How have state workers fared under performance pay? Good question.

August 13, 2010
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State workers could be accused of dreaming about this while the economy is still stuck in the mud, but when tax dollars begin refilling the coffers, public employees might start getting raises again.

Their pay was frozen last year and this year as revenue shriveled. In the three prior years, they had shifted to Gov. Mitch Daniels’ performance pay system, and it’s probably safe to assume Daniels would stick with at least some portion of the system if raises were to be handed out during his final two years in office.

Discerning how employees actually fared under the performance system compared to the old days of across-the-board raises is a heavy lift. Virtually nothing about the years when they received performance pay is apples-to-apples, says Dwight Dorsey, who oversees the information system for the state’s human resources department. Layoffs and other turnover are the main complications.

Here’s what is known:

In 2007, the first full year under the new system, the state handed out a total of $35.6 million in raises and bonuses tied to good work. That included $34.6 million added to baseline wages by exceeding agency expectations, nearly $1 million in bonuses handed out in on-the-spot recognition of outstanding performance, and $49,000 in Public Service Achievement Awards for measurable accomplishments.

Just over 25,000 employees received raises and 1,800 received none.

In 2008, the total was $31.4 million to 26,797 employees in about the same proportions as the previous year. Just over 700 received no raise.

How do you feel about performance pay for state workers? Has it improved service? Should it be extended by Daniels’ successor?


  • Another idea
    What would be more interesting, would be to find out if the top employees have been leaving because pay has remained the same, whereas insurance costs have gone up 1000%. So, we got a pay cut for the same work, for the past 3 years. Wonder who is leaving, and what kind of workers are left behind?
  • Reward the good employees
    To get no raise for 2009 or 2010, is robbery for those good employees who would have otherwise received raises. Ever heard of inflation? and health care costs? The good people are actually making less and who knows if they will get raises in 2011. What's worse is that even if you get a "promotion" into a higher paid position at the state, you either take the job with no pay increase or lose out on advancing your career. It's a horrible decision either way. And trust me, we do not want all the good people to leave employment there. I can't even fathom how things would operate then.
    What Mitch is trying to do for Indiana is great, but when he's hurting so many of the people that work for him to do it, that's not great. Of course the raises should be performance-based. There are slackers at every company, why would anyone want to pay them more? But you've got to reward the good people.
  • State workers are suffering what most private sector employees are facing. no pay raises, cuts in pay and increases in health insurance.

    Of course the alternative for public employees is to give them payraises and increase taxes which hurts them and private sector employees or layoffs. Take the lack of pay raises for now and when life gets better, the raises will come. Having a job is better than the alternative right now.
  • Its Hot Outside at State Office Building
    It worked as well as the Smoking Ban on State Property.

  • Pay for Performance?
    Think of it this way.

    Mitch Roob created a huge mess at FSSA and he got a pay raise and promotion to head IEDC.

    He gets paid more than Michael S. (â??Mickeyâ??) Maurer and Nathan Feltman combined with fewer results.

    Channel 13: Where are the jobs?

  • Pay for Performance
    This would work better if all supervisors were fair when doing appraisals. Some feel they need to be fair to everyone so everyone gets the same evaluation and raise. We are also having more money pulled out of our pocket with the insurance and cost of living increases.
  • Treated badly
    I've heard that state employees are treated badly and it isn't just the raises or lack of them. One department I know of the employees can't even speak to one another while they are working. And if they slip and do talk they can be pulled aside and written up or fired. I can't remember being treated like this on any of my past positions. I think the last time was in school. Can you imagine going into work and not being able to talk??? Also this department has been made to obey the new dress code and no one but the employees get into this department. It is closed to the public. So what's the big deal if they wear blue jeans, a tee shirt and tennis shoes. Pure tyranny!!!

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  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

  3. Clearly, there is a lack of a basic understanding of economics. It is not up to the company to decide what to pay its workers. If companies were able to decide how much to pay their workers then why wouldn't they pay everyone minimum wage? Why choose to pay $10 or $14 when they could pay $7? The answer is that companies DO NOT decide how much to pay workers. It is the market that dictates what a worker is worth and how much they should get paid. If Lowe's chooses to pay a call center worker $7 an hour it will not be able to hire anyone for the job, because all those people will work for someone else paying the market rate of $10-$14 an hour. This forces Lowes to pay its workers that much. Not because it wants to pay them that much out of the goodness of their heart, but because it has to pay them that much in order to stay competitive and attract good workers.

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