This publication reviews performance pay schemes covering middle management and senior management levels in departments and agencies of central government and also looks at, on a selective basis, schemes for managers in other parts of the public sector. The objectives of the study were to investigate why performance-related pay schemes are being introduced at management levels in the public sector, to examine how these schemes operate, to assess whether the schemes are meeting their stated objectives, and tosee whether and under what conditions performance pay can operate successfully in public sector settings.