Incentivising staff is important for improving civil service performance and has been both a consistent challenge (Bebbington & McCourt 2006) and an objective of many reform efforts. Evidence suggests that building a merit-based civil service is the most effective way of incentivising staff, while pay reform and performance monitoring have been less effective.
Merit-based recruitment and promotion
Merit-based recruitment and predictable, rewarding career ladders improve civil servants’ capability and performance (Anderson et al. 2003) and are valued by citizens as an accountability mechanism (McCourt 2000). Basing personnel decisions on professional competence and merit is systematically associated with less corruption (Recantini et al, 2005). Merit-based state bureaucracies are associated with higher growth rates: merit-based recruitment is the most significant factor, followed by promotion from within, and career stability (Evans & Rauch 1999).
A merit-based system can help attract well-educated individuals. Higher educational attainment of civil servants is linked to higher tax revenue mobilisation, reduced corruption, better public financial management and higher economic growth (Arezki & Quintyn 2013; Arezki et al. 2012).
McCourt (2007) notes that governments can promote merit-based appointments in the civil service through organisational arrangements: for example, legal provisions, a central recruitment agency, an internal code of conduct, and separation of the administrative and political spheres. He finds that governments can take other key steps to promote merit-based systems: declaring adherence to merit principles, specifying any exceptions, auditing existing practice, and establishing a good selection procedure. The latter, he notes, includes a job analysis, (internal and/or external) advertisement, a standard application form, a scoring scheme, a shortlisting procedure, a final selection procedure, and appointment based on scoring, with notification of results. In this ‘tiered’ screening process, it is important to ensure that no one person holds the decisive vote or veto at all stages (Reid, 2009). An assessment centre procedure involving an interview and written or other oral activities remains the gold standard of staff selection (McCourt 2007).
Pay and conditions
Low pay is linked to reduced performance and motivation, as well as a number of potentially detrimental ‘coping strategies’. In a study of health workers, coping strategies included second jobs, but also predatory behaviour such as pressure on patients to attend private consultations, under-the-counter fees, and charging for free drugs (Van Lerberghe et al., 2002). However, interventions to improve pay and conditions have had mixed results, including some clearly negative impacts (Poate et al., 2008).
Increasing base salaries
A systematic review examining the evidence of the impact of increasing salaries on improving the performance of public servants found the literature to be inconclusive (Carr et al., 2011). During the review the only study that met the criteria for inclusion for analysis related to teachers rather than to core civil service workers. The study reported a significant improvement in Brazilian students’ grades when the base salaries of their teachers were higher, even after controlling for human and material resources (Menezes-Filho & Pazello, 2007). However, the study did not explore intervening mediators or moderators such as job satisfaction or organisational factors.
Research relating to pay and motivation suggests that ‘best use of money is to take the issue of money off the table’ and that ‘effective organizations compensate people in amounts and in ways that allow individuals to mostly forget about compensation and instead focus on the work itself’ (Pink, 2010, p. 170). This suggests that a sufficiently high level of base pay would motivate more effectively than an attractive bonus structure. In Tendler’s 1997 case study of health workers in Ceará, workers were paid considerably less than they would have been paid as civil servants. This was still enough to be attractive to local people, who would have faced strong social incentives to ensure adequate performance. Tailoring pay to the relevant labour market conditions is usually a necessary, but not sufficient, factor to ensure good performance.
Closing the salary gap between the salary and social expectations of private sector professionals and the terms and conditions that the public service can offer is not a realistic option in many of the poorest countries, though in such cases the pay need only be high relative to local conditions. It might not, however, restore the sense of purpose that is required to make public services function (Van Lerberghe et al., 2002). Tendler (1997) notes the importance of civil servants’ non-financial incentives, such as a sense of civic duty or accountability to the public.
In a literature review, focused on performance-related pay in the public sector, Hasnain et al. (2012) found that explicit performance standards linked to some form of paid bonus can improve outcomes. However, this was in relation to jobs with readily observable outputs or outcomes, such as health care, teaching, and revenue collection. The authors found insufficient evidence of the effect of performance-related pay in organisational contexts that are similar to that of the core civil service (i.e. involving complex tasks and difficulty in measuring outcomes) to arrive at a generalised conclusion concerning such reforms. An earlier review also found that there was no strong evidence to support the idea that performance-related pay improves worker or organisational performance in central government administrations in developing countries (Scott 2010).
Performance-related pay has been difficult to implement in many cases. A study of civil service pay systems in seven sub-Saharan African countries found that both of the performance-related pay reforms attempted had met resistance (Kiragu & Mukandala, 2003). In Benin, trade unions strongly resisted the reforms, and in Burkina Faso, civil servants were reluctant to support the ‘merit-based’ pay system because of concerns about its efficiency and fairness.
Donor salary support
Permanently raising civil servants’ salaries to competitive levels is unrealistic in many of the poorest countries. In the short term, donors have implemented salary supplements or top-ups to discourage staff from taking additional jobs (‘moonlighting’) and to recruit skilled staff quickly. Such supplements involve official cash payments or in-kind benefits that a civil servant receives beyond the level of colleagues at the same grade (Mukherjee & Manning, 2002).
Mukherjee & Manning (2002) note that competition among donors to recruit the best staff, often through offering higher salaries, can ‘cream off’ competent staff from other ministries. This can contribute to a vicious circle, creating pressure for further Project Implementation Units outside the civil service. This can also distort the local labour market, create inflationary pressures and skew the balance between pay and skills, as language skills become the most lucrative. The authors note that such ‘top-ups’ can contribute to perceptions of donor favouritism and impropriety. They recommend implementing regulations to make all government allowances clear, and preventing serving civil servants from receiving salary support from any source – although they do not provide examples of this having actually been tried. They note that government regulations should also require a cooling off period between civil servants leaving government positions and taking donor contracts or positions with a private firm that is a government supplier.
An evaluation of public sector reform in Sierra Leone concludes that excessive use of salary enhancement schemes have actually held back reform and may have decreased capacity within the wider civil service (Poate et al. 2008). The reforms were primarily driven by technocrats who received salary top-ups from donors, with little or no evidence of political buy-in.
Civil service performance is difficult monitor and assess directly. It is often inferred based on the outcomes produced – i.e. services delivered – but even so, there can be difficulty using this as a measure of performance. Evidence is, as yet, inconclusive as to the effectiveness of performance monitoring, either by the government (‘top-down’) or by external stakeholders (‘bottom-up’).
Top-down performance monitoring
A study on transition countries found that “performance management practices” had no significant impact on the performance of public bodies, but were in some cases associated with higher incidences of bribery among staff (Anderson et al. 2003). The authors conclude that the less robust the existing rules-based organisational culture and accountability mechanisms, the greater the risk of performance management practices increasing corruption.
A case study on service delivery monitoring in South Africa, through establishing a dedicated Ministry of Performance Monitoring and Evaluation, suggests that such initiatives produce mixed results (see box below). Chief ministers succeeded in encouraging departments to set measurable performance targets, but as political support for the new system waned, its sustainability became uncertain (Friedman, 2011). Nevertheless, some officials believe that the system has changed the culture of planning, monitoring and evaluation of policies in South Africa to embrace data-based processes.
Introducing service delivery monitoring systems in South Africa
President Jacob Zuma came to power in 2009 amid a wave of demonstrations by South Africans protesting at the government’s poor record in delivering basic services. During his first month in office, Zuma established a Ministry of Performance Monitoring and Evaluation to improve service delivery by ministries.
Two key officials in the new ministry, Ketso Gordhan and Ronette Engela, identified three major reasons for the government’s poor performance: (1) a lack of accountability at ministries’ upper levels, (2) decentralised and often ad hoc policy planning, and (3) poor inter-ministerial coordination. They devised a system that reorganised ministries around 12 policy goals and set data-based performance targets for ministers and departments. Zuma signed performance agreements in April 2010 with his ministers, who together framed 12 delivery agreements during the following months.
Performance and delivery agreements succeeded in specifying targets against which ministers and departments could be assessed, and in changing the culture of planning, monitoring and evaluation to embrace the new data-based performance targets. The approach made the process of formulating policies more coherent and coordinated across ministries, created opportunities to improve policies, and incentivised ministries to plan strategically, both in their own portfolios and in collaboration.
Source: Friedman, J. (2011). Sticking to the numbers: Performance monitoring in South Africa 2009-2011. Innovations for Successful Societies. Princeton University.
Bottom-up performance monitoring
Community-based (‘bottom-up’) approaches have also been designed to monitor performance and even guide reform (see Concepts: Bottom-up reforms). However, the available evidence (which relates to service delivery rather than to core civil service reform) on their effectiveness is mixed (Björkman & Svenson, 2010).
A randomised experimental study in Uganda on the use of citizen report cards in monitoring primary health services suggests that they can work, but their effectiveness is mixed and dependent on the community in question (Björkman and Svensson 2009, 2010). The authors find that ethnic divisions and income inequality in the community reduce the intervention’s effectiveness.
Tendler’s 1997 study found that workers can also face informal pressures to perform well. Her study found that workers in Brazil’s Northeast performed better due to scrutiny from the communities in which they worked, which forced them to be accountable without pressures from supervisors or other monitoring bodies.
McCourt (2013) suggests that ‘bottom-up’ approaches may be more viable for service delivery (e.g. health care services) than for core public administration functions (such as financial management, policy advice, or administrative processes). Service users can readily observe and potentially give feedback on how well the service providers are doing their jobs to create pressure for improved performance.
Amundsen (2009) argues that an ‘ethics infrastructure’ – a combination of standard-setting, legal regulation and reform of practices – can help prevent misconduct and corruption in the public sector. However, a study of 154 national administrations finds that the implementation of a code of ethics has had no influence on corruption problems in the public context. Instead, level of education is the most important determining factor in the control of corruption, especially in developing countries (Garcia-Sanchez et al. 2011).
Intrinsic motivation of staff
Besides incentives imposed from outside or by upper management, civil servants also have intrinsic motivations for performance. In a case study from Brazil’s Northeast, Tendler (1997) identifies four drivers of motivation and performance which reform programmes can build on:
- Dedication: Government workers demonstrated dedication to their jobs and a sense of civic duty. They reported feeling appreciated by their communities.
- Recognition: Government recognised civil servants through prizes for good performance, public screening methods for new recruits and public information campaigns.
- Voluntarism: Workers carried out a larger variety of tasks than their prescribed functions, often voluntarily.
- Downward accountability: Workers performed better due to scrutiny from the communities in which they worked, which forced them to be accountable without pressures from supervisors or other monitoring bodies.
Amundsen I. (2009). Introduction to public sector ethics. In I. Amundsen & V. P de Andrade (Eds.), Public sector ethics: Compendium for teaching at the Catholic University of Angola (pp. 5-45). Bergen, Norway: Chr. Michelsen Institute.
Bebbington, A., & McCourt, W. (2006). Where does development success come from? Explanations and practical implications. IDPM Working Paper no. 70. Institute for Development Policy and Management. Manchester: University of Manchester.
Björkman, M., & Svensson, J. (2009). Power to the people: evidence from a randomized field experiment on community-based monitoring in Uganda. The Quarterly Journal of Economics, 124(2), 735-769.
Garcia-Sanchez, I., Rodriguez-Dominguez, L., & Gallego-Alvarez, I. (2011). Effectiveness of ethics codes in the public sphere: Are they useful in controlling corruption? International Journal of Public Administration, 34, 190-95.
Hasnain, Z., Manning, N., & Pierskalla, J. H. (2012). Performance-related pay in the public sector. A review of theory and evidence. Policy Research Working Paper 6043. Washington D.C.: World Bank.
McCourt, W. (2013). Models of public service reform: A problem-solving approach. Policy Research Working Paper 6428. Washington D.C.: World Bank.
Scott, Z. (2011). Evaluation of public sector governance reforms 2001-2011: Literature review. Oxford: Oxford Policy Management.
Anderson, J., Reid, G., & Ryterman, R. (2003). Understanding public sector performance in transition countries: An empirical contribution. Washington, DC: The World Bank.
McCourt, W. (2000). Public appointments: From patronage to merit. Human Resources in Development Working Paper No. 9. Manchester: Institute for Development Policy and Management, University of Manchester.
Recanatini, F., Prati, A., & Tabellini, G. (2005). Why are some public agencies less corrupt than others? Lessons for institutional reform from survey data. Draft presented at PREM Week forum. Washington, DC: World Bank.
Evans, P., & Rauch, J. (1999). Bureaucracy and growth: A cross-national analysis of the effects of ‘Weberian’ state structures on economic growth. American Sociological Review, 64(5), 748-65.
Arezki, R., & Quintyn, M. (2013). Degrees of development. Finance and Development, 50(1).
Arezki, R., Lui, H., Quintyn, M. & Toscani, F. (2012). Education attainment in public administration around the world: Evidence from a new dataset. IMF Working Paper 12/231. Washington D.C.: International Monetary Fund (IMF).
McCourt, W. (2007). The merit system and integrity in the public service. Paper presented at Conference on Public Integrity and Anticorruption in the Public Service, 29-30 May, Bucharest.
Reid, G. (2009). Guidance note: Human resource management actionable governance indicators (HRM AGI) instrument. Washington D.C.: World Bank.
Van Rijckeghem, C., & Weder, B. (1997). Corruption and the rate of temptation – Do low wages in the civil service cause corruption? Washington, D.C.: International Monetary Fund.
Gorodnichenko, Y., & Sabirianova Peter, K. (2006). Public sector pay and corruption: Measuring bribery from micro data. IZA Discussion Paper No. 1987. Research Paper Series No. 06-05, Institute for Study of Labor IZA. Andrew Young School of Policy Studies. Georgia, USA: Georgia State University.
Van Lerberghe, W., Conceição, C., Van Damme, W., & Farrinho, P. (2002). When staff is underpaid: Dealing with the individual coping strategies of health personnel. Bulletin of the World Health Organisation, 80(7).
Poate, D., Balogun, P., Rothmann, I., Knight, M., & Sesay, F. (2008). Evaluation of DFID country programmes. Country study: Sierra Leone. Evaluation Report EV690. UK: DFID.
Carr, S., Leggatt-Cook, C., Clarke, M., MacLachlan, M., Papola, T. S., Pais, J., . . . Normand, C. (2011). What is the evidence of the impact of increasing salaries on improving the performance of public servants, including teachers, nurses and mid-level occupations, in low- and middle-income countries: Is it time to give pay a chance? Systematic Review. EPPI Centre, Social Science Research Unit, Institute of Education. London, UK: University of London.
Menezes-Filho, N., & Pazello, E. (2007). Do teachers’ wages matter for proficiency? Evidence from a funding reform in Brazil. Economics of Education Review, 26(6), 660-672.
Pink, D. H. (2010). Drive: The surprising truth about what motivates us. Edinburgh: Canongate Books.
Tendler, J. (1997). Good government in the tropics. Baltimore and London: John Hopkins University Press.
Scott, Z. (2010). Performance related pay. GSDRC Helpdesk Research Report 661. Birmingham, UK: GSDRC, University of Birmingham.
Kiragu, K., & Mukandala, R. (2003). Public service pay reform: Tactics sequencing and politics in developing countries: Lessons from Sub-Saharan Africa (draft report). PricewaterhouseCoopers and University of Dar es Salaam.
Mukherjee, R., & Manning, N. (2002). Salary top-ups. Administration and Civil Service Reform. Washington D.C.: World Bank.
Friedman, J. (2011). Sticking to the numbers: Performance monitoring in South Africa 2009-2011. Innovations for Successful Societies. Princeton University.
Björkman, M., & Svensson, J. (2010). When is community?based monitoring effective? Evidence from a randomized experiment in primary health in Uganda. Journal of the European Economic Association, 8(2?3), 571-581.