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False or Fitting Recognition? The Use of High Performance Bonuses in Motivating Organizational Achievements

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  • Carolyn Heinrich

Abstract

This research undertakes a theoretical and empirical examination of high performance bonus systems in government, that is, incentive payments awarded by the federal government to state organizations or statewide programs to motivate and recognize high performance achievements. The paper draws from a multidisciplinary literature on incentives in organizations to first derive implications for the design and implementation of high performance bonus systems. An empirical analysis of the Workforce Investment Act performance bonus system and its effectiveness in recognizing and rewarding performance follows. The results of the theoretical and empirical investigation suggest that high performance bonus systems are more likely to encourage misrepresentation of performance and other strategic behaviors than to recognize and motivate exceptional performance or performance improvements.

Suggested Citation

  • Carolyn Heinrich, 2008. "False or Fitting Recognition? The Use of High Performance Bonuses in Motivating Organizational Achievements," Public administration issues, Higher School of Economics, issue 4, pages 72-104.
    • Handle: RePEc:nos:vgmu00:2008:i:4:p:72-104
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    2. Maureen A. Pirog & Anne L. Buffardi & Colleen K. Chrisinger & Pradeep Singh & John Briney, 2009. "Are the alternatives to randomized assignment nearly as good? Statistical corrections to nonrandomized evaluations," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(1), pages 169-172.
    3. Carolyn J. Heinrich & Gerald Marschke, 2010. "Incentives and their dynamics in public sector performance management systems," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(1), pages 183-208.
    4. Donald Moynihan & Ivor Beazley, 2016. "Toward Next-Generation Performance Budgeting," World Bank Publications - Books, The World Bank Group, number 25297, April.
    5. Boying Li & Shui‐Yan Tang & Feng Wang & Haitao Yin, 2024. "Policy implementation through performance measurement: A study of water pollution remediation in China's Huai River Basin," Review of Policy Research, Policy Studies Organization, vol. 41(1), pages 210-238, January.
    6. Carolyn J. Heinrich, 2008. "Advancing public sector performance analysis," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 24(5), pages 373-389, September.
    7. Homrighausen, Pia, 2014. "Differential pricing and private provider performance," IAB-Discussion Paper 201425, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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