Tuesday, 11 May 2010

For workers, million dollar ideas could yield big bucks

These days especially, state government could use a few million-dollar ideas. Now it's even willing to pay for them.

A bill approved by the House and Senate last week will give state workers cash bonuses for their money-saving ideas. Original concepts that result in documented savings could earn their owners up to $25,000.

"You give away peanuts, you get monkeys," said Sen. Harold Giard, an Addison County Democrat who introduced a version of the bill last year. "If we want state employees spending the extra time out of work to come up with good proposals, we've got to make it worth their while."

The legislation is a little bit like Challenges for Change, except with prizes. In order to be eligible for remuneration, cost-cutting ideas can't impede the delivery of services or harm government programs.

"We think probably the best people to come up with creative ideas are the people on the front lines," said Sen. Jeanette White, a Windham County Democrat and chairwoman of the Senate Committee on Government Operations. "And this is a way to encourage them to think more creatively."

Employees will submit their ideas to managers and supervisors in their respective agencies and departments. A panel will vet the proposals, make sure none are already under consideration, and then move ahead with those that make the cut.

If an idea results in documented savings, then the employees responsible for the concept get 25 percent of total savings, up to $25,000.

Gov. James Douglas likes the concept, according to Commissioner of Human Resources Caroline Earle. But he has "grave" concerns about the constitution of the panel that will oversee the venture. The panel will consist of five people – three appointed by the Agency of Administration, and two appointed by the Vermont State Employees Association.

Earle said the panel – which she believes "will create an unnecessary level of bureaucracy and review" – is problematic enough. More worrisome though, according to Earle, is allowing union appointees to breach the ranks of the administration.

"It brings the VSEA into the administration and of course the VSEA is a separate entity and not a part of state government," Earle said. "To have individuals on this board appointed by an outside entity who are making recommendations to the Secretary of Administration is from our perspective inappropriate."

Jes Kraus, head of the VSEA, dismissed those concerns. Besides, he said, the administration will still control a majority bloc on the board.

"Especially at a time when we're strapped for cash, creating incentives for cost-saving ideas make a lot of sense," Kraus said. "It's done everywhere in the private sector already, so we're glad the Legislature sees the wisdom in hearing from rank-and-file employees on how government might save money."

Kraus said similar initiatives have saved money elsewhere.

In Wisconsin, for instance, the state paid out $7,000 for $359,000 worth of savings in 2006.

"I think the multi-million-dollar idea is pretty rare," Kraus said. "But smaller things do add up. And there's always the chance we get that one brilliant idea that may save $5 million or $10 million."

Earle said the governor is still weighing his options as the bill sits on his desk awaiting his signature.

"The bill has a noble purpose and appropriate purpose in days when we're trying to generate cost savings," she said. "But from out perspective this bill doesn't create an appropriate mechanism through which to fulfill its intent. And the governor is still evaluating … whether it's sufficiently defective that the purpose of the bill is lost in the mix."

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