Pay for Performance: A Public Sector Puzzle

Source: Dick Grote, IPMA_HR News, March 2007
(subscription required)

True or false: Good workers should get paid better than bad workers. Sounds simple, doesn’t it? But the apparently obvious concept that those who do better work should receive better pay underlies one of the most puzzling public sector performance management issues: the notion of pay for performance. Before a pay for performance system can work, the tool to measure performance must be solidly in place. That’s why it’s a good idea to develop a good performance appraisal system before you tinker with the compensation system. But the conventional appraisal system used in most cities and state agencies doesn’t have the horse power to drive an effective pay for performance effort. The system has to be scrapped and recreated so that the city’s mission statement and vision and values are clearly linked to individual performance.

Public Safety Concept in the Post-9/11 World

Source: Leonard Matarese, Kenneth Chelst, Gayle Fisher-Stewart, and Albert Pearsall, Public Management, Vol. 89 no. 4, May 2007
(subscription required)

More than 15 years ago, authors Kenneth Chelst and Leonard Matarese described in an ICMA report the efficiencies and successes gained by the consolidation of police and fire departments. They defined the issues surrounding a police-fire merger, identified the key decisions that had to be made, developed a process to assess and overcome environmental barriers to a merger and presented a mathematical model for predicting the impact on costs and performance of a proposed police-fire merger. Specifically, they were addressing mergers where police officers and firefighters routinely worked together, rather than just administrative consolidations. Yet, in a post-9/11 environment, does consolidation continue to make sense? Is it an efficient use of human and financial resources? As this “age of terrorism” forces local governments to assess issues of interoperability and emergency management, while still competing for scarce resources, should emergency response organizations become combined under one public safety umbrella?

The Memphis Strike: Martin Luther King’s Last Campaign

Source: Michael Honey, Poverty & Race, Vol. 16 no. 2, March-April 2007

On February 12—Lincoln’s Birthday—Gillis and others on the sewer and drainage crew had had enough. They and nearly 1,300 black men in the Memphis Department of Public Works, giving no notice to anyone, went on strike. Little did they imagine that their decision would challenge generations of white supremacy in Memphis and have staggering consequences for the nation.

The Real ID

Source: Molly Ramsdell and Matt Sundeen, NCSL Legisbrief, Vol. 15 no. 22, April/May 2007
(subscription required)

In early March, the Department of Homeland Security (DHS) issued the long-awaited draft regulations on Real ID Act implementation. The Real ID Act of 2005 requires states to adopt federal standards for driver’s licenses and identification cards by May 11, 2008. If they do not, the federal government will not accept the driver’s licenses or identification cards for federal purposes—boarding commercial aircraft, entering a federal building or nuclear power plant, or other purposes as determined by the secretary of the Department of Homeland Security. DHS estimated the cost of implementation at $23.1 billion over 10 years; the states’ cost is $10 billion to $14 billion.
See also:
NCSL’s Countdown to Real ID
ACLU’s Real Nightmare

Universal Health Care

Source: Laura Tobler, NCSL Legisbrief, Vol. 15 no. 21, April/May 2007
(subscription required)

With bipartisan support, many state are creating comprehensive laws or proposals to improve the system and decrease the number of uninsured. They are fueled by the growing number of uninsured Americans, the declining number of employers that offer insurance to their employees, and improved state fiscal conditions.

State Labor Legislation Enacted in 2006

Source: John J. Fitzpatrick, Jr., Monthly Labor Review, Vol. 130 no. 1, January 2007

Minimum wages, workplace security, prevailing wages, equal employment opportunity, wages paid, time off, drug and alcohol testing, child labor, human trafficking, and immigrant protections were among the most active areas in which legislation was enacted or revised during the year.

The Reeducation of CalSTRS

Source: Steven Brull, Institutional Investor, April 2007

A little learning is a dangerous thing. But not when it comes to running the nation’s second-biggest pension fund. For years the California State Teachers’ Retirement System was the epitome of a creaky, mismanaged bureaucracy, toiling in the shadow of its cross-town sibling, the California Public Employees’ Retirement System. Its membership—public school and community college teachers—felt neglected. Its investment staff was underpaid. Its returns in most years were at best mediocre. That has all changed. CalSTRS has awakened from its slumber, emerging as a powerful force on the local and national stage.

Consumer-Driven Health Care in Its Adolescence

Source: Kevin O’Hara, Employee Benefit Plan Review, March 2007

As the groundswell continues for the implementation of the American health care model’s latest panacea, consumer-driven health care (CDHC), it becomes important to take a moment or two to review the progress to date. The popularity of CDHC plans has grown steadily in recent years with projections for their adoption rate to accelerate as early missteps are corrected. Difficulties encountered in the communication and administration of CDHC benefits short-circuited extremely optimistic early forecasts of their penetration rate as a percentage of all sponsored plan offerings. Recent surveys, such as the Kaiser Family Foundation Employer Health Benefits 2006 Annual Survey, indicate a continued increase in CDHC enrollment but at a much reduced rate than first anticipated.

The New Yellow Book: What You Need to Know About the 2007 Revision of Government Auditing Standards

Source: Government Finance Review, April 2007

Earlier this year the U.S. Government Accountability Office (GAO) released a revised edition of Government Auditing Standards, commonly known as the “Yellow Book,” to replace the 2003 edition currently in use. The new version will be mandatory for engagements beginning on or after January 1, 2008. The most recent changes in the 2007 revision of Government Auditing Standards reinforce the most fundamental of auditing ethics and principles, including transparency and accountability; update language to align with other standards; and give auditors an auditees additional guidance for a clearer understanding of what it takes to achieve high-quality government auditing to contribute to overall accountability in government.

Skill-Based Pay—Issues for Consideration

Source: Frank Giancola, Benefits & Compensation Digest, May 2007
(subscription required)

Compensation experts agree that skill-based pay is the wave of the future for compensating employees. In this approach, the skills of employees, instead of their jobs, are used to determine base pay. What compensation professionals may not realize is that this is much more than a new way to deliver pay. Adoption usually requires major changes in training and employee development programs, as well as the methods used to select and evaluate employees. Employers considering this method of pay should take into account a number of factors.