Creating a Performance Culture: Incentives, Climate, and Organizational Change

Performance management, despite its popularity as a strategy to improve the quality of public services, has had mixed results. One reason is that successful performance management reform depends not just on changes in formal systems but also on changes in organizational values. This article analyzes a large urban school district to measure the role that external incentives and organizational climate play in the development of performance management values. In contrast with prior research, it finds that organizational incentives have only a small effect on the espousal of performance values and have a negative and significant impact on the adoption of performance management behavior. By contrast, organizational climate has a strong and positive impact on performance values. These findings raise serious questions about the efficacy of high-stakes accountability reforms, and highlight the need for policymakers to consider alternate approaches that foster organizational trust and build up a capacity for reform.