Performance-oriented managerial practices and job attitude in public organizations

Abstract

With the growing popularity of pay-for-performance (PFP) program as a performance-oriented managerial practice in the public sector, many public administration scholars are raising concerns that the use of PFP in the public sector could have negative consequences for employees and organizations. This study mainly investigates how pay systems affects the job attitude of employees. Drawing on theory and prior studies, this paper hypothesizes that public manager’s job attitudes differ between agencies where pay-for-performance mechanism is adopted (PFP system) and those with no such system (GS system), expecting that public employees’ attitude is more influenced by monetary rewards in the former than in the latter. Hierarchical linear modeling with large-scale survey data is utilized to test the hypotheses. Consistent with expectations, the analytical results reveal that employee work satisfaction is more determined by extrinsic rewards in the PFP than in the GS system. This study discussed the empirical findings and implications in the paper.