Was Weber Right? : The Effects of Pay for Ability and Pay for Performance on Pro-Social Motivation, Ability and Effort in the Public Sector
This paper examines the effects of pecuniary compensation on the ability and motivation of individuals in organizations with non-pecuniary or pro-social missions. In particular, the paper compares flat pay systems, unrelated with ability or effort,...
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| Format: | Working Paper |
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/05/24467929/weber-right-effects-pay-ability-pay-performance-pro-social-motivation-ability-effort-public-sector http://hdl.handle.net/10986/21993 |
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okr-10986-219932021-04-23T14:04:06Z Was Weber Right? : The Effects of Pay for Ability and Pay for Performance on Pro-Social Motivation, Ability and Effort in the Public Sector Banuri, Sheheryar Keefer, Philip SKILLS EMPLOYMENT PUBLIC ADMINISTRATIONS E-MAIL RELIABILITY MOTIVATION STUDY ACCOUNTING PERSONALITY WAGES SOCIAL ORGANIZATIONS SCIENCE TIME FRAME RESULTS BASIC FAMILY INCOME AGE VALUE COMPETITIVENESS GENDER ACTIVITIES GROUPS SYSTEMS INFORMATION POLITICAL ECONOMY EFFORT IMAGE EFFECTS SOCIAL BEHAVIOR INCENTIVES TRANSMISSION INTRINSIC MOTIVATION PRIVATE SECTOR SYSTEM ECONOMIC THEORY PAYMENTS CODES ECONOMICS LANGUAGE MANAGEMENT MEDIA ADMINISTRATION OPEN ACCESS COMPUTER RESULT KNOWLEDGE INSTITUTIONS DATA LIMITATIONS THEORY EDUCATION RISK DEVELOPMENT ECONOMICS COMPUTERS HUMAN RESOURCES PERFORMANCE PUBLIC ADMINISTRATION BARGAINING INTUITION SCREEN RESOLUTION OUTPUTS ATTENTION TARGETS ABILITY PRODUCTIVITY INSTITUTION LAW PROFIT IDEAS STUDENTS FINANCIAL SUPPORT IT WEBSITE SOCIETY ORGANIZATIONS AT WEB PAYOUTS LEARNING OUTCOMES HIGH WAGES RECALL PRIMING STUDENT LEARNING COMPUTER SCREEN DEMOGRAPHICS USES FINANCE EFFICIENCY CAPABILITIES PRIVATE INFORMATION This paper examines the effects of pecuniary compensation on the ability and motivation of individuals in organizations with non-pecuniary or pro-social missions. In particular, the paper compares flat pay systems, unrelated with ability or effort, to two other systems that are considered superior: high-powered, pay for performance schemes and more traditional, “Weberian” schemes that calibrate pay to ability, independent of effort. The analysis uses a sample of future public sector workers and finds that all three pay schemes attract motivated workers into tasks with a pro-social mission. However, flat pay schemes also attract low ability workers. In the short run, pay-for-performance schemes generate higher effort than flat pay and pay-for-ability systems, a difference driven entirely by effects on unmotivated workers. Once selection effects are accounted for, however, workers with pay for ability and pay for performance exert statistically indistinguishable levels of effort in the pro-social task. Moreover, pay for ability elicits effort at lower cost than pay for performance. 2015-06-02T16:39:31Z 2015-06-02T16:39:31Z 2015-05 Working Paper http://documents.worldbank.org/curated/en/2015/05/24467929/weber-right-effects-pay-ability-pay-performance-pro-social-motivation-ability-effort-public-sector http://hdl.handle.net/10986/21993 English en_US Policy Research Working Paper;No. 7261 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
SKILLS EMPLOYMENT PUBLIC ADMINISTRATIONS RELIABILITY MOTIVATION STUDY ACCOUNTING PERSONALITY WAGES SOCIAL ORGANIZATIONS SCIENCE TIME FRAME RESULTS BASIC FAMILY INCOME AGE VALUE COMPETITIVENESS GENDER ACTIVITIES GROUPS SYSTEMS INFORMATION POLITICAL ECONOMY EFFORT IMAGE EFFECTS SOCIAL BEHAVIOR INCENTIVES TRANSMISSION INTRINSIC MOTIVATION PRIVATE SECTOR SYSTEM ECONOMIC THEORY PAYMENTS CODES ECONOMICS LANGUAGE MANAGEMENT MEDIA ADMINISTRATION OPEN ACCESS COMPUTER RESULT KNOWLEDGE INSTITUTIONS DATA LIMITATIONS THEORY EDUCATION RISK DEVELOPMENT ECONOMICS COMPUTERS HUMAN RESOURCES PERFORMANCE PUBLIC ADMINISTRATION BARGAINING INTUITION SCREEN RESOLUTION OUTPUTS ATTENTION TARGETS ABILITY PRODUCTIVITY INSTITUTION LAW PROFIT IDEAS STUDENTS FINANCIAL SUPPORT IT WEBSITE SOCIETY ORGANIZATIONS AT WEB PAYOUTS LEARNING OUTCOMES HIGH WAGES RECALL PRIMING STUDENT LEARNING COMPUTER SCREEN DEMOGRAPHICS USES FINANCE EFFICIENCY CAPABILITIES PRIVATE INFORMATION |
| spellingShingle |
SKILLS EMPLOYMENT PUBLIC ADMINISTRATIONS RELIABILITY MOTIVATION STUDY ACCOUNTING PERSONALITY WAGES SOCIAL ORGANIZATIONS SCIENCE TIME FRAME RESULTS BASIC FAMILY INCOME AGE VALUE COMPETITIVENESS GENDER ACTIVITIES GROUPS SYSTEMS INFORMATION POLITICAL ECONOMY EFFORT IMAGE EFFECTS SOCIAL BEHAVIOR INCENTIVES TRANSMISSION INTRINSIC MOTIVATION PRIVATE SECTOR SYSTEM ECONOMIC THEORY PAYMENTS CODES ECONOMICS LANGUAGE MANAGEMENT MEDIA ADMINISTRATION OPEN ACCESS COMPUTER RESULT KNOWLEDGE INSTITUTIONS DATA LIMITATIONS THEORY EDUCATION RISK DEVELOPMENT ECONOMICS COMPUTERS HUMAN RESOURCES PERFORMANCE PUBLIC ADMINISTRATION BARGAINING INTUITION SCREEN RESOLUTION OUTPUTS ATTENTION TARGETS ABILITY PRODUCTIVITY INSTITUTION LAW PROFIT IDEAS STUDENTS FINANCIAL SUPPORT IT WEBSITE SOCIETY ORGANIZATIONS AT WEB PAYOUTS LEARNING OUTCOMES HIGH WAGES RECALL PRIMING STUDENT LEARNING COMPUTER SCREEN DEMOGRAPHICS USES FINANCE EFFICIENCY CAPABILITIES PRIVATE INFORMATION Banuri, Sheheryar Keefer, Philip Was Weber Right? : The Effects of Pay for Ability and Pay for Performance on Pro-Social Motivation, Ability and Effort in the Public Sector |
| relation |
Policy Research Working Paper;No. 7261 |
| description |
This paper examines the effects of
pecuniary compensation on the ability and motivation of
individuals in organizations with non-pecuniary or
pro-social missions. In particular, the paper compares flat
pay systems, unrelated with ability or effort, to two other
systems that are considered superior: high-powered, pay for
performance schemes and more traditional, “Weberian” schemes
that calibrate pay to ability, independent of effort. The
analysis uses a sample of future public sector workers and
finds that all three pay schemes attract motivated workers
into tasks with a pro-social mission. However, flat pay
schemes also attract low ability workers. In the short run,
pay-for-performance schemes generate higher effort than flat
pay and pay-for-ability systems, a difference driven
entirely by effects on unmotivated workers. Once selection
effects are accounted for, however, workers with pay for
ability and pay for performance exert statistically
indistinguishable levels of effort in the pro-social task.
Moreover, pay for ability elicits effort at lower cost than
pay for performance. |
| format |
Working Paper |
| author |
Banuri, Sheheryar Keefer, Philip |
| author_facet |
Banuri, Sheheryar Keefer, Philip |
| author_sort |
Banuri, Sheheryar |
| title |
Was Weber Right? : The Effects of Pay for Ability and Pay for Performance on Pro-Social Motivation, Ability and Effort in the Public Sector |
| title_short |
Was Weber Right? : The Effects of Pay for Ability and Pay for Performance on Pro-Social Motivation, Ability and Effort in the Public Sector |
| title_full |
Was Weber Right? : The Effects of Pay for Ability and Pay for Performance on Pro-Social Motivation, Ability and Effort in the Public Sector |
| title_fullStr |
Was Weber Right? : The Effects of Pay for Ability and Pay for Performance on Pro-Social Motivation, Ability and Effort in the Public Sector |
| title_full_unstemmed |
Was Weber Right? : The Effects of Pay for Ability and Pay for Performance on Pro-Social Motivation, Ability and Effort in the Public Sector |
| title_sort |
was weber right? : the effects of pay for ability and pay for performance on pro-social motivation, ability and effort in the public sector |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2015/05/24467929/weber-right-effects-pay-ability-pay-performance-pro-social-motivation-ability-effort-public-sector http://hdl.handle.net/10986/21993 |
| _version_ |
1764449856100761600 |