Do They All Fail?: A Comparative Analysis of Performance-Related Pay Systems in Local Governments

Performance-related pay (PRP) regimes have been promoted as instruments to boost efficiency, motivation, and performance orientation of the public sector and its employees. However, experiences of implementation have revealed that PRP is not a quick-and-easy-win instrument, and that the results expected from it could not often be realized. Not only were expected effects like motivation crowdingin regularly not realized; looking at the reform discourse and development in some European countries it seems that PRP regimes have been loosened or even taken off the reform agenda, often with the notion that PRP systems were not operated as planned, failed to deliver, and ultimately were stalled as being a control instrument that was incompatible with the existing administrative culture. Local government level in Germany, France, and Italy are among the areas where such developments occurred, and where accounts of the successful implementation of PRP systems were given only somewhat reluctantly. These three national local government levels will serve as comparative cases to explore just why PRP systems have failed to manifest a core position in performance-oriented reform agendas. In terms of research the interest of this chapter lies in finding out what can explain why a once clearly positioned and regulated reform policy like PRP should be taken off the reform agenda rather quickly. By comparative analysis of the three case studies against those theoretical perspectives, we aim to better identify potential influencing factors and mechanisms.