Commentary Magazine


Commentary of the Day

David S. Mazel, on Jennifer Rubin:

I have worked at government sites, sitting next to government employees. And I now work at a private company. I can tell you that Jennifer is dead-on about the incentives and forces that managers see in these two very different settings.

Government managers are hamstrung and often have little control. Sure, they can approve time cards, monitor contracts with non-government companies (i.e., private companies) but they have little control over employees. (Once, I was directed to work with a government analyst by her manager. This analyst told me that she wouldn’t do the work, no matter what her manager said. And he, the manager, could not do anything about that.) What’s more, the incentives for government managers have nothing to do with profit or product. The incentives have everything to do with simply pleasing your boss or finding a position with a higher pay grade.

In a private company, the situation is quite different. Profits are of utmost importance, spending is kept low, and costs are always reduced, as much as possible anyway. The money belongs to the company so saving money is good for the company and, therefore, good for the employees. There’s an incentive to work to save.

What’s more, managers in private industry consider the bottom line constantly. It’s how they are graded. Managers will fire employees who don’t perform or demote them. That is a rarity in the government.

So, technocrats, as Jennifer notes, are trained differently from private industry managers.

That leads me to Chrysler and GM. It seems here Jennifer is spot-on again. The unions have made these companies too much like government employment. Unlike the government, the companies can’t tax people and force them to pay money. People, customers!, have a choice, unlike taxpayers. Unfortunately for GM and Chrysler their customers are deciding to spend their money elsewhere.