Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts hinges on two characteristics: noise and distortion. These criteria, though, will only be useful in practice as long as the noise and distortion of a performance measure can be...

Since the adoption of the Performance Based Bonus (PBB) scheme in 2012, its effectiveness-particularly its impact on agencies' reform efforts and on public sector employees' motivation and productivity-have not yet been examined. The Department of Budget and Management (DBM) deems it critical to...