Incentives in the Public Sector: Evidence from a Government Agency

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Title: Incentives in the Public Sector: Evidence from a Government Agency
Author(s): Burgess, S
Propper, C
Tominey, E
Item Type: Journal Article
Abstract: 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. We also show that the impact was greater on better-measured quantity outcomes than quality outcomes. The scheme was very cost effective in small offices.
Date of Acceptance: 20-Jan-2016
ISSN: 1468-0297
Publisher: Wiley
Journal / Book Title: Economic Journal
Keywords: Economics
14 Economics
Publication Status: Accepted
Appears in Collections:Imperial College Business School

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