Wednesday, April 18, 2012

Slashing and burning your way to profit ..... and the winner is .....

Good Day Readers:

A fascinating behind-the-scenes look at how the federal government is implementing its latest round of budget cuts. Here are a few questions it raises for us and, hopefully, you as well:

(1) Has the government not already paid a major accounting house $90,000 per diem to the tune of about $20 million to independently identify where and how much departments should be cut?

(2) Why will potentially huge bonuses be paid to some handsomely reimbursed executives to implement decisions previously made for them during an era when the Conservatives are preaching a doctrine of restraint?

(3) As a private sector employee, assuming you even have a job, how much will your bonus be this year?

(4) Who will be evaluating these executives and how much are they paid? What are their bonuses?

Everywhere workers are terminated, laid off, fired, downsized - whatever. Only in Ottawa are you "workplace adjusted."

Clare L. Pieuk  
Federal bureaucrats could pocket more than $50,000 for cutting budgets
By Elizabeth Thompson
Tuesday, April 7, 2012

Some federal government executives could be awarded performance pay and bonuses exceeding $50,000 this year — depending in large part on their success in cutting budgets and staff in their departments.

According to an internal Treasury Board directive, those at the very top of the government’s executive ranks, in the EX-04 and EX-05 classifications, are eligible to earn up to 26 per cent of their salary in bonuses and performance pay, known as “pay-at-risk.” The calculations would be based on what the executives were earning as of March 31.

Salaries at the EX-04 and EX-05 level ranged from $148,600 to $195,300 last year. That means an executive in those classifications who surpasses expectations can receive between $38,636 and $50,778, according to the directive.

However, not all government executives are eligible for the same percentage in performance pay. Under government guidelines, the best those in the EX01 to EX03 category who surpass expectations can hope for is 15 per cent of their salary. That means the most they can earn in performance pay and bonuses is between $15,400 and $23,145.

At the other end of the spectrum, an executive who does not meet performance expectations can end up not taking home a cent in performance pay.

Bonuses and "pay-at-risk" are part of the federal government's Performance Management Program designed to encourage, recognize and reward strong performance by top officials. The performance of each executive is assessed after the end of the government's March 31 fiscal year.

Last year, the government handed out hefty increases in executive performance pay and bonuses at the same time it talked publicly about the need for restraint and balancing the budget.

While the potential government payout for executives doesn't change from previous years, what does change under the new directive are the criteria used to assess their performance.

In the past, the criteria were often quite general, such as whether the person met the objectives for policy and program results, management results and leadership results. For 2012, however, the government has tied much of executives' performance pay to how well they cut costs in their departments during the government's strategic and operating review, also known as the deficit reduction action plan.

In support of the review, 40 per cent of the at-risk budget will be earmarked to reward senior executives for improving productivity and efficiency and identifying savings.

Evaluations of executives are generally done in April and June and cheques for performance pay are issued in September. This year, the evaluation and assessment of government executives continues with the workplace adjustment letters going out to thousands of public servants across Canada.

To date more than 10,000 letters have been delivered. While not everyone who receives a letter will lose their jobs, it could be weeks if not months before they know that for sure.

Claude Poirier, President of the Canadian Association of Profession Employees (CAPE), said his union is hearing that roughly 73 of its members who work for the Canadian International Development Agency were told last week their jobs are in jeopardy.

Poirier suggested executive performance pay is one area the government is unlikely to cut.

"If they start cutting bonuses and at-risk pay of their [executives], who is going to implement their bizarre decisions? So they have to be aware of the fact this is the last group of people they can rely on."

Patty Ducharme, National Executive Vice-President for the Public Service Alliance of Canada (PSAC) said she was "appalled" to find out just how much performance pay public service executives stand to potentially receive for cutting jobs.

"What I think is really telling about this government's priorities is that they are paying people massive performance pay while they slash and burn services, based on how deeply they cut services."

Ducharme said notices that members are about to be affected by the job cuts have been coming in each day and PSAC expects a new wave of notices to hit nest week.


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