Most corporations determine performance based on short term cycles. It allows them to recognize quarterly successes as representative of the culture within the organization. It permits senior leaders to take credit for short term changes. And when bonuses are linked to short term results, it increases the likelihood that numbers will be tweaked or straight out falsified for a quick cash payout.
The Veteran Affairs scandal has demonstrated this. In return for reducing the wait times of veterans, managers received financial bonuses as a demonstration of their prowess and capability. It was found after the fact that many had falsified documents or condoned the process of creating secondary wait lists to hide the real problems. Rebecca Wiley, then director of the Columbia VA medical center, received almost $18,000 in bonuses while her mismanagement was later found to have delayed more than 8,500 appointments, with nine veterans dying while they awaited their treatments.
The examples of unjustified bonuses runs rampant. Glenn Haggstrom, the Washington D.C. VA construction chief, earned approximately $55,000 in bonuses while having significant delays and cost overruns for his projects to the tune of $1.5 billion. Thomas Lastowka earned an extra $23,000 as the Director of the Philadelphia regional office, all while doubling the number of veterans waiting for care beyond 90 days.
The issue with bonuses is not whether or not they are given; it is whether or not they are earned. A bonus is generally a tool used to retain key talent within an organization or to reward key individuals for their increasing the profitability of the organization as a whole. Translation: You are so amazing we cannot afford to lose you, or you have made us so much money that we are showing our appreciation by paying it back.
Bonuses are harder to justify in non-profit earning companies. If the company does not create money, then they are using money which is taxed or donated to help their clients, and the use of bonuses seems to take away from the ability of the organization to them – in this case disabled service members.
If the concern is that people will leave the organization who are underperforming, then they were the wrong people to hire in the first place. If the concern is that great performers need to be paid more, then their pay should be renegotiated based on their capabilities and responsibilities. Otherwise, the application of bonuses at the VA will continue to cause veteran’s blood to boil over the lack of timely medical care they are receiving and second class status they feel. When you are not being seen for more than 90 days, and someone is being paid a bonus as a result, something is surely wrong.
The good news is that as of today, Congress has given the power back to the VA chief. For all of those bonuses which were paid out prior to scandals breaking, it would enable the return of the funds which were misappropriated. The Senate still has to vote, but the goals are clear – honest business practices are the goal of the future and executives should remember that long term planning nets long term results.
Disclaimer: The content in this article is the opinion of the writer and does not necessarily reflect the policies or opinions of US Patriot Tactical.