Performance management and performance pay have been on the civil service and public institutions reform agenda for years. If implemented correctly, they can have substantial, positive impacts on public sector productivity and performance. But what exactly should performance management frameworks look like? And how can we best engage clients on this topic? A World Bank project in Romania is presented to answer these questions. Are there pitfalls, where performance pay can have potential negative consequences? Professor John Marvel will present his research on the interaction between performance-based bonuses, gender and racially diverse teams, and turnover.
Managers or measures? Insights from an analysis of performance management of civil servants in Romania
The talk presents the lessons learnt from an in-depth analysis of the staff performance management system in the Romanian public administration. The project used large-scale survey data, behavioral analysis, and legal and administrative records to assess how well the system fulfills its purposes. Like many other public performance management systems, the Romanian one is highly formalized and focused on control and accountability. However, in practice, almost everybody receives the highest performance rating and there are no consequences for high or low performance. Yet, good managers succeed in motivating their staff through frequent hands-on feed-back and creating a good working environment. The results suggest that more attention should be paid to helping and incentivizing managers to coach and engage staff in achieving organizational objectives.
Inequality, Diversity, and Turnover in Formal Work Teams
This presentation focuses on the interaction of diversity and variation in performance-based bonuses in formal work groups. Based on a large set of micro-data on American federal government employees, we find that inequality in performance-based bonuses and diversity in teams are negatively associated with turnover, and that inequality’s effects on turnover become negative at higher levels of diversity. These results should encourage managers to bear in mind that their performance pay decisions should not overweight one factor. Instead, these decisions should incorporate information about group diversity, group member race and gender, individual group members’ relative material standing, and the potential interplay of these factors with each other and with inequality.