Assignment task:
Class Activity II: Pay For Performance
Background:
- There is a prevailing view that public sector and nonprofit organizations should adopt more businesslike attitudes and practices, a sentiment amplified by the rise of New Public Management (Weibel et al.. 2009).
- A significant number of OECD member countries and several developing nations have implemented performance-related pay systems. Examples include Brazil, Mexico, the Netherlands, New Zealand, the United Kingdom, the United States and Canada.
- According to principal-agent theory, well-managed pay-for-performance schemes can enhance public sector efficiency and boost employee motivation.
- For example, Jensen and Murphy (1990) suggest that cash compensation should offer substantial rewards for exceptional performance and meaningful penalties for subpar performance.
Questions:
1. Please evaluate whether the 'pay for performance system can be effectively implemented in the following organizations to motivate employees. If applicable, outline the potential benefits and implementation strategies. If not, discuss the potential challenges and factors that may hinder its effectiveness.
2. (1) Welleby Elementary School (public) in Broward County; (2) A DMV in Sunrise; (3) Coral Springs Are Department