Giving Employees Incentives for Innovation

March 18, 2010

Calls for more government efficiency come not just from the public, but also from the public servants who make government’s day-to-day operations possible.  Some of the best ideas come from the people who intimately know the processes that could be improved.  However, implementing those ideas often requires jumping several, tall hurdles.

In an unfortunate case of irony, government budget cuts have precluded some efficiency improvement efforts because those efforts require a financial investment.  Saving money three or four years down the line seems less attractive when employees are facing salary cuts, furloughs, and layoffs.  And, in the case of some Web 2.0 tools whose ROI isn’t measured in dollars, investing in the technology is almost out of the question.

Now, more than ever, more people are in need of government services and agencies need to find ways to provide more service with fewer resources.  To make this happen, agencies can’t just work harder.  Agencies need to find innovative ways to deliver services at less cost.

The Colorado legislature is supporting this effort with a bill, HB10-1264, that provides financial incentives to state agency employees who recommend cost-saving improvements. 

The bill requires the state department of personnel to develop a form, called an “idea application”, for employees to suggest improvements.  The personnel department is also responsible for developing criteria for evaluating the applications.  However, the director of the agency where an employee who makes a suggestion works is responsible for evaluating an application.

Then, for each idea that is implemented, the employee who made the suggestion will receive 5% of the cost savings, up to $5,000, as an honorary award.  The agency will receive 25% of the savings and the rest will be used by the state.

Up to a $5,000 bonus is definitely a strong incentive to put forth new ideas.  But, why is this type of bill necessary?  Why do we need laws to encourage innovation?  Isn’t giving an incentive to suggest improvements like paying a child for getting good grades?  (Disclaimer:  I wasn’t paid for grades when I was a kid, and I don’t have any kids, so I’m not really sure if that works.) 

Shouldn’t directors, managers, supervisors, and other agency leaders already be encouraging employees to share ideas for innovation?  Shouldn’t the leaders already be listening?  Well, it’s not the first time common sense has needed to be legislated.  I don’t mean to suggest this is a bad bill.  I just find the need for such a bill to be disappointing.  But, if Colorado government employees need an incentive to innovate and managers need to be pushed to listen to ideas, and I’m not saying they do, this is a step in the right direction.

What are your thoughts about this type of incentive?  What barriers have you encountered with recommending improvements?  How have you overcome those obstacles?

As of the date of this post, the bill is waiting to be heard in an appropriations committee.  The fiscal note associated with the bill doesn’t specify an amount for projected savings, and, while the fiscal note mentions the possibility of costs for implementing the idea applications, the note assumes those costs will be nominal.


Cell Phone Ban: Well-intentioned, But Misguided

April 23, 2009

When I read about Colorado’s proposed ban on talking on cell phones while driving, HB09-1094, I was firmly against it. Such a ban is one more step government is taking into controlling our personal choices. As is commonly mentioned, there are numerous other actions that can distract a driver that are not subject to a ban. But, cell-phones are singled out. Flipping through a book of 200 CDs while driving is probably just as distracting and dangerous (although, maybe I was the only one who did that) and shuffling an I-pod is just as bad.

That was all before I almost got hit by a car being driven by a young woman who was talking on her cell phone. I was crossing the park street coming in off of 13th and I saw the car barreling down. I figured she’d look up and stop, but she barely slowed down. When she noticed me, she removed her other hand from the steering wheel and gave me the courtesy wave. So, she was zooming into the park with no hands on the wheel.

After recovering from my momentary change of heart, I’ve realized the ban is not just misguided, but would also be insufficient, discriminatory, and a financial drain. The ban would only affect people under 18 years old and would still allow hands-free communication- speaker phones, mics, headsets, etc.

The problem with cell phones does not come from holding the phone. People frequently drive with one-hand on the wheel. The problem comes from talking to someone who is not present and the driver’s focus shifting from the car to the person on the other line of the phone. I’m not sure why, but talking on a phone seems to be more distracting than talking to another person in the car. We would never consider banning talking, right? I hope not, but banning cell phones brings us to the edge of that slippery slope.

The ban also disproportionately affects young adults. HB09-1094 would impose an outright ban on people under the age of 18 while people over 18 could use hands-free devices while driving. This is one more example of the discrimination against youth. If people over 18 stop getting into accidents while talking on their cell phones, then such a discrepancy may be reasonable.

At least the ban also prohibits sending text messages while driving.

Finally, the ban includes a $50 fine for infractions. Is that really worth the costs of enforcement? The overall goal is certainly public safety. But, will the ban really be enforced? The costs for the resources to enforce the ban are likely to exceed the revenue generated from $50 fines. But, the fiscal note for the bill does not make any reference to the costs of state patrol officers and local law enforcement, so my cost predictions are purely speculative.

As well-intentioned as the ban may be, the government is rarely successful at controlling personal behavior and really shouldn’t even be in that line of work.

The bill has passed the Colorado House and now moves to the Senate.

Colorado’s Budget – Cuts, Raids, and Band-aids, but no Solutions

April 10, 2009

The Colorado legislature introduced the proposed state budget, SB09-259, the long bill, on Monday, April 6th. The bill includes budget cuts across the board, but the largest impact is on the state’s funding of higher education.

Colorado already ranks 49th in the nation on higher education spending, according to the National Center for Public Policy and Higher Education. On top of that, the long bill proposes to cut $300 million from state higher education funding, further deflating a sinking system.

Higher education is the biggest, but by no means the only, function of state government to be a victim of the state’s budget crisis. The only solution, besides cutting funding and raising vehicle registration fees, that the legislature has proposed is to raid the surplus funds of a privately run workers’ compensation fund, Pinnacol Assurance.

Through SB09-273 the legislature has proposed taking (that’s a soft way of saying raiding or stealing) $500,000,000 from Pinnacol’s surplus funds. The bill, if it passes, will require Pinnacol to transfer the money to the state treasurer by September 1, 2009.

The legislature is going even further with SB09-281, following the federal government’s example, and attempting to remove private control of the fund. The bill would eliminate the authority of Pinnacol’s executives and board of directors and transfer that authority to the state. Pinnacol’s response is available at

The only rationale behind this raid is that Pinnacol has money and the state doesn’t. The state is going after a successful privately run organization and penalizing it for doing what the state has failed to do- maintain a rainy-day fund to deal with economic catastrophes. The state is removing control from people who have proven success and giving control to the people who have guided Colorado into this budget emergency.

It would be easy to pass this off as the Democrats’ effort to expand government and force their hand on private enterprise. But, it’s much more troubling than mere partisan politics. These bills would reward the short-sightedness of Colorado’s past and present elected officials.

Visit Project Vote Smart to find contact information for Colorado public officials to urge them to support the rights of private business and to encourage the legislature to pursue permanent solutions that will promote efficient, cost-effective government.