As we have seen with the success by the local contractor, CC Myers, repairing freeways and bridges, incentives work.
This news release from Rand announces a new study examining the issue.
An excerpt.
“Performance-based accountability systems can improve how employees deliver public services, but evidence demonstrating how effective these systems are at achieving their performance goals is rare, according to a new RAND Corporation study released today at a Capitol Hill briefing.
“The study by RAND, a nonprofit research organization, examines whether performance-based accountability systems — which are enjoying growing popularity in the public sector — are having their desired effects. It examines nine performance-based accountability systems in five sectors in which public services play an important role: child care, education, health care, public health emergency preparedness and transportation.
“Researchers found that in optimum circumstances, these systems — which link financial or other incentives to measured performance — are an effective way to provide better public services. But creating an effective performance-based accountability system requires careful attention to choosing the right design for the system, which must be monitored, evaluated and adjusted as needed to meet performance goals.
“While incentives tied to performance can shape behavior, it is very hard to build a formal accountability system in a public service area that gets it right the first time,” said Brian Stecher, lead researcher of the report and acting director of RAND Education. “You need to take time to develop the measures, identify the incentives, test them out and fine-tune the system to promote the desired outcomes.”
“Researchers conclude that the most clear-cut example of an effective performance-based accountability system is cost-plus-time (A+B) contracting for highway construction, in which contractors receive a financial bonus for completing road and construction projects with an accelerated timeframe.
“Unfortunately, many of the conditions that make A+B contracting work in highway construction are not found in other forms of public service.”
