RESPONSIBLE ENTREPRENEURSHIP VISION DEVELOPMENT AND ETHICS

Identifying the forces beyond state employees’ self-reported attitudes towards performance… 157
to understand employees’ views, concerns or even fears, and suggest ways of better initiating
a PPR scheme. Relevant studies have been largely quantitative, paying insufficient attention
to employee idiosyncratic views with respect to PRP systems (e.g. Marsden & Richardson,
1994; Marsden & French, 1998; Brown, 2001). Practitioners may incorporate employees’ perceptions,
opinions and concerns to create an effective PRP system. As Schmidt et al. (2011)
point out, the acceptance of a PRP system is more likely if employees are involved in the
design of this system. More specifically we first investigate whether there are differences in
workers’ perceptions about the effective implementation of the PRP system. Apart from heterogeneity
in first order beliefs (“my own beliefs”), our results indicate that workers do not
perceive others’ attitudes (“my beliefs on others’ beliefs”, or second order beliefs) equally.
That is, while they report a rather favorable or optimistic attitude for themselves, they anticipate
others to be more skeptical and less positive towards PRP.
Secondly we examine whether managers’ perceptions are different than those of employees
holding lower rank (clerical) positions. It could be assumed that managers are more positive
towards the implementation of a PRP system, because it will facilitate their jobs in many
ways. However, a recent study by Griffith & Neely (2009) found that only experienced managers
performed better as they were able to effectively allocate effort within the team. Until
now, managers are unable to reward a better performer more than a poor performer. Salary
raises are automatic based on the length of service. The only way to reward top performers
is through promotion to a higher rank, which generally means being transferred to a position
involving another set of tasks. On the other hand, clerks in public sector could be more reluctant
to the implementation of an PRP system due to the fact that employees have to deal with
multiple principals, a common feature of public service hierarchies. If different principals value
different outputs, have different information and have little ability or incentive to coordinate,
separately designed incentive schemes are likely to fail (Dixit 1999).
The remaining part of the article includes a literature review of the key concepts used.
Thereafter, the results of a national survey are presented and analysed with a view to eliciting
economic attitudes and motivations amongst public servants. Finally, we conclude with
theoretical and practical implications.
Theoretical underpinnings of PRP
PRP can be defined as a compensation that is linked to the performance of individuals
and/or group of employees and is usually awarded as a form of monetary incentives, such as
merit pay or gain sharing (Millkovich & Wigdor, 1991). PRP is based on the assumption that
individual outcomes improve when they are related to monetary rewards. The issue of improving
organizational outcomes through improving employees’ motivation and performance lies
in a simple microeconomic principal-agent model. In order to avoid moral hazard and adverse
selection, situations where naturally arise in both private and public sectors, incentive schemes
are provided. Therefore, this model proposed reward systems which induce employees to act
in the firms’ interest (Mirless, 1976; Holmstrom, 1976).
The assumption of the agency analysis, however, that monetary rewards automatically
increase individual performance and induce employees to act in the firms’ interest has received
criticism for being oversimplified and difficult to evaluate, especially in a “multitasking” working
environment (Holmstrom & Milgrom, 1991; Baker, 1992). Besides, PRP has been blamed