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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. Fabien Postel-Vinay & Hélène Turon, 2005. "The Public Pay Gap in Britain: Small Differences That (Don't?) Matter," PSE Working Papers halshs-00590765, HAL.
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    3. Alessandro Pavan, 2004. "On the Optimality of Privacy in Sequential Contracting," Theory workshop papers 658612000000000067, UCLA Department of Economics.
    4. 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.
    5. 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.
    6. repec:rus:hseeco:122160 is not listed on IDEAS
    7. Lawrence Katz & Alan Krueger, 1991. "Changes in the Structure of Wages in the Public and Private Sectors," Working Papers 662, Princeton University, Department of Economics, Industrial Relations Section..
    8. 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.
    9. Carol Propper & Deborah Wilson, 2003. "The Use and Usefulness of Performance Measures in the Public Sector," Oxford Review of Economic Policy, Oxford University Press, vol. 19(2), pages 250-267, Summer.
    10. 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.
    11. 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.
    12. Florian Ederer, 2010. "Feedback and Motivation in Dynamic Tournaments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(3), pages 733-769, 09.
    13. 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.
    14. 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.
    15. 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.
    16. 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.
    17. repec:fth:prinin:282 is not listed on IDEAS
    18. Blaise Melly, 2005. "Public-private sector wage differentials in Germany: Evidence from quantile regression," Empirical Economics, Springer, vol. 30(2), pages 505-520, 09.
    19. 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.
    20. 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.
    21. 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.
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