Incentive Systems and Goal Displacement in Personnel Resource Management

Abstract

Writing in Policy Sciences in 1977, Birnberg and Gandhi analyzed the contribution of accounting to evaluation, concluding that while accounting might be appropriate and valuable in public administrative evaluation it was of limited applicability to social program evaluation. Since 1977 numerous efforts have been made to apply accounting procedures to personnel work evaluation in the public sector. Two of the largest attempts, statewide efforts in North Carolina and Florida in the late 1970s, are analyzed in the present essay. It is found that accounting-based personnel work evaluation led to incentive system instability, goal displacement, and ultimate diffusion and disintegration of the management system intervention effort. It is concluded that premises intrinsic to the accounting orientation to organizational dynamics render the utility of this approach to personnel work evaluation far more limited than indicated by Birnberg and Gandhi.