What Are the Effects of the Performance-Based Bonus on Government Workers and Agencies?

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To improve service delivery in the public sector and motivate workers to enhance their performance, the government has been implementing the Performance-Based Bonus (PBB) since 2012. This Policy Note looks into whether the PBB has been effective in achieving these goals. It found evidence of generally positive outcomes resulting from it, such as increased compliance on conditions for PBB access and a shared perception among over 1,200 sampled government bureaucrats that the PBB helps improve public service. The study also noted evidence of some dysfunctional behavior, including allegations that some staff are gaming the incentives. The study recommends that the government continue implementing the PBB scheme but with improvements to its design and implementation, including a moratorium on changes in PBB requirements, especially in light of the COVID-19 pandemic, provision of capacity-building support for lagging agencies, and experimentation with incentives to support sectoral development outcomes.