RESPONSIBLE ENTREPRENEURSHIP VISION DEVELOPMENT AND ETHICS

Identifying the forces beyond state employees’ self-reported
attitudes towards performance related rewards
Efi VASILEIOU 1 , Iordanis KOTZAIVAZOGLOU 2 ,
Nikolaos GEORGANTZIS 3
1
International Faculty of Sheffield, City College
2
Technological Educational Institute of Central Macedonia,
Department of Business Administration, Greece
3
University of Reading, UK & LEE-UJI Castellon, Spain
1
vasileiou.efi@gmail.com
Abstract: Performance-related pay (PRP) is used by many private and public organizations. Although
its effect on company outcomes is generally viewed as positive, when used in public organizations, the results
are rather negative. Despite the growing debate about the effectiveness of PRP in the public sector, the Greek
government plan to adopt PRP schemes in public administration in the near future. Within a climate of strained
relations between civil servants and government due to the severe income reductions and the ongoing economic
crisis, the latter aspire to improve the performance of public employees by reforms including PRP
schemes. The purpose of this research is first, to study the perceptions and attitudes of Greek Public Sector
employees towards the introduction of PRP systems and secondly, to investigate whether job status could
mediate the acceptance of the aforementioned implementation. This study uses a unique questionnaire of
600 observations which was designed by the authors to address the questions outlined in the preceding lines.
Our econometric results indicate that workers have heterogeneous attitudes and hold heterogeneous beliefs
on others’ expectations regarding a successful implementation of PRP. Specifically, individual perceptions
are less skeptical towards PRP than are beliefs on others’ attitudes. Additionally, we found that managers do
not tend to be significantly more optimistic than lower rank employees regarding the correct implementation
of the PRP systems in their jobs.
Keywords: Performance-related pay, public sector, qualitative interviews, Greece.
JEL Classification: J28, J33
Introduction
The improvement of public administration performance has attracted attention by both
academics and practitioners for many years (Dahlström & Lapuente, 2009). Employees have
a central role in this improvement process, since their performance contributes considerably
to the attainment of the organizational objectives. Employee performance is viewed as a com-