Human Resources In Government

This Washington Post editorial from January 19, 2010, argues that bonuses for Wall Street are justifiable because it is an example of pay for performance. What I think is missing is any discussion of pay for performance when performance is poor. Shouldn’t the bankers be penalized, not rewarded for poor performance? This got me thinking about whether or not pay for performance is viable. If it is used only to reward and never to penalize, can it be an effective compensation policy? What do you think? Do you know of any situations where pay was reduced due to poor performance, or a bonus not awarded?

A recent study from the Rockefeller Institute of Government found that state and local government employment actually increased during the recession while private sector employment decreased. According to the report, more cuts are almost certainly on the way as the full impact of the recession is felt by state and local governments.

During the past year, total state- and local-government employment rose in 30 states and declined in 16, with employment in the remaining states unchanged. Since the recession began, state and local governments have added a total of about 110,000 jobs, an increase of 0.6 per cent.

“As is the typical pattern in recessions, overall state and local government employment continued to grow after the start of the recession, although there has been a small decline since the August 2008 peak,” said Rockefeller Institute Senior Fellow Donald J. Boyd, author of the new report. “Further employment reductions are almost certainly on the way.”

Is your agency planning more furloughs and lay-offs?

An IPMA-HR member brought to my attention a new website dedicated to keeping the tax-advantaged Flexible Spending Accounts (FSAs).  Lawmakers are considering lowering the amount that employees can contribute to FSAs or eliminating them in order to finance health care reform.

How common are FSAs and how important are they to your workforce?

In a follow-up to the November 2008 survey, IPMA-HR conducted a second survey from April 28 to May 13, 2009 asking members what actions they have taken and expect to take to address the economic downturn.

Only four percent of respondents said they expect to take no action in the next 12 months.

“These results underscore the pivotal role for public sector HR professionals.  As noted in both surveys, public agencies now, more than ever, have to aggressively manage their single greatest expense, the payroll and associated ‘headcount.’  To do otherwise is to avoid reality,” said Joe Lunt, IPMA-CP, the Association’s President and Personnel Director for the City of Shreveport, Louisiana. “The challenges for public sector HR professionals will endure, if not escalate, as the economic downturn continues to seek a firm bottom,” continued Mr. Lunt.

* 682 respondents completed the survey

Public employers understand the many angles to the healthcare question. As employers they provide benefits to employees and their dependents sometimes well into retirement. They also administer workers compensation programs and comply with health and safety regulations. As public servants, they see state and local budgets hit by the high cost of providing healthcare to the uninsured. The February 24, 2009, issue of the Washington Post has no fewer than three stories on healthcare, leading with President Barack Obama’s plan to make healthcare reform his top fiscal priority.

One of the other two articles is about an agreement between Ford Motor Co. and the UAW on how to fund retiree health benefits. Unfortunately, what’s touted as a potential model for other car companies does not translate to the public sector. The agreement, which has yet to be ratified, calls for paying part of the cost of retiree health benefits in stock rather than with cash.

The third article that caught my eye was about a program in Howard County, Md., designed to provide health insurance at a very low cost (around $50 per month) to the uninsured. The Howard County program is one of only two such programs in the country, and while it may sound like an excellent idea, there is a problem—not enough people are enrolling. There are three reasons for this low enrollment: first, there is no extra money even for the small premium payment; second, there is a belief that insurance isn’t necessary because the individual is young and healthy; and finally, people don’t know the program exists.

Public HR professionals, because of their unique position in the community, should make their voices heard on the healthcare debate. What are some problems and what are some possible solutions? What would make it possible to continue to provide some level of benefits to retirees while maintaining the fiscal soundness of state and local budgets? Is universal healthcare the answer, and if so, are there concerns unique to the public sector that we should tell lawmakers about? The IPMA-HR Healthcare Taskforce recently came up with several principles to help guide the debate. We would welcome your input as well. Click here for more information.