Pay the bureaucrats more money not less

Not PC bemoans the highly paid Government sector. So does anti-dismal.

I disagree.

The alternative to highly paid bureaucrats is lowly paid bureaucrats. Lowly paid bureaucrats are far far worse than highly paid ones. Here are three resons why:

  1. Lack of talent – why work for Government when you can get more money working in the private sector? The talented leave, the not so talented stay.
  2. Corruption – if you can’t make ends meet on your Government salary then there are plenty of other ways  earn some cash. This happens all over the world, and we don’t want that in NZ.
  3. Lack of respect and care – if your employer cannot pay you enough money, then you’ll start to get demotivated. This in turn leads to a punch the time-card approach to work and we all suffer from the resulting lower service.

So ‘d far rather keep highly paid public servants.

However – perhaps the survey aproach is flawed:

The flaw in the survey is probably the same as the flaw when looking at average salaries/living costs for occupations in big cities (e.g. NYC) versus small towns where the smallness of the salary gap doesn’t explain the huge difference in living costs.

Where the difference lies is that in big cities and in the private sector you get more opportunities for career advancement – you get promoted more quickly.

I would posit that the problem here isn’t highly paid Government workers, but the lack of highly paid private sector jobs. And where are those highly paid private sector jobs? They don’t exist – which is why so many Kiwis head offshore to move their careers forward. New Zealand offers excellent basic education, excellent early career experience but lousy mid and later career experience. The Government sector is one of the few places where you can have decent responsibility and work that is meaningful for those with advanced qualifications and experience. Even so – those Government salaries are struggling to attract back Kiwi talent from offshore – they are ludicrously low in the Western World’s economy.

So pay the Government folk decent money, but here are some caveats:

a: Aggressive performance management – You can’t have a secure job highly paid job if your performance doesn’t match up. People need to be performance managed to help them stay on top of the game, or fired if required. No tenure please.

b: Encourage Sector switching – The salaries in the public sector may be “better”, so we should be encouraging and pushing for people that actively switch between public and private sectors. That way we will get more rounded people, but also the paper pushers will benefit from injections of private sector rigour, and the private sector will benefit by understanding and working with the wheels of Government..

c: Periodic restructuring – It’s a fact of corporate business that a periodic reshuffling of the deck is required to keep thngs fresh. This may take many different forms, but the outcome is generally new leaders, new structures and a much leaner organisation. It means people will lose jobs, young turks get promoted and, yes, great uncertainty and pain. However the short term pain results in longer term benefit as the organisation is able to move to the next level. Ossification is the enemy, and Government can learn from the private sector and restructure early and often.

Published by Lance Wiggs


6 replies on “Pay the bureaucrats more money not less”

  1. You make a good case for paying public servants a decent salary Lance. The problem in New Zealand is that are way too many of the buggers.


  2. “a: Aggressive performance management”, from the stories I hear there needs to be a lot of this.


  3. Byran – hence Al’s Aggressive performance management and the periodic restructuring.

    The Government should perform the functions of a stock market – sending periodic signals to the boards and executives of each department that major change is required.

    This should theoretically happen when Governments change – which looks likely this year.

    I generally don’t care which government is in power, so long as they change now and then and listen to and react appropriately to logic. Muldoon’s final times and Bush II failed on the second of those tests.


  4. Excellent post Lance. Govt, like business, needs to attract talent, and good talent costs. I’ve always said that a good person repays their salary many times. But with that goes accountability for results. The problem is that higher pay is spread across the broader mass of public servants, because differentiation for performance is subsumed under commonality of responsibilities.

    And I absolutely agree that dynamic destruction is positive, if done well and early.


  5. There was a program on NPR (US National Public Radio) recently where they interviewed the author of a book who says that in the US, the public sector has been essentially starved to keep the good people out in the business world, where they supposedly can do much better work. That’s a Republican idea no doubt, and seems to have started with Reagan. One can only hope that Obama wins and restores public service to something that people consider a good thing, and that’s also paid at a level to compete with businesses.

    So yeah, I completely agree with what you wrote. The public sector is the lifeblood of a civilized country, we can’t let that dry out like that.


  6. Great post. Let me start this off by saying that I’m not a Kiwi, but that what you talk about is relevant in any part of the world. I must say that I felt a bit of revulsion when reading the post’s title. “Pay bureaucrats more?” Sounds kind of silly, given the connotation of the word (at least where I’m from). Then, in your caveats section you started convincing me–or at least you explained yourself better. It’s not just about paying them more, it’s about setting up the entire compensation system to attract more motivated, competent individuals. In countries where I’ve lived (US and Costa Rica to name the prime examples) many government positions are sought by many lazy people looking for job security. The money isn’t great, but the benefits and the job security put you on the easy track to retirement. We must then ask ourselves, is that the system that will best attract the trustees of some of our most important public functions? I would say no. If we can inject a little bit of healthy competition, and a little bit of extra financial incentive as you suggest, into certain public sectors where performance is paramount, then you can attract more talented people to public service. If the only thing we risk in doing so is job security for these professions, then I say so be it. Assuming you attract the achievers and not the slouches, it will be a relatively meaningless issue.


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