Governmental organizations within the United States are struggling with economic obstacles through recessionary budgets and the human resource challenges of an aging workforce, within the structure of changing electoral politics. Human Resource managers are challenged to identify more efficient and effective ways to utilize limited resources to accomplish organizational objectives. Established research in employee engagement and motivation theory provides ample examples of how the perceptions of workers impact organizational effectiveness. Yet a gap in the research has remained in how New Public Management (NPM) driven efforts such as performance-based incentive compensation impact employee engagement. This study investigates the relationship between eligibility for incentive compensation and employee engagement within a multigenerational American public sector, differentiating between Baby Boomer, Generation X, and Generation Y cohorts. The significant findings of this study include positive increases in overall engagement for the entire national sample, for the Generation X age cohort, and for government workers with the opportunity to earn incentive compensation through individual performance. Beyond the focus of this study, there is statistically significant evidence that men working in the public sector are more engaged by incentive compensation eligibility while the positive relationship between engagement and incentive compensation eligibility for women is not statistically significant at p < .05. Likewise, local government employees proved to be highly engaged by incentive compensation eligibility while the differences in engagement between incentive compensation eligible (ICE) and not incentive compensation eligible (NICE) failed to reach statistical significance at the state and federal level. These findings lead to a recommendation for practitioners to implement pay-for-performance incentive compensation programs with extensive planning and communication, through eliciting the involvement of senior management, and in building trust with workers. These recommendations are also tempered by the need for further qualitative and mixed methods research to study the isolated impact of incentive compensation on employee engagement, as well as the need for more involvement from Generation Y and, eventually, younger age cohorts.
|Adviser||James J. Krolik|
|Subjects||Management; Public administration; Organizational behavior|
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