Incentives to Productivity

As an employer the Dutch government faces major challenges in the coming years. Budgets are being squeezed by the economic crisis. Over half of total public administration staff are aged 45 or over, and many older staff will be retiring in the next few years. The challenge, in this maelstrom of ageing, a tight labour market (due to the crisis) and cutbacks, is to maintain the quality and volume of public services. Higher productivity – equal output with less manpower – could be a solution.

Smarter working enables higher production: in this way the same (or even an improved) levels of service can be achieved with fewer people. This is easier said than done, but higher productivity could be encouraged with the right incentives. This report explores three financial incentives that could help to achieve this: