Does Performance-related Pay and Public Service Motivation Research treat State-owned Enterprises like a neglected Cinderella? A Systematic Literature Review and Framework for Further Research on Performance Effects

Institutional reforms in public service Provision have made state-owned enterprises (SOEs) relevant in many countries. SOEs are defined as enterprises of which one/more public authorities have significant control, through... [ view full abstract ]

Institutional reforms in public service Provision have made state-owned enterprises (SOEs) relevant in many countries. SOEs are defined as enterprises of which one/more public authorities have significant control, through full/partial ownership. They are agencies with legal independence and financial autonomy(own financial statement). SOEs represent about 10% of the global GDP (Bruton et al. 2015), up to 10% of OECD countries’ employment share (OECD 2014). On the German local level, SOEs represent about 50% of public employees (German Federal Statistical Office 2015), 54,8% of public investments and up to 78,8% of public debts (German Federal Statistical Office 2016). Studies for other countries show a comparable relevance of SOEs (OECD 2017, Vining/Weimer2007, Aharoni 1981).

However, in leading scientific journals for public administration and public Management, far more empirical studies exist on core administration - literature seems to neglect SOEs. Considering research on performance-related pay (PRP) and public service motivation (PSM), this is an important research gap because studies have shown differences between public Administration and private firms. SOEs do not fit into contrasting simplifications of “public” vs. “private”. They have ambiguous organizational goals (e.g. financial goals vs. goals of public service provision) and complex ownership structures. Studies on PRP and PSM show that organizational goals and ownership factors are decisive factors for performance effects (Jung/Rainey 2011, Andersen/Pallesen/Pedersen 2011). Consequently, existing studies do not allow conclusions concerning effects of PRP and PSM in SOEs.

The goal of the paper is to provide a systematic literature review of empirical studies on PRP and PSM, categorizing public administration and the organizational types of agencies/SOEs, to analyse the patterns and to show the neglect of SOEs. It provides a conceptual enhancement of the categorization of agencies. Based on the reviewed studies it develops the first framework for further research on performance effects of PRP and PSM in SOEs.

The focus on both PRP and PSM allows us to provide a holistic overview of these two interdependent key influence factors of performance and to derive structural conclusions for the research situation. PRP and PSM have created special interest with plenty of studies on performance effects; current studies highlight the need of combined research on PRP and PSM.

The already finished systematic literature review shows a crucial research imbalance - only approx. 9% (21) of 236 peer-reviewed articles on PRP and PSM in 19 leading journals deal with SOEs. Moreover, the few papers dealing with SOEs almost exclusively focus the sector healthcare/nursing. The small number of studies for SOEs show heterogenous PRP and PSM effects. The presented research framework considers special antecedents in SOEs, highlights promising future research, and gives special guidance for a better measurement of organizational performance of SOEs.

The sound basis for the neglect of SOEs and the research framework have the potential to contribute to move the field of the panel. Because SOEs are key actors in the debate of co-production of public services in nearly all policy fields it also helps in the discussion of the overriding conference theme.