Write me a paper of 4 to 8 pages. About Pay for Performance in the Public Sector. I care about the Quality more the Quantity. Attached a review article about the same subject (Peer norm guesses and self-reported attitudes towards performance-related pay)
Michelle_Michy
20180407222208peer_norm_guesses_and_self_reported_attitudes_towards_performance_related_pay.pdf
RESEARCH ARTICLE
Peer norm guesses and self-reported
attitudes towards performance-related pay
Nikolaos Georgantzis 1,2*, Efi Vasileiou2,3, Iordanis Kotzaivazoglou4
1 School of Agriculture Policy and Development, University of Reading, Reading, United Kingdom,
2 Laboratori d’Economia Experimental and Economics Department, Universitat Jaume I, Castellon, Spain,
3 University of Sheffield, International Faculty, City College, Thessaloniki, Greece, 4 Technological
Educational Institute of Central Macedonia, Serres, Greece
Abstract
Due to a variety of reasons, people see themselves differently from how they see others.
This basic asymmetry has broad consequences. It leads people to judge themselves and
their own behavior differently from how they judge others and others’ behavior. This
research, first, studies the perceptions and attitudes of Greek Public Sector employees
towards the introduction of Performance-Related Pay (PRP) systems trying to reveal
whether there is a divergence between individual attitudes and guesses on peers’ attitudes.
Secondly, it is investigated whether divergence between own self-reported and peer norm
guesses could mediate the acceptance of the aforementioned implementation once job sta-
tus has been controlled for. This study uses a unique questionnaire of 520 observations
which was designed to address the questions outlined in the preceding lines. Our economet-
ric results indicate that workers have heterogeneous attitudes and hold heterogeneous
beliefs on others’ expectations regarding a successful implementation of PRP. Specifically,
individual perceptions are less skeptical towards PRP than are beliefs on others’ attitudes.
Additionally, we found that managers are significantly more optimistic than lower rank
employees regarding the expected success of PRP systems in their jobs. However, they
both expect their peers to be more negative than they themselves are.
1. Introduction
It has been often documented that people tend to overestimate the extent to which their beliefs
coincide with a given social norm. Psychologists refer to this phenomenon with the term “false
consensus”.[1]. From a statistical point of view, it looks rather straightforward that, in the
absence of systematic biases, individual beliefs and individual perceptions of peer norms
should coincide at least on average. This is also compatible with a broadly accepted principle
according to which social norms play a central role in the formation of individual beliefs and
behavior [2] favoring the emergence of a (real) social consensus and “modal conformism” of
individual preferences. However, research in the field of social psychology has found that peo-
ple often misperceive the norms in their peer group. According to Epley and Dunning [3],
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 1 / 15
a1111111111
a1111111111
a1111111111
a1111111111
a1111111111
OPEN ACCESS
Citation: Georgantzis N, Vasileiou E,
Kotzaivazoglou I (2017) Peer norm guesses and
self-reported attitudes towards performance-
related pay. PLoS ONE 12(4): e0174724. https://
doi.org/10.1371/journal.pone.0174724
Editor: Pablo Brañas-Garza, Middlesex University, UNITED KINGDOM
Received: November 14, 2016
Accepted: March 14, 2017
Published: April 17, 2017
Copyright: © 2017 Georgantzis et al. This is an open access article distributed under the terms of
the Creative Commons Attribution License, which
permits unrestricted use, distribution, and
reproduction in any medium, provided the original
author and source are credited.
Data Availability Statement: all relevant data are in
the paper and supporting information files
Funding: The authors received no specific funding
for this work
Competing interests: The authors have declared
that no competing interests exist
such differences in how people see themselves versus others are rooted in basic processes of
human perception. It is almost axiomatic that as long as people are in a position to perceive
themselves and to perceive others, differences in those perceptions will exist and will engender
disagreement, misunderstanding, and conflict. Due to a variety of reasons, people see them-
selves differently from how they see others. They are immersed in their own sensations, emo-
tions, and cognitions at the same time that their experience of others is dominated by what can
be observed externally. This basic asymmetry has broad consequences. It leads people to judge
themselves and their own behavior differently from how they judge others and others’ behav-
ior [4]. Recent research in food choice [5] has revealed a systematic pattern of divergence
between individual preferences and individual beliefs regarding peer norms. In particular, it
has been observed that individuals tend to state a stronger (weaker) preference for healthy
(less healthy) food than they believe their peers do. The divergence vanishes for food which is
considered to be “neutral” (not particularly healthy or unhealthy). Therefore, individuals tend
to overestimate their acceptance of a socially desirable rule compared to what they would
guess regarding others. Humphrey [6] found that subordinate workers undervalue their fel-
lows’ subordinates and overvalue their managers. His findings are based on the structural cog-
nitive model assuming that organizational structures influence the information that actors
have about each other. The magnitude of the difference in how you perceive yourself from
how you perceive others is systematic and predictable. For example, “closer” others are per-
ceived in more self-like ways than more “distant” others [7]. However, the sign of the differ-
ence and its determinants are not fully understood.
Our research also relates to the literature on extrinsic versus intrinsic incentives in labor
relations. Following the literature on gift exchange, a reliable worker would reciprocate to a
generous employer in a way which does not require the performance-contingent, ex ante
establishment of compensating incentives rules like PR contracts [8]. In the Akerlof [8] model,
higher pay always leads to higher effort (though firms clearly would not wish to pay for
unbounded effort) and if worker effort depends on a reference wage, then it may be logical for
firms to pay a wage above that level to obtain extra effort. However, extrinsic incentives may
"crowd out" intrinsic ones, yielding the contrary effects to the pretended increased motivation
and higher effort [9, 10]. Behavioral economists recognized that extrinsic incentives (rewards)
may positively affect individuals only in the short run, but in the long run they might decrease
motivation [11]. They explain that extrinsic motivation has a limited impact on actual perfor-
mance while it may reduce the agent’s motivation to undertake similar tasks in the future. In
fact, [12] warn us that "there is no doubt that the benefits [piece-rate systems or pay-for-per-
formance incentive devices] can be considerably compromised when the systems undermine
workers’ intrinsic motivation. Some of these findings are confirmed by the perceived potential
effects of Performance-Related Pay (PRP) on intrinsic motivation. A variety of psychological
theories have been used to designate the role of pay in motivation. Nevertheless, expert opin-
ions for the effectiveness of pay as a motivator have historically been divided. Motivational the-
ories can be classified in two groups, according to the importance they assign to pay as a
motivator. The first group of theories, including Maslow’s need hierarchy theory [13], Herz-
berg’s motivation-hygiene theory [14] and Ryan and Deci’s [15] self-determination theory,
questions the contribution of monetary rewards to performance enhancement. It mainly
emphasizes internal motives and intrinsic rewards, such as recognition, social relations, self-
actualization, job enrichment or autonomy. It asserts that money helps employees to meet
only ‘basic needs’ and prevents dissatisfaction; however, pay cannot promote satisfaction.
Hence, the motivational effect of financial incentives may be not only limited, but also negative
[16]. On the contrary, the second group of theories, including reinforcement theory, expec-
tancy theory, equity theory or goal-setting theory, mainly concentrates on the process by
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 2 / 15
which desired behavior is stimulated and enhanced, and advocate that there is a strong, posi-
tive pay-motivation relationship [17]. In general terms, these theories argue that individuals
are motivated when they are challenged and reinforced to attain clear, measurable and de-
manding but reasonable goals with valued and fair rewards. They imply that for most employ-
ees, money is the primary reason for working; therefore, pay is potentially a very effective
means for improving performance [18].
We report results on the elicitation of beliefs and peer norm guesses providing evidence on
the divergence between individual attitudes and guesses on peers’ attitudes. We also find evi-
dence on the perceived negative effects of PRP on intrinsic motivation. Respondents report a
more optimistic expectation regarding the success of a PRP scheme in their working environ-
ment as compared to their guesses on their peers’ expectations. We find that managers are
more optimistic than clerical employees regarding the success of the scheme, but they both
expect their peers to be more negative than they themselves are. Overall, we believe that under-
standing the existence of these misperceptions may help us to understand perceived norms
and behavioral patterns in the working environment in order to successfully implement neces-
sary reforms in the public sector.
2. Data and measures
2.1. Respondents and procedure
The current study is based on data from public servants in northern Greece. The questionnaire
was administrated in January 2015 at the National Centre for Public Administration and Local
Government (EKDDA) and more specifically its decentralized Thessaloniki annex, PINEPTH.
PINEPTH covers the northern part of Greece and serves a population approaching 40% of the
public servants in Greece. The Thessaloniki Section of the Institute of Life-Long Education
(INEP) has among its objectives to educate those working in the public sector and the local
administration. The Institute belongs to the National Centre for Public Administration and
Local Government (EKDDA) which is the national strategic agent for the development of
Human Resources of the Public Administration and Local Government (http://www.ekdd.gr/
ekdda/index.php/en/2012-06-29-09-59-33). While attendance in the courses is voluntary, par-
ticipation of public employees is very high because of the weight the courses have in promo-
tions to a higher administrative rank. Therefore, access to the participants in the courses of the
institute guarantees a representative sample, including people from a broad range of geographi-
cal areas, hierarchy ranks and institutions. While the INEP evaluates participants in the frame-
work of the aforementioned courses and it may carry out its own research, the survey whose
data are used hereby was administered independently with a clear indication that the informa-
tion would be used under strict anonymity, exclusively for the purposes of this research, which
was undertaken by autonomous researchers belonging to academic institutions only.
A permission was first guaranteed by the INEP for the survey to be distributed to the atten-
dants in its courses. Further, it was made clear to them, that individual participation was vol-
untary. The Ethics Committee of the School of Agriculture Policy and Development at the
University of Reading approved this study.
We distributed a total of 840 questionnaires during the first break of the morning class.
Responses were collected at the end of the same day, allowing for about five hours within
which the survey could be completed. A relatively high rate of responses was obtained, with
584 questionnaires returned to us fully or partially completed. To avoid the problem of missing
variables, we used the sample of 520 complete responses.
The primary data for our assessment of PRP traits took the form of questionnaire responses
indicating personal perceptions of, and attitudes towards, general practice in the context of the
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 3 / 15
forthcoming adoption of PRP in the Greek public sector. It must be stressed that the definition
of PRP incentives and their precise characteristics are still subject to debate. As no standard
instrument for the assessment of PRP traits being available for this context, we designed our
own, as follow.
Each respondent was confronted with 11 questions, on each of which he/she was invited to
express an opinion on a 5-point scale. The scale ranged through strongly disagree (1), disagree
(2), unsure (3), agree (4), and strongly agree (5). Table 1 reports the definition of each variable.
The questions are numbered according to their appearance on the original questionnaire. Fre-
quency distributions of responses to each of the 11 attitudinal statements appear in Table 2.
The questionnaire additionally requested information on respondents´ on personal infor-
mation (such as gender) and on Job characteristics (position in service and job satisfaction).
The questionnaire included demographics and other individual information like years of
employment in the public sector, education, age, but have been omitted from the model, as
they did not appear to be significant in any of the specifications estimated.
2.2. Measures of “own perception” and “my perceptions on others’
perceptions”
As stated previously, people hold heterogeneous beliefs on others’ expectations. In order to
consider whether there is divergence between first- and second-order beliefs (my beliefs on
others’ beliefs). we use the following two questions allowing for “me versus others” compari-
sons. Therefore, the survey contained a question about employee’s own behavior (e.g. “In your opinion, could an introduction of a PRP system be effectively implemented in your job (sec- tion)?”), and a question about respondents’ perceptions of others’ attitudes (e.g. “In your opin- ion, which would your colleagues’ attitude be towards the introduction of a PRP system?”). Responses were provided on a scale from 1 (completely disagree) to 7 (completely agree).
Fig 1 shows that approximately 20% of workers believe in a very successful implementation
of the PRP system in their division. Interestingly, the perception the workers have on their
coworkers’ reaction to the likelihood of a PRP system would be different. In terms of cowork-
ers’ expectations regarding PRP implementation only 8,3% of workers believe that others’ atti-
tude towards a PRP system could be positive. On the other hand, for those who believe that a
PRP system could be unsuccessfully implemented, 39,7% believe that this would arise due to
their coworkers’ reaction and only 27,9% due to their own.
Additionally, in Table 3, we present descriptive statistics of “own perception”, “my percep-
tion on others’ perceptions” and “me-vs-others misperceptions”. Misperceptions of others’
attitudes are calculated by subtracting the median of the behavior for each employee group
from each respondent’s reported perception of their employee’s behavior. Therefore, each
respondent has a misperception score which, if positive, indicated that they thought that other
employees would be more negative towards the implementation of a PRP system in their job
than their own attitudes. On average employees underestimate peers’ reaction on the success-
ful implementation of the PRP system with an own mean of 3.86 versus a mean of 3.17 for oth-
ers. To test whether there were significant misperceptions across the sample we conducted
one-sample t-tests comparing the mean misperception for each category with a value of zero.
All misperceptions were significantly different from zero.
3. Empirical methodology
This study followed the methodology for measuring self-vs.-other discrepancies between atti-
tudes by asking employees to express an opinion on what others would think regarding a possi- ble implementation of a PRP scheme in their job. The methodology employed is based on
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 4 / 15
regressions that relate the acceptability of PRP system to a set of attitudinal statements. The
definition variables included in the model are presented in Table 1. The dependent variable is
an ordered categorical variable taking on a finite number of outcomes, on a scale of 1 to 7, rep-
resenting the lowest and highest rating respectively. (“In your opinion, could an introduction of a PRP system be effectively implemented in your job (section)?”), which means that respondents
Table 1. Variables List.
Variables Definition
Attitudinal traits
Q 1. A PRP system help the workforce to improve
its productivity
Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Q. 2. A PRP system help public servants to better
understand the organization values and priorities
Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Q. 3.A PRP systems in public administration
discourage low-skilled applicants
Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Q. 4.A PRP system prompt employees to be
interested in tasks related to financial incentives
Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Q. 5.A PRP system lead a public servant to an
unethical behavior
Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Q. 6.A PRP systems demotivate public servants
that are intrinsically stimulated
Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Q. 7.A PRP system influence positively: supervisor-
employee relationship
Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Q. 8.A PRP system influence positively:
relationships with colleagues
Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Q. 9.A PRP system influence positively: total pay Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Q. 10.A PRP system influence positively: sense of
job security
Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Q. 11. A PRP system influence positively: tensions
in work
Dummy variable equal to 1 if the individuals; reported
the highest score in the five-point scale and 0
otherwise
Control variables
Male Dummy variable equal to 1 if the respondent is a male
Job satisfaction Standardized score of satisfaction with the job or
main activity where is measure on a seven-point scale
of 1 = totally dissatisfied to 7 = totally satisfied
Clerk Dummy variable equal to 1 if the respondent has a
clerical position
Dependent Variables
Own perception of the effective implementation of a
PRP system
Standardized score of an individuals’ own perception
where is measure on a seven-point scale of 1 = totally
disagree to 7 = totally agree
Own perception of others’ perceptions of the
effective implementation of a PRP system
Standardized score of an individuals’ own perception
of others ‘perceptions where is measure on a seven-
point scale of 1 = totally disagree to 7 = totally agree
https://doi.org/10.1371/journal.pone.0174724.t001
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 5 / 15
can only express their responses on a non-linear scale. Therefore, the researcher does not
know the respondent’s exact feeling but only the interval to which she/he belongs and for this
reason, the respondent’s attitude is assumed to be a latent variable that is not directly observ-
able and thus, an ordered probit model is applied.
In an ordered probit model, the latent probability of reporting a level of successfully imple-
mentation of a PRP system P �
is: Own perception of the effective implementation of a PRP sys- tem: Pi = F
−1 (Pi
�
) = ϑXi + δSi + εi eijX * Normal(0,1) (Model 1), where Pi is the own perceived implementation of the PRP system in the public sector stated by individual i. Xi are the 11 atti- tudinal variables. Si is a vector of control variables and εi is the error term. Assuming that μ1 < μ2 < . . . < μj where μ1,. . .μj are the cutoff points for the latent variable
P� ¼
0; if P�� m 1
1; if m 1 � P�� m
2
. . .
j; if P� > mj
8 >>>>><
>>>>>:
the parameters θ,δ and μ can be estimated by maximum likelihood.
Table 2. Questionnaire responses, Descriptive statistics.
Questions Responses (%)
Independent variables—Attitudinal traits Scale 1 Scale 2 Scale 3 Scale 4 Scale 5
Q. 1. In your opinion, to what extend does a PRP system in public service help the
workforce to improve its productivity?
7.4 9.5 16.6 47.8 18.7
Q. 2. In your opinion, to what extent does a PRP system help public servants to better
understand the organization values and priorities?
11.7 18 19.4 41.7 9.2
Q. 3. In your opinion, to what extent do PRP systems in public administration
discourage low-skilled employees (applicants)?
18.8 21.5 22.7 27.3 9.7
Q. 4. In your opinion, to what extent do PRP systems prompt public servants to be
interested solely in tasks that are directly related to financial incentives?
2.7 6.5 20 51.3 19.5
Q. 5. In your opinion, to what extent may a PRP system lead a public servant to an
unethical behavior?
12.6 20.4 24.6 32.2 10.2
Q. 6. In your opinion, to what extent may PRP systems demotivate public servants that
are intrinsically stimulated?
21 21.9 25.2 24.4 7.5
Scale from 1 (negative) to 5 (positive) 1 2 3 4 5
Q. 7. In your opinion, in which way could an introduction of a PRP system influence:
supervisor-employee relationship
12.8 20.2 34.7 21.9 10.4
Q. 8. In your opinion, in which way could an introduction of a PRP system influence:
relationships with colleagues
21.5 31.3 31.5 11.3 4.4
Q. 9. In your opinion, in which way could an introduction of a PRP system influence:
total pay
3.6 6.2 22.4 41.2 26.6
Q. 10 In your opinion, in which way could an introduction of a PRP system influence:
sense of job security
17.8 19.8 33.3 20.6 8.5
Q. 11. In your opinion, in which way could an introduction of a PRP system influence:
tensions in work
16 19.4 23.3 26.8 14.5
Your Job satisfaction from 1 to 7 11.1 13 22.5 31.4 22
Dependent Variables Strongly disagree
(Scale 1–2)
DisagreeScale
3
UnsureScale
4
Agree
Scale 5
Strongly
agree
(Scale 6–7)
In your opinion, could an introduction of a PRP system be effectively implemented in
your job (section)?
27.9 13.5 16.8 21.9 19.9
In your opinion, how could be your colleagues ‘reaction to the introduction of a PRP
system?
39.8 19.1 18.9 13.8 8.4
https://doi.org/10.1371/journal.pone.0174724.t002
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 6 / 15
In our model, we transform the five-point scale of the 11 attitudinal variables to binary vari-
ables. Therefore, we create 11 dummy variables equal to 1 if the individuals reported the high-
est score in the five-point scale and 0 otherwise.
The regression was re-run for the coworkers’ perception to identify differences in the
explanatory factors of own and others’ perceptions using an ordered probit model. The depen-
dent variable is again an ordered categorical variable based on the following question “In your opinion, which would your colleagues’ attitude be towards the introduction of a PRP system?” range from 1 (completely disagree) to 7 (completely agree).
A second model is specified to study Individual perceptions on others beliefs of the effective implementation of a PRP system: Li = αXi + λSi + ui (Model 2), where Li is individual i perception over the others’ perceptions for the successful implementation of the PRP system in the public
sector. Xi are the 11 attitudinal variables. Si is a vector of control variables and ui is the error term. The parameters α,λ and μ (the cutoff points for the latent variable) will be estimated by maximum likelihood. The results of the regressions are presented in Tables 4, 5 and 6.
4. Results
This section presents: a) the results of the employee’ perception about the successful imple-
mentation of a PRP system in the public sector (Table 4, column 1), b) the estimation results
Fig 1. Own attitudes and beliefs regarding peers’ attitude towards PRP.
https://doi.org/10.1371/journal.pone.0174724.g001
Table 3. Mean ‘own perception’, ‘others perceptions’ and ‘me vs others misperceptions’.
N Obs. Own perception Others perception Misperception t-test
Mean S.D Mean S.D Mean S.D
All 567 3.86 1.85 3.17 1.60 0.82 1.60 12.17***
Clerks 338 3.76 1.87 3.08 1.59 0.91 1.59 10.55***
Managers 229 4.00 1.81 3.31 1.62 0.68 1.62 6.32***
*, **, *** indicate significant improvement at 10, 5, 1 percent levels respectively.
https://doi.org/10.1371/journal.pone.0174724.t003
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 7 / 15
for perceptions on others’ attitudes (Table 4, column 2) and the misperceptions defined as “me
vs others” discrepancies (Table 4, column 3). More specifically, the dependent variable misper-
ception is an ordered categorical variable which also takes negative values. We define this vari-
able as z-scores measuring the number of standard deviations between a given response and
the mean. According to Freeman (1978) this unit transformation preserves the rank-order of
the values and yields results that are qualitatively similar to those that the original variables
would have yielded. c) the estimation results disaggregated by job position (Table 5, Table 6,
column, 1–4).
4.1. Are there differences between “my beliefs” and “my beliefs on
others’ beliefs-norm”?
In general, respondents perceived their colleagues’ attitudes towards a successful implementa-
tion of a PRP system to be less positive than their own self-reported attitudes. More specifi-
cally, the individuals who strongly agree that “a PRP system will help public servants to better
understand the organization values and priorities” and “will create more tensions in work” are
more likely to believe that a PRP system could be effectively implemented in their section
(own perception) whereas it has no impact on their beliefs concerning their colleagues’ attitude
Table 4. Ordered probit regression results of the categorical responses of “Own perception/own beliefs” versus “my perception on others’ per-
ceptions/second order beliefs” of the effective implementation of a PRP system and “misperceptions”.
VARIABLES Own beliefs Second order beliefs Misperceptions
(zscore)
(1) (2) (3)
Coef. Coef. Coef.
A PRP system help the workforce to improve its productivity 0.292** 0.270** -0.275**
A PRP system help public servants to better understand the organization values and priorities 0.678*** 0.246 -0.234
A PRP systems in public administration discourage low-skilled applicants -0.168 -0.254 0.215
A PRP system prompt employees to be interested in tasks related to financial incentives 0.0416 -0.394*** 0.335***
A PRP system lead a public servant to an unethical behavior -0.359** -0.224 0.191
A PRP systems demotivate public servants that are intrinsically stimulated -0.457** -0.374* 0.268
A PRP system influence positively: supervisor-employee relationship -0.0121 -0.160 0.105
A PRP system influence positively: relationships with colleagues 0.328 -0.0111 0.061
A PRP system influence positively: total pay 0.555*** 0.396*** -0.352***
A PRP system infl. positive. job security feel 0.135 -0.136 0.091
A PRP system infl. positive. tensions in work 0.423*** 0.188 -0.162
Job satisfaction 0.156* 0.302*** —0.251***
Male 0.171*** 0.130*** -0.113**-
Constant 0.172**
Constant cut1 -0.806 -0.828
Constant cut2 -0.285 -0.0881
Constant cut3 0.112 0.414
Constant cut4 0.586 1.010
Constant cut5 1.347 1.662
Constant cut6 1.912 2.157
Log-likelihood -933.7 -901.4
R 2
0.11
Observations 520 520 520
*, **, *** indicate significant improvement at 10, 5, 1 percent levels respectively.
https://doi.org/10.1371/journal.pone.0174724.t004
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 8 / 15
towards the introduction of a PRP system (norm). In addition, workers who strongly agree
that such “a reward system could not lead a public servant to an unethical behavior” are less
Table 5. Summary statistics of the attitudinal traits towards the introduction of PRP scheme disaggregated by job roles.
Attitudinal traits Mean
(range
1–5)
Std.
Dev.
t-stat.
Q 1. In your opinion, to what extend does a PRP system in public service help the workforce to improve its
productivity?
Managers 3.70 1.13 1.61*
Clerks 3.54 1.10
Q.2. In your opinion, to what extent does a PRP system help public servants to better understand the
organization values and priorities?
Managers 3.25 1.22 1.12
Clerks 3.14 1.15
Q.3. In your opinion, to what extent do PRP systems in public administration discourage low-skilled employees
(applicants)?
Managers 2.98 1.29 2.75*
Clerks 2.80 1.24
Q.4. In your opinion, to what extent do PRP systems prompt public servants to be interested solely in tasks
that are directly related to financial incentives?
Managers 3.81 0.93 0.64
Clerks 3.76 0.92
Q.5 In your opinion, to what extent may a PRP system lead a public servant to an unethical behavior? Managers 2.99 1.21 1.19
Clerks 3.11 1.18
Q.6. In your opinion, to what extent may PRP systems demotivate public servants that are intrinsically
stimulated?
Managers 2.54 1.23 3.28***
Clerks 2.89 1.23
Q.7. In your opinion, in which way could an introduction of a PRP system influence: supervisor-employee
relationship (from 1 negative to 5 positive)
Managers 3.04 1.18 1.42
Clerks 2.90 1.14
Q.8 In your opinion, in which way could an introduction of a PRP system influence: relationships with
colleagues (from 1 negative to 5 positive)
Managers 2.56 1.07 2.04**
Clerks 2.37 1.08
Q.9. In your opinion, in which way could an introduction of a PRP system influence: total pay (from 1 negative
to 5 positive)
Managers 3.90 1.03 1.78*
Clerks 3.74 0.99
Q.10. In your opinion, in which way could an introduction of a PRP system influence: sense of job security
(from 1 negative to 5 positive)
Managers 2.84 1.15 0.38
Clerks 2.80 1.22
Q.11. In your opinion, in which way could an introduction of a PRP system influence: tensions in work (from 1
negative to 5 positive)
Managers 3.19 1.30 2.26***
Clerks 2.93 1.28
Dependent variables
In your opinion, could an introduction of a PRP system be effectively implemented in your job (section)? Managers 4.00 1.81 1.48
Clerks 3.76 1.87
In your opinion, how could be your colleagues ‘reaction to the introduction of a PRP system Managers 3.31 1.62 1.69**
Clerks 3.08 1.59
Control variable
Your Job satisfaction from 1 to 7 Managers 4.48 1.35 1.03
Clerks 4.36 1.43
*** p<0.01 ** p<0.05 * p<0.1
https://doi.org/10.1371/journal.pone.0174724.t005
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 9 / 15
likely to believe that a PRP system could be effectively implemented in their section (own per-
ception) whereas it has no impact on their beliefs concerning the norm.
4.2. Are there similarities between “my beliefs” and “my beliefs on others’
beliefs”?
There are also some similarities of perceptions observed across the “me vs others” dimension.
For example, employees who strongly agree that a PRP system will help the workforce to
improve its productivity are more likely to believe both for themselves and for their coworkers
that a PRP system could be effectively implemented. Probably in employees’ perception, per-
formance improvements coincide with improvements in management practices, e.g. clearly
defined priorities and values. However this is in contrast with Weibel et al. [16] and Schmidt
et al. [10] who find that the effect on employee performance is less clear and could even be
negative.
Table 6. Ordered probit regression results of the categorical responses of “Own perception” versus “my perception on others’ perceptions/sec-
ond order beliefs” of the effective implementation of a PRP system split by employment position.
VARIABLES Clerks_Own
beliefs
Clerks_Second order
beliefs
Managers_Own
beliefs
Managers_Second order
beliefs
(1) (2) (3) (4)
Coef. Coef. Coef. Coef.
A PRP system help the workforce to improve its
productivity
0.364** 0.154 0.259 0.444**
A PRP system help public servants to better understand
the organization values and priorities
0.586** 0.452* 0.895*** 0.068
A PRP systems in public administration discourage low-
skilled applicants
0.175 -0.242 -0.525** -0.245
A PRP system prompt employees to be interested in
tasks related to financial incentives
-0.008 -0.533*** 0.148 -0.194
A PRP system lead a public servant to an unethical
behavior
-0.298 -0.204 -0.456* -0.177
A PRP systems demotivate public servants that are
intrinsically stimulated
-0.554** -0.185 -0.418 -0.872**
A PRP system influence positively: supervisor-
employee relationship
-0.237 -0.173 0.187 -0.093
A PRP system influence positively: relationships with
colleagues
0.349 -0.130 0.574 0.125
A PRP system influence positively: total pay 0.666*** 0.466*** 0.374** 0.280
A PRP system influence positively: sense of job security -0.014 0.029 0.0996 -0.404
A PRP system influence positively: tensions in work 0.730*** 0.097 0.185 0.114
Male 0.163 0.255** 0.164 0.336**
Job satisfaction 0.242*** 0.118* 0.0881 0.151*
Constant cut1 -0.832 -0.816 -0.790 -0.875
Constant cut2 -0.177 -0.0673 -0.470 -0.144
Constant cut3 0.162 0.403 0.0207 0.412
Constant cut4 0.640 1.033 0.507 0.963
Constant cut5 1.399 1.722 1.312 1.602
Constant cut6 1.852 2.197 2.069 2.135
Log-Likelihood -540.91 -519.93 -373.79 -373.44
Observations 307 307 213 213
*, **, *** indicate significant improvement at 10%, 5%, and 1% levels, respectively.
https://doi.org/10.1371/journal.pone.0174724.t006
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 10 / 15
Job tasks and responsibilities are usually complex in public administration. This so-called
‘multitasking problem’ [16] creates additional difficulties in the precise measurement of per-
formance. Performance appraisal systems have been rather problematic in public organiza-
tions. The existence of quotas in extrinsic rewards and favoritism create feelings of unfairness
among employees [10, 19, 20]. Public sector employees are more risk averse and intrinsically
motivated than those of the private sector [19, 16]. Thus, PRP may affect their efforts nega-
tively. In line with the above literature, this study shows that those who strongly agree that
PRP system could demotivate public servants that are intrinsically stimulated are less likely to
believe to a successful implementation of a PRP system.
Studies on PRP show that constraints in funding of public sector organizations restrict
the level of monetary rewards. As a consequence, the effect of PRP is rather limited, since
employees may not value low monetary rewards [16, 19, 21]. This study does not confirm
these findings. We show that the wage positively influences the expectation of a successful
implementation of PRP schemes.
Evidence also shows that the application of PRP in the public sector undermines employee
morale and teamwork [19, 22]. The notions of profit and loss are rather specific to the private
sector, and may be unfamiliar to civil servants [17, 23]. Our study shows that there will be no
significant effect on a worker’s relationship with a supervisor and with colleagues.
Additionally, those who are more satisfied with their job are more positive to an introduc-
tion of a PRP system. Job satisfaction, which would include all monetary and especially non-
monetary features such as the amount of discretion that is exercised, how challenging or stim-
ulating the job is, the degree of skill utilization etc., suggests that workers have a preference for
financial rewards based on performance. More satisfied workers are likely to be more produc-
tive [24], hence affecting their likelihood of receiving PRP in the future [25]. Males are more
positive towards PRP wage systems.
In order to further investigate the misperceptions between “me vs others”, we run a linear
regression using as dependent variable the misperception score. As stated earlier, mispercep-
tions of others’ attitudes are calculated by subtracting the median of the behavior for each
employee group from each respondent’s reported perception of their peers’ behavior. Since the
dependent variable is not naturally ordinal, and takes negative values it was transformed into z-
scores measuring the number of standard deviations between a given response and the mean.
According to Freeman [26], this unit transformation preserves the rank-order of the values and
yield results that are qualitatively similar to those the original variables would have yielded The
coefficients of “improve productivity” and “total wage” which are significant and negative indi-
cate that individuals tend to be less optimistic than their beliefs concerning their colleagues atti-
tude would be towards the successful implementation of a PRP system. The coefficient “A PRP
system prompts employees to be interested in tasks related to financial incentives” is significant
and positive indicating that they thought that other employees would be more negative towards
the implementation of a PRP system in their job than they would be themselves.
4.3. Clerk- manager differences
Research suggests that work roles influence perception and have an influence on behavior of
work aspects. Humphrey [6] finds that subordinate workers undervalue their fellow subordi-
nates and overevaluate their managers concluding that organizational factors systematically
bias the information that actors have about each other. Previous literature on organizational
behavior has shown that organizational factors may distort workers’ perceptions of each other
revealing that the clerks rate managers higher on leadership, intelligence and other important
role-related traits than the fellow clerks [6]. The above literature implies that since managers
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 11 / 15
are higher in the organizational hierarchy and perceive that they do more responsible work,
they will probably view the introduction of PRP system more favorably than clerks.
Therefore, we conduct our research on job roles in order to highlight whether there are
job role differences in terms of the perceived implementation of the PRP system. We split the
sample into two groups, those with a clerical position and those with a managerial position.
According to Table 3, on average, clerks perceived their peers’ attitudes to be less positive than
they actually were with an own mean of 3.76 versus a mean of 3.08 of others. The mispercep-
tion score on clerks’ group (0.91) is significantly higher than the 0.68 mean misperception of
managers, based on an one-sided t-test. The result also holds allowing for unequal variances.
Table 5 presents summary statistics of the responses. The average numerical answers of 5
out of 11 attitudinal traits from both managers’ and clerks’ responses are greater than the mid-
point of the scales (3). The t-statistics for these job position differences indicate high statistical significance for 6 out of 11 attitudinal traits. Managers are more optimistic than clerks that a
PRP system will help public servants to better understand the organization values and priori-
ties (Q.2), establishing an organizational culture oriented towards productivity (Q.1), discour-
aging low-skilled applicants (Q.3), and positively influencing total pay (Q.9). On the other
hand, clerks believe more than managers that a PRP system will influence negatively the rela-
tionship with their colleagues (Q.8), demotivate public servants that are intrinsically stimu-
lated (Q.6), whereas it will produce fewer tensions in work (Q.11). Summing up, we show that
managers tend to be more optimistic than clerks regarding the successful implementation of
PRP systems. Therefore, managers have a stronger belief in the positive aspects of PRP sys-
tems, whereas clerks hold stronger beliefs regarding their negative aspects.
The purpose of the following section is to highlight whether there are manager-clerk differ-
ences using econometric models (both within their fellows and between their job positions) in
terms of their own beliefs and their beliefs on others’ beliefs towards the successful implemen-
tation of PRP system in their job.
According to Holmstrom [27], the underlying premise behind all such schemes is that
workers are motivated primarily by monetary rewards and that an increase in remuneration
based on performance will invariably lead to an improvement in performance along the lines
desired by the management. In this study we find that all workers believe that pay, per se, is
not necessarily a potential motivator and employees would not be interested solely in tasks
related to financial incentives. However, clerks who strongly agree with the statement that a
PRP system prompt employees to be interested in tasks related to financial incentives are less
likely to believe for others (norm) towards a successful implementation of a PRP system how-
ever it has no impact for their own beliefs.
For clerks, who strongly agree that a PRP system will help public servants to improve their
productivity are more likely to believe in a successful implementation of a PRP scheme,
whereas for managers this statement has no impact for their own beliefs and has positive
impact for others’ beliefs.
Many workers could probably become very concerned about their level of job security. In a
survey of US workers both in the public and private sectors, for example, found that many work-
ers were very concerned about their level of job security [28]. However this study, in line with
Pouliakas & Theodossiou [29] finds that contingent rewards do not affect job security. This effect
could arise because public sector jobs in Greece still provide long term employment stability.
In pay-for-performance schemes managers can exactly set the values and priorities that
employees must achieve and this helps managers to focus on what is central to their operation.
We found that clerks who strongly believe for themselves and for their coworkers that a PRP
can indeed help them understand the desired outputs consider in a successful implementation
of a PRP system in their section. Finally, it is found that managers who strongly believe that
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 12 / 15
pay-for-performance schemes could discourage and lead public servants to an unethical
behavior are more negative to an introduction of a PRP system effectively. Whereas for clerks
this statement has no impact. This could probably be explained by the fact that PRP schemes
give managers more flexibility to reward the best workers, but also provide systems to stigma-
tize the least effective ones.
Overall the results of this study reveal that both managers and clerks perceive differently on
selected attitudinal traits and hold heterogeneous beliefs on others’ expectations regarding a
successful implementation of PRP.
5. Conclusions
This paper investigates how public sector employees perceive the forthcoming introduction of
a PPR system making a distinction between individual perceptions and perceptions on others’
attitudes. It is the first of its kind in the country, since PRP schemes have never been used in
the Greek public sector before. Although most studies focus on the impact of PRP on employee
motivation and organizational outcomes long after the adoption of PRP, this study is con- ducted prior to its introduction. It is a quantitative attempt aimed at exploring in depth em- ployees’ perceptions on the initiation of PRP schemes in a public organization. As Schmidt
et al. [10] point out, the acceptance of a PRP system is more likely if employees are involved in
the design of this system and understanding their preferences is a necessary first step.
Contrary to what one would have thought, public sector employees in Greece are far from
unanimously negative regarding the adoption of performance contingent pay. However, they
seem to “delegate” the opposition to others around them, in an apparent effort to signal a pro-
efficiency own attitude but put the blame for a more conservative view on others. This could
be explained as the wish to comply with some objectively correct measure, which would face
objections by others.
The explanatory factors of own attitudes towards performance-contingent pay are similar
to those of beliefs on others’ attitudes on the following points: a PRP system will help the work-
force to improve its productivity, it will have a positive effect on wage, but it could demotivate
public employees that are intrinsically stimulated.
Moreover, workers have heterogeneous attitudes and hold heterogeneous beliefs on others’
expectations regarding the fact that a PRP system will help public employees to better under-
stand the organization values and priorities, and that after the implementation of such schemes
public servants will be interested solely in tasks that are directly related to financial incentives.
Social norms play a central role in the formation of individual beliefs and behavior and the
differences in how you perceive yourself from how you expect others to think may provide
important information on the tension between the true individual attitudes and a normative
representation of one’s own preferences. The understanding of this process creates opportuni-
ties for eliminating misperceptions and successfully implementing reforms in public adminis-
tration in the near future. The results reported here may be valuable to policy makers and
human resources managers, helping scholars to understand employees’ views, concerns or
even fears, and suggest ways of better initiating a PPR scheme. Relevant studies have been
largely quantitative, paying insufficient attention to employee idiosyncratic views with respect
to PRP systems [22, 19]. Practitioners may incorporate employees’ perceptions, social percep-
tions, opinions and concerns in order to create an effective PRP system.
Supporting information
S1 File. STATA Data file.
(DTA)
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 13 / 15
Author Contributions
Conceptualization: N.G; E.V; I.K.
Data curation: E.V.; I.K.
Formal analysis: N.G.; E.V.; I.K.
Investigation: N.G.; E.V.; I.K.
Methodology: N.G.; E.V.; I.K.
Project administration: N.G.; E.V.; I.K.
Resources: N.G.; E.V.; I.K.
Software: N.G.; E.V.; I.K.
Supervision: N.G.; E.V.; I.K.
Validation: N.G.; E.V.; I.K.
Visualization: N.G.; E.V.; I.K.
Writing – original draft: N.G.; E.V.; I.K.
Writing – review & editing: N.G.; E.V.; I.K.
References 1. Buehler R, Griffin D, Ross M. Exploring the "Planning Fallacy": Why People Underestimate Their Task
Completion Times. Journal of Personality and Social Psychology. 1994; 67: 366–381.
2. Paluck EL, Shepherd H. The Salience of Social Referents: A Field Experiment on Collective Norms and
Harassment Behavior in a School Social Network. Journal of Personality and Social Psychology. 2012;
103: 899–915. https://doi.org/10.1037/a0030015 PMID: 22984831
3. Epley N, Dunning D. The Mixed Blessings of Self-Knowledge in Behavioral Prediction: Enhanced Dis-
crimination but Exacerbated Bias. Personality and Social Psychology Bulletin. 2006 32: 641–655.
https://doi.org/10.1177/0146167205284007 PMID: 16702157
4. Pronin E. How we see ourselves and how we see others. Science. 2008; 320: 1177–1180. https://doi.
org/10.1126/science.1154199 PMID: 18511681
5. Lally P, Bartle N, Wardle J. Social norms and diet in adolescents. Apetite. 2011; 57: 623–627.
6. Humphrey R. How Work Roles Influence Perception: Structural-Cognitive Processes and Organiza-
tional Behavior. American Sociological Review. 1985; 50: 242–252.
7. Ames DR. Inside the mind reader’s tool kit: Projection and stereotyping in mental state inference. Jour-
nal of Personality and Social Psychology. 2004; 87: 340–353. https://doi.org/10.1037/0022-3514.87.3.
340 PMID: 15382984
8. Akerlof G. Labor Contracts as Partial Gift Exchange. The Quarterly Journal of Economics.1982; 97:
543–569.
9. Frey B, Jegen R. Motivation Crowding Theory. Journal of Economic Surveys. 2001; 15: 589–611.
10. Schmidt W, Trittel N, Müller A. Performance-related pay in German public services: The example of
local authorities in North Rhine-Westphalia. Employee Relations. 2011; 33: 140–158.
11. Bénabou R, Tirole J. Incentives and prosocial behaviour. The American Economic Review. 2006; 96:
1652–1678.
12. Baron JN, Kreps DM. Strategic human resources: Frameworks for general managers. New York: John
Wiley;1999.
13. Maslow A. A theory of human motivation. Psychological Review, 1943; 50: 370–396. Retrieved June
2001, from http://psychclassics.yorku.ca/Maslow/motivation.htm.
14. Herzberg F. The Motivation-Hygiene Concept and Problems of Manpower. Personnel Administra-
tor.1964; 27: 3–7.
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 14 / 15
15. Ryan RM, Deci EL. Self-determination theory and the facilitation of intrinsic motivation, social develop-
ment, and well-being. American Psychologist. 2000; 55: 68–78. PMID: 11392867
16. Weibel A, Rost K, Osterloh M. Pay for performance in the public sector -Benefits and (hidden) costs.
Journal of Public Administration Research and Theory. 2010; 20: 387–412.
17. Perry JL, Engbers TA, Jun SY. Back to the future? Performance-related pay, empirical research and
the perils of persistence. Public Administration Review. 2009; 69: 39–51.
18. Pfeffer J, Sutton RI. What’s wrong with pay-for-performance. Industrial Management. 2006; 48: 12–17.
19. Brown M. Merit pay preferences among public sector employees. Human Resource Management Jour-
nal. 2001; 11: 38–54.
20. Lucifora C. Performance-related pay and labor productivity. Do pay incentives and financial participation
schemes have an effect on a firm’s performance? IZA World of Labor, May 2015, wol.iza.org
21. Reilly P. New Approaches in Reward: Their relevance to the public sector. Public Money & Manage-
ment. 2003; 23: 245–252.
22. Marsden D, Richardson R. Performing for pay? The effect of ‘merit pay’ on motivation in a public ser-
vice. British Journal of Industrial Relations. 1994; 32: 244–261.
23. Susseles ER, Magid M. Pay for performance in public sector. Benefits & Compensation Digest. 2005;
42: 32–35.
24. Wright T, Cropanzano R, Denney P, Moline G. When a happy worker is a productive worker: a prelimi-
nary examination of three models. Canadian Journal of Behavioural Science. 2002; 34: 146–150.
25. Kahn LM, Sherer PD. Contingent pay and managerial performance. Industrial & Labor Relations
Review. 1990; 43: 107S–120S.
26. Freeman RB. Job satisfaction as an economic variable. American Economic Review. 1978; 68: 135–
141.
27. Holmstrom B. Moral Hazard and Observability. The Bell Journal of Economics. 1979; 10: 74–91.
28. LeBlanc PV, Mulvey PW. How American workers see the rewards of work. Compensation and Benefits
Review. 1998; 30: 24–28.
29. Pouliakas K, Theodossiou I. Confronting Objections to Performance Pay: The Impact of Individual and
Gain-sharing Incentives on Job Satisfaction. Scottish Journal of Political Economy. 2009; 56: 662–684.
Attitudes towards performance-related pay: Me versus others
PLOS ONE | https://doi.org/10.1371/journal.pone.0174724 April 17, 2017 15 / 15
Copyright of PLoS ONE is the property of Public Library of Science and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.
