Tournament Fiscal Leverage in Public Service
RCTClinical Trial
Direct pay-for-performance schemes in the public sector require substantial financial outlays for every unit of output produced and often face strong political resistance from labor unions.
Picture this
Imagine offering a single trophy at the end of a long season; every competitor runs faster all year to win that single reward, allowing the organization to boost total performance across thousands of participants while paying out only a few actual prizes.
What the evidence says
Only 9 supervisor positions became vacant during the study (resulting in 4 meritocratic promotions in the treatment group), yet establishing merit-based advancement rules induced a 22% increase in total household visits (+1.497 visits per worker) across the entire 2,009-worker pool.
- Who was studied
- N = 2,009 Community Health Workers across 372 Peripheral Health Units in Sierra Leone tracked over a 10-month experimental period.
- How
- Field experiment (RCT) measuring population-wide frontline worker productivity shifts in response to meritocratic promotion tournament rules despite low vacancy rates.
What to do
Structure public sector worker incentives around rank-order promotion tournaments rather than linear piece-rate bonuses to achieve high fiscal leverage under constrained budgets.
From the source
"Our results show that thanks to the tournament structure, promotion incentives convert only a small fraction of gains into higher wages."
Promotions_and_Productivity_The_Role_of_Meritocracy_and_Pay_Progression.pdf