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November 27, 2007
To Micromanage, Or Not To Micromanage?
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| Image: How close should we watch city management practices? Learning about how the city manages its money can be frustrating. You hear a lot about how a city is different than other financial institutions, and normal practices or logic don't apply. On the other hand, a city is different than a business, and some of their activities are mandated by state or federal agencies. These mandates, along with local policies are not designed for efficiency. But in considering the Management Merit Pay program I came up with a number of personal opinions that don't necessarily mesh well together. This leaves me with a wishy-washy feeling about how valuable merit pay is to me, the taxpayer. On one hand I've heard that we have to pay well to get the best employees. That includes pay and benefits. So I'm left wondering, if we have the best employees why do we need to provide more incentives to overachieve? I thought good pay did that. I've heard that merit pay is for completing things that aren't part of the day-to-day job. But I feel strongly that if we opened up the management achievement plans and looked at the projects that warrant merit pay we'd see plenty of projects whose lack-of completion could put someone out of a job. That means the projects are required by the job and not just extra-credit. I think the increases in money spent on merit pay and the fact that in 2006 virtually all management employees received merit pay should create a discussion about when merit pay becomes "pay". It's like a business that gives out Christmas bonuses. Everybody starts counting on Christmas bonuses, even when the business can't afford it. So with all of that said it's important not to be hyper-critical of the city management. The merit pay issue is a drop in the bucket regarding our budget problems (recognizing that it's a big drop to most of us). There's no way to know whether merit pay improves the city over the alternative of no merit pay. Providing incentives for employees is a common practice, and one used by many fiscally sound organizations. So I'm left asking one big question regarding merit pay. Is it being abused? I can't see any indication that it is. I think the increases in dollar amounts over the last 5 years need to be explained. As do the increased percentages of merit pay being awarded on average. But the highly paid managers at our city need the flexibility to manage their employees. As long as the merit pay program is explained and applied reasonably it probably is an effective tool in improving city operations. It might be worthwhile to explore moving all funds of the merit pay system out of the General Fund. That would really remove its impact from areas where the taxpayer is most concerned. The impact on the General Fund on merit pay was less than $90K last year, maybe it could be less? Update: At this morning's Finance Committee meeting the Finance Director, Jennifer Hennessy, answered the question of why merit pay has grown from 2001 to 2006. This also relates to Mark Sorensen's suggestion yesterday that I relate managment pay brackets to merit pay growth. The city increased salary brackets in order to make management recruitment and retention easier (increased the minimum and maximum pay for a job position). This had the effect of moving many of the management salaries lower in the pay bracket (same pay, but below the maximum available). That made it possible for them to earn merit pay. So there can be an assumption that the merit pay program implementation was not the direct cause of increases in merit pay payments. The overall increase in salaries would be the trigger for increased merit pay. |
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CI Challenge: Can you guess what it is? Winner: Jason Bougie, see comments below for the answer. |
Posted by Lon at November 27, 2007 07:13 AM
Comments
I think it would make for an interesting exercise to allow in cases where staff are directly in contact with the public that the public, through comment cards or other means is allowed to comment on performance and that be used within the merrit pay structure.
CI Challenge - I think its a fig leaf in on the $1 bill but all I have are $100s
Posted by: Jason Bougie at November 27, 2007 08:03 AM
I think those are leaves as printed on a dollar bill under closer scrutiny.
I saw your ride downtown by the Plaza this morn. Were you calling the shots down at the budget meeting?
Posted by: Gregg Payne at November 27, 2007 09:46 AM
Gregg,
I was down at the Finance Committee meeting. Big news... the library will likely not lose its funding and people are not entirely happy about the high pay received by city employees.
In fact, one library supporter made the point that the $170K considered cut for the Butte County library was no more than the cost of a single city employee (one of the better paid ones). The Finance Committee voted not to forward approval of a cut in library funding to the Council.
Larry Wahl asked that the reasons for increases in merit pay from 2001 to 2006 be forwarded to the Council. So they will talk about it, which is probably all they need to do.
Lon
Posted by: Lon at November 27, 2007 10:19 AM
Jason,
I think its a fig leaf in on the $1 bill but all I have are $100s
All I've got is nickels, gum wrappers, and lots and lots of baby stuff.
Lon
Posted by: Lon at November 27, 2007 10:20 AM
Lon,
I don't recall getting any merit pay in my old govt job. In fact, I spent more time performing collateral duties like acting as the Intelligence Officer (thought you'd enjoy that oxymoron), than I spent flying planes. If you did a good job and you were lucky you got a shiny medal. So I say we hand out medals to our stellar city employees instead of cash. This whole merit pay thing is ludicrous.
Big surprise on the library funding. My family enjoys the library, but expanded hours are not a "need" when your budget is in the red. Apparently the council will not make any tough decisions until we vote down a tax increase.
Posted by: Sean at November 27, 2007 11:56 AM
Hey Sean,
The library supporters performed a political "push" at the right time. Stopping the discussion at the Finance Committee level preserved their funding.
I think one of the library supporters in particular made a great point. The city should not be nickel and diming the budget solutions. They need to tackle the big issue of the budget problem, which is human resources cost.
On merit pay I just came to the conclusion that it doesn't really matter if merit pay is a tool used by city management. What matters is controlling the overall cost of city government, which again gets us back to human resources.
But I am of the opinion that merit pay shouldn't be required to get good work product out of highly paid employees.
Lon
Posted by: Lon at November 27, 2007 02:07 PM
i think the city should pay me to play disc golf. they could just lower everyone's salaries by $20 a month, and give the excess to me. problem solved.
then i would take the money and make beer for everyone to come drink.
Posted by: TrevHastings at November 27, 2007 02:33 PM
Trevor,
You just need a disc golf union.
Lon
Posted by: Lon at November 27, 2007 02:55 PM
ok. how do I start a union? Can we strike?
Posted by: TrevHastings at November 27, 2007 03:42 PM
Trevor,
Not only can you strike, you have to strike. How else do you stick it to the MAN. To form a union you first need a bloated self-serving bureaucracy. You have to make sure that it is not in danger of competing with another bureaucracy or private institution. Then you organize, demand more than you need, and wah-lah you file for a disability retirement at 48.
Power to the people brother.
Lon
Posted by: Lon at November 27, 2007 03:48 PM
ok hold on i'll make a few calls to some available beruruacracies.
Posted by: TrevHastings at November 27, 2007 04:19 PM
Jason,
The CIC is a close up of a leaf on a $1 bill. That makes you the glorious challenge winner. Tell your friends, take out an ad in the paper, and celebrate, because today (or rather yesterday) is (or rather was) your day!
Lon
Posted by: Lon at November 28, 2007 06:08 AM