Are bureaucrats paid like CEOs? Performance compensation and turnover of top civil servants

Geys, Benny; Heggedal, Tom‐Reiel; Sørensen, Rune J.

doi:10.1016/j.jpubeco.2017.05.006

Cited by 12 publications

(10 citation statements)

References 41 publications

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“…Cox regression also considers the executive tenure measured in years until the turnover occurs. Consistent with existing turnover studies (Geys et al, 2017; Rutherford & Lozano, 2018), this study does not distinguish between voluntary and forced turnover because “tenure endings are often due to a complex mix of push and pull factors” (Petrovsky et al, 2017, p. 594).…”

Section: Methodssupporting

confidence: 58%

“…Moreover, additional research is needed to extend the theoretical understanding of the governance mechanism “executive pay” and its effects and determinants. The controversial field of executive pay discussed in the public sphere (Geys et al, 2017; Papenfuß & Keppeler, 2020) remains a promising field for further research in the debate on recruitment of qualified/competent key personnel and instrument for control publicness of public corporations—given the broad discretion in executive pay.…”

Section: Discussionmentioning

confidence: 99%

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Personnel governance of corporatized public services: Effects of executive resources and corporation forms on turnover

Papenfuß

Schmidt

2021

Public Administration

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Corporatization has potentials for public service provision but also induces far-reaching governance challenges. Appointing executives for public corporations is a powerful personnel governance mechanism for public authorities to manage public service provision and resource dependencies. However, the theoretical understanding of executive turnover is limited. Drawing on resource dependence theory and embedding publicness fit perspectives, Cox regressions for 491 executives of 275 German municipal corporations between 2006 and 2016 show that politicized executives, executives with higher pay, and internally hired executives have a longer tenure and a lower turnover likelihood. Furthermore, the findings reveal different governance rationalities between different corporation forms by showing a higher likelihood of executive turnover in not profit-making corporations than in profit-making corporations. This highlights the theoretical needs and potentials to conceptually differentiate between these two corporation forms in future research. Overall, this study enhances the theoretical understanding of executive turnover and provides important research perspectives. Die politischen Entscheidungen zur Auslagerung öffentlicher Aufgaben auf öffentliche Unternehmen haben hohe Potenziale

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Section: Methodssupporting

confidence: 58%

Section: Discussionmentioning

confidence: 99%

Personnel governance of corporatized public services: Effects of executive resources and corporation forms on turnover

Papenfuß

Schmidt

2021

Public Administration

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“…We also included the yearly salary of each agency head as a control variable. Previous research exploring public employees' turnover decisions found that salary is an important predictor of turnover rates (Geys, Heggedal, and Sørensen ; Grissom et al ). Although we cannot control for the labor market conditions because we cannot observe the outside options of each agency head, we included the salary level as a proxy for the opportunity costs of being dismissed.…”

Section: Methods and Datamentioning

confidence: 99%

Loyalty or Competence: Political Use of Performance Information and Negativity Bias

Hong

Kim

2019

Public Administration Review

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This article explores how political principals weigh loyalty and competence in public personnel decisions. Exploiting the abrupt shift in political leadership following the impeachment of President Park Geun-hye of Korea, the authors examine how the newly elected president made the decision to retain or dismiss 118 agency heads appointed by the previous administration. The evidence shows the importance of loyalty in managerial survival: those who had a political patronage relationship with the ousted president were less likely to survive in the new administration. However, the authors also demonstrate the relevance of competence, as measured by the outcomes of agency performance evaluation. Further, the article shows the existence of negativity bias: the punishment for low performance is greater than the reward for high performance. Finally, the authors provide support for the idea that political principals reward loyalists, but only if they show acceptable levels of competence. Evidence for Practice• This study explores how political principals weigh loyalty and competence in public personnel decisions. • Political principals' punishment for low performance is greater than their rewards for good performance. • Political principals reward loyalists, but only if they show acceptable levels of competence.• The availability of performance information may protect bureaucratic expertise from political opportunism.

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“…In fact, a recent study by Bell and Reenen showed that the CEO pay-performance relationship continues to be asymmetric as CEO pay tends to be rising with good firm performance but not falling with bad performance. Geys et al (2017) also asserted that CEOs are often uniquely rewarded for high profit levels in private sector settings. Meanwhile, the evidence of punishment for poor performance is non-existent.…”

Section: Introductionmentioning

confidence: 99%

Asymmetric information phenomenon in the link between CEO pay and firm performance

Olaniyi

2019

JES

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Purpose The purpose of this paper is to examine the asymmetric behavior between CEO pay and firm performance in Nigeria. Design/methodology/approach The study adopts a two-step dynamic panel generalized method of moments (GMM) to reveal asymmetric responses of CEO pay to positive and negative shocks in firm performance. Findings The research outcomes of a two-step dynamic panel GMM) adopted reveal asymmetric responses of CEO pay to positive and negative shocks in firm performance. This implies that CEOs are handsomely compensated for good performance, but not punished for poor performance. Originality/value The study, therefore, suggests that CEO pay fails to serve as an internal corporate governance mechanism to alleviate agency problem in Nigeria’s listed firms.

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Are bureaucrats paid like CEOs? Performance compensation and turnover of top civil servants

Cited by 12 publications

References 41 publications

Personnel governance of corporatized public services: Effects of executive resources and corporation forms on turnover

Personnel governance of corporatized public services: Effects of executive resources and corporation forms on turnover

Loyalty or Competence: Political Use of Performance Information and Negativity Bias

Asymmetric information phenomenon in the link between CEO pay and firm performance

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