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Performance-related pay in health care
J Arrowsmith1, S French, M Gilman
1Industrial Relations Unit, Warwick Business School, University of Warwick.
Journal of Health Services Research & Policy
|May 19, 2001
Summary
Performance-related pay (PRP) in the National Health Service (NHS) has shown minimal positive impact. While managers see benefits, employees are skeptical, suggesting cautious implementation of future PRP schemes.
Area of Science:
- Health Services Management
- Public Sector Economics
- Human Resource Management
Background:
- Performance-related pay (PRP) has seen significant expansion in the UK public sector.
- Its adoption within the National Health Service (NHS) has been limited but sufficient for initial impact assessments.
Purpose of the Study:
- To evaluate the extent of PRP implementation in the NHS.
- To assess the impact of PRP on staff motivation, recruitment, retention, and organizational culture.
Main Methods:
- A review of published literature on PRP in the NHS.
- Inclusion of two case studies to provide in-depth analysis.
Main Results:
- Few rigorous studies on PRP in the NHS have been reported.
- Reasons for PRP introduction include motivation, recruitment, retention, cultural change, cost control, and union influence.
- Senior managers perceive benefits for performance, while employees express skepticism regarding its effectiveness.
Conclusions:
- PRP has had a very modest beneficial impact in the British NHS.
- Government should encourage local PRP initiatives over mandatory national schemes.
- Rigorous evaluation of local PRP schemes is recommended.