During a recent town hall meeting, New Jersey’s Governor Chris Christie recently responded to a teacher’s question about his efforts to address the financial difficulties facing the state’s educational system and his battle with the teacher’s union. The video of their interaction is included below:
In the video, Governor Christie cites that NJ teachers contribute nothing to the cost of their healthcare benefits. A hundred percent of the cost is covered by the taxpayers not only during their time as teachers but, if they attain tenure, for their lifetime. Working with an enormous deficit, Christie was requesting the teachers contribute 1.5% of their pay to offset some of the costs of their benefits, on average, $750 per year. Additionally, he requested that the union freeze salaries for one year (there is a provision guaranteeing 4.9% increases each year). If these items were adopted, minor teacher layoffs would be required and result in ~$700M in savings. The union did not support these programs and many more teachers were let go.
Looking at these proposals from a business perspective and in our current economic client, they seem extremely reasonable. Where is the shared sacrifice? Building a profitable company is a difficult task. There are often times when sacrifice is required on many fronts. Making sacrifices can mean the difference between survival and closing the doors. Employees who cling to entitlement cannot be tolerated. And in these difficult situations, strong leadership is critical. Christie demonstrated the directness and clarity that are needed from a leader. He’s candid and clear. His reaction to the teacher’s eyerolling was beautiful. He doesn’t ignore it. He calls it out. Let’s have some mutual respect. Leadership is about straight talk and honesty. Articulate the problem, the action, the benefits and the consequences. Listen. Take the heat.
And if you have a compensation program that provides employees a 5% increase every year and no matter how they perform or what they contribute to your business, I would love to know why.