Performance-related-pay nel pubblico impiego: un'analisi economica

Why have not performance-related-pay methods in the civil service confirmed positive results obtained in private business firms? Are such methods effectively useful tools in human resources practices within public organisations? How should we introduce them in public organisations and which are particular problems we find respect on their use within business firms? This paper aims to answer such questions referring to the economic theory of incentives and contracts. In particular, an agency model with multidimensional effort is presented and it is then extended in order to analyse the effects produced on incentives by dimension plurality of social welfare, civil servants risk-aversion, difficulties in measuring public goals (which imposes the use of proxies of performance), and preferences heterogeneity of political and institutional principals holding Public Administration. Policy implications which derive are discussed. Although, in general, public sector results to be a less suitable environment for the use of performance-related-pay practices, some important institutional and managerial changes could contribute to improve their effectiveness. In particular, performance subjective evaluation by managers, administrative and bargaining de-centralisation, political and managerial separation, if well realised, can act in such a way.