Performance related pay (PRP) schemes, which link salary to the results of an individual performance assessment, have spread rapidly through the public services in recent years and are often regarded as indicators of a fundamental shift in the employment relationship. This article tests the latter claim by considering evidence on the purposes and effects of PRP in local government. It seeks to determine whether PRP represents a `return to contract' in public service employment, characterised by a precise specification and monitoring of the wage-work bargain by management. The conclusion is that, while some aspects of PRP conform to the contractual model others do not and the study attests to the ability of public sector organisations to absorb, deflect and modify new management techniques transposed from the private sector.
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