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Incentives and their dynamics in public sector performance management systems
Author(s) -
Heinrich Carolyn J.,
Marschke Gerald
Publication year - 2009
Publication title -
journal of policy analysis and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.898
H-Index - 84
eISSN - 1520-6688
pISSN - 0276-8739
DOI - 10.1002/pam.20484
Subject(s) - incentive , accountability , performance measurement , public sector , context (archaeology) , function (biology) , system dynamics , performance management , principal (computer security) , public economics , economics , business , computer science , microeconomics , marketing , political science , paleontology , economy , artificial intelligence , law , evolutionary biology , biology , operating system
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.