Agency autonomy, public service motivation, and organizational performance

ABSTRACT

While agency theory predicts mixed impacts of agency autonomy on organizational performance conditioned by result-based controls, stewardship theory predicts positive effects. This study contrasts the two views by introducing public service motivation (PSM) to this debate. As the PSM increases, the employees move closer to the ideal type of stewards, and thus agency autonomy should have a larger impact on organizational performance. Using the 2005 and 2010 Merit Principles Surveys, the empirical tests support this proposition. This study bridges the literature on agency autonomy and PSM by highlighting interactions between organizational structures and employee motivations in shaping organizational performance.

KEYWORDS:

• Agency autonomy
• public service motivation
• organizational performance
• agency theory
• stewardship theory

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. While the MPS data for PSM measurements are available in multiple years, such as 2000, 2005, 2010, and 2016, the PART data, a critical data source to measure agency performance, are available from 2003 to 2008. We choose the years 2005 and 2010 to maximize the possibility of constructing concurrent measurements of PSM and agency performance.

2. A detailed coding scheme is available on Lewis’s website, https://my.vanderbilt.edu/davidlewis/data/.

3. The two agencies left out are missing in the PART data.

4. The original PART scores range from 0 to 100. They are rescaled from 0 to 1 to facilitate interpretation of the results.

5. The variable education is treated as continuous in the HLM estimation, but the results are robust with controlling dummies for each level of education. In the OLS estimation at the agency level, this variable is recoded as college degree, which indicates the percentage of respondents who hold a degree that equals to associate’s degree or above.

6. In the 2010 MPS sample, the variable years of service is a categorical variable indicating different internals of years that a respondent works as a federal civil service employee from low to high.

7. The results are available upon request.

Additional information

Notes on contributors

Jinhai Yu

Jinhai Yu, Ph.D., is an associate professor (tenure track) in the School of Public Economics and Administration at Shanghai University of Finance and Economics (SUFE), Shanghai, China. His research examines how policymakers allocate fiscal resources to improve government performance and accountability. He has published at Public Administration Review, National Tax Journal, and Public Performance and Management Review, among others.