Would “Pay For Performance” Be Good In The Social Services?

Bean counting
Beans ready for counting

Pay for performance in the social services may sound good in principle, but there are many reasons to be skeptical.  There is a certain allure in the many kinds of legislative proposals that link pay to performance in the social services.  Some are getting serious consideration at state and federal levels, but we should be very careful with them.

My concern is in the potentially corrupting effect that slavish devotion to a single bottom-line metric could have on the work of the social service provider.  It could be as damaging as the corrupting effect that slavish devotion to the bottom line “quarterly profits” has had in the corporate sector.

And slavish devotion it would be if service providers’ salaries depended on how well their employer met their financial, er, service, goals.  We’d see all manner of shortcuts, like creaming, skimping on the service, workplace abuses, and simple garden variety misreporting.   I know the mantra these days is to make nonprofits operate more like business, but I’m a skeptic.

I’m not against “pay for performance” in principle, but it is essential that the right performance measures be chosen.  Frankly, I’m not sure it’s possible to do with the exactitude needed to prevent widespread dissatisfaction.  Managers would also have to find ways to lessen the threat of mismanagement.  The public should be assured that the outcomes obtained are quality, reasonable, meaningful outcomes.

Take a seemingly simple social services, like a nonprofit training and employment program with a mission to provide employers with skilled workers.  Here, where “job placement” might rule as the payoff metric, it’s the quality of the service—the curriculum, the mentoring, the follow-up — that in reality drives the outcomes.

This was made clear by W. Edwards Deming, the founder of the quality control movement.  Far from being just a bean counter or numbers guy, he said business success is more about quality than quantity, and that businesses make their money and grow their market by making products and services that meet specifications of quality.

And BTW, the art of social service delivery will advance only when they can specify the qualities of excellent social service, and orient the organization to deliver those qualities.  If the various social service industries were induced to focus more on their own principles of quality work, they could develop a more skilled workforce, reduce their costs, and improve the production of meaningful outcomes.

Steven E. Mayer / originally published May 20, 2011 / revised November 21, 2019