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Public Employee Compensation

Recent Fox News commentary about compensation turmoil in Bell, California reached an almost manic crescendo, with pundits making hugely misleading generalizations about the compensation of all public employees. Frankly, it made me ill.  While no one can condone a Chief Administrative Officer of a city with 40,000 residents making $787,637 annually or an Assistant City Manager making $376,288, this is far from common. In fact, it is so outrageously uncommon it is outside the realm of reality. In the Associated Press report, it appears that, in addition to the enormous salaries of the CAO and his assistant, the Police Chief made $457,000 and part-time council members were making between $90,000 and $100,000 a year for part-time work. All three of the appointed officials have resigned and some elected officials may be next; the Council has called an emergency session for tonight in the face of continuing public outcry.

I have grave concerns about anyone so blatantly ripping off taxpayers, but I also have concerns about why there was no transparency and oversight. An even greater frustration is that various right-wing conservative groups are extrapolating this situation and making a case that all public salaries are too high. This is worrisome because most public employees do not make big bucks and, while there are some pensions that are totally unfair, most hard-working public employees will not make much in retirement. I know hundreds of city, county, state and federal employees and the vast majority are concerned about their ability to cobble together enough to make it through retirement years.

Reviewing recent job announcements, for cities the size of Bell, I see CAO and assistant jobs advertised from anywhere from $85,000 to around $125,000, with some over $150,000 depending on cost of living in that area. Curiously, Bell’s CAO started at $73,000 in 1993, which was within reason. How it got so far out of line is beyond me and, as the AP noted, it appears that city residents didn’t pay attention.

There are several messages here. First, there are always anomalies in the world of compensation and this, no matter how outrageous and wrong, should not be used as a hammer to punish other public administrators who are on call 24/7 365, and deal with some of the most complex issues in America. Second, the vast majority of public employees are not overpaid…not even close, and have less security than ever. Let’s not forget that there have been massive layoffs of city, county and state employees over the past two years. The remaining employees might (and might not) have more security in these dark economic times, but that is what is keeping many from bolting for more money elsewhere. Third, there is a sad and misleading overreach being perpetrated by various conservative groups and news sources, and, generally, their data does not match reality. How these folks can rage on for 30 to 60 minutes (especially the convened panels of ‘experts’) with far-ranging accusations borders on a witch hunt.

I believe in fair wages and reasonable pension plans. Government employees endure what their corporate counterparts typically do not – incessant public scrutiny, constant complaints, insufficient budgets, growing expectations and demand, being constantly on-call, and limited opportunities. It is about service…not profit. Yes, there are those who have profiteered in this case and I’m sure there are others (some union pensions come to mind), but generally, compensation is not out of line and should not be used as another vehicle to malign public employees.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Community Leaders and Public Administrators, will be available in fall 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

Leadership and Motivation

Having had the pleasure of presenting a leadership program to participants of the Northwest Community Development Institute this week, I was reminded again how much is known but forgotten about motivation. My ‘enlightened frustration’ did not come from Institute participants, who are a motivated and aware group, but from reading an article on motivation in the April 12 edition of Fortune Magazine.

Written by Telis Demos, the article cited work by the Boston-based company Globoforce, which consults on employee motivation, among other things. The article implies that the firm’s experts have discovered that the secret to motivating employees lies not in compensation but in small, unannounced, and frequent rewards that recognize contribution and involvement. The article praises this approach, implying that these ‘theories’ are new and innovative. I am both amazed and troubled by this.

Historic contributors to leadership and motivation science include Maslow, McGregor, Lewin, Herzberg, Senge, and, more recently, Daniel Goleman, who gave us Emotional Intelligence (EQ). We have known for over 60 years what motivates, what satisfies, and what diminishes workforce performance. As far back as the 1920s there were studies that revealed the value of inclusion, involvement, and appreciation. The Hawthorne Effect was founded on such principles over 80 years ago. So why is Demos lauding Globoforce ‘theories’ when they are merely restatements of well-known and accepted workplace social science? There is no doubt that this company’s key element for motivation is the element of surprise, but this too is well proven and for decades has been cited in various academic studies.

Unexpected praise is a good thing. Recent studies by professor Hayagreeva Rao at Stanford seem to indicate that the element of surprise is more important for the recipient than the size or nature of the reward. Keep this in mind as you develop your workforce…the most compelling and critical element of every public agency or government. However, be aware of the wealth of information that underpins the rationale and premise for employee motivation. Having this knowledge provides insight and a mirror that reflects not only your style but your inclination to reward. This is critical because many senior managers choose to not recognize or reward employees for work they consider part of normal job duties. This is a mistake. Showing appreciation pays huge dividends and creates a culture that cherishes accomplishment.

I suppose the message for public leaders is that motivation still relies on established factors that include frequent praise, small rewards (often non-monetary), showing appreciation, inclusion, and establishing a sense of team. Virtually none of this is new to seasoned public managers; the key question pertains to whether we are properly executing accepted social psychology principles in a manner that, especially for these challenging times, builds dedicated teams that are resilient, collaborative and productive.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Community Leaders and Public Administrators, will be available in fall 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).