The general criticism is that performance pay cannot be implemented in the public sector because political difficulties in selecting appropriate design features to address the complexity of the job variables — for example, giving bonuses to everyone thereby rendering it a completely predictable salary supplement and not an incentive payment. However, this criticism glosses over the many different organizational contexts within the public sector. For example the outcomes of schools and tax authorities are more measurable than those of central policy or administrative units in ministries and departments. Moreover, many large private sector bureaucracies also approximate public bureaucracies on some of these variables — while there is the profit ―bottom line‖, the controllability of outcomes can be low and the tasks that generate the outcome can be multidimensional. In examining the empirical evidence therefore, it is very important to distinguish between these different contexts in order to better understand under what conditions these schemes can or cannot work.

This paper borrows and slightly modifies Wilson‘s typology (Table 1) to organize the empirical evidence so as to present these contextual nuances.<sup>5</sup> Jobs can be characterized by whether or not the job‘s outputs are easily measurable and whether or not the actions in the job to produce the output, or the internal production process, are observable. The matrix provides a framework within which to organize the empirical evidence by job type, with the simplifying assumption that jobs with multiple dimensions are located within the cell that represents the most complex of those dimensions. The top left box describes ―Production Jobs‖ in which outcomes are easily measurable, the production process consists of repeatable, mechanical tasks that are observable to an outside monitor, and controllability is likely to be high. Typical examples are manufacturing factory-floor jobs, sales jobs, and municipal services like garbage collection. If the production process is not directly observable, but outputs remain measurable, such jobs are termed ―Craft Jobs‖. With recent advances in measuring learning outcomes, teaching can be classified as a public service in which the exact process of production is hard to fix, but, at least to a certain degree, desired outcomes are quantifiable. Similarly some of the outcomes of healthcare, particularly preventative services like child immunization, are also more measurable. Other examples include tax collection, job placement services, and auditing.

In the bottom row are ―Procedural Jobs‖ and ―Coping Jobs‖. Both are characterized by difficult to measure outcomes, but again differ in the observability of the production process to an outsider. Procedural jobs like the military have clearly defined inputs, whereas administrative jobs in general policy units of the central government neither produce easily measurable outputs, nor have transparent production processes. Coping jobs present the most challenging functional contexts for PRP.

The general literature on performance pay is quite positive in relation to production jobs. Much of the earlier literature on incentive payments in the private sector looked at the impact of piece-rate compensation on productivity in production organizations involving manufacturing jobs or on similar repetitive tasks. (Stajkovic and Luthans 2003) conducted a meta-analysis of 72 empirical studies that investigate the impact of financial, as well as other, incentives on various measures of performance in organizational settings. These studies were conducted in a variety of private organizational settings, and

> 5 Wilson had originally used this framework to classify organizations and not jobs, the implicit assumption being that organizations were homogenous in the tasks that they performed.  This adaption of the framework to jobs does not change the logic of the typology, and is consistent with the proposal made by (Pritchett and Woolcock 2004) to classify decision-making functions in the public sector according to the discretion inherent in the task (vs. simple rule-following) and the number of the transactions necessary to deliver the service. Tasks which are necessarily discretionary and transaction intensive are “practice” tasks in Pritchett’s logic and “coping” tasks in Wilson’s view – but essentially refer to the same type of job – and, as Pritchett notes: “(t)he provision of key, discretionary, transaction-intensive services through the public sector is the mother of all institutional and organizational design problems” (Pritchett and Woolcock 2004, p.196).

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