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Forum editorial: Rewarding good work punished?

The decision by Blue Cross Blue Shield of North Dakota to scrap incentive trips for high-performing employees comes too late to avoid a public relations black eye that all but glows in the dark.

The decision by Blue Cross Blue Shield of North Dakota to scrap incentive trips for high-performing employees comes too late to avoid a public relations black eye that all but glows in the dark.

Responding to a firestorm of self-righteous public outrage and talk-radio wind-bagging, Blues executives and board members said last week's jaunt to the Grand Cayman Islands for 35 employees probably was "a mistake," and it won't be repeated.

A mistake? Well, from a public relations perspective, certainly. The Blues are in the midst of a tussle with the state Insurance Department over an 18 percent rate increase for a segment of its health insurance customers. Toss the rate case into worries about the economic downturn, and the public reaction to an expense-paid trip to a posh resort is no surprise. The public relations tone deafness of a relatively sophisticated company was a wonder to behold.

But the substance of rewarding employees who perform above and beyond the routine is a different matter. Merit should be rewarded. The incentive trip for such employees has been a fixture of the company's employee compensation package for years. Such incentives are common in business. They are legitimate methods to reward good work.

If the Blues had merely put the $6,500 (the cost of the Cayman trip per couple) into paychecks as cash bonuses, there would have been no hyperventilating by the media and the public. The cost to the company would have been the same, but there would have been no high-profile trip to warm beaches and spas. There would have been no outrage (envy?).

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The trip was scheduled months before the economy tanked. It's been a regular incentive for motivating employees. This year, the company was caught in a double vice: bad timing because of the poor economy and the rate increase request. It doesn't matter to the public that dollars spent for employee incentives of any shape have no effect on what they pay for health insurance. What matters is perception, however flawed. And that's the factor the Blues misread.

Hamm is smiling

Meanwhile Insurance Commissioner Adam Hamm, recently slapped down by a judge because of his denial of a Blues rate increase, was handed a club by the company with which he immediately proceeded to beat them. He changed the focus from his incompetence regarding the rate case to the company's ill-advised South Seas trip. He couldn't have asked for a better diversion from, as the judge put it, his actuarial mistakes.

Hamm's latest ploy: a possible probe into the Blues' executive pay. Does anyone smell political opportunism?

The folks so worked up over the employee trip should take deep breaths and try to relax. There is no high crime or malfeasance in all this, just a hint of corporate arrogance that led to a spectacular public relations blunder.

Forum editorials represent the opinion of Forum management and the newspaper's Editorial Board

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