Performance-related pay for health service professionals: the Italian experience

Italy has significant experience of performance-related pay (PRP) for health service professionals: a system which links part of doctors' remuneration to their productivity dates back to 1938. This paper reports on a two-year field research, carried out on the Italian National Health Service, which investigates the objectives, design and implementation of PRP, as well as its operation and effectiveness. First, the evolution of PRP schemes over the latest 25 years is reconstructed, and the range of covert and overt objectives underlying the use of PRP are unravelled. Then, after having highlighted the main structural and cultural factors which negatively affect PRP effectiveness, a critical evaluation of PRP is attempted, drawing on the analysis of both hard performance data and the subjective perceptions of stakeholders. The conclusion is that PRP led to problems and unforeseen consequences in most of the hospitals examined, due to both structural factors, mainly some flaws in PRP design, and cultural constraints, mainly the values of health professionals. However, the case of a Northern Italian hospital proves that, despite the constraining environmental setting, there is still scope for managerial intervention in the implementation process which is sufficient to guarantee PRP effectiveness. This indicates that the implementation process far outweighs the significance of structural and cultural constraints, and that PRP is a powerful tool at management disposal to increase employees' performance and commitment.