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Transparency, Recuitment and Retention in the Public Sector

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  • Gian Luigi Albano
  • Clare Leaver

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    Abstract

    Although performance measurement systems are likely to have significant recruitment and retention consequences these have received much less attention that the individual incentive effects. This paper explores these recruitment and retention consequences in organizations, such as those in the public sector, which are characterized by rigidities in pay. We clarify when performance measurement increases the cost of recruiting and retaining public sector employees and when it does not. Within the same framework, we also show that traditional practices such as tenure based pay and ports of entry can be rationalized as an optimal response to rigidities in pay.

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    File URL: http://www.bris.ac.uk/Depts/CMPO/workingpapers/wp132.pdf
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    Bibliographic Info

    Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 05/132.

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    Length: 30 pages
    Date of creation: Sep 2005
    Date of revision:
    Handle: RePEc:bri:cmpowp:05/132

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    Related research

    Keywords: performance measurement; disclosure; sorting; wage compression; public sector;

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    References

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    1. Deborah Wilson & Bronwyn Croxson & Adele Atkinson, 2004. "“What Gets Measured Gets Done”: Headteachers’ Responses to the English Secondary School," The Centre for Market and Public Organisation 04/107, Department of Economics, University of Bristol, UK.
    2. Heckman, James J. & Heinrich, Carolyn J. & Smith, Jeffrey A., 2002. "The Performance of Performance Standards," IZA Discussion Papers 525, Institute for the Study of Labor (IZA).
    3. Mueller, Richard E., 1998. "Public-private sector wage differentials in Canada: evidence from quantile regressions," Economics Letters, Elsevier, vol. 60(2), pages 229-235, August.
    4. Carol Propper & Deborah Wilson, 2003. "The Use and Usefulness of Performance Measures in the Public Sector," The Centre for Market and Public Organisation 03/073, Department of Economics, University of Bristol, UK.
    5. Giacomo Calzolari & Alessandro Pavan, 2004. "On the Optimality of Privacy in Sequential Contracting," Discussion Papers 1394, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    6. Postel-Vinay, Fabien & Turon, Hélène, 2005. "The Public Pay Gap in Britain: Small Differences That (Don't?) Matter," IZA Discussion Papers 1637, Institute for the Study of Labor (IZA).
    7. Thomas J. Kane & Douglas O. Staiger, 2002. "The Promise and Pitfalls of Using Imprecise School Accountability Measures," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 91-114, Fall.
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    9. Lawrence F. Katz & Alan B. Krueger, 1991. "Changes in the Structure of Wages in the Public and Private Sectors," NBER Working Papers 3667, National Bureau of Economic Research, Inc.
    10. George J. Borjas, 2002. "The Wage Structure and the Sorting of Workers into the Public Sector," NBER Working Papers 9313, National Bureau of Economic Research, Inc.
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    12. Caroline M. Hoxby & Andrew Leigh, 2004. "Pulled Away or Pushed Out? Explaining the Decline of Teacher Aptitude in the United States," American Economic Review, American Economic Association, vol. 94(2), pages 236-240, May.
    13. Richard Disney & Amanda Gosling, 1998. "Does it pay to work in the public sector?," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 347-374, November.
    14. Arijit Mukherjee, 2008. "Career Concerns, Matching, And Optimal Disclosure Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1211-1250, November.
    15. Blaise Melly, 2005. "Public-private sector wage differentials in Germany: Evidence from quantile regression," Empirical Economics, Springer, vol. 30(2), pages 505-520, 09.
    16. Stinebrickner, Todd R, 2001. "A Dynamic Model of Teacher Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 196-230, January.
    17. Courty, Pascal & Marschke, Gerald, 1997. "Measuring Government Performance: Lessons from a Federal Job-Training Program," American Economic Review, American Economic Association, vol. 87(2), pages 383-88, May.
    18. Gibbons, Robert & Waldman, Michael, 1999. "Careers in organizations: Theory and evidence," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 36, pages 2373-2437 Elsevier.
    19. Clare Leaver & Gian Luigi Albano, 2004. "Transparency, Recruitment and Retention in the Public Sector," Economics Series Working Papers 219, University of Oxford, Department of Economics.
    20. James M. Poterba & Kim S. Rueben, 1994. "The Distribution of Public Sector Wage Premia: New Evidence Using Quantile Regression Methods," NBER Working Papers 4734, National Bureau of Economic Research, Inc.
    21. Florian Ederer, 2010. "Feedback and Motivation in Dynamic Tournaments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(3), pages 733-769, 09.
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