Performance-Related Payment in the Public Sector: Theoretical Issues and Results from a Case Study of a Brazilian Government Agency

Paulo Augusto Pettenuzzo Britto (), Carlos Henrique Rocha () and Andrea Oliveira Gonçalves ()
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Paulo Augusto Pettenuzzo Britto: University of Brasília
Carlos Henrique Rocha: Universidade de Brasília
Andrea Oliveira Gonçalves: University of Brasília

Public Organization Review, 2023, vol. 23, issue 3, No 24, 1275-1292

Abstract: Abstract Performance-related pay (PRP) is a tool used to induce productivity gains by aligning workers and enterprises incentives. In the public sector it involves, in addition to motivation, attracting and maintaining qualified personnel, reducing costs and promoting public objectives. Several countries have adopted PRP in the public sector. PRP in the public sector differ from those seen in private sector because in most of the public sector organizations there is no obvious way to measure productivity. This article contributes to the PRP discussion by presenting a theoretical model, discussing recent experiences, and simulating an application to a case study to a Brazilian government agency showing that a productivity gain of 3% would be sufficient to cover the cost of the gratifications leaving a positive net result to the Treasury.

Keywords: Performance-related pay; Incentives in the public sector; Performance measurement in the public sector; Rucker’s model; Case study (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11115-022-00660-7

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