DP4010 Incentives in the Public Sector: Some Preliminary Evidence from a UK Government Agency

Author(s): Simon Burgess, Carol Propper, Marisa Ratto, Emma Tominey
Publication Date: August 2003
Keyword(s): incentives, performance, public sector, teams
JEL(s):
Programme Areas: Labour Economics, Public Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=4010

This Paper evaluates the impact of a team-based incentive scheme piloted in the public sector agency, Jobcentre Plus. The way the scheme has been designed raises many questions for which theory makes predictions. We test these predictions against our data. We find that team size affects the impact of the incentive scheme upon performance. Moreover, while the measure of quantity increased in incentivized areas, no improvement was found for the two quality measures. This may reflect concerns related to multi-tasking issues, or may reflect the small sample size available for the quality analysis. Finally, the data suggests that employees participating in the incentive scheme aim to exert a level of effort to ensure the target is achieved, but as additional effort is not rewarded they aim not to exceed this limit.