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You get what you pay for--even with state employees

As Wisconsin governor Scott Walker joins many of his brethren in attacking the bargaining rights and economic well-being of state employees, I met with a Singapore government employee going back to a senior position in his country's department of homeland security. One of four people attending the Stanford Sloan program, at a cost of over $100,000 just in tuition, he illustrates a very different leadership approach to public sector employment. Singapore believes that if some task, including governmental work, is worth doing, it is worth doing well. Therefore the country pays its top civil servants lavishly, by government standards, so it can successfully compete with the private sector for the best talent, and then invests in their training and development. Little wonder that Singapore has such great infrastructure and over the past decades is truly an economic miracle.

Somehow we have come to believe that there is a trade-off between being fiscally sound and paying people well. But that trade-off is mostly a myth. Colorado professor Wayne Cascio has shown how Costco's higher pay translates into lower turnover and higher sales (and profits) per worker. Southwest, a fully unionized airline, pays better than its customer-service challenged domestic competitors. As George Zimmer, founder and CEO of the off-priced men's clothing chain, The Men's Wearhouse, once told me, the question is not what people cost, but what they can do.

Continually bad-mouthing public sector employees as overpaid bureaucrats leads to high levels of distrust and disengagement, something that prompted a staff member of California's Little Hoover Commission to call me a few years ago for suggestions. "Stop treating public employees like sewage," I said (although I actually used a stronger word). No one is going to be interested in doing a good job if they are continually told that they, and their work, is of no value--and that is the precisely the message that many leaders, in both government and companies, send.

As decades of research has shown, employee engagement and commitment drive productivity and quality. Productivity means doing more with less. So unless Wisconsin and other states plan to get by with lower quality public safety, teaching, and social services--not a strategy that will build long-term human and physical infrastructure--leaders need to learn the lessons of the best managed private companies and, for that matter, the government of Singapore. That lesson is a simple one: a highly committed, well-trained work force actually saves money, particularly in the long-run. Which makes the seeming choice between being fiscally sound and taking care of the workforce a false one.

Jeffrey Pfeffer  | Mar 10, 2011 5:17 PM

 
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