Examining the Implementation of Performance-Based Bonus Scheme in the Public Sector

January 28, 2020

In 2012, the government adopted a Performance-Based Incentive System, composed of the productivity enhancement incentive and the performance-based bonus (PBB), to reward exemplary performance of employees in the public sector. This Policy Note examines how the PBB scheme is implemented in three sectors of public service.

 

The study finds, among others, that while there was a general strong support for its continuation, many lamented on the increasing number of PBB requirements over time. In the education sector, there was no proper dissemination of information on the PBB scheme at the school level. However, the study finds that the PBB scheme strengthened team work among employees. Government personnel became more aware of their responsibilities and deadlines and exercised more accountability for each other. It also noted unintended consequences of the incentive program, such as jelousy among employees, perception of arbitrary ratings, increased tendency to render overtime, and unnecessary competition among staff.

 

To enhance the effectiveness of the PBB scheme, the study suggests for the government to institute changes in the PBB requirements less frequently and only after ample preparation for cascading information. It is also critical that reform and capacity-building roadmaps in each agency be synched with the PBB targets.