A Minnesota County’s Successful Transition to a Performance-Based Compensation System

Background

The declining confidence in government policies and the opposition of taxpayers to higher taxes have heightened concerns about the efficient use of public funds and the productivity of public employees. In addition, the aging population and the consequent pressures on health care, Social Security and pension systems have been exacerbated by the recent economic crisis and the widening of the federal deficit. Current economic conditions have resulted in declining tax revenues, raising the urgency of many government agencies to look for ways to improve efficiency by transforming how they conduct business. Given the fact that labor costs make up a large portion of operating expenses, the forces of government accountability — including taxpayer associations and some elected officials — have pressed for changing the way tax dollars are spent and how public employee job performance is evaluated.

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