It Really is All About the Money
I’ve spent the last four years working for state government. A state gig is widely coveted here in West Virginia. It is stable, as most positions enjoy civil service protections which make it nearly impossible to be fired. There are good hours, lots of state holidays, decent insurance and retirement benefits, and, for an impoverished state, good wages for those who lack higher education or trade skills. And yet, many state agencies struggle with high turnover and dissatisfied employees. As one who has now happily returned to the private sector, I have theories, at least in relation to my state.
Contrary to popular belief, state workers do not get raises each year. While the legislature has doled out a raise for the last two years, last year’s was the first one in several years. And while the modest cost of living raise was welcome, the bigger issue is that there are no merit raises. Exceptional work and dedication is not rewarded with more pay. There used to be financial incentives based on performance reviews, but an executive order by the governor nearly a decade ago issued during a budget crisis placed a moratorium on merit-based pay increases. While the order was eventually lifted, many state agencies- including the enormous division I worked for- adopted the policy and never let it go. When filling a position, managers make it clear to their candidate of choice: Be certain you can accept the salary offered, because you are likely stuck with it.
In the myriad HR trainings to which managers and supervisors are subjected, time and time again the topic is how to reward employees and keep them happy when raises are not an option. Pizza parties! Blue jean Fridays! Certificates of Recognition! And assorted other token gestures intended to boost morale, and inspire loyalty and hard work. And for some people who are fairly happy with their financial situation and enjoy the cushy benefits of a state job, it is enough. But for many others who have growing families and growing expenses, the lack of growth potential in their jobs leads to high rates of attrition.
About the only way to increase your salary and stay in state government in West Virginia is to change jobs. But there’s a catch there, as well: job changes within the same classification are ineligible for pay increases. For example, if you are a secretary at the DMV and you take a job as a secretary at the child welfare department, you do not get an increase in pay. Even if the person who had the job before you made more. There are multiple levels of certain positions- i.e., secretary 1, 2 or 3. But these positions are agency specific. They are classified by the Division of Personnel’s determination of an agency’s needs, not the qualifications of the employee. A secretary 1 position will not become a secretary 2 position just because that secretary now has the five years of experience required of a secretary 2; that particular job is a secretary 1 job no matter who fills it.
What results, then, is that people are constantly changing jobs within the state government, from one agency or office to a higher pay grade position in another. It is the only way to advance. Or, they leave state employment altogether, as I have. I was an “attorney 3”; there is no attorney 4. Unless I intended to run for attorney general, I had gone as far as I could as a lawyer for the state. The work I did at my most recent state job, when I had anything to do, was largely boring and unfulfilling (though the job before that was amazing.) I hate to complain about my salary in comparison to most West Virginians, but in comparison to private practice attorneys with my level of experience, it was paltry. Couple the low salary and unfulfilling work with the micro-managing and bean counting (half hour lunch, even for exempt professional positions, and they are definitely keeping track) and general infantalizing of most employees, and I couldn’t wait to get out.
I found myself falling into a rut of “good enough” at my old job if I’m honest. Yes, there should be pride in doing one’s job well. And yes, one should be expected to do the job one was hired and paid to do. And I did. But there was no reason to go above and beyond. Now, I am in the private sector working for a Fortune 500 company, which happens to be a state contractor in my field of expertise. In addition to a nearly 30% salary increase, I am eligible for bonuses and performance-based salary raises. I’m treated like a learned and experienced professional and trusted to manage my time. I can work from home one day a week and as necessary. The benefits are as good as or better than the state’s. For me, the best part is that working for a state contractor allows me to continue to use my professional talents to serve the state I love, without having to deal with the aggravations of working for state government.
Obviously, nobody takes public service jobs with the expectation of being rich (with the exception of the unethical or corrupt.) And the six-figure salaries are only for those at the top- the elected officials, judges, and cabinet secretaries. But pretending to be bewildered at the failure of recruitment and retention efforts while denying that compensation plays a role is bad business, even for government. Pizza parties and blue jean Fridays do not pay ever-increasing utility and grocery bills. Of course, it’s easy to shrug and say fine, let them quit; people will line up to take their place. While that is true to some extent, for some of the more complex or specialized positions finding qualified applicants is a challenge. And it is significant to consider the amount of knowledge, training and experience lost when an employee leaves. There is a not-inconsiderable amount of lost productivity involved in training a new person.
Of course, with state government, we are talking about taxpayer dollars, which requires a measure of frugality. But there is plenty of reason to rethink compensation practices that are so often cited by unhappy or departing employees. At my new employer, the folks I work with have been with the company for years. If they have changed jobs within the organization, it has been through promotions as they climbed a career ladder. I know I may only speak for myself, but I feel energized and motivated to ingratiate myself to the firm through excellent work ethic and product, and snatch up that bonus at the end of the year.
And if they want to throw in a pizza party from time to time, that’s alright too.
Payroll for gov’t, at any level, is a line item on a budget that is enacted at some level by the public. To whit, the trade-off was (at least in CA, where I am from) lower pay in return for a very generous retirement package.
Problem is, many of the constraints that lead to that equilibrium don’t hold anymore. As you well describe.
My wife is a public university employee and has been the entire span of our relationship. She has gone from minor flunkee in the president’s office to HR director in the 16 years that I have known her. Mostly because she is one of those people who can’t stop seeing failures and faults in the system, and so works to fix them as she truly believes in the mission of higher ed. But, that also allows her to see how so many of the people see it only as a giant jobs machine, forgetting its actual and real purpose.
Both universities and gov’t do good, necessary work. But due to the nature of the beast, the only limiting principle on their employment is through the most ham-fisted manner possible, the public.Report
Agreed. I work for my state gov. We have had many budget cuts in the last few years. The section i work for has done a really good job of treating people well which has ameliorated the 4% pay cut and no raises for a few years. And we have jeans days which some people seem to like. We’re pretty damn stable which makes all the work much more efficient. Though our one cookie per year for state employees day went the way of the dodo and any sort of holiday celebration outside of an email with gifs is history. But treating people well means better service which the citizens who come to the court want.Report
My wife and I have both been public employees who transitioned to private sector, and there is very little the public sector could offer to attract either of us back.
At least not before we are done climbing the ladder. Then we might be willing to accept the lower pay in exchange for the security.
Maybe…Report
I was a federal employee before I went to law school. I couldn’t handle the drudgery but I do miss the holidays and benefits. We have kind of the best of both worlds now with me in the private sector able to get the big raises while my wife is in an NPO embedded in a federal agency with a government-like benefits package.
Public service in the US is hard. We need it to work well but something about our culture seems to prioritize patronage over effectiveness in the entire sector. One of the many reasons we can’t have nice things.Report
I visited a friend’s private sector IT workplace a while back – I guess they have a policy that if you’re hanging out of an evening with a potentially interested and qualified person, bring em by. We played ping pong, had a beer (a different microbrewery keg every week), had a tour of the office (here’s the lunch room, stocked with bread, cheese, fruit, canned soups, energy bars, yogourt).
What a difference from my current public service job. And I can’t really bring myself to make the move to a place like that – job security and a good pension are totally foreign at his job.
I’m in the same boat with no merit increases for essentially ever. At least in my current position my boss trusts us to manage our own time. Work from home when that works best, nobody’s tracking our lunch breaks, etc. At the old job the performative frugality was kind of ridiculous. Someone caught wind that the employer was buying Costco coffee and filters for the break room, and they had to squash that lest there be a scandal that spoilt fat cat civil servants were suckling cheap drip coffee from the teat of the long suffering taxpayer.Report
Great piece! Loved it!Report
While the legislature has doled out a raise for the last two years, last year’s was the first one in several years. And while the modest cost of living raise was welcome, the bigger issue is that there are no merit raises.
This seems like the worst possible way to save on payroll costs, since it disproportionately drives away the highest-performing workers.
Also, I used the <em> tag to quote Em.Report
Well, in my non public sector job, we don’t have colas, we have merit increases, which typically have been 3%. Sorry, that’s not merit..that;s a “merit cola”. Now, 3% a year for 10 years DOES add up, but there were some years…a long time ago, I got 4% merit and 4% cola. Now that’s a pay increase.
I’ve worked for companies that the AVERAGE budgeted merit increase was 1.5%. Whey would anyone bust their ass for that? Morale was bad, and all the non pay stuff was tried. That may motivate some, but not many. They even instituted a program of awards where they gave you a gold start to put in your office…a paper gold star you could hand on your cube or door. WTF? Are we 4 year olds?Report
Which is, in a nutshell, why so many states, cities and municipalities have such a pension crisis. Promising future money is almost irresistible attractive to politicians: it costs nothing in present terms but makes your public employees happy and willing to overlook lacks of raises elsewhere. Of course the bill eventually comes due.Report
Don’t forget the Federal Reserve. For a very long time they ran things so that completely safe investments returned ~4% per year, reasonably safe ones returned 6%, and more speculative ones higher rates. In 2000, most city and state pension funds were in good shape: they assumed annual returns around 7.5%, and had done that well essentially forever.
Since the 2001 recession, the Fed has acted as if the economy is so fragile that interest rates in those ranges will crush it. The Fed didn’t recognize that the financial industry was packaging risky stuff and getting AAA ratings on it. Public pensions aren’t the only ones, but most states/municipalities aren’t allowed to shed pension obligations like private pensions are (eg, use bankruptcy to cut benefits or toss the whole thing over to the PBGC).
The public pension fund I know best is Colorado’s PERA. If they had earned 7.5% per year over the last 20 years, they would be in excellent shape, rather than struggling.Report
We have had “pay for performance” in my branch of the federal government for over a decade now, and it hasn’t really worked. At the start – and we were paybanded out of the GS pay scale at the same time – a lot of folks cranked raises and scores up to help get what they perceived as pay aprity between lower for GS levels and higher levels in the same band. Then we were all told unofficially that scores were too skewed to the higher percentiles, and so a lot of scores (and thus raises) were driven down to create a more effective looking bell curve where a 65 is supposed to be a great score since its in the middle (never mind that is an F to anyone who has been in any school in America). And all the while our cost of living percentage has been a pawn between Congress and the WH, we are getting little useful feedback in our reviews that actually help people get better scores so they can get better raises.
I’m not sure what the answer is, but no one in government seems to have figured it out.Report
After reading this OP, I feel a bit chastened for my opposition to public employees’ unions. While I still believe they’re mostly a bad thing, I have to recognize that requiring some sort of progressive wage increases, either through cost of living adjustments, “merit” raises, or “compression” fixing plans (or other means), can help government retain good and dedicated workers. I also have to recognize that public employee unions tend to force the state’s hand in that respect, which could mean they do some good. I still lean toward opposing them, but Em’s piece offers a good counterpoint.Report
Do you support unions generally but not so much public servants unions? If so, why the dichotomy?Report
It’s complicated. I have reservations about unions in general, but my feelings are mixed.
My feelings are much less “mixed” when it comes to public-sector unions. I.e., I’m generally opposed. Many of my reasons are expressed in this post: <https://ordinary-times.com/2018/07/06/theres-a-constituency-for-janus/>. However, as one of the commenters pointed out, my point about there not being any incentive to cut costs was off base, especially in the absolutist way in which I expressed it.Report
Sorry about the funky linking there.
I could have added that Em’s post also presents a strong counterpoint to my prior claim about state employers having no “vested interest in keeping costs down.” West Virginia, by Em’s telling, has a pretty strong interest in, or at least practice of, keeping costs down. Also by Em’s telling, the state seems to be doing so in a way that harms its own interests.Report
If a conservative is a liberal who got mugged, then a liberal is a conservative that hasn’t had a pay raise in a few years.Report