Effect Of Pay For Performance Research Articles

Heterogeneous Effects of Performance Pay with Market Competition: Evidence from a Randomized Field Experiment

It is well-established that the effectiveness of pay-for-performance (PfP) schemes depends on employee- and organization-specific factors. However, less is known about the role of external forces. Investigating the role of market competition on the effectiveness of PfP, we theorize that there are two counteracting effects – business stealing and competitor response – that jointly generate an inverted U-shape relationship between PfP effectiveness and competition. Weak competition discourages effort response to PfP because there is little extra market to gain, while strong competition creates low incentives because competitors are more likely to respond. PfP hence has the strongest effect under moderate competition. Field data from a bakery chain and its competitive environment confirm our theory, allow us to empirically separate the business stealing and competitor response effects, and refute alternative explanations.

성과급이 구성원의 혁신활동에 미치는 영향에 관한 연구: 구성원의 직급에 따른 효과를 중심으로

성과급이 구성원의 혁신활동에 미치는 영향에 관한 연구: 구성원의 직급에 따른 효과를 중심으로

The Effect of Pay for Performance in the Emergency Department on Patient Waiting Times and Quality of Care in Ontario, Canada: A Difference-in-Differences Analysis

In 2008, a pay-for-performance program was implemented in sequential waves in Ontario emergency departments (EDs), with the aim of reducing length of stay. We seek to evaluate its effects on ED length of stay and quality of care. This was a retrospective observational study of ED visits in Ontario from April 1, 2007, to March 31, 2011, using multivariable difference-in-differences analysis. Pay-for-performance hospitals and matched control sites were selected for each of 3 waves of the program. The primary outcome was 90th percentile ED length of stay; we also examined quality-of-care indicators. Pay-for-performance hospitals had a modest reduction in overall adjusted 90th percentile ED length of stay in wave 1 (-36 minutes; 95% confidence interval [CI] -50 to -21 minutes), but not in wave 2 (-14 minutes; 95% CI -30 to 2 minutes) or wave 3 (-7 minutes; 95% CI -23 to 8 minutes). ED admitted patients had a pronounced reduction in adjusted 90th percentile length of stay in wave 1 (-225 minutes; 95% CI -263 to -188 minutes) and wave 2 (-133 minutes; 95% CI -175 to -91 minutes). Nonadmitted low-acuity patients had reductions in adjusted 90th percentile ED length of stay in wave 1 (-24 minutes; 95% CI -29 to -18 minutes) and wave 3 (-19 minutes; 95% CI -24 to -14 minutes). The program did not negatively affect ED quality-of-care measures, such as 30-day mortality or readmission rates. Pay-for-performance was associated with modest overall benefits for ED length of stay without adversely affecting quality of care.

Pay for performance in the public sector: the challenge of fairness

This paper contributes to an explanation of why pay for performance (PFP) in the public sector has difficulties in functioning properly and why, despite the difficulties, its use is continued. To do so, the paper draws on insights from behavioural economics. The explanation focuses on cognitive biases in the way people process information. These biases, affecting employees as well as managers, are reasons for employees' perception of unfairness in the allocation of PFP. Attempts to reduce this perception of unfairness may conflict with other considerations concerning motivation and efficiency, and generate a number of dilemmas. The cognitive biases may impede managers' rational reflections on the dilemmas associated with attempts to reduce the perception of unfairness, and then also the rational choice of trade-offs. Furthermore, the cognitive biases may cause managers to underestimate the negative effects of PFP and, consequently, PFP may be maintained even if it is not appropriate in the specific context.

The Effect of Pay for Performance on Radical Creativity and Incremental Creativity

The Effect of Pay for Performance on Radical Creativity and Incremental Creativity

The Long-Term Effect of Premier Pay for Performance on Patient Outcomes

Background Pay for performance has become a central strategy in the drive to improve health care. We assessed the long-term effect of the Medicare Premier Hospital Quality Incentive Demonstration (HQID) on patient outcomes. Methods We used Medicare data to compare outcomes between the 252 hospitals participating in the Premier HQID and 3363 control hospitals participating in public reporting alone. We examined 30-day mortality among more than 6 million patients who had acute myocardial infarction, congestive heart failure, or pneumonia or who underwent coronary-artery bypass grafting (CABG) between 2003 and 2009. Results At baseline, the composite 30-day mortality was similar for Premier and non-Premier hospitals (12.33% and 12.40%, respectively; difference, −0.07 percentage points; 95% confidence interval [CI], −0.40 to 0.26). The rates of decline in mortality per quarter at the two types of hospitals were also similar (0.04% and 0.04%, respectively; difference, −0.01 percentage points; 95% CI, −0.02 to ...

Effects of Pay for Performance on the Quality of Primary Care in England

Effects of Pay for Performance on the Quality of Primary Care in England

Sorting Effects of Performance Pay

Sorting Effects of Performance Pay

An Empirical Examination of Goals and Performance-to-Goal Following the Introduction of an Incentive Bonus Plan with Participative Goal-setting

Prior research documents performance improvements following the implementation of pay-for-performance (PFP) bonus plans. However, bonus plans typically pay for performance relative to a goal, and the manager whose performance is to be evaluated often participates in setting the goal. In these settings, PFP affects managers’ incentive to influence goal levels in addition to affecting performance effort. Prior field research is silent on the effect of PFP on goals, the focus of this paper. Using sales and sales goal data from 61 stores of a U.S. retail firm over 10 quarters, we find that the introduction of a performance-based bonus plan with participative goal setting is accompanied by lower goals that are more accurate predictors of subsequent sales performance. Statistical tests indicate that increased goal accuracy is attributable to managers “meeting but not beating” goals and to new information being impounded in goals. We further investigate how differences among managers are associated with goal levels. We find significant “manager effects” but no “supervisor effects.” In additional tests we find that cross-sectional differences among managers are related to differing marginal returns to slackbuilding effort. Turning to the role of new information on goals, we find that prior period performance has incremental power to explain goal levels in the postplan period. Our results provide field-based evidence that PFP and participative goal setting affect the level and accuracy of goals, effects that are associated with both information exchange and with managers’ incentives to influence goals.

Effects of Pay for Performance on the Quality of Primary Care in England

A pay-for-performance scheme based on meeting targets for the quality of clinical care was introduced to family practice in England in 2004. We conducted an interrupted time-series analysis of the quality of care in 42 representative family practices, with data collected at two time points before implementation of the scheme (1998 and 2003) and at two time points after implementation (2005 and 2007). At each time point, data on the care of patients with asthma, diabetes, or coronary heart disease were extracted from medical records; data on patients' perceptions of access to care, continuity of care, and interpersonal aspects of care were collected from questionnaires. The analysis included aspects of care that were and those that were not associated with incentives. Between 2003 and 2005, the rate of improvement in the quality of care increased for asthma and diabetes (P<0.001) but not for heart disease. By 2007, the rate of improvement had slowed for all three conditions (P<0.001), and the quality of those aspects of care that were not associated with an incentive had declined for patients with asthma or heart disease. As compared with the period before the pay-for-performance scheme was introduced, the improvement rate after 2005 was unchanged for asthma or diabetes and was reduced for heart disease (P=0.02). No significant changes were seen in patients' reports on access to care or on interpersonal aspects of care. The level of the continuity of care, which had been constant, showed a reduction immediately after the introduction of the pay-for-performance scheme (P<0.001) and then continued at that reduced level. Against a background of increases in the quality of care before the pay-for-performance scheme was introduced, the scheme accelerated improvements in quality for two of three chronic conditions in the short term. However, once targets were reached, the improvement in the quality of care for patients with these conditions slowed, and the quality of care declined for two conditions that had not been linked to incentives. Continuity of care was reduced after the introduction of the scheme.

Antecedents and Consequences of Intra-firm Wage Dispersion: Effects of Performance-Pay on Wage Dispersion and Wage Dispersion’s Effects on Employees’ Consciousness and Attitudes

Antecedents and Consequences of Intra-firm Wage Dispersion: Effects of Performance-Pay on Wage Dispersion and Wage Dispersion’s Effects on Employees’ Consciousness and Attitudes

Sorting and Incentive Effects of Pay for Performance: An Experimental Investigation

Agency theory highlights losses in productivity that may occur when the interests of owners and employees are imperfectly aligned. Pay for performance has been proposed as a solution to this proble...

An Empirical Examination of Goals and Performance-to-Goal Following the Introduction of an Incentive Bonus Plan with Participative Goal Setting

Prior research documents performance improvements following the implementation of pay-for-performance (PFP) bonus plans. However, bonus plans typically pay for performance relative to a goal, and the manager whose performance is to be evaluated often participates in setting the goal. In these settings, PFP affects managers' incentive to influence goal levels in addition to affecting performance effort. Prior field research is silent on the effect of PFP on goals, the focus of this paper. Using sales and sales goal data from 61 stores of a U.S. retail firm over 10 quarters, we find that the introduction of a performance-based bonus plan with participative goal setting is accompanied by lower goals that are more accurate predictors of subsequent sales performance. Statistical tests indicate that increased goal accuracy is attributable to managers “meeting but not beating” goals and to new information being impounded in goals. We further investigate how differences among managers are associated with goal levels. We find significant “manager effects” but no “supervisor effects.” In additional tests we find that cross-sectional differences among managers are related to differing marginal returns to slack-building effort. Turning to the role of new information on goals, we find that prior period performance has incremental power to explain goal levels in the postplan period. Our results provide field-based evidence that PFP and participative goal setting affect the level and accuracy of goals, effects that are associated with both information exchange and with managers' incentives to influence goals.

Effect of Pay for Performance on PC Uncertain

Effect of Pay for Performance on PC Uncertain

Peformance Culture: The Causes and Effects of Performance Pay in Public Services

It is commonly argued, not least by the Conservative Government, that failings in public services stem, not from inadequate financing but from poor management. Accordingly, the Government has initiated a wave of managerial experiment in the public services and has sought to strengthen the managerial function, often by a series of wholescale borrowings from the allegedly better managed private sector. Increasingly, the object of this new managerialism has been to generate a ‘performance culture’ in the public services. The skilful deployment of new management techniques, it seems, will alter attitudes and practices across public services, such that staff become more client or customer focused and committed to the continual improvement of the services they deliver.