Includes bibliographical references (pages 96-100)

Introduction -- Review of related literature -- Overview of the PBB scheme and its design -- PBB implementation -- Conclusion and policy recommendations

Since the adoption of the Performance-Based Bonus (PBB) scheme in 2012, its effectiveness,
particularly its impact on agencies’ reform efforts and public sector employees’ motivation
and productivity, has not been examined. The Department of Budget and Management
(DBM) deems it critical to study the effect of PBB on whole-of-government efforts to boost
productivity and push reforms, as well as government employees’ individual and team-level
motivations and productivity. DBM wishes to determine whether PBB is achieving its design
objectives and whether it is worth pursuing, given its budgetary implications. However, prior
to an impact evaluation, it is important to undertake a process evaluation, which could help
clarify whether and to what extent PBB has worked as planned. In this regard, this study
examines the extent to which the PBB design has been executed and identifies
implementation deficits, if any, particularly taking note of the bottlenecks and challenges
encountered by government agencies in meeting the conditions to qualify for PBB. It also
presents initial data on the possible effects of PBB on at least three levels: (a) agency-wide
incentive effects, (b) team-level collaboration effects, and (c) individual staff-member
incentive effects. This study finds mixed results on these three main channels of PBB impact.
It recommends a general review of the main policy objectives of this reform. It also identifies
several concrete reforms that could help sharpen PBB moving forward.