Friday, August 01, 2008

More on pay, incentives and motivation: donating unpaid overtime in the for-profit and not-for-profit sectors

There is an interesting article in the Spring issue of Research in Public Policy from Bristol University’s Centre for Market and Public Organisation.

The article summarises some CMPO research In search of the public service ethos. While people talk of a public service ethos, do they actually demonstrate it in behaviour through donating labour in the form of unpaid overtime. It crunched raw data that showed 46% of employees in education, health and social care in the non-profit sector do some unpaid overtime compared with 29% of their counterparts in the for-profit sector.

After adjusting for demographic variables and for the possibility that unpaid overtime may be motivated by the prospect of promotion or bonuses, it concluded that people working in welfare services in the non-profit sector are 12% more likely to do unpaid overtime than those in the for-profit sector.

The authors point out that:

[The] estimate of the premium suggests that an additional 120 million hours are donated in the public sector compared with similar people working in similar jobs in the private sector. This is equivalent to an extra 60,000 people.

But before we get to the unlikely scenario of advocates of keeping the NHS (and other public services) public using the argument that the private sector is bad because it fails to extract unpaid labour from its employees, its worth noting that the researchers did not find that people changed behaviour when they moved between the for-profit and non-profit sectors.

Where does that leave us? Perhaps the research strengthens the case for a mixed economy in public services. The existence of non-profits and for-profits may allow better matching of people to the sector and the motivational structure that works for them. Of course, non-profits cover a range of models and the research did not explore the interesting question of how public sector or third sector employees may work differently.

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