Reform in government rarely succeeds without considering both the technological and the human components of change. Often, reforms have focused more on introducing new ideas, but without extensive changes in how the changes will affect existing structures and interpersonal relationships. The use of performance-based pay to improve motivation, competencies, and outputs is one of the latest examples. This paper describes the background of performance-based pay reform from its scientific management origins and its blending with rational economics under the New Public Management movement and analyzes its use from a review of literature. Using a critical management framework, the paper shows how the performance-based pay has limited effectiveness in bringing about greater commitment to public service because it ignores use of broad-based, professional competencies that improve organizational outcomes and build individual efficacy.
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