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The Paradox of Merit Pay in the Public Sector

J. Edward Kellough, Haoran Lu

Open publisher page 179 citations

Abstract

A growing consensus among administrators and academic researchers is that merit pay based on individual performance has failed in the public sector. At the same time, however, governments continue to express support for the merit pay concept. This article reviews the theoretical foundation and proposed advantages of merit pay systems, then identifies the four most critical problems associated with merit pay practices in the public service.

About this research paper

What this paper is about

A growing consensus among administrators and academic researchers is that merit pay based on individual performance has failed in the public sector. At the same time, however, governments continue to express support for the merit pay concept. This article reviews the theoretical foundation and proposed advantages of merit pay systems, then identifies the four most critical problems associated with merit pay practices in the public service.

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OpenAlex reports 179 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

A growing consensus among administrators and academic researchers is that merit pay based on individual performance has failed in the public sector. At the same time, however, governments continue to express support for the merit pay concept. This article reviews the theoretical foundation and proposed advantages of merit pay systems, then identifies the four most critical problems associated with merit pay practices in the public service.

Key concepts: Merit pay, Foundation (evidence), Public sector, Civil service, Pay for performance, Economics, Performance-related pay, Public economics

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