Grading on a Curve, Setting Goals in Public, And Cutting for Tax Cuts

Plus: A New Budget Gimmick, And More Management News
by | October 7, 2010
 

Should performance measures — particularly those in which letter grades are used — use a curve? Or should the grades be given based on pre-fixed, unchanging criteria? The Numbers Guy, a Wall Street Journal blog, raised this point recently in a blog entry that addressed the restaurant cleanliness grading systems in Los Angeles County. Blogger Carl Bialik wrote, "In L.A. County, the proportion of A restaurants has more than doubled since the county's health department began grading them for healthy practices in 1997. So why not shift the scoring system so it takes more than a 90 to get an A...?"

We can see arguments on both sides of the issue (and have talked about this for years, as we've been involved in various projects that graded governmental entities). What do you think? We'd love to hear from the performance measurement gurus out there.


In a TED Talk that was posted in September, entrepreneur Derek Sivers warns that evidence stemming back to the 1920s shows that if you talk about personal goals you're less likely to achieve them. "Repeated psychology tests have proven that telling someone your goal makes it less likely to happen," he says. "The mind is kind of tricked into feeling that it's already done. And then, because you've felt that satisfaction, you're less motivated to do the actual hard work necessary." We're pretty sure that organizational goal-setting plays with a different set of rules, but this does make us wonder.


We rarely write about politics, mostly because we're much more interested in management and policy. But we do pay attention, and have taken note of a pre-election phenomenon here in our home state of New York that we suspect is going on in many other places as well. One of the major candidates for election in November is promising huge tax cuts. Anyone who has been paying attention to New York State will know that there's hardly a lot of free cash available to give away right about now, so the question comes up: How will these cuts be paid for?

The answer: By cutting government dramatically. We have nothing against cutting government per se, but we can't help but wish that politicians who promise tax cuts based on programmatic cuts would spell out the cuts with great precision and make them first, before cutting taxes. It's always a good thing to make sure you have money in the bank before you make a withdrawal.


Every time we see an article saying that states and cities have used up all the budgeting gimmicks available and must now face the music, we come across another gimmick. Thanks to Norman Draper of the Minneapolis Star Tribune, here's our latest example:

Apparently, the Minnesota state budget office recently announced "that it's tapping K-12 education funding for $142 million. The loans are to be paid back, without interest, in May. It's the second time this year the state has done such short-term borrowing from schools." The state accomplishes this by simply delaying aid payments to the school, leaving many districts tapping their own reserves (which were presumably earning some interest) or borrowing money (on which they pay interest). But the state isn't paying the schools any interest.

"Recent figures from the Association of Metropolitan School Districts show that, as a result of funding shifts, its 33 member districts have incurred a collective cost of more than $5 million, through interest they have paid on borrowing or interest income lost on reserves they have tapped. The state's largest district — Anoka-Hennepin — has made $400,000 in interest payments this year because of borrowing."

Even if you forget about the interest, the school districts have other things to worry about. Minnesota is facing a nearly $6-billion deficit over the next couple of years. Where do you think it's going to get the money to pay back the school districts anytime in the foreseeable future?


Our favorite quote this month: "Most people who have absolutely no idea of what they're doing have absolutely no idea that they have no idea what they're doing." — from a lecture delivered by John Cleese at the 2009 Creativity World Forum, held in Germany.


About 15 years ago, a magazine called Financial World went out of business. At the time, we were doing a great deal of writing about cities, states and the federal government for that publication. We bring this up simply because the state of Utah continues to send us regular mail at the right location for us, but addressed to the long-dead Financial World. It doesn't really matter to us, but shouldn't the state check its mailing lists every once in a while? (Certainly every decade and a half?) Otherwise, how can it be sure that every time it spends 33 cents on a special-rate stamp, it's actually getting someplace worthwhile? We know this is penny-ante, but it seems like such a simple way to save a few bucks in tight times. We've made reference to other entities doing similar things in the past, but Utah is now the record-holder in our little world. (By the way, Utah, please don't take us off your mailing list! We really respect your work on a whole variety of fronts and want to know as much about you as we can.)


Controls against fraud can easily be fiscally unsound, especially when they cost more money than eliminating the potential fraud is likely to save. This can be a real issue in cities, counties and states that require multiple levels of signoffs to spend relatively small amounts of money. Underneath our argument is a belief (which we know is open to argument) that the vast majority of people are honorable. Here's a little proof in video form. And even if you don't care about this topic, we suggest you watch this clip. We found it moving.


Will better data and performance information make it easier for governments to improve employee health programs? A National Association of State Personnel Executives white paper says it will. The development of better return on investment (ROI) information was one of several recommendations for addressing employee health benefit challenges.

"With more reliable ROI estimates, benefits administrators can direct healthcare resources more effectively," according to the paper, "present a more compelling case for program funding to legislatures, and use data to help make the case for change among resistant employees and union representatives."


Public civility corner. The Rhode Island Higher Education Assistance Authority Deputy Director Gail E. Mance-Rios recently sent us an e-mail that we thought might resonate with many of you. We thought we'd pass it along.

"I am astounded by the 'I have the right to free speech' being used to support any and all expressions -- even ranting at a colleague. While your speech may be free, the consequences must be paid (like the piper)."

Thanks, Gail.


A couple of weeks ago, we asked readers if they were experiencing more stress in the workplace and if there was more "yelling and verbal abuse," in part as a reaction. There wasn't enough of a consensus in the answers we received to provide any kind of sum-up, but, as always, there were lots of interesting thoughts. Here are a few:

  • "I have found that people are becoming much more sensitive to criticism or even open discussion. What would pass in the for-profit world as normal discourse regarding corrective action is characterized as the boss 'hollering at me' in the government/non-profit arena."
  • "Having to lay people off when others hang on, who shouldn't, is very stressful."
  • "More pressure to perform in situations where expectations are unrealistic. Lots of skipped or abbreviated lunches. The public is mad that government in general has not been successful at solving the economic crisis ... which has put long term incessant pressure on local leaders to perform where resources don't exist at the levels demanded by the public for program delivery. The scenario is a decidedly tense workplace in local government, which only does harm."
  • "If you love your job and what you're doing, skipping lunch and working longer hours isn't so bad — as long as your efforts are recognized and you experience satisfaction ... I think there are more fundamental issues causing stress these days. Everyone is trying to do more with fewer people. For instance, the job market is such that employees are 'afraid' to leave at five or take time off. Moreover, bosses are in a position to postpone approval of vacation leave from their burned out staff — knowing that even their most valued workers are less likely to be able to jump ship in this market."

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