Chapter

The Paradox of Performance-Related Pay Systems

David Marsden

in Paradoxes of Modernization

Published in print June 2010 | ISBN: 9780199573547
Published online September 2010 | e-ISBN: 9780191722677 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199573547.003.0010
The Paradox of Performance-Related Pay Systems

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This chapter analyses the case of pay for performance in the British Civil Service since the 1980s, which progressively moved from a 19th-century classified pay system (in which pay rises came either from promotion to a higher grade or from incremental progression on a given grade) to one in which a fifth or more of pay was obtained by discretionary bonuses. It is argued that the intended consequence or perhaps more correctly, anticipated consequence of performance-related pay — to improve the motivation of public servants — has proved elusive. When a policy is the result of decisions by many actors, it is not clear whose intentions were paramount. In contrast, the unintended or unanticipated consequence was that, although performance appears to have improved in several cases, it did so by other means than motivation. Notably, it came about because of the emergence of processes facilitating convergence between goal setting at the individual and organizational levels. These have supported a renegotiation of performance standards and priorities at the individual level.

Keywords: pay for performance; British Civil Service; civil servants; performance-based pay systems

Chapter.  7759 words. 

Subjects: Public Management and Administration

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