Abstract
The Virginia Department of Transportation attempted to use skill-based pay (SBP) to trigger the development of both multiskilled, self-managing work teams and a high-involvement work culture. A case study determined that this “new pay” intervention did not achieve intended goals. Two related, internal dynamics negatively affected the change effort: untimely systems redesign between SBP and agency subsystems and nonexistent strategic visioning to articulate where managers would “fit” in a high-involvement culture. These incongruencies led to loss of political support in the Virginia legislature, which ended the Virginia Department of Transportation SBP innovation. The study suggests that public agencies using SBP as a catalyst for institutional transformation must (a) be prepared for simultaneous systems redesign to support the SBP intervention, (b) address the job security needs of managers, and (c) produce successful outcomes to maintain political support throughout implementation and diffusion.
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