July 9, 2010 — Gov. Arnold Schwarzenegger on July 2 ordered the base pay of some 200,000 California public employees be cut to the federal minimum wage level of $7.25. Salaried manager pay will be cut to the minimum of $455 per week, and doctors and lawyers working for the state will not be paid at all as they are not covered by minimum wage. This is in response to the legislature's inability to pass a state budget, which is currently at a $19 billion deficit. No doubt the move will get people's attention if it gets implemented, as the state Controller has refused to comply with the order. While I haven't heard any direct comments from the governor on his specific rationale for this action, I'm curious as to what our readers out there think. Is he justified in making what no doubt are substantial cuts to employee pay as it's an expense over which he has direct control, or is this a very poor decision to hold employees "hostage" and force the legislator's hand to get a budget passed?
I have always felt that pay is an effective motivator; both in terms of motivating the recipient of the pay themselves and also their peers who may not be receiving the same level of pay. The intent is to motivate them to take whatever steps are necessary (training, education, job performance, results) to also achieve that level of pay. In this case, the pay of a large group is being cut with the intent of motivating another group entirely. In any case, the motivation level of everyone who is associated with this bold move will be impacted.
Jim, what are your thoughts?
Just when you think you have heard and seen it all. Of course, with the Govenator making his grand entrance into the world of compensation all bets are off. In fact, employees are held hostage all the time. In private-sector organizations, who hasn't watched helplessly as voluntary severance programs are launched with a goal of "x" number of employees. The none-too-subtle threat being that the axe will fall if we don't get enough volunteers. Or, similarly, benefits programs have known to be overhauled to achieve cost savings on the eve of merit planning cycles. These examples, and I am sure you can supply your own, are not exactly aligned with the Govenator's action. He was trying to motivate his nonresponsive legislature. Yet, perhaps the severance and benefits examples are even more unsavory as the same employees who are challenged to reach goals that are largely out of their immediate control — numbers of severance volunteers and self-insurance funding goals in this instance — are being motivated (held hostage) by the threat of layoffs or merit budget reductions. It gives new meaning to the phrase "follow the money," doesn't it?
Scott David Boynton, CCP Compensation Manager Member Since: 1/1/2001 Comments: 49
It's not the first time the "Governator" has decreed that wages should be cut to Federal minimums, and it is also not the first time the Controller has refused to comply. They are still in court over the first refusal. Part of (but not the main) reason for refusal, according to the Controller, is that their payroll systems cannot be modified to pay the "new" wages. Makes me wonder what payroll system they are using.
The motivational tactic being used by the Gov to press the legislature into action will only work if Schwarzenegger can also win the PR war. Who will the media tell the government workers to blame for their drastically reduced pay, assuming the cuts ever take place?
Seems a dubious strategy, and apparently, headcount reductions are not an option.
E James Brennan, III Senior Associate Member Since: 4/19/1979 Comments: 406
Speaking generally, pay is a hygiene factor rather than a "motivator." Besides, people already come ready-made built-in with their own unique personal motivations. The entire field of Total Rewards deals with the various options to hit those existing trigger points with combinations of various layers of positive and negative reinforcements. Your example of peer equity complaints addresses not compensation but status and self-image: esteem and self-actualization, in Maslow's classic triangle.
Here, the Governator has cut right to the quick and raised the heat on the legislature by supplying a threat of a negative reinforcement that will bring down ire upon all and sundry... unless the legislators unite and do something more temperate. When you reduce or eliminate pay, you light the fire of resolution to end that (hopefully) temporary attack on the victims' primary physiological and safety motivational drives (food, shelter, income). It's a political move employing those fundamental psychological factors we don't talk about here as much as we should.
July 9, 2010 — Gov. Arnold Schwarzenegger on July 2 ordered the base pay of some 200,000 California public employees be cut to the federal minimum wage level of $7.25. Salaried manager pay will be cut to the minimum of $455 per week, and doctors and lawyers working for the state will not be paid at all as they are not covered by minimum wage. This is in response to the legislature's inability to pass a state budget, which is currently at a $19 billion deficit. No doubt the move will get people's attention if it gets implemented, as the state Controller has refused to comply with the order. While I haven't heard any direct comments from the governor on his specific rationale for this action, I'm curious as to what our readers out there think. Is he justified in making what no doubt are substantial cuts to employee pay as it's an expense over which he has direct control, or is this a very poor decision to hold employees "hostage" and force the legislator's hand to get a budget passed?
Just when you think you have heard and seen it all. Of course, with the Govenator making his grand entrance into the world of compensation all bets are off. In fact, employees are held hostage all the time. In private-sector organizations, who hasn't watched helplessly as voluntary severance programs are launched with a goal of "x" number of employees. The none-too-subtle threat being that the axe will fall if we don't get enough volunteers. Or, similarly, benefits programs have known to be overhauled to achieve cost savings on the eve of merit planning cycles. These examples, and I am sure you can supply your own, are not exactly aligned with the Govenator's action. He was trying to motivate his nonresponsive legislature. Yet, perhaps the severance and benefits examples are even more unsavory as the same employees who are challenged to reach goals that are largely out of their immediate control — numbers of severance volunteers and self-insurance funding goals in this instance — are being motivated (held hostage) by the threat of layoffs or merit budget reductions. It gives new meaning to the phrase "follow the money," doesn't it?
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