Ever since I left the Army, my compensation plan has been flexible. For the first few of years of my career of selling copying machines, I was paid with a small salary plus commission. If I didn’t make enough sales, it was hard to put food on the table for my family. And then later, when I ran our family business, my compensation was based totally on profits.
Government bureaucrats are paid by salary and most of them have huge benefit packages. Their compensation does not change, no matter what kind of job they do for the public. If they make a bad decision that costs a lot of money, the only people who lose are the taxpayers.
From a Wall Street Journal story on Oct. 11: “For years the inspector general of the Transportation Department has been the official biographer of the FAA’s (Federal Aviation Administration) failures in overhauling radar technology that dates to World War II.”
That quote is a classic of example of bad decisions made by government officials. When I first read the quote, I said to myself, “Where was the congressional oversight and why didn’t it work?”
In April 2016, the Senate approved S.2659, which authorizes funding for the FAA for two years. The Senate approved spending of $33.5 billion and did nothing to fix the mess at the FAA. According to the Heritage Foundation, the bill is “also laden with regulatory power grabs and congressionally directed spending that expands the federal government’s presence in the aviation sector” (“Perpetuating Ineffective Programs,” The Heritage Foundation, April 11, 2016).
Congress can be influenced by lobbyists and by voters. Government officials are influenced by Congress, by the executive branch and by lobbyists. Therein lies the rub. There’s absolutely no economic penalty for making bad decisions.
Of course, you can fire a government official for making a bad decision and a good example of this is what happened at the University of Missouri. Melissa Click, an assistant professor, blocked a student journalist from taking a picture of a protest that she supported. She even called security to have him removed. She was fired by the University of Missouri’s board of curators. She said she was fired because of “racial politics.” She was fired because she made a bad decision about American freedom of expression.
You can get a lot of arguments about whether or not government officials are over- or under-paid. I propose to you that this is not the argument that we should use when it comes to government officials’ compensation. I feel strongly that government officials should be paid for the quality of the job done.
Government officials do not have any skin in the game and I agree that, “when spending other people’s money, the spenders — government officials, most are unelected — have little incentive to be judicious and may spend the money according to their interest of their own bureaucracies instead of the taxpayer” (“Bad Decisions that Seemed Like Good Ideas at the Time,” by Ivan Eland, The Huffington Post).
When I ran our shop, all my managers and employees were paid a salary plus commission or bonus based on standards that I set. I have always used the formula of 60 percent salary and 40 percent commission or bonus. I didn’t start out paying my managers or employees this way but after a lot of blood, sweat and tears, I settled on the 60/40 split.
I propose that we pay government officials the same way. This will hopefully make them ponder their decisions more effectively.
“There’s so much in the 21st century that is stymied by bureaucracy and mediocrity and committee.” - Benedict Cumberbatch
Robert Pembroke is the chairman of Pembroke’s Inc. and considers himself on permanent sabbatical. He can be reached at pembroke894@gmail.com.