Incentives in the Public Sector: Evidence from a Government Agency | Zendy

Burgess Simon | Zendy; Propper Carol | Zendy; Ratto Marisa | Zendy; Tominey Emma | Zendy

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Incentives in the Public Sector: Evidence from a Government Agency

Author(s) -

Burgess Simon,

Propper Carol,

Ratto Marisa,

Tominey Emma

Publication year - 2017

Publication title -

the economic journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 4.683

H-Index - 160

eISSN - 1468-0297

pISSN - 0013-0133

DOI - 10.1111/ecoj.12422

Subject(s) - incentive , agency (philosophy) , public sector , government (linguistics) , business , public economics , empirical evidence , public administration , economics , political science , market economy , economy , sociology , linguistics , philosophy , epistemology , social science

We study the impact of team‐based performance pay in a major UK government agency, the public employment service. The scheme covered quantity and quality targets, measured with varying degrees of precision. We use unique data from the agency's performance management system and personnel records, linked to local labour market data. We show that on average the scheme had no significant effect but had a substantial positive effect in small teams, fitting an explanation combining free riding and peer monitoring. The impact was greater on better‐measured quantity outcomes than quality outcomes. The scheme was very cost effective in small offices.

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