Paper #1770

Title:

Promotions and productivity: The role of meritocracy and pay progression in the public sector

Authors:

Erika Deserranno, Philipp Kastrau and Gianmarco León-Ciliotta

Date:

February 2021

Abstract:

We study promotion incentives in the public sector by means of a field experiment with the Ministry of Health in Sierra Leone. The experiment creates exogenous variation in meritocracy by linking promotions to performance and variation in perceived pay progression among the lowest tier of health workers. We find that meritocratic promotions lead to higher productivity, and more so when workers expect a steep pay increase. However, when promotions are not meritocratic, increasing the pay gradient reduces productivity through negative morale effects. The findings highlight the importance of taking into account the interactions between different tools of personnel policy.

Keywords:

promotions, meritocracy, pay progression, worker productivity

JEL codes:

M51, M52, J31, D73

Area of Research:

Labour, Public, Development and Health Economics

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