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Vol. 41, No. 19  October 05, 2009
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Cash for Employee Clunkers?

One of the most popular new government programs in a long time has recently ended — the Cash for Clunkers program. The idea of being able to “retire” inefficient vehicles you can’t count on anymore for shiny models and receive an incentive in the process was so popular that the appropriated funds were quickly exhausted, and further government intervention was required. 

The program was popular perhaps because it contained something for nearly every political persuasion. It was a little bit green, a little bit economic stimulus and bail out, a little bit free enterprise entrepreneurship, and a little bit beautification. The latter came in the sense that we would see a reduction of smoke-belching cars broken down on the side of the road destroying the feng shui of a beautiful field of flowers.

Perhaps it was no coincidence that at about the same time as the Cash for Clunkers program ended, the intense battle in state and local governments around the country was reaching its height — the battle to balance next fiscal year’s budget. The battle is particularly acute whenever there is an economic downturn with mortgage foreclosures, joblessness, credit crunches and all sorts of other things occurring at the same time.

It raises the volume and intensity of cries against any thought of new taxes or new staff. It complicates any thought of improving compensation or even adding a fringe benefit here and there. The cry of “cutback,” reduction in force and “why can’t government be more efficient” are heard with increased vigor in every state. 

Perhaps there is an opportunity to adapt a very popular program to meet another pressing need. Why not adapt Cash for Clunkers into an incentive program to encourage employees with poor performance and poor behavior to “exit with honor.” 

Increasing government efficiency is definitely a factor of employee attitudes and performance outcomes. Generally, governments don’t manufacture anything. They provide services. Services are very much dependent upon the employees. There may be high technology at work, but even that technology is managed by humans and involves necessary human intervention when the automated telephone attendant keeps hanging up on its customer or the Internet credit card charges are not accurately transmitted.

Hardly anyone would doubt that improvements in service involve improvements in employee engagement and commitment to the concept, to borrow the brilliant motto of Rotary International, “Service above Self.” 

Making these improvements is not as easy as it would seem. Recognizing individual performance excellence in tangible and sustained ways often clashes with ancient and venerable notions entrenched in many governments and union contracts of one-size-fits-all increases or an insistence that everything orbits around the star called “seniority.” When the greatest performers are likely to receive exactly the same financial incentive as people who are wandering through government buildings in a near coma, over time a spirit of innovation is retarded and may eventually be killed. 

Wall Street and insurance industry bonuses and excesses have received a lot of attention in the past year, reflecting a “diminished capacity” for common sense. A lost sense of differentiation between excellence and mediocrity is perhaps in the long run much more widespread and much more harmful to any efforts to improve. 

Creating incentives for early exit has long been the purview of across-the-board thinking and a reaction to economic distress rather than an innovation to improve service. The HR Doctor believes it is time to consider inspiration rather than perspiration in creating incentives to say an honorable farewell to mediocre performers.

There are no doubt tremendous forces which would rally in opposition to an employee Cash for Clunkers program, and the HR Doctor would agree with many of the reasons why this kind of idea would likely be doomed before it got very far at all. 

A major reason would be the lack of documented and defensible performance evaluation models in most local governments. How can we even know in a logical and clear way which employees are failing to perform or behave with excellence? We have enough trouble being able to justify why one or two employees might receive a cash bonus as performance champions without crashing into allegations of favoritism.  Plaintiffs’ lawyers would attack an employee Cash for Clunkers program as an excuse for unlawful discrimination — and they might be right.

Persons with perceived poor performance and attitudes arguably would benefit from corrective action, training and remediation. Their many years of service surely brings with it experience which an agency ought to be able to harness to make further improvements. A simple incentive to exit would not allow for that possibility. Having said that, however, we already see among the most severe budget casualties, the deletion or depletion of exactly this kind of remediation program. 

Notwithstanding all of this, the single major reason why a Cash for Employee Clunker program is likely to be doomed is that the key participants to make it work have to be committed managers and supervisors who themselves pay attention to performance excellence and work hard to make the system less complicated and more service oriented. Without supervisors as mentors, as coaches, and occasionally as enforcers of rule and policy, the mantra of “make government more efficient” will never come to full fruition. 

Cash for Clunkers is a great and exciting public policy. How wonderful if it could be extended to solve another problem involving malfunction and pollution — that of attitudes gone astray and a lack of caring and commitment by some of our colleagues. The real challenge of 21st century public service will be how to effectively inoculate public servants with a vaccine against arrogant complacency.

Phil Rosenberg
The HR Doctor •



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