Thursday, June 26, 2003
Governments Always Overreact in the Face of Bad Press

The Legislative Auditor General release several audits this week. The one that seemed to cause the most press was one that audited the payment of bonuses to state workers. The Deseret News is reporting that several state agencies will halt paying bonuses all together.

There were abuses to be sure. The audit, for example, cites on instance where someone was paid a bonus for "putting paper in the copy machine." And in some agencies, nearly 100% of the employees received a bonus. In times when there are no pay raises, its tempting for managers to find some way to reward their employees. Unfortunately, the public sector manager often has trouble participating in the kind of discrimination that rewards only good employees. Its easier to just reward everyone.

It appears that the cure will be worse than the disease, however. Instead of trying to fix the bonus program and turn it into an effective manager tool, many agencies are simply scrapping it all together. This is a shame. There are already too few ways for managers to reward public employees for a job well done. The better response would be one where managers are given a budget for bonuses, training in how to reward employees, and guidelines about what kinds of things should be rewarded. A quota on the percentage of employees in any one department who are eligible would force managers to pick the best.

The public sector tends to even everything out when it comes to employees. Everyone should make close to the same salary, everyone ought to have the same opportunities, and everyone ought to get a little bonus instead of just the stars getting larger bonuses. This is in stark contrast to the private sector. To a public sector manager, the most important factor in treating employees is fairness, not productivity.

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