Early in this millennium, whilst working for the Department for Work and Pensions, I was privileged to work as a business sponsor for a study conducted by the Centre for Economic Policy Research at Bristol University, in a team led by Professor Simon Burgess. The resulting research paper addressed a previous lack of evidence on the impact of performance pay in the public sector by evaluating a pilot scheme of incentives in Jobcentre Plus.
See what you can make of links between bonus pay based incentives associated with the delivery of stretching targets, and the extent with which performance improved. To what extent can we recognise higher engagement levels in the staff who were incentivised?
Interestingly the study suggested that, at that time and in the controlled conditions, the use of incentive pay was much more cost effective than a general pay rise.