State’s misused employee bonus program could lead to favoritism

Fort Wayne Journal Gazette

To ensure that compensation of state employees remains competitive with the private sector, Indiana last year revitalized its spot bonus program, allowing agency chiefs to award bonuses in pay for exceptional work.

Guidelines from the State Personnel Department cap such awards at $1,000 and don’t include multiple bonuses per year. Yet the Indiana Capital Chronicle reported Monday the state’s 10 largest agencies spent more than $5 million on taxpayer-financed bonuses for 69% of their employees over the last two years.

Application of the spot bonus program by agency heads is anything but standard. Some state employees are awarded bonuses repeatedly. For example, the Indiana Economic Development Corp.’s David Rosenberg, formerly the chief operating officer and chief of staff, received $52,700 in bonuses over two years before being named head of the agency, the Capital Chronicle reported.

And it’s not just the state’s largest departments that are extensively using the spot bonus program to augment pay. Secretary of State Diego Morales has given one to almost every employee in his office this year – including his brother-in-law – for a total of more than $308,000. Eighty bonuses have been doled out to 68 agency employees – in an office of about 75 workers – ranging from $500 to $12,000, for an average of $4,540 per employee, the Capital Chronicle said.

If bonuses were intended as salary adjustments, having an authority figure handing them out at his or her discretion raises the possibility of unfair distribution of government pay. Making bonuses a more formal compensation adjustment would provide the kind of transparency and structure that would discourage favoritism, said Abraham Schwab, interim director of graduate studies and professor of philosophy at Purdue Fort Wayne.

When it comes to spot bonuses, guidance from the State Personnel Department dictates such awards range from $100 to $1,000 to “recognize outstanding performance ‘on the spot.’” But among the 10 largest state agencies, just the Department of Health and the Department of Environmental Management adhered to the $1,000 maximum award.

It’s obvious many of Indiana’s elected and appointed agency leaders are abusing the revamped spot bonus program as a means to compensate for lower pay than the typical Hoosier working in the private sector, when its intent was to reward exceptional performance.

If Gov. Eric Holcomb’s administration doesn’t force compliance with State Personnel Department guidelines on bonuses, the General Assembly must. Otherwise, the bonus program could lead to workers favored by agency chiefs being paid more than others competently doing the same job.