Public Management Incentives and Motivations Friday, February 22, 2019 Hun Myoung Park, Ph.D. Public Management & Policy Analysis Program Graduate School of International Relations

Big Question (Behn 1995) Micromanagement Motivation: How can public managers motivate public employees to work energetically and intelligently towards achieving public purposes? How can the legislature control the executive, and how can political managers control civil servants (principal-agent problem)? Measurement 2

Basic Questions What do employees want to get from organizations and society? Why do people want to work for government? 3

How To Motivate? Organizations and their employees exchange (contribution and rewards) Reward (carrot) and penalty (stick) based on fair and accurate performance appraisal Need-incentive fit: What does he/she want to get? Provide proper incentives/disincentives. 4

Need, Motive, and Value Need is a resource or condition required for the well-being of an individual Motive is a force acting within an individual that causes him to see to obtain or avoid some external object Value is an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence.

Employees’ Needs Murray’s List of Basic Needs (1938) Maslow’s Need Hierarchy (1954) Alderfer’s ERG Model (1972) Abasement Achievement Affiliation Aggression Autonomy Counteraction Defendance Dominance Exhibition Harm avoidance Nurturance Order Play Rejection Sentience Sex Succorance Understanding Self-actualization needs Esteem needs Belongingness social needs Safety needs Physiological needs Growth needs Relatedness needs Existence needs 6

Incentive for Employees Which incentives do organizations provide to their employees? 7

Types of Incentives 1 Incentive Type Definitions and Examples Barnard (1938) Specific Incentives Material inducements Personal, nonmaterialistic inducements Desirable physical conditions of work Ideal benefactions General incentives Associational attractiveness Customary working conditions Opportunity for feeling of enlarged participation in course of events Condition of communion Incentives “specifically offered to an individual” Money, things, physical conditions Distinction, prestige, personal power, dominating position “Satisfaction of ideals about nonmaterial future or altruistic relations” (pride of workmanship, sense of adequacy, altruistic service for family or others, loyalty to organization, esthetic and religious feeling, satisfaction of hate and revenge) Incentives that “cannot be specifically offered to an individual” Social compatibility, freedom from hostility due to racial, religious differences Conformity to habitual practices, avoidance of strange methods and conditions Association with large, useful, effective organization Personal comfort in social relations 8

Types of Incentives 2 Incentive Type Definitions and Examples Simon (1948) Incentives for employee participation Incentives for elites or controlling groups Clark and Wilson (1961) and Wilson (1973) Material incentives Solidary incentives Specific solidary incentives Collective solidary incentives Purposive incentives Salary or wage, status and prestige, relations with working group, promotion opportunities Prestige and power Tangible rewards that can be easily priced (wages and salaries, fringe benefits, tax reductions, changes in tariff levels, improvement in property values, discounts, services, gifts) Intangible incentives without monetary value and not easily translated into one, deriving primarily from the act of associating Incentives that can be given to or withheld from a specific individual (offices, honors, deference) Rewards created by act of associating and enjoyed by all members if enjoyed at all (fun, conviviality, sense of membership or exclusive-collective status or esteem) Intangible rewards that derive from satisfaction of contributing to worthwhile cause (enactment of a law, elimination of government corruption)

Incentive & Organization Type 1 Clark and Wilson (1961) Material incentives: tangible rewards, often monetary – wages, fringe benefits, patronage Solidary incentives: intangible rewards from the act of association – sociability, status Purposive incentives: intangible rewards related to the goals of the organization – e.g., working on an election of a supported candidate 10

Incentive & Organization Type 2 Utilitarian organizations rely primarily on material incentives (business firms, labor unions). Clark and Wilson predict they will have fairly precise-cost accounting machinery (Scott p. 172). Managers will focus on obtaining necessary material incentives. Conflicts will be about distribution. Organizational goals will be secondary to incentives. 11

Incentive & Organization Type 3 Solidary organizations (service-oriented voluntary organizations and social clubs) are places where people make contributions in return for sociability and status. Executive efforts at securing prestige, good fellowship Organizational goals are non-controversial and socially acceptable. These organizations tend to be less flexible and more public in actions and decisions. 12

Incentive & Organization Type 4 Purposive organizations rely on their stated goals to attract and retain people (Clark and Wilson, 1961). Executives need to maintain inducements, but when goals are lofty this is difficult to sustain. Often their efforts fail initially or intermittently (don't elect candidate, don't stop hunger, etc.). Sometimes the goals are too vague or only support a minority of interests.

Motivation Psychological forces that determine the direction of behavior, level of effort, level of persistence. Motivation is NOT unchangeable Preferences are not exogenous (given by outside) but endogenous (socialization) 14

Intrinsic vs. Extrinsic Motivation Intrinsic motivation Comes from doing the work itself Extrinsic motivation To acquire materials or social rewards To avoid punishment Workers’ own personal characteristics; Nature of their job Nature of organizations 15

Motives 1 Perry & Wise (1990) Rational (instrumental) motives are grounded in enlightened self-interest and are present in individuals who believe that their interests coincide with those of the larger community. They personally identify with some programs and express a commitment to public policy or special interest advocacy. 16

Motives 2 Norm-based motives describe a desire to serve the public interest, a duty and loyalty to the government, and a concern for social equity. Affective motives, such as altruism, are characterized by a willingness or desire to help others. 17

Lessons from Motivation Study Given diversity of individual preferences, there is no one best incentive that fits all cases Examine individual preferences and find out more salient ones in an institutional setting Try to measure performance although acknowledging its difficulty and danger Try to link performance and incentives As individual preferences change (country, generation…), incentives need to change as well