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For over a decade, the early grade reading assessment (EGRA) has been used to measure and report on students’ acquisition of five reading skills. Education development initiatives funded by the US Agency for International Development, the World Bank, Department for International Development (DFID), and other agencies have facilitated the use and adaptation of the EGRA into over 100 languages in more than 65 countries (Dubeck & Gove, 2015, p. 315). Guidelines for the proper use and the limitations of the EGRA have been circulated widely. An international evidence base that challenges the theoretical underpinnings and the expanded use of the EGRA is also growing (Bartlett, Dowd, & Jonason, 2015). Not yet explored to date, however, is the use of the EGRA as a measure to determine Payment by Results (PbR) in a donor agency initiative. This chapter examines the use of the EGRA oral reading fluency (ORF) subtest as a PbR learning outcomes measure in DFID’s Girls’ Education Challenge (GEC) projects, and it concludes that the way in which the EGRA ORF was used for PbR was a misuse of the EGRA, and ultimately it did not serve well the PbR project beneficiaries, the marginalized girls.

Policymakers worldwide have proposed a new contract – the ‘social impact bond’ (SIB) – which they claim can allay the underperformance afflicting not-for-profits, by tying the private returns of (social) investors to the success of social programs. We investigate experimentally how SIBs perform in a first-best world, where investors are rational and able to obtain hard information on not-for-profits’ performance. Using a principal-agent multitasking framework, we compare SIBs to inputs-based contracts (IBs) and performance-based contracts (PBs). IBs are based on a piece-rate mechanism, PBs on a non-binding bonus mechanism, and SIBs on a mechanism that, due to the presence of an investor, offers full enforceability. Although SIBs can perfectly enforce good behaviour, they also require the principal (i.e., government) to relinquish control over the agent’s (i.e., not-for-profit’s) payoff to a self-regarding investor, which prevents the principal and agent from being reciprocal. In spite of these drawbacks, in our experiment SIBs outperformed IBs and PBs. We therefore conclude that, at least in our laboratory test-bed, SIBs can allay the underperformance of not-for-profits.

Efficiency wage theory predicts that firms can induce worker effort by the carrot of high wages and/or the stick of monitoring worker performance. Another option available to firms is to tilt the remuneration package over time such that the lure of high future earnings acts as a deterrent to current shirking. On the assumption that firms strive for the optimal trade-off between these various instruments, we develop a two-period model of efficiency wages in which increased monitoring attenuates the gradient of the wage-tenure profile. Our empirical analysis, using two cross sections of matched employer-employee British data, provides robust support for this prediction.

This chapter examines and discusses the unintended outcomes of the production bonus scheme the mine had instituted to motivate and increase the productivity of the frontline mining teams. This is crucial given that the maladministration of the bonus system could lead to a range of undesired outcomes such as deteriorating levels of trust between management and frontline workers, prioritisation of production at the expense of safety, poor work relations and ultimately low levels of organisational, employee and team performance. There are a number of organisational, management and labour factors that can render a production bonus scheme effective or ineffective. These factors influence the nature and extent of worker reactions to the bonus scheme.

This chapter examines and discusses the factors that influenced the reaction of the mining teams to the team-based production bonus scheme and the extent to which mine management fulfilled its side of the bargain in the implementation of the production bonus. The chapter highlights the manner in which the team-based bonus system influenced teams of stope workers to engage in their informal organisational practice of making plan (planisa) in order to offset the snags that jeopardised their prospects of earning the production bonus. The chapter reveals that, to a large extent, the productivity bonus generated conflict rather than cooperation at the point of production down the mine. As a result, the incentive scheme failed to live up to expectations by not eliciting the desired levels of organisational, worker and team performance at the rock-face.

Whereas many researchers have examined the way in which health institutions have been transformed through funding modalities, and particularly through prospective payment systems (PPS), few have investigated the architecture of these systems, that is, costs and cost variance. Focusing on the study of costs and on the production of hospital rates, this chapter shows that the French PPS, called “rate per activity” made possible what we call a policy of variance. For health policymakers, the aim was to make the different accounting figures between hospitals, and between ways of practising healthcare, visible, in order to reduce these variances. This policy was attended by uncertainty in the processes of quantification, which led to metrological controversies. As a consequence of the issues around the way of calculating costs, some accounts and calculations were redone. In this chapter, we consider the case of metrological controversy over the remuneration of costs for cystic fibrosis patients’ hospital stays, and over the action of a patient organization that criticized the costs calculated officially. It leads to the analysis of the way calculative infrastructures, as cost accounting and rates, are challenged, and how some actors try to stabilize them.

In this chapter we use data from industrial plants to find out whether seniority-based pay is used as a motivational device for production workers. Alternatively, seniority-based pay could simply be a wage-setting rule independent of incentives. Unlike previous papers, we use a direct measure of seniority-based pay as well as measures of monitoring devices and explicit incentives. We find that those firms that base their wages partly on seniority are less likely to offer explicit incentives. They are also less likely to invest in monitoring devices. We also discover that these companies are more likely to engage in other human resource management policies, which result in long employment relationships. Overall these results suggest that seniority-based pay is indeed used as a motivational device.

The introduction of performance-related pay with performance management in the state school sector of England and Wales represents a considerable change in the school management system. After 2000, all teachers were subject to annual goal setting performance reviews. Experienced teachers were offered an extended pay scale based on performance instead of seniority, and to gain access to the new upper pay scale, teachers had to go through a ‘threshold assessment’ based on their professional skills and performance. This paper reports the results of a panel survey of classroom and head teachers which started in 2000 just before implementation of the new system, and then after one and after four years of operation. We find that both classroom and head teacher views have changed considerably over time, from initial general scepticism and opposition towards a more positive view, especially among head teachers by 2004. We argue that the adoption of an integrative bargaining approach to performance reviews explains why a growing minority of schools have achieved improved goal setting and improved pupil attainments as they have implemented performance management. Pay for performance has been one of the measures of organisational support that head teachers could bring to induce changes in teachers’ classroom priorities. We argue that the teachers’ case shows that a wider range of performance incentives than previously thought can be offered to employees in such occupations, provided that goal setting and performance measurement are approached as a form of negotiation instead of top-down.

The effect of variable pay schemes on workplace absenteeism is estimated using two cross-sections of private sector British establishments. Establishments that explicitly link pay with individual performance are found to have significantly lower absence rates. The effect is stronger for establishments that offer variable pay schemes to a greater share of their non-managerial workforce. Matched employer–employee data suggest that the effect is robust to a number of sensitivity tests. Establishments that tie a greater proportion of employees’ earnings to variable pay schemes experience lower absence rates. Quintile regressions suggest that the effect is greater among establishments with a higher than average (‘sustainable’) absence rate. Finally, panel data suggest that a feedback mechanism is present; high absenteeism in the past is correlated with a greater future incidence of individual variable pay schemes, which, in turn, is correlated with lower current absence rates.