Added Note: That does not mean I would put 20 something year old kids in charge of managerial positions with no oversight as was going on in the Indianapolis Department of Metropolitan Development.Aaron,Your comments reflect a fundamental disagreement I have with many people who argue for high CEO, government and nonprofit managerial salaries. Namely that you measure what we should pay these managers by what others are paying.I don’t buy that. To me the question is not what others are paying for a position, but what salary is required to attract someone to a job who is capable of doing the job well. The fact is we’re not talking baseball shortstops where there are only a few people on the planet who can play as well as Derek Jeter. That’s why Jeter is paid, rightfully, a lot of money. But if there were a ton of shortstops that play as well as Jeter, for much less, do you pay Jeter a lot of money anyway? No.We’re talking about managerial jobs that literally thousands of people can do and do every bit as well as the small pool of top level managers who continually get recycled. Look at the CEOs who consistently lose money for their company. I venture to guess that plenty of people who can lose money every bit as well as the those CEOsThere are tons of people out there who could have done a better job than [former Public Safety Director] Frank Straub, as evident from his performance. Even with [IndyGo Manager Gilbert] Holmes, I don’t see the special talent that he brings to the position that makes him somehow different from hundreds if not thousands of people who could fill that position. Again, these are not baseball shortstops where there is only a handful of people who can hit .300, with power, while playing excellent defense.The people who occupy these managerial type positions like to think they bring special, unique talents to the mix. But they don’t. They like to think that because it justifies their high salaries. But those salaries that they are paid is based on what others are paying, not what one has to pay to attract that level of talent in a free market. It’s just not a free market when it comes to executive talent. Look who sits on corporation boards approving CEO salaries...other CEOs and people making high executive salaries. They're not going to bite the hand that feeds them.If I was Mayor, I would take the Moneyball approach to getting people…reaching out to people who are outside the normal circle of recycled managerial talent. I venture to say that I could put together a team every bit as good as those Mayors paying high salaries to the same recycled managers.
Saturday, May 25, 2013
My Thoughts on Paying Big Bucks to Attract Managerial Talent to Government
Urban expert Aaron Renn, publisher of the Urbanophile blog, and I are having an interesting email exchange about paying better salaries to upper level management in government. Renn, for whom I have a great deal of respect, argues to attract top level executive talent to government, we need to pay higher salaries. I won't publish his email as I never publish emails without consent. But I will publish my email (with a few minor revisions) as it represents the philosophical difference I have with him regarding executive pay: