World Bank leaders: fix our broken staff incentives

Doing a good job – or just moving the money?

Did you see this blog from two World Bank heavy hitters? Recognizing and rewarding the best development professionals

It’s kind of a crazy idea (from an NGO perspective). But the interesting part is their diagnosis of the problem.

The problem

They write that development agencies need ” … a way to more fully align the incentives of managers and operational staff with sustained development impact.”

“… currently development agencies appear to assess their staff primarily using easily observable bureaucratic and procedural measures, such as “the amount of money moved,” which may be poor indicators of longer term impact.”

And that’s no “may be” that moving money is a poor indicator!

This is a powerful indictment of current performance management systems. It is consistent with Alnoor Ebrahim’s excellent analysis of incentives in the World Bank, delivered to the US House of Representatives in 2009.

It also reinforces the crucial point made on this website. Development agencies urgently need to trial better ways of managing and reporting their performance.

And this from Mead Over (ex Lead Health Economist of the World Bank, now Senior CGD Fellow) and Martin Ravallion (Acting Chief Economist and Director of the Development Economics Research Group at the World Bank). Seriously experienced and influential players.

The remedy

Check out the blog. Broadly, they suggest that development professionals should be allocated notional ‘shares’ in every project they work on (like shares in a company). Then, projects are continually valued and updated by an independent party – so the shares are assigned a value. The total value of a person’s shares is termed her ‘Development Impact Wealth’. It would go up and down over time, as impact emerges – or doesn’t.

And this variable could be used as an indicator of staff performance, for instance to celebrate achievement or inform salary raises.

From an NGO’s perspective, this is brilliantly barmy and totally unworkable. (It’s too expensive to administer; impossible to be objective & credible enough; ‘impact’ is not a reliable driver of staff performance, as it lies outside agencies’ control. How about triangulated client feedback on value added instead?)

But that’s not so important. It’s terrific to see creative ideas about tackling one of the central questions we all face: how to drive up performance and accountability in development agencies.

2 Responses

  1. This is a good blog. Thanks. The same applies to many NGOs where performance based payment approaches have been introduced. A culture of bonuses (albeit much smaller than in the private sector) is common in many international development think tank and NGOs in the UK.

  2. yes but who judges performance? The recent report From Local to Global Protection(www.local2global.info) on S Sudan shows that what local people want from civilian protection (enhanced livelihoods that give a ‘buffer’ against turbulence, and protection for whole communities) is not the same as the international goal of focusing on protection of the rights of vulnerable groups. Unless local people set the criteria for success, this will just reinforce ‘top down’ programming that satisfies donors and leaves local people out of the picture.

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