Designing Performance Indicators for Career Incentives

We consider a case of career incentives given to local civil servants hired by the Chinese Government to serve the broad needs of the population. In collaboration with the regional officials and a provincial research center focusing on local governance, we propose to test alternative performance evaluation schemes, ranging from the status quo of delegation to local officials with total discretion, to a transparent performance score based on easily observable high signal-to-noise ratio indicators. We will also test two intermediate schemes, a transparent scoring formula including a larger set but of lower signal-to-noise ratio indicators, and giving discretion to the local officials to decide on the weighting scheme but not the components of the performance score. The objective is to test whether the levels of precision, transparency, and delegation in assigning performance scores improve the power of incentives, and to detect potential trade-offs in performance along non-incentivized dimensions due to multi-tasking.