Individual Pay for Performance in the Public Sector: Dissemination of the Failure

For a long time public organizations have been using tools and techniques originating from the private sector such as performance based budget programs, strategic management, quality management, market analysis and performance management. Among these tools and techniques, pay for performance programs may be the most discussed one. Even though reports and surveys indicate that individual pay for performance schemes in the public sector failed to a large extent, these programs have been diffusing throughout the world. This study analyzes pay for performance practices in public administration in different countries. In this context, the research on the success/failure of the pay for performance programs will be explained briefly. Then, different views on the dissemination of the programs in the public sector are reviewed. Even if pay for performance programs at the individual level do not have a success, we are going to explain why the programs are getting popular as a paradox.