Lessons for Advancing Future
Performance Standards Systems
James J. Heckman
Carolyn J. Heinrich
The economic recession that started in 2007 led to renewed interest in public employment and training services. At the same time, the accompanying financial crises also elevated concern for how dwindling government budgets could be spent more efficiently and effectively to maximize returns to public investments in training. As discussed in the introductory chapter, revamping incentive systems in government is a critical step toward improving government performance and our future economic outlook.
The chapters in this volume marshal some of the most detailed evidence available on how performance standards and incentives influence the behavior of program administrators and staff and contribute to program outcomes or unintended consequences. Since each chapter presents a self-contained summary of its main findings, we do not review the details of each one. Instead, this conclusion presents three main lessons learned from these essays and discusses some of their policy implications.
Concerns that performance incentives are disregarded by government employees because award levels are low or because benefits are diffused are not justified. Low-powered cash incentives may, in fact, be high-powered because of the value of the budgetary awards in establishing the reputation of bureaucrats and the recognition that comes