Three Federal Demonstration Projects: Using Monetary Performance Awards

In: Public personnel management, Volume 23, Issue 1, p. 153-164

Abstract

Three federal demonstration projects have been using monetary rewards for performance with mixed results. Two of the projects, Navy and the National Institute of Standards and Technology, use individual merit pay in research and development environments. A third, an Air Force project, involves blue collar employees, and utilizes gain sharing. This article analyzes evaluation research conducted to date. Results show it is difficult to separate pay outcomes from the effects of multiple interventions. However inconclusive, there is evidence that improvements have been produced without many of the side effects which have been described in the literature on pay-for-performance in the federal government.