McKenna preaches fiscal responsiblity at chamber luncheon

Better employee performance management, in both the public and private sector, could improve the state’s economy, said Rob McKenna, Washington State’s Attorney General, at a Chamber of Commerce luncheon at the McCormick Woods Golf Course, Thursday.

In the public sector, that’s vital, he said.

“The tendency of government is to pay everyone on a salary schedule,” he said, “so 30 to 40 percent of state employees will get an automatic pay raise next year.”

That’s unsustainable, he said, considering the state employs 108,000 people, and the revenue to pay those employees has become increasingly anemic.

The state’s deficit has risen to around $5 billion, after assuming a $4 billion revenue increase, although the state will only see that increase if the economy grows by 13 percent in the next two years.

McKenna, a Republican, sees that scenario as unlikely.

“I think 13 percent growth would be pretty impressive,” McKenna said. “How many of you expect your businesses to grow by 13 percent in the next two years? How many of you would be happy to have your job in two years?”

The state shouldn’t count on that new money, McKenna said.

Instead, they should adopt a policy, like his office has, to make sure employees are rewarded based on their performance. McKenna said he implemented the system shortly after he was elected in 2004 and was “disappointed” that Gov. Christine Gregoire, who preceded him as the state’s attorney general, has not made performance culture mandatory in all state agencies.

The employees at the Attorney General’s Office each undergo “rigorous” performance evaluations twice per year.

Generally, between 5 and 7 percent are described as “super performers,” and get an “excellence award,” said McKenna, adding that those employees earned as much as a $3,000 bonus before that ended because of budget constraints.

The bulk of the employees get an average rating, and a standard “performance award,” and about 8 to 9 percent don’t get an award of any kind.

“Those who don’t get a performance award for two years in a row are encouraged to look for employment elsewhere,” McKenna said. “We help them get better and stronger, or we help them find the door.”

As a result, “People are more efficient and better at doing their work,” he said.

The Attorney General’s Office has saved $600,000 some years by getting rid of the non-performers, and that money is spread throughout the remaining employees in increments of $500 to $3,000 per employee, depending on how well they did.

This year, however, they didn’t get the bonuses.

“We used that money this year,” he said, “to avoid layoffs and furloughs.”

It’s about creating a “performance culture,” McKenna said, and “we can do this throughout the state’s government.”

McKenna also suggested that the state implement a “kai zen, lean government” system.

“Everybody in our office is an expert in his or her job,” he said, and, last year, they contributed 300 ideas for how to improve the office.

One woman, Becky Waldron, said she knew how the office could save money on manila folders, and the office implemented her suggestion.

“Becky Waldron believed that if she spoke up, in that town hall, that we’d take her seriously,” he said. “Everyone knows they’re a valued member of a team.

“State employees are not the problem,” McKenna said. “State employees are the solution. State employees will help us find the way to be more efficient.”

When asked if he has plans to run for governor, McKenna said: “I will make a decision of what I’m doing sometime this summer.”

• McKenna joined 25 other state attorney generals in challenging the constitutionality of federal health-care reform. He said the lawsuit is “moving very quickly” and anticipates it heading to the U.S. Supreme Court.

“I think it’s a pretty radical idea to tell people they have to buy Congress-mandated health insurance,” McKenna said.

• Gregoire has not made a decision whether she will seek a third term in 2012. McKenna said he has not determined if he will seek that position, but expects to make an annoucement about his future this summer.

Port Orchard Independent staff writer Chris Chancellor contributed to this report.

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