Performance Base Incentives in Multi-Layered Organizations: Evidence from Sierra Leonean Community Health Workers
Pay-for-performance (P4P) has shown to be effective in improving job performance in both private and public organizations. Existing literature has studied the effect of P4P within a single tier of the organizational hierarchy, mostly focusing on frontline workers and rarely paying attention to their supervisors and/or managers. However, incentivizing one layer of the organization (either the lower- or upper-tier) might affect effort across both layers of the hierarchy, either through effort complementarities or fairness concerns. Further, given a certain budget it is also unclear how to structure incentive schemes between these different layers of the organization. Is it optimal to adopt flat incentive structures that reward different layers of the organization equally? Or instead adopt steeper incentives structures that reward one of the two layers more than the other? Our research project aims to provide the first evidence on financial incentives across different layers of the organization. We plan to test this in the context of a large national public organization that is structured around two key figures: community health workers (CHW) and their peer supervisors (PS).