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Jeffrey Pfeffer

Jeffrey Pfeffer

Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University, and author of the Sept. 2010 book, POWER: Why Some People Have it and Others Don’t.

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

Question: Gov. Scott Walker of Wisconsin continues to demand an end to collective bargaining rights for state employees even after winning their agreement on the benefit reductions he sought. These are the same state employees he must rely on to operate state government and implement his policies. How should he strike the balance between the urgent need to restore the state's fiscal health and his longer-term challenge of leading a large governmental enterprise?

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.

By Jeffrey Pfeffer

 |  March 2, 2011; 10:15 AM ET
Category:  Economic crisis , Government leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
Previous: Governor Walker's tightrope walk | Next: Leadership requires balance and fairness


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We sat here watching the teachers in Wisconsin walk off the job, lie about being sick and stiff their employers. These people would not get anywhere near my kid. We saw these protestors carve into the marble with knives and black permanent ink leaving rounds of ammo at two entrances. Why these people are complete trash!
And these pitiful self centered people think the rest of us are just dying to go to Wisconsin and open a business? Are you loony? We watched these union goons tell reporters that they would break their legs. We watched a Democrat lawbreaker tell a Republican lawmaker "you are dead". The best thing for Wisconsin is to lay these low class no class people off. There are plenty of workers across this nation willing to step in to just have a job.

Posted by: greatgran1 | March 7, 2011 3:44 PM
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Wow - you had to go all the way to Singapore to find a good example?!?

Oh, yeah, by the way - providing an eduation to a specialist in Homeland Security is far different than collective bargaining with run-of-the-mill educators, road crew workers, and the like.

Sorry - but your comparison is EXACTLY the reason why collective bargaining doesn't apply universally; how you can lump one person who was hand picked and show them as an example of 'everything and everyone is the same' is absurd.

Sorry, but good people can and do get adequate reimbursement even if they don't have a collective bargaining unit behind them - look no further than the thousands of Federal employees in the GS/Paybanding schemes.

Posted by: Disbelief | March 7, 2011 3:34 PM
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That would be WONDERFUL to have a public sector the same as in Signapore, with its annual PERFORMANCE REVIEWS, similar salaries and benefits as the PRIVATE SECTOR, and the ability to FIRE UNDERPERFORMERS.

The problem, as demonstrated across the country the last couple decades is when the public sector can (a) Unionize, (b) fund campaigns and buy politicians, (c) never get fired for poor performance, (d) continually buildup off-market retiree entitlements that are taxpayer funded, and (e) quality of education or degrees is not taken into account.

It would be most wonderful for the U.S. public sector to be treated and paid the same as the real world.

Posted by: SamRon1 | March 6, 2011 4:10 PM
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Strange we should pay public employees large salaries, but most of you, rail against the large incomes of the owners and presidents of large businesses. These enterprises make billions of dollars to cover those salaries. The government makes nothing, other than stealing taxpayers dollars, only to waste it on the fraud that is known as welfare and other entitlement programs.

Posted by: thestoriedtruth | March 5, 2011 6:06 PM
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Fact is the highest paid teachers are in the northeast and the lowest in the south. No accident the highest levels of learning are in the northeast and the lowest in the south.

Posted by: jameschirico | March 4, 2011 6:01 PM
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Yes, yes, yes. State employees are worth every dollar they earn. That's all fine and good...unless the state is broke.

Posted by: BeowulfthePolitician | March 4, 2011 1:38 PM
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A teacher at a private school in Wisconsin complained to me that teachers in the public sector do so much better, and they should have their benefits cut.

I asked her, "Why not apply for one of those better paying jobs?"

Well, she had and the state went with a better-qualified candidate.

Posted by: colonelpanic | March 2, 2011 8:21 PM
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What most critics seem not to grasp is the simple fact the politicians who agreed to these contracts were immensely unqualified. The workers didn't sign for the state. Wisconsin has had a Republican governor and Legislature more in recent history than democratic, so it's amazing that the people responsible, who gave the farm away are pointing fingers at someone other than themselves.

Posted by: johnturkal1 | March 2, 2011 8:06 PM
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Excellent column Mr. Pfeffer. Unfortunately the comments of pilot1 demonstrate the depth of the problems in this country after decades of average Americans eating themselves. This type of cannibalism was popularized by Pres. Reagan.

Pilot1-So the problems of education in America can be solely blame upon teachers? Parents have no role to play in their children's education? The child's attitudes have no bearing upon his/her academic achievements? No sir, it's all the fault of those overpaid lazy teachers! This is the kind of trite response that is not helpful but so often posted.

Posted by: mlx10dp | March 2, 2011 2:50 PM
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Kind of ignore the fact we are not getting what we pay for. Education is one example where we spend more then most countries per student and get less.

Posted by: Pilot1 | March 2, 2011 12:42 PM
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