Dennis M. Daley
North Carolina State University, Raleigh
The use of extrinsic monetary incentives to motivate increased or enhanced employee effort and performance (see also performance appraisal).
Generally, pay-for-performance is an intricate part of the industrial revolution wherein workers' wages were linked explicitly to the production of specific quantities of a product (piecework). These concerns were reemphasized under Frederick Winslow Taylor's (1856-1915) scientific management movement and the advent of industrial engineering at the end of the nineteenth century (see Taylor, Frederick W. and scientific management). While Taylor focused on the introduction of productivity‐ enhancing processes and techniques, later efforts were directed at means of acquiring worker compliance with and motivation in their use.
Very little application of incentive systems was made in the United States to the public sector (outside of the blue-collar, manufacturing functions performed mainly for the military). Since efficiency still had to compete with notions of government as a threat to individual liberty, a highly motivated and effective civil service was not necessarily seen as desirable. Furthermore, market theorists preferred incentive structures that drew the more dynamic individuals to productive business occupations. Insofar as individuals pursuing public employment were concerned, public interest purposes and patriotism were the preferred motivators rather than pecuniary gain.
Even so, merit pay was introduced as part of the positivistic administrative management reforms introduced with the Classification Act of