Case #1153.0

Profit Sharing for the Public Sector: The Shared Savings Program in Pittsburg, California

Publication Date: January 01, 1992
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Abstract:
Under pressure to save money and improve efficiency, the head of the public works department of the small city of Pittsburg, California develops a novel approach: if key members of his department are able to perform specific tasks in ways such that costs are reduced, they will themselves share personally in the savings, taking home bonuses in their paychecks. This powerful motivational tool is deployed within a department which, notwithstanding this incentive, generally offers little job security or fringe benefits.

Learning Objective:
The case allows for discussion of whether personal financial rewards are appropriate for public agencies and whether such an approach could be sustained, as a practical matter, over time.

Other Details

Case Author:
Harvey Simon
Pages (incl. exhibits):
15
Setting:
United States
Language:
English
Funding Source:
Ford Foundation