According to this article which appeared in a recent edition of SunThisweek, Farmington’s City Council wants to eliminate merit pay for public sector employees because they were originally tied to specific projects which may have ended.
From the article:
McKnight said the issue will be discussed during union negotiations, and he expects the city will need to conduct a wage study to determine fair and equitable salaries for employees.
Council Member Christy Jo Fogarty said the program was likely instituted because public sector jobs traditionally have not paid as well as private industry.
However, the economic downturn has reduced private sector pay and benefits, yet the public sector has not followed suit, she said.
Merit pay in the public sector has always been a complete and utter failure. It has never been shown to increase productivity or quality. While there are many reasons for this failure, and not one can be singled out as the real reason, the real question is why Farmington enacted the change in the first place without a framework in place to support its use? The second question is why it took this long to figure it out and begin work to do something about it?
What do you think about public sector merit-pay based systems? Do you think that they work and should be utilized if setup properly? Are you concerned that your own city may have had merit-pay based systems in place and running unchecked for a decade or more? Whatever you have to say about this one go ahead and comment on as I’d love to hear your thoughts.
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May 23rd, 2012 at 9:56 am
I have no problem with merit pay in either public or private companies.
If a person has been doing a job for 3 years, they are probably better than they were at that job than they were a year ago. Usually, they are able to do the same job at the same level of success but probably in less time than it used to. This gives them extra time to focus on things that they did not have time to focus on before. It alternatively gives them time to slack off if they are not held accountable for utilizing this free time that is available due to more efficient performance.
I get and give out merit increases every year and I expect the same to happen next January as with every year provided I have done a credible job in the year prior as have my employees. If I am not giving a merit increase to an employee, than they probably are in jeopardy of losing their job as well.
May 23rd, 2012 at 10:34 am
I prefer to see bonuses as opposed to merit increases. A bonus is one time and can reflect the job well done on a particular project, or over the course of a year. A merit increase adds to the wage and continues in perpetuity. Give a cost of living increase to the wage (Hell, I know many people not even getting that anymore). Reward specific great performance and merit with bonuses.
May 24th, 2012 at 12:48 am
Merit pay when instituted properly works just fine in the public sector. (Full disclosure: I work for a public entity with merit pay under a union contract – not Farmington). The issue here is not the merit pay failed. The issue is that nobody revisited or updated the merit pay structure. That lies squarely on the council and the City HR department.
Merit pay does offer incentives, and my employer pays a combination of wage increases and one time bonus pay, depending on where in the pay grade you fall. This was instituted to bring pay up to the rest of the comparison world, and is revisited annually. Again, note that the structure in my case is revisited annually, not created, put on the shelf, and forgotten.
While it is true that public pay has not decreased as dramatically as privae sector pay, it is only fair to point out that public sector pay lagged private sector pay for years during the so called good times. My employer made a point that in order to compete for talent, it had to increase pay to attract and retain qualified candidates.
August 3rd, 2012 at 6:58 am
[...] regarding high salaries have been plaguing the city for years and have recently come to a head in recent discussions including an interesting look at the large salary boosts given to a number of [...]