Less is More in Government

By Brad Alexander 

Many public sector managers rank downsizing and dismissing government workers somewhere between a toxic waste spill and a nuclear apocalypse on the undesirability scale. Recent news coverage shows that when funds are scarce their preference is for across-the-board furloughs, elimination of travel funding, delayed construction projects and field office shutdowns.  

On the other hand, trimming inefficiency from government workforces is popular among taxpayers, who must tighten their own belts during economic downturns. Everyone has encountered government employees who are some combination of unresponsive, incompetent, unmotivated or clueless. Likewise, there are government folks who go far and above in creatively solving problems and moving new ideas and improved processes forward.   

Is it unreasonable to fire the incompetent and promote the competent? That’s what successful private companies do, but government just can’t seem to. 

In some ways, this desire to protect people is a natural instinct for leaders to develop.  Over time, most government managers start to see employees they supervise as “my people” whom it is their job to protect at all costs. Too, with power among senior government folks largely a function of how many warm bodies they manage, a 10 percent reduction in headcount becomes a 10 percent reduction in overall agency power. 

The compensation of Georgia’s public employees also helps drive this mentality:

•  An old-fashioned defined benefit pensions system instead of the self-managed, IRA-style defined benefit that virtually every private company in the country long ago adopted. 
• Lifetime health care for retirees at a level far exceeding that in the private sector. 

Over the long term, lower government salaries are offset by these much higher pension benefits. Losing a job also means that an employee loses not just a salary but many of the post-employment benefits they have been working to earn for years. Managers are justifiably careful about dismissing people who have years of service but not enough years to qualify for a full pension. 

Three specific steps would go a long way toward turning this situation around and achieving a performance-managed government workforce at the state and local level in Georgia. 

First, Georgia can’t protect every single government employee without putting some private sector employees out of work. For example, postponing construction of new roads or classrooms will force contractors to downsize workforces. Raising taxes will pull money out of Georgia’s economy by reducing wages and discouraging new employers from entering the state. At the state and local level, budgets are balanced every year, so we can’t have our cake and eat it, too. It’s impossible to simultaneously protect every government worker and maximize private sector employment opportunities. As the economy goes south, jobs go, too. The decision policy-makers can make is not whether unemployment will go up, but who will lose their jobs.   

Second, agencies need to establish performance measures for every employee, fire or demote employees who fall far below the median in production, and promote employees who exceed targets. Under Governor Perdue’s leadership, Georgia has moved far ahead of its peers on this front. But more can be done. Fiscal conservatives should actively embrace change in this direction and aggressively advocate for it. The silent majority of state employees who work hard every day and strive to meet goals should be the strongest advocates for eliminating chronic underperformers. Every dollar paid to someone performing poorly is a dollar not spent on someone doing their job well. 

Finally, reform of the defined contribution benefit system must continue. Georgia is finally offering a corporate style benefit package to new hires, while leaving the existing pension system in place for current employees. Even this small and eminently logical step required the Speaker of the House personally taking the well to urge passage against strong opposition.  

The state must move past the challenges. Specifically, agency heads should have a tool to compensate departing employees for pension credits accrued during their service. A fiscally responsible “pension buyout” mechanism would motivate unhappy workers reluctant to leave because a large percentage of their compensation is contingent on spending years more on the job. Such a situation doesn’t serve agency managers, the bitter employee and his or her colleagues or the unfortunate taxpayer. 

Georgia is well positioned to lead the nation in developing a performance-based government personnel policy. A strong history as a right-to-work state, top leaders who believe deeply in efficient government and a lack of politically powerful public employee unions puts the state in a unique position among peers. 

There is no joy in job loss, regardless of where one works. But what’s more painful in protecting every single job is the cost to taxpayers, high-performing state employees and private sector employees who work on government funded projects such as roads. That’s wrong, and Georgia can do better.  

By Brad Alexander 

Many public sector managers rank downsizing and dismissing government workers somewhere between a toxic waste spill and a nuclear apocalypse on the undesirability scale. Recent news coverage shows that when funds are scarce their preference is for across-the-board furloughs, elimination of travel funding, delayed construction projects and field office shutdowns.  

On the other hand, trimming inefficiency from government workforces is popular among taxpayers, who must tighten their own belts during economic downturns. Everyone has encountered government employees who are some combination of unresponsive, incompetent, unmotivated or clueless. Likewise, there are government folks who go far and above in creatively solving problems and moving new ideas and improved processes forward.   

Is it unreasonable to fire the incompetent and promote the competent? That’s what successful private companies do, but government just can’t seem to. 

In some ways, this desire to protect people is a natural instinct for leaders to develop.  Over time, most government managers start to see employees they supervise as “my people” whom it is their job to protect at all costs. Too, with power among senior government folks largely a function of how many warm bodies they manage, a 10 percent reduction in headcount becomes a 10 percent reduction in overall agency power. 

The compensation of Georgia’s public employees also helps drive this mentality:

•  An old-fashioned defined benefit pensions system instead of the self-managed, IRA-style defined benefit that virtually every private company in the country long ago adopted. 
• Lifetime health care for retirees at a level far exceeding that in the private sector. 

Over the long term, lower government salaries are offset by these much higher pension benefits. Losing a job also means that an employee loses not just a salary but many of the post-employment benefits they have been working to earn for years. Managers are justifiably careful about dismissing people who have years of service but not enough years to qualify for a full pension. 

Three specific steps would go a long way toward turning this situation around and achieving a performance-managed government workforce at the state and local level in Georgia. 

First, Georgia can’t protect every single government employee without putting some private sector employees out of work. For example, postponing construction of new roads or classrooms will force contractors to downsize workforces. Raising taxes will pull money out of Georgia’s economy by reducing wages and discouraging new employers from entering the state. At the state and local level, budgets are balanced every year, so we can’t have our cake and eat it, too. It’s impossible to simultaneously protect every government worker and maximize private sector employment opportunities. As the economy goes south, jobs go, too. The decision policy-makers can make is not whether unemployment will go up, but who will lose their jobs.   

Second, agencies need to establish performance measures for every employee, fire or demote employees who fall far below the median in production, and promote employees who exceed targets. Under Governor Perdue’s leadership, Georgia has moved far ahead of its peers on this front. But more can be done. Fiscal conservatives should actively embrace change in this direction and aggressively advocate for it. The silent majority of state employees who work hard every day and strive to meet goals should be the strongest advocates for eliminating chronic underperformers. Every dollar paid to someone performing poorly is a dollar not spent on someone doing their job well. 

Finally, reform of the defined contribution benefit system must continue. Georgia is finally offering a corporate style benefit package to new hires, while leaving the existing pension system in place for current employees. Even this small and eminently logical step required the Speaker of the House personally taking the well to urge passage against strong opposition.  

The state must move past the challenges. Specifically, agency heads should have a tool to compensate departing employees for pension credits accrued during their service. A fiscally responsible “pension buyout” mechanism would motivate unhappy workers reluctant to leave because a large percentage of their compensation is contingent on spending years more on the job. Such a situation doesn’t serve agency managers, the bitter employee and his or her colleagues or the unfortunate taxpayer. 

Georgia is well positioned to lead the nation in developing a performance-based government personnel policy. A strong history as a right-to-work state, top leaders who believe deeply in efficient government and a lack of politically powerful public employee unions puts the state in a unique position among peers. 

There is no joy in job loss, regardless of where one works. But what’s more painful in protecting every single job is the cost to taxpayers, high-performing state employees and private sector employees who work on government funded projects such as roads. That’s wrong, and Georgia can do better.

  Brad Alexander, the former chief of staff to Lt. Gov. Casey Cagle who now leads communications and government relations at Georgia360 public affairs company, wrote this commentary for the Georgia Public Policy Foundation. The Foundation is an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.