Stewards in an “Odd” Kingdom: Performance and Remuneration of the Boards of Directors of NHS Foundation Trusts

ABSTRACT:

Performance measures and rewards are becoming commonplace in public sector organizations. This article studies the implementation of performance-related pay (PRP) mechanisms in the boards of directors of the Foundation Trusts (FTs) of the National Health Service (NHS) in England and analyzes whether their remuneration is linked to organizational performance using qualitative and quantitative analyses (structural equation model). FTs operate in a favorable context for implementing PRP to remunerate executive directors. Our results show that many FTs have not implemented PRP and hardly any report having payed bonuses. However, most of them disclose that they carry out some kind of performance appraisal. These results indicate both reluctance to and difficulties in adopting PRP in public sector entities. Results also suggest that executive directors of NHS FTs are stewards in an “odd” kingdom that uses performance ratings to evaluate organizations, blaming directors when ratings are bad, but with no rewards when good performance is achieved.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

FUNDING

This research was supported by the Spanish National R&D Plan (ECO2015-66240P MINECO/FEDER), the Gobierno de Aragón/FEDER (S56-17R), and the Universidad de Zaragoza (JIUZ-2017-SOC-11).

Additional information

Notes on contributors

Javier García-Lacalle

Javier García-Lacalle ([email protected]) is a Lecturer in the Department of Accounting and Finance at the University of Zaragoza (Spain) and belongs to the Gespública research group (http://gespublica.unizar.es). He received his Ph.D. in business at the University of Zaragoza. He has been a visiting researcher at the University of Bristol and the University of Edinburgh in the UK. His research interests are in performance measurement and corporate governance in the public sector.

Sonia Royo

Sonia Royo ([email protected]) is a Senior Lecturer in the Department of Accounting and Finance at the University of Zaragoza (Spain) and belongs to the Gespública research group. Her doctoral thesis was awarded a Merit Prize by the EU Committee of the Regions. She was a visiting researcher at Manchester Business School (UK) and Sheffield Management School (UK). Her primary research interests are in the fields of e-government and citizen participation.

Ana Yetano

Ana Yetano ([email protected]) is a Senior Lecturer in the Department of Accounting and Finance at the University of Zaragoza (Spain) and belongs to the Gespública research group. She received her Ph.D. in business at the University of Zaragoza. She was a visiting researcher at Sydney University (Australia). Her research interests are in citizen participation, performance measurement and management in the public sector, and in public sector accounting.