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Promotions and Productivity: The Role of Meritocracy and Pay Progression in the Public Sector

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  • Erika Deserranno
  • Philipp Kastrau
  • Gianmarco León-Ciliotta

Abstract

We study promotion incentives in the public sector by means of a field experiment with the Ministry of Health in Sierra Leone. We experimentally establish a new promotion criterion that links promotions to performance for the lowest tier of health workers and introduce variation in perceived pay progression by revealing to them the salary of their supervisors. We find that meritocratic promotions lead to higher worker productivity and that this effect is driven mainly by workers who are highly ranked in terms of performance and those who expect a steep pay progression. When promotions are not meritocratic, increasing the pay gradient reduces worker productivity through negative morale effects. The findings highlight the importance of taking into account the interactions between different tools of personnel policy.

Suggested Citation

  • Erika Deserranno & Philipp Kastrau & Gianmarco León-Ciliotta, 2021. "Promotions and Productivity: The Role of Meritocracy and Pay Progression in the Public Sector," Working Papers 1239, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1239
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    Cited by:

    1. Amodio, Francesco & Choi, Jieun & De Giorgi, Giacomo & Rahman, Aminur, 2022. "Bribes vs. taxes: Market structure and incentives," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 435-453.
    2. Fracchia, Mattia & Molina-Millán, Teresa & Vicente, Pedro C., 2023. "Motivating volunteer health workers in an African capital city," Journal of Development Economics, Elsevier, vol. 163(C).
    3. Erika Deserranno & Stefano Caria & Philipp Kastrau & Gianmarco León-Ciliotta, 2022. "The Allocation of Incentives in Multi-Layered Organizations: Evidence from a Community Health Program in Sierra Leone," Working Papers 1346, Barcelona School of Economics.
    4. Breunig, Robert & Hansell, David & Win, Nu Nu, 2023. "Modelling Australian Public Service Careers," IZA Discussion Papers 16549, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    promotions; meritocracy; pay progression; worker productivity;
    All these keywords.

    JEL classification:

    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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