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False or fitting recognition? The use of high performance bonuses in motivating organizational achievements

  • Carolyn J. Heinrich

    (LaFollette School of Public Affairs, University of Wisconsin-Madison)

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. © 2007 by the Association for Public Policy Analysis and Management

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File URL: http://hdl.handle.net/10.1002/pam.20244
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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

Volume (Year): 26 (2007)
Issue (Month): 2 ()
Pages: 281-304

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Handle: RePEc:wly:jpamgt:v:26:y:2007:i:2:p:281-304
Contact details of provider: Web page: http://www3.interscience.wiley.com/journal/34787/home

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  1. Baker, George P, 1992. "Incentive Contracts and Performance Measurement," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 598-614, June.
  2. James J. Heckman & Carolyn Heinrich & Jeffrey Smith, 2002. "The Performance of Performance Standards," Journal of Human Resources, University of Wisconsin Press, vol. 37(4), pages 778-811.
  3. Gerald Marschke & Pascal Courty, 2000. "An Empirical Investigation of Gaming Responses to Performance Incentives," Discussion Papers 00-12, University at Albany, SUNY, Department of Economics.
  4. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
  5. Robert Gibbons, 1998. "Incentives in Organizations," NBER Working Papers 6695, National Bureau of Economic Research, Inc.
  6. Kathryn Anderson & Richard V. Burkhauser & Jennie E. Raymond, 1993. "The effect of creaming on placement rates under the Job Training Partnership Act," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(4), pages 613-624, July.
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