After months of errors, omissions and colossal screw ups at Cover Oregon, the new Interim CEO Clyde Hamstreet has offered retention bonuses to hold onto the organization’s employees.
Hamstreet said at a press conference last week that Cover Oregon is reeling from heavier-than-expected personnel departures and like private business would do should pay its remaining 163 employees bonuses worth at least two week’s pay if they remain with the operation through the next nine months while Cover Oregon moves to adopt the federal exchange.
Thirty-eight employees with skills considered ‘critical’ will get bonuses worth one to three months’ pay. Cover Oregon, which was in charge of the state’s disastrous health care exchange development effort, lost 27 employees since April, according to Hamstreet in a recent letter to the board of directors. Some of those reductions came as a result of layoffs. But many left on their own accord as Cover Oregon’s flagship project became a complete technological and political nightmare.
It may well be that paying bonuses to key employees to lock up their services is an accepted part of the business world particularly when the company or organization is undergoing a transition or a crisis.
However, Cover Oregon is much more than a crisis. Using tax dollars to pay bonuses to employees simply for not leaving does not sit well with taxpayers especially with Cover Oregon spending $250 million and never producing a functional website.
Now under the interim leader apparently with Governor Kitzhaber’s blessing they want to spend an additional $650,000 on bonuses. Hamstreet has called $650,000 a ‘paltry sum.’ It’s actually about $72,000 a month over the next nine months that would go to only 38 employees.
A private business, recognizing the sensitivity of spending more after wasting a lot, might handle the situation differently. Fire everyone and hire competent people to finish the job or give those that really do have skills a raise. The problem with a bonus is that the meaning of bonus is suppose to be an award for good performance, not a bribe.
Cover Oregon’s offer of retention bonuses follows several layoffs recently. Between the layoffs and voluntary departures, 27 employees left the organization. Since April, Cover Oregon’s total workforce has declined from 190 to 163. Has the culture of the organization deteriorated so much that those 163 cannot perform their duties?
Meanwhile the Governor who is running for re-election is in a faceoff with Oracle, the lead technology contractor on Oregon’s exchange. Oracle has largely been blamed for the unworkable website, however the enormous company is now saying that the website worked, but ‘state leaders chose not to release.’
Of course, State officials say that Oracle’s position is untrue. Insurance agents and other insiders given access to the site during this spring’s open-enrollment period state it remained a faulty work in progress.
Governor Kitzhaber has asked Oregon Attorney General Ellen Rosenblum to initiate legal action to recover payments and other damages from Oracle.
It’s a messy situation and Oregon may never recover the loss, but the political unsavory nature of bonuses is not the answer.