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Performance and Management in the Public Sector: Testing a Model of Relative Risk Aversion
Author(s) -
NicholsonCrotty Sean,
NicholsonCrotty Jill,
Fernandez Sergio
Publication year - 2016
Publication title -
public administration review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.721
H-Index - 139
eISSN - 1540-6210
pISSN - 0033-3352
DOI - 10.1111/puar.12619
Subject(s) - discretion , public sector , perception , business , risk aversion (psychology) , public management , organizational performance , risk management , public economics , marketing , public relations , economics , psychology , political science , expected utility hypothesis , finance , economy , mathematical economics , neuroscience , law
Research has demonstrated that management influences the performance of public organizations, but almost no research has explored how the success or failure of a public organization influences the decisions of those who manage it. Arguing that many decisions by public managers are analogous to risky choice, the authors use a well‐validated model of relative risk aversion to understand how such choices are influenced by managers’ perceptions of organizational performance. They theorize that managers will be less likely to encourage innovation or give discretion to employees when they are just reaching their goals relative to other performance conditions. Analyses of responses to the 2011 and 2013 Federal Employee Viewpoint Surveys provide considerable support for these assertions. The findings have significant implications for our understanding of the relationship between management and performance in public organizations .