The Philippine government has adopted a performance-based incentive system (PBIS) for employees in the executive department to motivate higher performance and greater accountability in the public sector. It is composed of the performance-based bonus (PBB), a top-up-based bonus premised on the delivery of units or individual contributions to the accomplishment of agency targets, and the productivity enhancement incentive, an across-the-board bonus amounting to PHP 5,000 per employee. This Policy Note zeroes in on the PBB and its implementation in national government agencies (NGAs) and attached agencies, government-owned or -controlled corporations, constitutional commissions, and other executive offices. It finds that the compliance of agencies to varying PBB requirements has become more tedious over time, to the extent that meeting such demands tends to jeopardize their major functions. The best-better-good-poor rankings have also been perceived as unfair, resulting in undue competition within the agency. The study urges the government to minimize frequency of changes of PBB requirements. With the perceived lack of fairness and the resulting undue competition among employees, the PBB design and rating system for individuals should be revisited, particularly the conflict between individual and institutional performance.
