Gainsharing program lifts Baltimore employees’morale
When Baltimore County Executive C. A. “Dutch” Ruppersberger took office in January 1995, replacing the incumbent, he knew there was dissension in the ranks. County employees had not received pay raises in four of the previous five years, breeding bitterness and a “Why should I?” attitude toward performance improvement. Moreover, layoffs in several departments had further damaged morale, while demand for services had increased.
Additionally, while the county’s public safety and education departments had seen their head counts increase by a modest 12 to 14 percent over the previous 10 years, there had been a marked 21 percent decline in personnel allocated to health and human services, recreation and community services, public works and administration. Meanwhile, the county’s population during the same 10 years had increased by more than 40,000 residents.
Ruppersberger’s solution – and the platform upon which he campaigned and won – could be summed up in a word: gainsharing.
More commonly practiced by private sector companies than by government organizations, gainsharing rewards employees for making improvements that increase revenues or reduce costs without compromising quality and service objectives. The concept is based on teamwork, which effectively blurs the lines between employee responsibilities and allows every project participant to share in the triumphs.
While serving for nine years on the County Council prior to his election, Ruppersberger observed that a gradual decline in employee morale was affecting service quality.
He became convinced that if the county wanted quality and productivity improvements, its administrators would have to put their money where their mouths were. Department heads would have to establish achievable goals for employees, and then pay them appropriately for meeting or exceeding those goals.
They would have to find the funds to keep their best employees on board. And they would have to make working for the county more fun. After researching the issue, Ruppersberger concluded that a gainsharing program would meet all those criteria at no added cost to taxpayers.
Consequently, one of his first executive acts was the recruitment of a compensation and human resources consulting firm and a local consultant from the Regional Economic Studies Institute at Towson State University in Baltimore.
Employees were asked how their own productivity could improve, departments were selected for the pilot project and asked to identify specific areas for cost savings or added revenues and a formula was established for pay-out as goals were achieved.
The first 10 months of the program involved gathering employee input and structuring employee teams to handle the program design.
An internal oversight committee was created, and a blue-ribbon panel representing private business, non-affiliated unions, government and the university community was established.
Development of the gainsharing program began in November 1995, with a survey of employees across all departments to determine their readiness to participate.
Based on the survey results, the 14-employee Dietary Division and the 87-employee Maintenance Division were selected for the pilot program. These two departments differed radically in their management styles (the Dietary Division was semi-militaristic, and the Recreation and Parks Maintenance Division was much more participatory).
>From January 1996 through the spring months, the two employee groups received training in teamwork and conflict resolution. At the same time, they worked in teams to draft program objectives and strategies.
The Dietary Division, for example, proposed ways to save $88,000 on meals for inmates through better portion control, improved recipes, alternative products and a reduction in the loss and destruction of utensils.
Recreation and Parks Maintenance employees said that they could save $126,000 by taking back some of the work performed by outside contractors and through improved grass mowing, ball field maintenance and refuse removal operations, as well as through natural attrition.
In May 1996, the employee design teams submitted their draft plans to the six-member internal oversight committee of department leaders, which made only minor modifications. Further revisions were suggested by the outside blue-ribbon panel, and the final plans then were reviewed by the County Council.
July 1 marked the formal implementation of the gainsharing pilot program, with anticipated savings to the county of more than $200,000 in the first year.
Half of the savings will go to the county general fund, while the remaining savings will be divided equally among participating employees up to a predetermined maximum distribution. Results for the first half of the year produced a savings in each department.
Participating employees received an average of $500 in the Dietary Division and up to $200 in Recreation and Parks Maintenance. Another payment is scheduled for this fall.
This article was written by James Fox and Bruce Lawson, partners in Fox Lawson Associates, Roseville, Minn.