Performance‐related pay in German public services The example of local authorities in North Rhine‐Westphalia

Performance‐related pay in German public services The example of local authorities in North... Purpose – This article seeks to examine the experiences of the recent introduction of performance‐related pay (PRP) in German public services. From an industrial relations perspective, it addresses the question of how different designs of PRP schemes and the circumstances under which PRP is implemented influence its functionality and its acceptance by employees. Design/methodology/approach – The paper uses an analysis of 215 works and establishment agreements, 17 case studies in municipalities of the federal state of North Rhine‐Westphalia (including employee attitude surveys in three cases), and interviews with experts from the employers' federation and the trade union. Findings – It is shown that – in accordance with the literature – enhancing employee motivation is not the only objective pursued by the collective actors in the introduction of PRP. Different PRP schemes have differing effects: highly selective PRP schemes tend to fail; schemes resembling conventional appraisal systems have little positive effect on motivation and performance, whereas participative systems focusing on the inclusion of employees can offer an opportunity to renegotiate performance objectives in the public services. Practical implications – Factors such as balancing material interest and social recognition, and strengthening participative elements could be crucial for improving the acceptance and functionality of PRP schemes. Originality/value – This paper provides first findings on the recent introduction of PRP in the German public sector and contributes to the discussion on the functionality of PRP in public services. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Employee Relations: An International Journal Emerald Publishing

Performance‐related pay in German public services The example of local authorities in North Rhine‐Westphalia

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
0142-5455
DOI
10.1108/01425451111096686
Publisher site
See Article on Publisher Site

Abstract

Purpose – This article seeks to examine the experiences of the recent introduction of performance‐related pay (PRP) in German public services. From an industrial relations perspective, it addresses the question of how different designs of PRP schemes and the circumstances under which PRP is implemented influence its functionality and its acceptance by employees. Design/methodology/approach – The paper uses an analysis of 215 works and establishment agreements, 17 case studies in municipalities of the federal state of North Rhine‐Westphalia (including employee attitude surveys in three cases), and interviews with experts from the employers' federation and the trade union. Findings – It is shown that – in accordance with the literature – enhancing employee motivation is not the only objective pursued by the collective actors in the introduction of PRP. Different PRP schemes have differing effects: highly selective PRP schemes tend to fail; schemes resembling conventional appraisal systems have little positive effect on motivation and performance, whereas participative systems focusing on the inclusion of employees can offer an opportunity to renegotiate performance objectives in the public services. Practical implications – Factors such as balancing material interest and social recognition, and strengthening participative elements could be crucial for improving the acceptance and functionality of PRP schemes. Originality/value – This paper provides first findings on the recent introduction of PRP in the German public sector and contributes to the discussion on the functionality of PRP in public services.

Journal

Employee Relations: An International JournalEmerald Publishing

Published: Jan 4, 2011

Keywords: Performance related pay; Public sector organizations; Collective bargaining; Industrial relations; Germany

References

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