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Paradoxes of ModernizationUnintended Consequences of Public Policy Reform$
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Helen Margetts, Perri 6, and Christopher Hood

Print publication date: 2010

Print ISBN-13: 9780199573547

Published to Oxford Scholarship Online: September 2010

DOI: 10.1093/acprof:oso/9780199573547.001.0001

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The Paradox of Performance-Related Pay Systems

The Paradox of Performance-Related Pay Systems

Why Do we Keep Adopting Them in the Face of Evidence that they Fail to Motivate?

(p.185) 10 The Paradox of Performance-Related Pay Systems
Paradoxes of Modernization

David Marsden (Contributor Webpage)

Oxford University Press

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

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