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Part III: Federal Employee Compensation Reform

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In 1959 I began my pursuit of a BS degree in Electrical Engineering. At the end of my sophomore year, I landed a summer job as an Engineering Trainee at a nearby Army R&D Center. The pay was better than typical summer jobs. The position was a recruiting tool to interest future graduates in a career with the civil service.

What an eye-opener it was. My job was in a drafting room, where I redrew existing drawings in what could only be viewed as ‘make-work’ tasking. The permanent employees were all nice enough and quite content in their positions. Only several years later did I come to understand why, and how little job stress they had.

I was encouraged to apply for a full-time job once I got my degree. When I did, I found that “GS” starting salaries were less than $5,000 a year, while private industry figures were in the $7,000 range. For someone preparing to go out on his own, which way to go was an easy decision.

I was too young to understand that the job choice then amounted to lower income with essentially guaranteed lifetime employment and predictable salary advances, vs. higher income but at-risk employment with merit-based advancement.

I chose the latter option and am glad I did. My customers through most of my career were civilian and uniformed personnel in the Department of Defense, so I stayed relatively up to date on federal career specifics. I retired around the turn of the century, and was always happy I made the career path choice I did.

Since that time, however, the trade-offs have changed significantly. Government service (GS) pay scales have escalated continuously, while private enterprise pay scales reflect economic realities. Frankly, I’m astonished by the compensation figures reported these days for mid-level and senior Government Service professionals. Especially when you consider that Government benefits, including guaranteed pensions, are Cadillac in nature compared to private sector equivalents, and that lifetime job security is virtually guaranteed.

In the private sector, dominant performance incentives are the survival of the enterprise (your employer) and personal job security. Neither of these apply in government employment; have you ever heard of a government, or a component agency, ‘going out of business?’ Or being trounced by a competitor? Of course not.

During my career, “staff improvement programs” and “clearing out the deadwood” were occasional realities to keep the enterprise in fighting trim. These are virtually unheard of in government service, except when personal political interests (eg, “Reinventing Government”) come into play, and even then, it’s a pure charade. I know; I saw it happen.

Bureaucracies have no profitability measures, there are no market share metrics. Investment ‘analysts’ don’t provide quarterly rankings and evaluations of future outlooks. Buy, sell, hold evaluations have no relevance, so neither does performance, generally speaking.

With the exception of driving crime rates down and winning battles against enemies, which are the mandatory and noble province of government. These are the fundamental obligations to “protect us against all enemies, foreign and domestic.”

In the private sector, every performance measure is key to enterprise survival and personal career success, including ROI for stakeholders, if the company is publicly owned. These foster a team mentality that has no equivalent in most government bureaucracies.

Remember the notion of public service? It was once a calling, and the absence of private sector financial rewards was part and parcel of a dedication to the ideal; you traded lower income for far greater job security and benefits. In this day and age, you’re hard pressed to find exemplars of this noble calling, with the exception of the uniformed services, who are shamefully under-compensated for what they do.

It’s well known that average government employee compensation has risen above that in the private sector in recent years. The specific knowledge I have in a number of cases convinces me that were I still working in industry, the tables would have been flipped.
I was a ‘mid-level executive’ in the latter half of my career, and was confident I made more than my counterparts in the civil service, whose GS levels and salary tables were public knowledge. I also knew that I worked longer and harder than most of those counterparts, with far more ‘esprit’ and dedication to collective goals. I had real career risk; my employer of 35 years was absorbed by another, and the facility where I worked was torn down 15 years ago to make room for condos and a shopping center.

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Now-a-days, constant news coverage frequently cites the salary levels of mid-level to senior civil servants, and I am astonished when I hear the numbers, especially since it’s fairly easy to find out what their benefits, including pensions, are. Many are living the high life, as revealed in the GSA expose a few years back, where one manager had his picture taken sitting in a whirlpool tub in his suite, glasses of wine readily at hand (see photo above). Numerous other revelations from various ‘conferences’ should have been embarrassing to those in charge, but disgraceful behavior has become accepted, and perpetrators assume they won’t be held accountable, lest their superiors be exposed for their own misbehavior.

The notion of ‘public servant’ has been all but invalidated by the behavioral norms of the vast majority of bureaucrats and those they employ as consultants. Witness Prof. Jonathan Gruber’s statement that “lack of transparency is a huge political advantage” and reference to “the stupidity of the American voter.” Throw Lois Lerner’s arrogance into the mix as she refused to take responsibility for clear illegal behavior as a senior manager at the IRS, and that of her agency chief.

Revelations of personnel incompetency and lack of devotion at VA hospitals are sickening, and might have been grounds for numerous careers to come to an end decades ago. Now-a-days, the wagons are circled, changes are promised, and cover-ups of one sort or another protect all but a sacrificial lamb or two. Anyone with a conscience would find the reported foul-ups disgusting, immoral, and criminal.

How’s this for a scary thought: various officials, advocates, and candidates have argued that America needs to transform its health care system to “Medicare for all.” Try to imagine “VA health care for all,” because that’s what will almost certainly result if single payer is enacted. And multiply the client base by a factor of ten!

Clearly our social and political culture has changed, and not for the better.

Now we’ve learned that ‘bonuses’ have become part of the bureaucracy’s way of rewarding itself at taxpayer expense, even though they’re operating at huge deficits, printing money like Parker Brothers, and failing miserably to meet even minimal expectations for performance and integrity. Public servants? They insult the very concept. And they do it while thumbing their noses at us, and those who dare attempt to engage in the oversight their constitutional obligations demand.

Once you start giving out these unearned doses of OPM, the addiction quickly takes hold, leading to demand for wider and wider distribution, and larger and larger doses.

Bonuses for government employees make absolutely no sense at all. Growing market share, increasing profitability, building shareholder value, and enhancing product quality and productivity are meaningless in the government context, while they are fundamental to private sector enterprise success. Simply doing your job as defined in your position description is not noteworthy or praiseworthy, and certainly does not merit a ‘bonus.’

Exceeding job expectations should be meaningless in this context, though as I say that, I realize I may have painted myself into a corner. Expectations have been lowered so much over the years that ‘exceeding’ them has a particularly perverse meaning.

Referring back to our earlier thoughts on attacking deficits and the resulting national debt, I propose the following, which to some will seem extreme and unfair, while to others it will seem obvious, fair, and reasonable:

  1. Eliminate bonuses as an element of compensation for government employees.
  2. Instead, make it clear that meeting normal standards of job performance is the minimum standard for receiving the full compensation designated for each position. When normal standards are not met, the employee’s pay is to be docked accordingly, until such time as performance returns to normal, acceptable levels. Rules should be established for automatic dismissal when accepted standards are not met for multiple (TBD) review periods.2 Part 3
  1. Exceptions should be designed for those charged with defending us against ‘all enemies foreign and domestic,’ including performance based pay incentives for reducing crime and threat levels, and for neutralizing identified security threats.

Summary:

Our country arguably faces the greatest fiscal and socio-political challenges it has ever confronted. “Business as usual” will not get us out of this mess. The current election season demonstrates that taxpayers and the electorate are fervently seeking solutions to stem the near certain death spiral, though  there is much to debate as to how to go about it.

There can be no argument, however, about the need to confront the rampant OPM addiction, and to seriously reign in both the supply and demand side of its distribution. Too many lives are at stake; too much devastation has already occurred, and it is spreading virally.

I have proposed two ‘simple’ ideas for chipping away at the budgetary madness that underlies our economic decay, and to bring some common sense back into the discussion.

I hope these spur some useful discussion; I look forward to your comments and replies.

Part I: Deficits, Debts, and Drug Addiction
Part II: Suggesting the Obvious – Starting at the Beginning, and the Top

 

About Pem Schaeffer

Pem Schaeffer is a retired engineer who progressed to a position in business development leadership in defense electronics. He lives and writes in Brunswick, Maine, and blogs at: http://othersideofbrunswick.blogspot.com/ He can be reached at pemster4062@yahoo.com or you can always buy him lunch at an MHPC luncheon. He's easy that way, and he'll still respect you if you do.

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