾、尼泊尔和印度尼西亚三个亚洲国家公共部门的绩效测量系统为分析对象,采用案例研究的分析方法,着重探讨了近几年来这些国家在绩效测量系统的设计、实施和管理等方面的一些经验教训。尽管没有一种放之四海而皆准的解决方案,但是本文在对这些经验教训反思的基础上,总结出的具有可持续性的绩效评估系统成功的五个关键要素,即所有权、激励、简单化、透明度和部门政策目标,可以为发展中国家的公共部门绩效评估提供最好的实践指导①。     

Size Matters: Toward a Contingency Theory of Diversity Effects on Performance

Abstract

This study examines the diversity-performance link by focusing on two types of diversity—gender and functional—in the context of governing boards of 24 quasi-government agencies in Korea over 16?years (2000–2015). Although public management scholarship contains evidence regarding the importance of diversity in public organizations, there is little consensus on what constitutes diversity and how it affects public sector performance. This study expands the scope of dialogues by highlighting multidimensional characteristics of diversity and the contingent nature of diversity effects. Multiplicative interaction models confirm that there are distinctive effects of different types of diversity on performance, and the relationship is moderated by the size of the group to which minorities belong. While the effect of board gender diversity is limited in our data, the effect of having a female chief executive is positively significant with decreasing marginal effect as the number of board members increases. On the other hand, the relationship of functional diversity in the boardroom to agency performance is negative, while the negative marginal effect decreases and becomes positive when board size rises above a critical number.     

Municipal Bond Issuance: Is There Evidence of a Principal-Agent Problem?

Is there evidence of a principal-agent problem in the municipal bond industry? Do public managers, either on their own or through private sector agents, act to increase their own utility at the expense of the public? This article examines municipal bond decisions in the context of principal-agent theory based on data collected through a random sample survey of municipal bond issuers. Principal-agent theory is not well developed in the public sector. In the municipal bond industry, however, we have evidence that it helps explain the actions of public managers and elected officials, in particular for pay to play and the importance of interest rates vis-à-vis relationships. These actions carry potential costs to citizens.     

(De)Composing Public Value: In Search of Basic Dimensions and Common Ground

ABSTRACT

In re-emphasizing public organizations’ societal and related normative functions, public value (PV) discourse is one way of approaching public sector performance. Although PV research is flourishing, empirical studies are still lacking. We provide evidence of the basic dimensions of PV creation in Germany's Federal Labor Agency. The results suggest a three-part factor structure and a second-order factor, indicating a broad notion of performance across different constituencies. The factors provide a framework to measure any public organization's perceived PV contribution. Our study complements the existing process perspective of PV, as developed by Moore (1995).     

Political Pressure,Conformity Pressure,and Performance Information as Drivers of Public Sector Innovation Adoption

Why public organizations adopt and abandon organizational innovations is a key question for any endeavor to explain large-scale developments in the public sector. Supplementing research within public administration on innovation with the related literature on policy diffusion, this article examines how external factors such as conformity pressure from institutionalized models, performance information from other organizations, and political pressure affect innovation adoption. By the use of two survey experiments in very different political contexts—Texas and Denmark—and a difference-in-differences analysis exploiting a reform of the political governance of public schools in Denmark, we find that public managers respond to political pressure. We find no indications that they emulate institutionalized models or learn from performance information from other organizations when they adopt organizational innovations. The results thereby point to political pressure as an important factor behind large-scale adoptions of organizational innovations in the public sector.     

Public Service Motivation,Task, and Non-task Behavior: A Performance Appraisal Experiment with Korean MPA and MBA Students

ABSTRACT

Appraisals of public employees are important for a host of reasons, and particularly so with the increasing emphasis on pay-for-performance systems and performance-based management in the public sector. However, managerial appraisals of employees can be somewhat subjective and our understanding of the appraisal process in the public sector is largely U.S.-centric. In this study, we explore whether characteristics of managers, like a rater's public service motivation (PSM), affect appraisal outcomes for their subordinates. Using a mixed experimental design, we analyze these dynamics in a non-U.S. context with MBA and MPA students enrolled in one of Korea's top universities. We find that rater PSM moderates the influence of both task and non-task behavior on an employee's performance appraisal.     

Building sustainable capacity in the public sector: What can be done?

Effective government performance is central to the creation of market-oriented economies, secure and productive populations, and democratic political systems in developing countries. Capacity building to improve public sector performance is thus an important focus of development initiatives. Several implicit assumptions underlie most such efforts: that organizations or training activities are the logical site for capacity-building interventions; that administrative structures and monetary rewards determine organizational and individual performance; that organizations work well when structures and control mechanisms are in place; and that individual performance improves as a result of skill and technology transfer through training activities. Each of these assumptions is called into question by the findings of research carried out in six developing countries and reported in this article. Our studies indicate designing interventions that most constructively address sources of poor performance must follow from an assessment of a relatively broad set of variables, including the action environment in which all such activities take place. We also found that effective public sector performance is more often driven by strong organizational cultures, good management practices, and effective communication networks than it is by rules and regulations or procedures and pay scales. Our case studies further indicate that individual performance is more affected by opportunities for meaningful work, shared professional norms, teamwork, and promotion based on performance rather than it is by training in specific skills. In this article, we describe a framework or conceptual map that emphasizes that training activities, organizational performance and administrative structures are embedded within complex environments that significantly constrain their success and that often account for training or organizational failure. When it was applied in the six case study countries, the framework proved useful in identifying capacity gaps and providing a tool for the strategic design of interventions that are sensitive to the roots of performance deficits. This allows us to conclude that the assumptions underlying many capacity-building initiatives may focus attention on interventions that do not generate the highest payoffs in terms of improved performance.