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1 – 10 of 296This paper focuses on the World Bank's emerging experience with a promising application of performance-based contracts: Output-Based Aid (OBA) subsidies. OBA is the provision of…
Abstract
This paper focuses on the World Bank's emerging experience with a promising application of performance-based contracts: Output-Based Aid (OBA) subsidies. OBA is the provision of subsidies for the delivery of and access to social or infrastructure services. Under OBA, subsidy payments are tied to measurable performing outputs, leaving the specific methods of achieving these outputs to the service provider's discretion. While creating better risk allocation, more value for users and contracting agencies, and fewer opportunities for corruption than traditional methods, OBA schemes raise new procurement issues that need to be reconciled in order to achieve optimal results. An issue this paper explores is the tension between the need that contracts be "expenditure-based" with the "performance-based" nature of OBA subsidies.
Jade Wong, Andreas Ortmann, Alberto Motta and Le Zhang
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…
Abstract
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.
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The purpose of this paper is to investigate value for money drivers in public private partnership (PPP) schemes.
Abstract
Purpose
The purpose of this paper is to investigate value for money drivers in public private partnership (PPP) schemes.
Design/methodology/approach
Three case studies of PPP construction projects in the UK were undertaken.
Findings
PPP contracts commonly require the private agent to take responsibilities for the performance of the asset over a long term, at least for a significant part of its useful life, so that efficiencies arising from long term asset management can be obtained. The evidence is finely balanced on the usefulness of such initiatives in realizing efficiency gains, although there is clear benefit of risk transfer.
Practical implications
The findings highlight the challenge of designing and implementing innovative partnership plans to manage public services more effectively. More emphasis needs to be placed on strategies for the transfer of risk, value for money drivers and project expertise for the successful conclusions of PPP contracts.
Originality/value
The paper contributes to the new research area of public private partnerships.
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Baynesagn Asfaw Ambaw and Jan Telgen
Performance-Based Contracting (PBC) is widely accepted as a useful tool. It is believed that the use of PBC can assist the efficient utilization of the public resources. The…
Abstract
Performance-Based Contracting (PBC) is widely accepted as a useful tool. It is believed that the use of PBC can assist the efficient utilization of the public resources. The objective of this research is to assess the extent of PBC application and the obstacles to applying it in the public procurement systems of developing countries. Interviews and factual analysis of procurement guidelines and contracts are used to collect data for this research. The analysis results indicate that the majority of public organizations have not yet used PBC even though it is allowed by the law. This is due partly to lack of clarity in the procurement laws and lack of capacity to use PBC.
Outsourcing has been used in Australia as part of the new public management agenda with the aim of increasing efficiency and decreasing costs. In the public health sector its use…
Abstract
Purpose
Outsourcing has been used in Australia as part of the new public management agenda with the aim of increasing efficiency and decreasing costs. In the public health sector its use has been problematic and the purpose of this paper is to explore the largest Australian health contract at the time; investigating the reasons, the processes and the outcomes. Specifically, it investigates why the contract failed and the lessons to be learned from its subsequent awarding.
Design/methodology/approach
The paper uses a case study approach to investigate in depth the outsourcing decision.
Findings
Alongside savings in costs, changes to work practices and reduction in union power, it was found that the outsourcing contract produced problems with service quality, sharing of culture, relationships between contract and internal staff, and in managing the contract and staff; and reductions in trust and morale of both internal and contract staff. Inadequate contract specifications and subsequent under pricing was the cause of contract termination, poor quality, and difficulties in contract management.
Practical implications
The paper provides important lessons for decision makers when outsourcing in public health.
Originality/value
The paper investigates the largest outsourcing contract in public health in Australia in the 1990s. It investigates the failure of the initial contract and its subsequent awarding to another vendor. The case study approach provides an in‐depth analysis of this decision.
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Lan Guo, Bernard Wong-On-Wing and Gladie Lui
We examine how input- (vs. output-) based performance evaluation and incentive intensity impact employees’ autonomous motivation, thereby influence their proactive work behaviors.
Abstract
Purpose
We examine how input- (vs. output-) based performance evaluation and incentive intensity impact employees’ autonomous motivation, thereby influence their proactive work behaviors.
Methodology
We collected survey responses from 309 employees of different firms. Multi-group Structural Equation Modeling analyses were used to analyze the data.
Findings
Input-based evaluation had a positive effect on autonomous motivation and proactive work behaviors when task uncertainty was high, but a negative effect when it was low. Autonomous motivation had a positive effect on proactive work behaviors.
Research implications
Our results on the moderating effect of task uncertainty provide insights into inconsistencies in earlier studies. Moreover, applying self-determination theory of motivation to incentive research can provide some insights into why sometimes, incentives can negatively affect performance.
Practical implications
The study of proactive work behaviors is important because despite their necessity in the fast-changing business environment, they are relatively unexplored in the incentive literature. Proactivity is especially important for tasks that are high in uncertainty because the exact tasks to achieve those goals are hard to specify.
Originality/value of paper
We investigate the effect of performance management system on proactive work behaviors, mediated by autonomous motivation and moderated by task uncertainty.
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Bob Heavisides and Ilfryn Price
The concept of service provision through output specifications rather than input‐based specifications is currently occupying directors and managers within the service. While the…
Abstract
The concept of service provision through output specifications rather than input‐based specifications is currently occupying directors and managers within the service. While the debate continues, little research has been undertaken to find out the current spread of the new output specification and how it operates in NHS Trusts compared to the longer established input‐based service specification. This paper presents a study of around one‐third of the Trusts in England and provides a comparative analysis of the different specifications in use, whether in‐house or outsourced providers deliver the services to these Trusts, and how these providers are assessed for satisfactory performance. In addition, through a series of structured discussion forums, users’ requirements for the development of standardized performance metrics are established for the future management of output specifications.
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Nicoline Frølich, Evanthia Kalpazidou Schmidt and Maria J. Rosa
The purpose of this paper is to discuss how funding systems influence higher education institutions and their strategies and core tasks.
Abstract
Purpose
The purpose of this paper is to discuss how funding systems influence higher education institutions and their strategies and core tasks.
Design/methodology/approach
Taking the results of a comparative study between Denmark, Norway and Portugal as a point of departure, the paper identifies and analyses the main features of these state funding systems, their strengths and weaknesses, and their impact on academia.
Findings
The system‐level analysis offers an illustration of a trend across Europe. The paper shows that mixed funding models have been implemented in all three countries.
Originality/value
Funding systems and their impacts do not come in neat packages. The systems demonstrate a mixed pattern of strengths and weaknesses. The impacts of the funding systems converge, although different mechanisms are employed. There are no clear cut differences in the perceived strengths, weaknesses and impacts of the two main types of funding systems – input‐based funding and output‐based funding – presented and discussed in the paper.
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The purpose of this paper is to provide an argument supporting the growth of online outsourcing, which will exponentially increase in the coming years with the spread of internet…
Abstract
Purpose
The purpose of this paper is to provide an argument supporting the growth of online outsourcing, which will exponentially increase in the coming years with the spread of internet availability to the less-developed regions of the world. In addition, this paper stresses the role of human decision-making in fostering this growth, rather than promoting inhibitory policies because of nationalism or fear of change.
Design/methodology/approach
First, globalization and the three “waves” of outsourcing are discussed. Next, the economic principles guiding online outsourcing (disintermediation, the rise of global internet connectivity and the benefits of output-based pay over input-based pay) are discussed. After explaining how artificial intelligence will complement rather than replace human laborers, a case study and evidence are provided. Then, suggestions for government policies going forward, including skill development and education are provided. Finally, the debate that will inevitably emerge regarding online worker benefits is introduced.
Findings
Evidence points toward the growth of online outsourcing and the resulting increased efficiency and gains through this type of trade. The increase in freelance workers and their earnings, the investments of Google and Facebook to develop internet capabilities in less-developed regions and the reducing costs of technology (such as laptops) provide support for this argument (Elance, 2013; Forbes, 2014; Pofeldt, 2015). Finally, a case study provides evidence illustrating how individuals may gain from these advances.
Originality/value
This paper contributes to the literature by providing a compelling argument for the upcoming transition to increased efficiency in work through online outsourcing. Technological advances will allow the modern worker to delegate his/her mundane tasks so that he/she is free to focus on more pressing issues. This shift will multiply the domestic and foreign labor markets, creating opportunities that have not been available to this point. As this transition is not inevitable, this paper further outlines suggestions for policymakers to ensure maximized gains in the future.
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Christian Gross and Pietro Perotti
Accounting comparability has been the subject of significant interest in empirical financial accounting research. Recent literature, particularly that following De Franco et al.’s…
Abstract
Accounting comparability has been the subject of significant interest in empirical financial accounting research. Recent literature, particularly that following De Franco et al.’s (2011) influential study, has focused on utilizing the output of the financial reporting process to measure accounting comparability. In this paper, we conduct an early survey of studies using output-based measures of comparability. We provide two distinct contributions to the literature. First, we describe and comment on four important measurement concepts as well as the studies that introduced them. With this methodological contribution, we aim to facilitate the measurement choice for empirical accounting researchers engaged in comparability research. Second, we classify the sub-streams of literature and related studies. In providing this content-related contribution, we sum up what has already been achieved in output-based accounting comparability research and highlight potential areas for prospective research. As a whole, our study attempts to guide empirical researchers who (plan to) undertake studies on accounting comparability in selecting relevant topics and choosing adequate approaches to measurement.
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