Thursday February 09, 2012


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This is the Life: Never the twain shall meet

While we were visiting family in Alberta on the weekend one of my many in-laws told me that the provincial government there is revisiting the decade-long practice of giving senior management people performance bonuses. About time, too, I said.

In a trend that mirrored the Bush-era fiasco in the U.S., many Canadian governments attempted to create management models similar to those in business. In other words, senior administrators were provided with incentives to meet performance and budgetary goals. Like so many things in life, what might look like a good idea on paper doesn’t always work so well in practice.

First, the budgetary bonuses idea was, is and always will be just plain dumb. It’s not the first time I’ve written this and it won’t be the last, but a monkey could balance a budget if it could do simple math. Cut enough expenditures and any budget can be met. Of course there might be some negative repercussions, but hey, the budget is balanced, right?

But what about performance goals? Well, why I wonder should it be necessary to incent administrators with bonuses for meeting performance goals when that is, to put it simply, their job.

As we were discussing the topic, my sister-in-law, a career provincial agency employee and administrator said that the argument was always made, at least in entrepreneurial, anti-bureaucratic Alberta, that hiring conditions for top-level supervisors had to be competitive with those in the private sector. Nice theory, I said, but I doubt that such an argument has a lot of evidence to prove its veracity.

Government administrators are apples, I said, and private sector administrators are oranges. I suspect an entirely different set of motivations pushes individuals into one side or another. Successful private sector bosses are entrepreneurial and have a penchant for finding the profitability factors in the businesses they run — they deep-six money-losing endeavours and push profitable ones to greater heights. They are adept at convincing owners and shareholders that their investments are sound and have a strong future. In many cases a good private sector administrator has abilities that are transferable from one type of business to another.

Public sector administrators, on the other hand, are more likely to have come up through the ranks, having chosen health care or public education, for instance, because they have a passion for what their sector can contribute to society. They are motivated less by financial reward than by the belief that they are doing important work. Because these people tend not to be found in the private sector in the first place, there is little merit in trying to lure them with huge salaries and bonuses.

In B.C., we’ve learned the hard way that government and business don’t always mix well. There is no shortage of citizens who would argue that the Insurance Corporation of BC, for instance, might be a great cash cow for the government, but that it has become a powerful behemoth that wields influence far beyond its mandate of providing reasonably priced auto insurance. Likewise the government’s foray into gaming. Again, huge profits back to the government, but an iffy record when it comes to fuelling social and personal problems. And does anyone remember the public-private partnership that was supposed to assure the taxpayer a safety net in the building of the Olympic Games athletes’ village?

It’s time, I think, that we re-evaluated just where governments should be involved in providing services that the private sector can handle, and whether we want to pretend that services we want our governments to provide should be operated as though they were private businesses.

Lorne Eckersley is the publisher of the Creston Valley Advance.


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