less expensive than extrinsic schemes. The employee values the intrinsic rewards for their recognized symbolic or trophy qualities. Second, the public sector, with its inherent pursuit of the public interest and general welfare, is in a far better and easier position to emphasize and convince people of the symbolic importance or worth of its activities.
Practice in the United States varies quite widely (as it does for pay-for-performance schemes). The use of employee recognition awards, however, is quite widespread.
Certificates and plaques along with newsletters highlight outstanding employees with recognition. Flextime, vacation scheduling priorities, or extra time off might all serve as recognition awards. Special equipment (or being among the first to obtain additions) for the employee's office can also serve as a recognition award.
More "substantial" intrinsic rewards can also be offered, such as dinners, trips to seminars, or even merchandise (often donated by private sector organizations and individuals). A physical recognition award, whether it is a certificate of merit or a television, has added value because it is a trophy; it is also an object that constantly serves to remind individuals of their accomplishments and the organization's appreciation.
Variations in intrinsic reward practices do occur. The extent to which local society favorably views public employment may determine how cooperative external actors are (whether the reward involves donations or space in a local newspaper for employee recognition). State laws and local ordinances may also limit the extent to which even small financial expenditures are allowed.
Of course, the manner in which political leaders and administrative managers approach the intrinsic reward process is also highly important. Substantial rewards lose their trophy value (and engender negative memories) if they are awarded begrudgingly. If rewards are undeserved or universal (everyone a winner), their value is eroded. A truly friendly smile and heartfelt thank you can be more meaningful than the formal award itself.
Regimes based on monarchical governments enjoy the opportunity to include prominent civil servants on their "honors lists," conferring various knighthoods and, in exceptional cases, peerages and life peerages. Because of their ties to a country's historical traditions and ceremonies, for example, these types of rewards are highly valued as symbols that recognize career accomplishments. Militarybased systems, of course, use the full array of medals and ribbons associated with the armed forces as intrinsic awards in addition to other forms of incentive pay.
DENNIS M. DALEY
Greiner, John M., Harry P. Hatry, Margo P. Koss, Annie P. Millar , and Jane P. Woodward, 1981. Productivity and Motivation: A Review of State and Local Government Initiatives. Washington, DC: Urban Institute.
Lawler, Edward E., III, 1990. Strategic Pay: Aligning Organizational Strategies and Pay Systems. San Francisco: Jossey-Bass.
Milkovich, George T., and Alexandra K. Wigdor, eds., with Ranae F. Broderick and Anne S. Mavor, 1991. Pay for Performance: Evaluating Performance Appraisal and Merit Pay. Washington, DC: National Academy Press.
INCOME TAXES . Taxes levied on the income accrued during a specific period by an individual or other unit. Income is defined as the money or other gain received over a period of time by an individual, corporation, or other entity from labor or service rendered; from sales of products, services, or property; from earnings on property, natural resources, or investments; or from other sources. Income taxes vary in structure and impact by the type of unit to which they are applied (individuals, partnerships, corporations, etc.) and by the government that is applying the tax (federal or state). Discussions about the yield response, collectability, equity, and economic effects of income taxes, then, must be specific to the type of income tax being levied and to the taxing jurisdiction.
The United States adopted an income tax in 1913. Doing so required an amendment to the United States Constitution, as the government had prohibited any direct taxes that were not apportioned among the states according to population. Such apportionment would have limited any direct taxation to a "head" tax not linked to the income of the state. Prior to 1913, the predominant sources of government revenues had been derived from customs taxes and other trade related fees. With the expansion of the federal government that occurred in the early 1900s and the potential involvement in World War I, the need for new sources of revenue became more apparent. The Sixteenth Amendment to the Constitution was passed to create the income tax as that source. It provided that "Congress shall have the power to lay and collect taxes on income, from whatever source derived, without apportionment among the several States."
Initially, the levels of income effected by the federal income tax were high, and only a small proportion of comparatively high-income people were subjected to the tax. Across time, the generous exemptions that were included in earlier versions of the tax were lowered, as was the minimum taxable income, so that most of the income-earning population is now covered. Critics of the expansion questioned whether a wide-based income tax could be administered effectively and efficiently. By using a withholding system on wages and salaries, however, and by pushing initial collection costs off onto employers rather than govern