Monday, November 18, 2013

Flaws of Common -- How About Choice Instead

I read a lot these days about "common." There's Common Core on the education side of things (in the US). I read this morning in a Harvard Business Review article about common goals for a health care system. We are supposed to do things for the common good.

This is all well and good, but when we look about any of these common elements, who determines what it is commonly best? In my experience, it is neither the end users nor the people in the trenches. More typically, it is one of the government, the bureaucrats (they may be government), the administrators who will never have to implement the common things they prescribe, or people from think tanks who often have never spent a day in the real world.

Here are a couple of facts. I am different than you. You are different from the person who is currently sitting or standing nearest to you. Even if that person is your identical (maternal) twin, you've had different experiences and while you may be far more alike than any two random people, you are not the same as each other. In fact, you are different.

So, what is commonly best? I don't know. Neither do you. And, neither do the people developing common programs. Perhaps (and perhaps not), they are more informed about the subject matter to which they are applying commonality than are you and I. But, generally, they have not walked a mile in your shoes or mine.

I'm much more a fan of choice. Suppose we consider employee rewards. For these purposes, I am going to define an individual's rewards value (or cost) to be the sum of (the value or cost) these elements:

  • Compensation -- base pay plus bonus plus overtime plus long-term incentives plus equity compensation to the extent that any of these apply
  • Retirement benefits -- this includes 401(k), profit sharing, pension, ESOP, or anything else that is targeted to help an individual to generate retirement income or retirement wealth [I separate this from the next element because retirement benefits are typically pay related while many other benefits either are not or are less pay related]
  • Other benefits -- this includes health care as its largest component
  • Softer stuff -- consider here things like training and development, and work/life benefits
Suppose for any given year, each employee was offered a formula (we're getting very hypothetical here, so ignore current tax law) whereby they would be allocated some number of dollars based on a percentage of what we would typically view as base pay plus some flat dollar amount. This is essentially what people are given today, except that they are largely told how to take those dollars. 

Suppose further that each employee could allocate those dollars any way that he or she wanted. Consider a health care option. Much like under the Affordable Care Act, a person would have an option of a somewhat minimal bare-bones plan (think Bronze missing some of the essential benefit coverage) right up through a plan that subjects the employee [and family] to extremely little risk (think Platinum plan). The difference here is that I am going to let each individual annually design their own program to meet their needs. In order to avoid complete anti-selection, however, there will be certain components that someone can only opt in and out of periodically (for example, once you opt in to maternity health benefits, I am going to make you stay in that program for at least 10 years to avoid people opting in only in the year in which they expect to have a baby).

What we would get from such a program is that each person would take the dollars allocated to them and design an UNcommon program that meets their individual needs. Pretty cool, huh?

Now, let's move back to education. In the programs that produce the most successful people (success here isn't measured by income, but by achievement and no, I don't know how to measure achievement either, but you know what I mean), teachers don't teach to tests. They teach to students. They let the creative juices flow whether that creativity is geared toward math for a mathematically inclined student or art for an artistically inclined student. The teachers seek to bring out the best in students. 

Yes, we all need exposure to different areas of education. And, while it does come up in conversation occasionally, that I learned in four different grades that Vasco Da Gama was a Portuguese explorer who sailed around the Cape of Good Hope in the very late 15th century, that knowledge has certainly not added to my probability of success. Perhaps that time in school could have been more useful to my future had it been spent on developing my social skills or on my writing (I hated writing when I was in school). I had classmates, however, who were so naturally social butterflies, but who thought that basic arithmetic was the most challenging thing they would ever encounter.

It goes back to my them. We are all different. If you are in your teens, even though you think that you and your best friend have so much in common (there's that word again), your lives will likely move down different paths.

Why then does everything have to be common?

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