Back to the future revisited: A systematic literature review of performance-related pay in the public sector

Abstract

Performance-related pay (PRP) has been part of public-sector pay structures in the past four decades. Despite public administration scholars denouncing its use in the public sector, PRP is being increasingly implemented in public organizations worldwide. Notwithstanding controversy over its use in the public sector, the last decade has seen a huge surge in its adoption. In order to assess the theoretical, empirical, and scientific reasoning for this interest we analyze the existing literature in order to identify the emerging discussions in this area and to provide a systematic review that can be used as guidance for future research. The review highlights the gaps in our current knowledge of PRP in the public sector and identifies factors affecting its success that have emerged from new research over the last fourteen years. After identifying these, we propose a number of important pathways that future research might take in order for public organizations globally to design optimal PRP schemes.

Data availability statement

The authors confirm that the data supporting the results of the study are available upon request.

Additional information

Notes on contributors

Farooq Ahmad

Farooq Ahmad (PhD) is a lecturer in management at Siena College. Prior to this role, he taught and researched at several academic institutions including the University of Southampton, Imperial College London, and the University of Winchester. He received his Ph.D. from the University of Southampton. His research interests lie in employment relationships, work motivation, and reform in public institutions, as well as international HRM. His primary interest lies in identity and institutional theory in the context of understanding the organizational change process.

Jing (Daisy) Lyu

Dr. Jing (Daisy) Lyu (PhD) is a lecturer in marketing after accomplishing her doctoral study at the Department of Digital and Data Driven Marketing, Southampton Business School. Daisy has presented research at international conferences in the areas of marketing, information systems and electronic business. Daisy has published in Information and Management, Journal of Business Research, Journal of International Marketing, Journal of Marketing Theory and Practice. She is keen on working with authors who have similar research interests.

Edmund Stazyk

Malcolm Higgs (DBA, MPhil, Chartered Psych) is Professor of Leadership at Birmingham City University and Emeritus Professor of Organization Behavior and HRM at Southampton Business School, University of Southampton. Before joining Birmingham City University, Malcolm held the post of Director of the Business School at Southampton, and held posts at Henley Business School including: Academic Dean, Director of the Leadership Group and Research Director. He has published a number of books and over 150 academic journal papers on topics related to Leadership, Emotional Intelligence, Change Management and Team Behavior and is coauthor of psychometric tests relating to Emotional Intelligence and Leadership.

Malcolm Higgs

Edmund Stazyk (PhD) is an Associate Professor in the Department of Public Administration and Policy, housed within the Rockefeller College of Public Affairs and Policy. Professor Stazyk’s research focuses on the application of organization theory and behavior to public management, public administration theory, and human resources issues. His primary interests are in the areas of organizational and individual performance with an emphasis on employee and public service motivation.