Sunday, January 10, 2010

What Is the Worth of the Person Tasked to Fix RI’s Economy?

Commentary
by Professor Tony Wheeler
Assistant Professor of Human Resource Management


Apparently not $250,000. Ioanna Morfessis withdrew from her appointment to head RI's Economic Development Corporation (EDC). For those who don't know the purpose of this Governor-appointed group, the EDC (http://www.riedc.com/) basically assists the state in developing economic policies and strategies to enable the state to economically prosper. You could joke, as I often do, that the EDC has failed and miserably at that.

But its past failures that have contributed to the state's lackluster (to put it nicely) economic conditions should highlight the need to step outside of the state to find fresh ideas. Instead, the media focuses on Morfessis's proposed salary instead of her qualifications or worth to the state. The focus on her salary, in my estimation, misses the larger picture.

First, is she or anyone else who might head the EDC worth that salary? Some of you might say no. I disagree. Given the troubles the state faces, what will it take to attract, motivate, and retain the most qualified, best performing head of the EDC? That is the purpose of compensation: to attract, motivate, and retain. Compensation also signifies what a job is worth, both to the company and to the market. Yes, $250,000 is a lot of money, especially compared to what most people in the state earn, even the President of URI or the Governor himself. Do other states pay similar amounts to their respective EDC heads? I'd say that given the problems this state faces, maybe $250,000 isn't enough.

Now the Governor appoints Keith Stokes, the Executive Director of Newport County's Chamber of Commerce, to head the EDC for a temporary 1 year term. Why did the Governor seek an out of state replacement for this position only to find a replacement in the state? And why is his contract offer only $185,000?

Second, with the focus on salary, what signal does the state send to future directors, especially given that the state will need to hire a permanent replacement next year? The state faces serious economic adversity, and the head of the EDC holds a serious position. The state should ask itself again: What is this job worth?

Handling the performance management of this job is for a different post altogether.

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