Pay for Performance in Human Service Settings,

by Carla M. Nita and Alicia M. Alvero
Queens College of the City University of New York

The field of human services encompasses many areas of human needs. Many agencies are government funded and are responsible for providing care and assistance to people in the community. Some clients require assistance with physical, psychiatric, or developmental disabilities. Others have housing or health issues. Some other areas of human service also include education and child welfare. Although there have been budgetary cuts, the field of human services will only continue to grow as the needs of many different client populations must be met.

Although human service agencies are an integral part of society, I have observed that many are plagued with organizational problems such as high turnover rate, which may affect how the agencies function. From my experience as a counselor working in a residential services program for the psychiatrically disabled, possible factors associated with the high turnover rate are vague job structure, high stress, and low salary. These factors may contribute to ongoing problems with staff performance such as absenteeism, tardiness, incomplete paperwork, and insufficient client interaction. Employees receive training until competency has been met. The staff is taught how to properly interact with clients in order to assist them and determine which goals should be met for both clients and staff. Employees also receive feedback from clients and management. Yet, consequences to maintain proper work behavior are still lacking. In order to maintain staff performance, differential and effective positive consequences need to be implemented (Arco, 1993).

Organizational Behavior Management (OBM) has developed many procedures to improve performance in human service settings (Reid & Parsons, 2000). Most of the research in human service settings focuses on training and management procedures designed to improve staff performance and maintain appropriate work behaviors. Although training and management techniques can be very useful, performance enhancing techniques, such as pay for performance, have been shown to be highly effective (Stajkovic & Luthans, 2001; Sturman, Trevor, Boudreau & Gerhart, 2003) and may benefit human service settings by using positive consequences in order to maintain staff work performance.

Pay for performance has been shown to be most effective when pay procedures are linked directly to behavior. It has also been demonstrated that the amount of incentive relative to the employee’s salary can also be quite small and still be effective (Duncan & Smoot, 2001). Pay for performance programs have worked for many large organizations. Productivity within these organizations has increased and employees preferred having the option of earning extra money above their current salary. Despite this, very little research has been conducted on pay for performance in human service settings (Arco, 1993). This may be due to the lack of funding in human service organizations, as many are grant funded and not-for-profit. However, if human service agencies continue to have deficiencies in staff performance and client outcomes, government costs may continue to increase due to inefficient spending on programs that do not work.

Arco (1993) argued that material contingencies, (e.g., monetary bonuses and work privileges such as arranging days off, etc.) may be more powerful in maintaining staff performance than social contingencies, (e.g., praise from colleagues, clients, supervisors, etc.), and client progress. Praise from clients and supervisors may be effective but require continual observation and recording, which may not be sufficient or realistic in human service settings. Reinforcement through client progress is also not very reliable because client outcomes are variable and may have very little to do with staff performance. Material contingencies have been shown to be very effective in increasing work performance and productivity in commercial organizations, yet if implemented incorrectly it could be detrimental to the organization (Arco, 1993). Specific and isolated behaviors need o be carefully selected before rewarding in order to ensure that employees do not neglect other behaviors which are not rewarded.

Arco (1993) developed a guide for researching and applying performance pay. The first condition states that goals, performance standards, and incentive pay rates are negotiated publicly, equitably, and in context of productivity and client benefit. The second condition requires that the incentives are supplementary to non-contingent base salaries. The third condition states that when client outcomes are uncertain, pay should be based on program procedures and should be protected against circumstances that are out of their control. The fourth condition states that incentives should be paid regularly and frequently. The fifth condition states that incentives should be based on individual and not group performance. The sixth condition requires that incentive pay be based on fair, open, objective, and reliable staff performance assessment, which should be done every six to twelve months. The last condition for researching and implementing performance pay states it must be cost effective.

If research were to be conducted, performance pay procedures could prove to be just as successful in the human service setting as they are in corporate organizations. There are several ways performance pay could be implemented in order to improve staff performance in human services. One way would be to give bonus pay to employees, who have surpassed goals set by the program for attendance, timeliness regarding completion of paperwork and client interaction. Management could set goals publicly and individuals who attain these goals per month would receive a bonus on top of their base salary. Staff would be more motivated to spend extra time with clients and be more aware of punctuality and attendance because these behaviors would be directly tied to the bonus. Pay for performance could also be implemented as an incentive for managers to improve how they manage staff and implement training programs. Managers may be more likely to observe staff behavior and give feedback more frequently if money were contingent upon these behaviors. The performance pay program in a human service setting would be cost effective because the amount of incentive paid to the staff to increase productivity and service to the clients would either be equal or less than the amount spent when there is high turnover. Also when employees are excessively absent, other employees receive over-time pay.

More research should be conducted regarding performance pay in human services. It is important that all methods of staff performance improvement be researched in order to improve the quality of care in human service settings. Human service settings will continue to expand and more attention should be focused on how these agencies are run.

References

Arco, L. (1993). A case for researching performance pay in human service management.
Journal of Organizational Behavior Management, 14, 117-136.

Duncan, P. K., & Smoot, D. T. (2001). Pay for performance. In C. Johnson, W. Redmon,
& T. Mawhinney (Eds.), Handbook of Organizational Performance Behavior
Analysis and Management (pp. 255-276). Binghamton, NY: Haworth Press.

Reid, D. H., & Parsons, M, B. (2000). Organizational behavior management in human
service settings. In J. Austin & J. E. Carr (Eds.), Handbook of Applied Behavior
Analysis (pp. 275-293). Reno, NV: Context Press.

Stajkovic, A.D., & Luthans, F. (2001). Differential effects of incentive motivators on
work performance. Academy of Management Journal, 44, 580-591.

Sturman, M.C., Trevor, C.O., Boudreau, J.W., Gerhart, B. (2003). Is it worth it to win
The talent war: Evaluating the utility of performance-based pay. Personnel
Psychology, 56, 997-1035.