New Public Management in the Era of Cutback: Research Performance with Declining Financial Incentives

Abstract To examine empirically whether the effect of the incentives on individual performance lasts even after the incentive cutbacks, this study analyzed the change in journal publications associated with the pay-for-performance incentives in a Korean university in which the trend of performance-based financial incentives took a reversed U-shape. The panel data on the research performance of 310 professors from the humanities and social sciences field collected over 14 years showed that increased financial incentives had a lasting effect on increasing publications in domestic journals, even when the incentives were shrinking. By contrast, following the curtailed incentives, the publications in international journals (SSCI- and A&HCI-listed journals) were reduced at the same rate as they surged when the incentives had increased. In interpreting the different responses resulting from diverse skills required for publications in each type of journal, we proposed that the right combination of performance-based incentives, autonomy-supportive atmosphere, and perceived likelihood of achieving the desired goals would result in longstanding behavioral changes and improved research performance. This study also suggested that a theory of sustainable behavioral change should consider the role of skill development in linking internalizing values and sustaining changing behaviors.