To help your clients reduce their employee benefit costs, the Associations are providing complimentary services such as Summary Plan Descriptions and Section 125 Plan documents to all dues paying members.
Summary Plan Descriptions (SPDs) ALERT: The Employer Retirement Income Security Act (ERISA) guidelines make it mandatory for all businesses with 2 or more employees to provide employees with a Summary Plan Description (SPD).
We continue to take a leading role in informing and helping our members meet their obligations under ERISA. We offer SPDs at no charge to our members. Types of benefits covered by Summary Plan Descriptions include: Medical, Long Term Disability, Short Term Disability, Life and AD&D and freestanding Dental/Vision.
The adoption agreement is a compliant document reflecting ALL the Health Care Reform Law changes as of January 2012. The Benefits SPD adoption agreement is one compliant document rather than 5 different forms. These documents are FREE to our members. NOTE: The cost for non-members will be $50 effective May 1st.
Let us complete your All-Inclusive SPDs for your clients:
To request an SPD:
Simply contact our office and our team will work with you or your client
Download the documents from our secured Agent Pavilion, complete, and return to the Association office.
The completed Agreement should be emailed in WORD format to info@michbusiness.org for processing.
The Association will send the completed agreement to you or your client.
Section 125s To request your Section 125 for your clients:
Simply contact our office and our team will work with you or your client.
The Section 125 Plan has a separate adoption agreement.
Please follow the same submission instructions as with a SPD.
The completed Section 125 Plan and supporting documents are normally returned in 2-5 business days.
If you have questions or need assistance, please contact our Membership Services Team at 1-888-277-6464 or 1-586-393-8800.
https://michbusiness.com/wp-content/uploads/2023/08/MichBusiness_logo_horizontal.png00michbusinesshttps://michbusiness.com/wp-content/uploads/2023/08/MichBusiness_logo_horizontal.pngmichbusiness2012-04-10 16:00:552015-10-08 00:00:00The MBPA SPD Agreement is an All-Inclusive Document Covering All Lines of Health and Welfare Benefits
March 29, 2012 By Bonnie Bochniak
MBPA/MFBA Director of Government Relations
The Michigan Business and Professional Association (MBPA), along with its sister group, the Michigan Food and Beverage Association (MFBA), work diligently to keep you up to date on our new federal healthcare law and how it will affect you, your family, and your business.
The most recent action dealing with our new healthcare law was the U.S. Supreme Court hearings that began this past Monday, March 26th, and concluded three days later on March 28th. The court heard arguments on the anti-injunction act, the individual mandate, and lastly, on the severability and Medicaid expansion. A ruling is expected by no later than early July, but rumors have also indicated that a decision may be delayed into the fall.
Details: Michigan is one of 26 states suing the federal government over the Affordable Care Act (ACA), which was signed into law two years ago. An unusually long stint of three days and six hours was given to the U.S. Supreme Court to hear challenges to overturn this law, arguments to maintain the law, and also statements were made by an attorney appointed by and representing the Obama Administration.
Anti-Injunction Act– On Monday, arguments began with one hour of whether or not the court can rule on the health reform law before its major provisions take effect in 2014.
Individual Mandate– Tuesday statements were heard for two hours on whether or not it is constitutional to require people to buy healthcare insurance.
Severability and Medicaid Expansion– Wednesday the court heard two issues: how much if any, of the rest of the law can be upheld if it strikes down the mandate section, and whether or not the federal government can force states to expand their Medicaid programs if they want federal money.
Due to the outcry of public interest in this case, the Supreme Court has provided audio recordings and transcripts of arguments on its website: www.supremecourt.gov
We will continue to keep you up to date on any new developments regarding this ruling, and as always please contact our Government Relations Team with questions/comments at: bbochniak@michbusiness.org or by phone at: 517-374-9128.
Visit our website www.michbusiness.org and click the National Healthcare tab for more detailed information. In addition, please use our website to find more helpful links understanding your healthcare options, obligations, and frequently answered questions.
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BCBSM has changed their Agent of Record policy. In particular, they have removed the 12-month rule in response to requests from their group customers. The change is effective immediately. Under the revised policy, when they receive a notice of a change in the agent of record, commissions become effective at the time premiums are paid, one month following 30 days from when they receive the letter.
Example: An AOR letter received on March 15 will result in commissions becoming effective with the May premium and payout with the June check.
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The MBPA & MFBA can provide you and your clients state of the art COBRA administration through BASIC, a Michigan-based award winning company providing a wide-range of HR Solutions for businesses. Best of all – The Associations COBRA Administration program is open to all members – Starting at $25.00 per month!
Our COBRA Administration program with BASIC reduces your client’s risk and frees up valuable time and resources, allowing them, your client’s time to focus on their active employees and business operations. With BASIC COBRA, your clients will be relieved to know that their COBRA administration is being handled consistently and accurately by experts.
SPECIAL OFFER – For each new to BCBSM group enrolled as members you have two options:
Receive a $500.00 incentive for each 10+ member group signed up with MBPA or MFBA. Receive a $100.00 incentive for each member group with less than 10 employees that sign up with MBPA or MFBA.
Receive 1-year Free COBRA Administration with our program partner BASIC (Qualifying groups: 20 – 99 lives). Plus you will receive a $250.00 bonus!
Qualifications for 10+ Membership Incentive Bonus:
We must receive a copy of the groups completed membership application with dues payment AND a copy of the group’s completed Part C Agreement (Showing the number of employees) to qualify for the $500.00 incentive or special COBRA incentive.
Send all completed membership applications and Part C agreement paperwork to our Membership Dept. at info@michbusiness.org
If you have questions or need assistance with enrolling your clients, please contact our Membership Services Team at 1-888-277-6464 or 1-586-393-8800.
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In these tough economic times, it can be hard to think about more than just running your business from day to day. Energy costs are one operating expense that we can help you control. Michigan Saves, a nonprofit organization, has money to help independent grocers, restaurants, and convenience stores finance equipment that reduces utility bills, and would like your help to design a statewide financing program that meets your needs.
The Michigan Business and Professional Association — the voice of independent businesses — supports the work of Michigan Saves. Please take a few minutes and answer 10 questions at http://www.cvent.com/d/5cqkd9?RefID=MFBA.
To thank you for your time, Michigan Saves will send Michigan Business and Professional Association $10 for each of the first 50 people to respond.
Even if you don’t plan to make improvements in the near future, we value your opinion and appreciate your response.
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With the debate continuing over national health care reform, and a constitutionality challenge planned this spring before the U.S. Supreme Court, the issues around health care coverage and employee wellness programs rank high in importance among many MBPA members.
As part of our new “Business Knowledge” series of reports, we’ve gathered several print and online resources to help MBPA members better understand health and wellness issues, and find ways to implement programs in the workplace.
Health care premiums significantly top wage growth – After several years of relatively modest premium increases, annual premiums for employer-sponsored family health coverage increased to $15,073 in 2011, up 9 percent from the previous year, according to the Kaiser Family Foundation 2011 Employer Health Benefits Survey. Premiums increased significantly faster than workers’ wages (2.1 percent) and general inflation (3.2 percent). The full survey report of September 2011 provides employers a detailed picture of trends in private health insurance costs and coverage, and is available online at http://ehbs.kff.org.
Study: Wellness program popularity, spending up – Fidelity Investments’ benefits consulting business commissioned a study in 2010 with the nonprofit National Business Group on Health (NBGH) . The study showed that financial incentives have taken on greater importance in the drive to increase employee participation in company wellness programs. The study examines trends and offerings at a wide variety of U.S. companies in various industries. Excluding incentives, the study found that employers spent an average of $154 per employee on wellness programs versus $108 in 2009. For more information about HBGH research and resources, including a health care reform implementation and communications toolkit, go to www.businessgrouphealth.org.
Study: Wellness awards shrink health care costs – Employers can encourage individuals to practice healthier behaviors by offering incentives in connection with their wellness programs, according to an August 2011 study by the Incentive Research Foundation (IRF). The study affirms the role and success of wellness incentive programs – important findings in light of the 2014 implementation of the Patient Protection and Affordable Care Act’s provisions that increase the value of wellness incentives to as much as 50 percent of the per worker total health care premium. The study shows that corporate wellness programs have shown savings-to-cost ratios of more than $3 saved for each $1 invested. To view the study, select the Research tab at www.theirf.org.
Wellness rewards: Employers linking healthy behaviors with lower premiums – The February 1, 2012 edition of HR Magazine, published by the Society of Human Resource Management, reports that as corporate wellness strategies rapidly evolve, “more employers are turning to health insurance premium discounts as a key incentive to boost participation and produce healthy results.” Of 1,248 organizations surveyed in 2010 by Buck Consultants, LLC, almost 75 percent of the respondents said they offered or plan to offer such discounts. To view the story in its entirety, visit www.google.com , and enter the search phrase “wellness rewards and hr magazine.” SHRM members only have direct access to archived stories.
Wellness programs produce stronger, more productive workers – Americans work harder, are more productive and miss fewer days of work as a result of wellness benefit programs, according to the latest Principal Financial Well Being Index, released Jan. 20, 2012. According to the research, 52 percent of workers (up from 37 percent last year) said they have more energy to be productive at work by participating in a wellness program. Another 35 percent (up from 28 percent a year ago) said they have missed fewer days of work by participating in a wellness program. To learn more, go to www.principal.com/wellbeing.
Wellness strategies outlined in SHRM Foundation report – A 2011 report by the Society of Human Resource Management Foundation. “Wellness Strategies to Improve Employee Health, Performance, and the Bottom Line,” offers a series of strategies and practical tips for employers designing wellness programs and related incentive packages. To view the full report, visit www.google.com , and enter the search term: “promoting employee well-being.”
Employer access to free wellness library – The website Wellness Proposals offers the world’s largest free wellness library, with more than 15,000 health and wellness related materials covering topics such as nutrition and diet, health promotion resources, fitness and exercise, and more. Visit the site at http://wellnessproposals.com.
Disabilities, prevention strategies presented – According to the Council for Disability Awareness, a company-supported wellness program “can significantly reduce – sometimes even prevent – many major causes of employee disabilities. In addition, wellness programs often cost less than they save, resulting in a net revenue gain for organizations.” To learn more, go to http://www.disabilitycanhappen.org for related articles, reports, and practical tips for employers.
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As a small business person, you probably find yourself being asked to serve on boards or committees with people with whom you find it difficult to communicate. Undoubtedly, from time to time, you are faced with customers who rub you the wrong way or with employees who cause you angst. The faster you learn to make the most of those relationships, the sooner everyone concerned benefits. I learned this lesson years ago while serving on a board. Maybe you can identify with me when I tell you about Milton.
My dislike for Milton was relentless. I couldn’t find a single redeeming quality in him. He seemed caught in a permanent sneer, and the high-pitched whine of his voice made my teeth ache. His breath offended. He never met a clove of garlic he didn’t like.
I found everything about Milton offensive, and he knew it. Thus, he became more of everything I resented. Seven years of serving on the same board-of- directors, putting up with his fanatical attention to detail, his opposition to anything I suggested, and his argumentative disposition tested my character to the breaking point. Finally, the time came when something had to change.
It was my year to be president of the organization, and I needed Milton’s support to accomplish my goals. Aside from that, my conflict with Milton had created a conflict within myself. My feelings for Milton were in direct opposition to the person I believed myself to be: loving, gracious, and generous with all people. It was Milton who had to change. But I knew his change had to begin with me. Although it didn’t feel fair that I should have to make the first move, down deep fairness wasn’t the issue. Growth requires change. If I waited for Milton to make the first move, I knew I’d only be more and more frustrated when it didn’t happen. I had to be the catalyst. You’ve heard of taking the bull by the horns? Well, I had to take the pig by the tail.
As far as I was concerned, Milton’s only redemptive trait was how lovingly he spoke of his grandchildren. To hear him tell it, they actually loved their grandfather. Unbelievable! He was influential with professional colleagues; his reputation as a college professor was positive. Many former students sought him out after they’d graduated. Incredible! My mission was to find in Milton some of what his children, grandchildren, colleagues and students found in him that was worthy of appreciation. It took all the imagination I could muster.
Challenge Yourself
I began by challenging myself to assume the best. I started by giving him the benefit of the doubt. This was not easy. When tempted to question his motives, I’d consciously shift my thinking to assume something more positive and explore his ideas by asking open-ended questions and listening to him. “What prompts you to say that, Milton? I’d like a better understanding of your thinking on the matter.” Grudgingly, I was surprised to find that once I understood his rationale, it was easier to value his point of view.
Whenever he’d begin to dwell on the negative, I’d resist the temptation to tune him out, and instead, disciplined myself to respond with, “Milton, that doesn’t sound like you; you usually find the best in a situation.” His conversation would shift to more positive aspects of whatever was under discussion. If he actually said or did something I appreciated and wanted to see repeated, I’d say, “That’s what I like about you, Milton. You…”
I learned not only to assume, but to acknowledge Milton’s positive motives. For example, during a meeting at which he strongly opposed an idea I favored, my response was, “Milton, I know that your heart is in doing what’s best for this organization. I’m wondering if you’d chair a committee to explore both sides of this issue and then come back and present a case for each?” He ran with the idea, and as a result, was able to fairly assess both sides of the issue. The bluster in his voice was gone, and in its place was the voice of reason as he calmly detailed the pros and cons. If he criticized my idea, rather than react, I learned to say, “Thanks for your input, Milton. Tell me more.” Once I offered no defense, no justification, the matter would be dropped almost immediately. Our relationship was maintained, and both of us could walk away with our heads high.
Over the years, Milton and I continued to serve on the same boards and committees, but our relationship moved from darkness into light. In place of disgust, there was trust. Instead of resistance, there was the desire to explore each other’s viewpoint. Desire to do battle was replaced with genuine appreciation and concern for one another. I fully understood this when, in response to an email from me thanking him for the hard work he had done on behalf of our council, he wrote back a simple acknowledgment. It read: I love you, too, Mary Jane.
Milton retired a couple of years ago. I miss him.
Hold Yourself Accountable
To ensure our success with people, as professionals we must hold ourselves accountable. Have you ever noticed how easy it is to get stuck in a victim mode? Unfortunately, once caught there, we begin to believe our own story and neglect to realize how powerful we are to change a situation we don’t like. I’m sure you’d agree that I had a part to play in my negative relationship with Milton; rarely if ever, is a bad relationship a one-sided affair. Just like me, you always help to create, contribute to and keep a sour relationship going. If you didn’t, you wouldn’t have the power to change things. My relationship with Milton changed in powerfully positive ways.
Some of you may be thinking, “Wait a minute. Are you trying to tell me that when I’m in the throes of a rocky relationship, it’s my fault? Is that what you’re saying?” No. My message is much more encouraging than that. What I am saying is that you, like me, play an important part in every negative relationship. But the good news is that if you have the power to create something you don’t like, then you also have the power to change it. By holding myself accountable for the part I played in my relationship with Milton, I was able to exercise tremendous power in bringing about the change I desired. And you can, too.
A seminar participant recently wrote to me saying, “I am a no-nonsense person and value honesty. I take my work seriously and want to get it done in the most efficient, accurate, and professional manner possible. My boss is the Queen of Denial type, and whenever I give her truthful feedback on the programs she initiates, she accuses me of being critical. Therefore, I have discontinued giving her input, which just fuels my anger. As you see: big clash. What should I do?”
Don’t Become a Victim
It’s clear that this woman sees herself as the victim of a boss who can’t accept her “no-nonsense, professional approach.” From her perspective, she had nothing to do with the negative reaction of her boss. She didn’t want it; it just happened. Almost nothing “just happens.” We always help to create, contribute to, and keep a negative situation going. Let’s take a look at how that happens by using the situation above.
First, the woman helped to create the negative situation with her boss. She knew her feedback to her boss would be negative, and she chose to share the unvarnished truth of her perceptions. Now, let me clarify here. I am not saying that you do not tell people the truth. Of course we do. Truth telling is critical to a good relationship. It doesn’t give us license, however to give our opinion to everybody about every thing. And in the case I’m referring to, this woman gave feedback that wasn’t requested. In essence, she made her boss wrong. Creation of tension.
She contributes to the current situation by refusing to provide her boss with input. When she withholds her opinion, she stuffs her feelings. Things are getting crowded inside, and now her unexpressed feelings of anger are eating her alive. Finally, she allows the negative situation to continue by complaining behind her boss’ back to anyone who will listen, rather than taking her concerns to her boss.
Reversing Bad Relationships
If we want to reverse a bad relationship, we need to accept responsibility for the part we play. Having the courage to face the truth about ourselves isn’t easy, but it’s an essential ingredient to positive growth and change. You’ve heard the saying, “You shall know the truth and the truth shall set you free.” Well, the greatest truth we can discover is the truth about ourselves. When we take responsibility for being a co-creator in all our relationships, we take back control of our lives, and we serve as powerful examples for others to follow. As professionals whose job it is to communicate clearly with untold numbers of people, we not only have greater opportunity, but increased responsibility to set that example. Congruency is key to our credibility on or off the platform.
As a reminder of the importance of taking responsibility for all your communications, take the time to answer the following questions.
Transformers
Identify a person with whom you’ve had difficulty. What happened to create negative feelings with this person in your life? Did he or she disappoint you? Cancel an appointment at the last minute? Speak to you in a tone you didn’t like?
Were you holding any misgivings about this person prior to the activating experience? Be as honest as you can about any thoughts you might have been experiencing. For example, when I first started my business, it was not uncommon for me to approach a meeting with the CEO or the VP of an organization with fear and a lack of confidence. Unconsciously, I’d broadcast these feelings to them, and then wondered why they didn’t hire me. My thinking was actually contributing to their misgivings about my ability to do the job.
If someone else had been looking on, how might they have described your reaction? What did you do? What did you say? What was your physical reaction? What was the tone of your voice? Did you maintain silence?
Was your reaction rational? For example, whenever I speak for an organization that doesn’t provide a host and allows me to fend for myself, I find myself feeling annoyed. That is, until I stop long enough to think about how irrational it is for me to expect someone else to exhibit the same rules of etiquette I learned growing up. It’s irrational because often that person didn’t grow up in my generation, nor in my family. Once I ask myself, “What else could this mean?” it’s easy to let go of the irritation. Any time we expect people to share our standards, do as we would do, think as we would think, respond as we would respond, we are being irrational.
If given a second chance, how might you respond differently? A good way to answer this might be to answer some other questions first. For example, “What attitude would lead to the most productive outcome? What attitude would lead to organizational or personal success? What attitude would have the most positive impact?”
If you had responded differently, how would the outcome have been different? Would you have maintained or enhanced the relationship? Would you have established a greater trust bond? Would you have felt more authentic? Would you have had greater feelings of self-respect? Would your credibility have been enhanced?
Mary Jane Mapes is an award-winning leadership/communication strategist, author, and professional speaker who works with organizations that want to create great relationships and develop a culture of excellence. She is from Portage, MI and can be reached at www.maryjane@maryjanemapes.com or at 800-851-2270.
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States and local economic development organizations are increasingly establishing indicators, dashboards, and benchmarks intended to both monitor economic and social conditions in their region and, less often, track the effectiveness of their programs and initiatives. In this article I will describe some pitfalls, large and small, that can occur in the development of these various performance yardsticks.
Pitfall #1: Stand-alone dashboards
The first pitfall is to allow these statistical efforts to stand alone; they should be a part of a larger comprehensive regional development strategy, which starts with the development of a shared vision for the region. This important step, which is often ignored, provides the necessary direction needed for the development of a comprehensive economic development strategy. Possible vision statements can include the elimination of poverty, achieving full employment, or the development of a fully trained workforce. While the vision may seem unobtainable, it provides direction in defining the goals in the comprehensive strategy.
Once the plan’s goals and strategies have been hammered out, its implementation should establish performance metrics to measure its progress. This is when it gets tricky; since the ideal data series are rarely available, organizations tend to track too many available indicators, hoping that quantity will make up for the lack of quality.
Once a vision and strategic goals are in place, the creation of an effective economic development dashboard, benchmark analysis, or scorecard for a region can play a crucial role in setting strategies and measuring outcomes. The definition of each is provided in Table 1. Two key steps are involved. First, the region’s economic development stakeholders must agree on the general performance measures that should be used to measure the expected outcomes. Typically these include employment growth, growth in per capita income, output growth, or population change. It is possible that the strategy is focused on a certain aspect of economic development, such as entrepreneurship, business retention, or workforce development andtraining. In these instances, the measures are less broad based. For community organizations, the performance measure could be the reduction of the area’s poverty rate.
Table 1 Measurement Tools and Analyses Regional economic indicators—statistics that track a specific aspect of the regional economy. By themselves, indicators are not very useful; however, they are the building blocks to more useful tools. (See Erickcek et al. [2009].)
Dashboards—a well-designed, easy-to-read layout of key indicators or composite of indicators that track the overall performance of the region and/or the organization’s efforts. It is important to imagine the construction of a car’s dashboard and not that of the cockpit in a plane, with its myriad of gauges and readouts. It should have a small number of community-wide indicators as well as program indicators. (See Eberts, Erickcek, and Kleinhenz [2006] and Erickcek [2007].)
Regional benchmarks—a comparative analysis that contrasts the performance of the region with that of strong-performing communities, that share similar economic, social, and/or demographic characteristics. The key challenge in this activity is to select the right comparison areas. (For rural Michigan comparisons, see Erickcek and Watts [2003].)
Scorecards—a statistical report that tracks the performance of the region on identified key indicators over time and/or across communities.
The next step, identifying factors that drive these performance measures, is much more difficult and has three separate approaches. The first relies on experts’ judgment. An advisory board of economic development experts can be called together to identify key growth factors. However, this can generate concern that it is yet another “top-down” approach that will not reflect the needs or interest of the regional residents. The second way is to obtain community input by organizing town hall meetings where residents and businesses can express their views on the important growth factors. While this approach can build community support and “buy-in” to the resulting strategies, it is highly subjective and can ignore empirically based research findings on what factors are important. The issues that arise from these meetings can be very local—streetscape issues or the redevelopment of an abandoned mill site, for example—or very general, such as poverty reduction.
The third approach to developing an economic development dashboard is statistically based—identifying factors that are statistically associated with the movement of the performance measures. In several studies we have used both factor and regression analyses. First, we separate the factor analysis groups from 40 to 70 indicators into “factors” based on how strongly correlated they are with each other. We typically find that six to eight factors are generated by the analysis, which can “explain” up to 90 percent of the variation of the indicators. Based on which indicators fall into which factor, the factors can be interpreted and labeled. For example, we have found that indicators that monitor the skills of a region’s workforce tend to be strongly associated with each other and are typically grouped into one factor that can be labeled a skilled workforce.
We then run these calculated factors in a regression model to statistically determine if they are associated with the selected performance indicators. In our previous work, we have consistently found that:
a skilled workforce is strongly associated with per capita income growth;
business dynamics—the opening and closing of firms and the number of small establishments—is strongly associated with employment growth;
the region’s industrial legacy—its history of manufacturing—is negatively related to employment growth; and
social isolation by income or race is negatively associated with employment growth.
Pitfall #2: Believing that more is better
One of the benefits of the statistically based approach is that it identifies a limited number of growth factors, which avoids the pitfall of not appreciating the fact that less is more. Tracking more data does not necessarily generate more clarity if the data are highly duplicative or measure activities that are not related to the goals of the organization. Some studies contain more than 100 indicators and can leave even the most attentive reader in a fog. Often two indicators seemingly tracking the same factor can move in the opposite direction. For example, employment by place of work often goes in a different direction from employment by place of residency in the short run. Too many indicators can only add confusion, lead to inaction, and, in general, do more harm than good. Remember, the resulting dashboard should look more like that found in a car than in the cockpit of an airplane.
Finally, once the performance measures are set and the factors that are associated with them are identified, then the regional economic development organization is set to develop strategies or tactics to address these factors. The key point is that the organization does not develop strategies that directly impact the performance measure, such as create jobs or personal income. Instead, the regional economic development effort is directed at forming more realistic strategies that address the factors associated with the performance indicators, such as creating a small business assistance program, designing customized training programs for area employers, or conducting retention visits with area employers. It is particularly challenging for economic development organizations to implement a strategy because they cannot direct area firms to follow the plan that may call for the adoption of better technology, the provision of workplace training, and the development of new products for expanding markets. Instead, they can only attempt to create an environment that is conducive for these actions, through the use of incentives and technical assistance. At best, economic and community development organizations have only a marginal influence on a limited number of the inputs required to substantially change the economic performance of their communities.
The lack of direct control over the region’s economic assets, resources, and business decision making can be one of the most challenging aspects of implementing a strategic plan. Therefore, when constructing regional performance measures, it is necessary to control expectations. An excellent economic strategy can be thwarted by a bad economy or by a corporate decision to relocate a major regional operation.
Pitfall #3: Performance measures as net impact evaluations
In fact, this leads to another major pitfall to avoid: using performance measures to evaluate the impact of economic initiatives or programs. Change in regional per capita income is one of the best measures of an area’s economic performance. However, even the most effective economic development program will likely have little or no impact on the area’s per capita income. National, demographic, and industrial factors that are completely outside the influence of local organizations can have a much greater impact on an area’s per capital income. One of the greatest fears I have is that an outstanding economic development program that is costeffective and generates positive results could be terminated because it did not do the impossible: make a noticeable bump in the area’s per capita income or employment statistics. This is why a dashboard or scorecard should include program specific indicators as well as broader growth factors.
To recap, the development of regional performance measures should be part of a comprehensive economic development strategy that identifies the key growth factors that impact the region’s performance measurements. In some respect, the performance measurements—employment growth and per capita income, for example—could be considered a mountain peak, and the dashboard or scorecard tracks the progress of a community up the mountain. The summit may never be reached, but the community’s progress is being recorded.
Pitfall #4: Fixating on one indicator
There are two additional pitfalls that must be avoided along the climb. The first of these is to aim solely at a specific indicator. Indicators are simply that: they indicate if the region is going in the right direction. They provide evidence that the region’s workforce is becoming more skilled or the business environment is more dynamic. The regional economic development strategy should be directed at improving the quality of an area’s workforce or in enhancing the area’s business environment and not aimed at moving a certain indicator. The selected indicators should not become the focus of the strategy. Instead, they simply monitor whether a growth environment is being developed in the region. Although the percentage of residents between the ages of 25 and 34 who have a bachelor’s degree or higher is a reasonable indicator of the quality of the region’s workforce, raising this percentage would prove to be a difficult economic development strategy to articulate. Instead, the strategy could be to increase the number of internships offered to college graduates in the area, promote the area to professional and engineering services, and encourage social and cultural events aimed at young professionals.
Pitfall #5: Mistaking output or inputs for outcomes
The final pitfall is mistaking outputs—or even worse, inputs—for outcomes. The amount of resources utilized in generating activities should not be used as a measurement of the results of these activities. For example, a local economic development effort should not be measured by the number or size of fully serviced, site-ready parcels of industrial space that have been developed (inputs) or the number of brochures or tours generated (outputs). What matters is the amount of investment made in the area due to the availability of the site-ready parcels.
In conclusion, regional economic development strategies depend upon partnerships, the leadership and innovation of their key industries, the attitudes of its citizenry, and, of course, simple luck. Clearly, if a region’s residents do not believe in the importance of education, and if its major companies are not generating new products, its economic development organization cannot simply fire its residents and firms and hire new ones. Thus I believe that economic development organizations should be cautious in the development of economic indicators and dashboards, and be aware that regional performance measures are difficult to move and are impacted by events clearly outside the control of the organization. As with your car, an economic dashboard can show your speed (growth), fuel levels (human and physical resources), and miles traveled (industrial legacy); however, it says very little about the quality of your engine. An economic development organization should, of course, watch all these indicators, but its strategies should focus on improving the quality of its economic engine.
References:
Eberts, Randall W., George A. Erickcek, and Jack Kleinhenz. 2006. “Development of a Regional Economic Dashboard.” Employment Research 13(3): 3–5.
Erickcek, George A. 2007. Economic Dashboard Supplemental Report: Other Social and Economic Indicators. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
Erickcek, George, Bridget Timmeney, Brian Pittelko, and Brad Watts. 2009. Social and Economic Indicators Typifying the Community’s Health. Report prepared for the Kalamazoo Community Foundation. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
George A. Erickcek, and Brad R. Watts. 2003. An Economic Development Benchmarking System for Rural Michigan. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
George A. Erickcek is senior regional analyst at the Upjohn Institute.
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Gov. Rick Snyder and Dr. Dieter Zetsche, chairman of the Board of Management and head of Mercedes Benz Cars, meet at Daimler AG headquarters in Stuttgart, Germany.
STUTTGART, Germany – Michigan is more business friendly than ever and eager to establish productive relationships with European businesses, Gov. Rick Snyder said today in an address at a supplier reception at the Mercedes Classic Center in Stuttgart.
“Michigan is blessed with a number of strong, productive and long-standing relationships with German-based companies, and to those companies, we say thank you for your continuing contributions to our state,” Snyder said. “To those of you looking to expand your global presence or enter the North American market, Michigan is the place to be. We have been busy reinventing Michigan, breaking some bad habits of the past and embracing new opportunities for our future. We see many great opportunities ahead for all of us to do more business together.”
Earlier in the day Snyder and the entire Michigan delegation of state, university and local officials and economic developers visited Daimler’s training center in Untertürkheim-Brühl. Snyder also met with Dr. Dieter Zetsche, chairman of the Board of Management and head of Mercedes Benz Cars, at the Daimler AG headquarters.
Daimler is one of the Michigan’s largest German employers with about 3,000 employees in the state. The company has made significant investments in its 3.3 million square foot Detroit Diesel operation, in Redford since 2000. Its $500 million investment in the “Redford Renaissance” helped to make it one of the leading Daimler truck engine plants in the world. In addition, Farmington Hills is home to the headquarters of Mercedes Benz Financial Services.
Among the reforms the state implemented to attract investment and energize Michigan’s economy are:
Repealing the jobs-killing Michigan Business Tax and ending double taxation on small business with a simple, fair, flat 6 percent Corporate Income Tax.
Adopting a balanced budget for the current fiscal year that eliminated the state’s $1.5 billion deficit and set aside savings to help the state meet its long-term obligations. This fiscal discipline laid the groundwork for the governor’s proposed 2013 budget, which recommends strategic investments in key priority areas such as education and transportation.
Streamlining regulatory processes to weed out laws and regulations that are inefficient or needlessly burdensome, while maintaining proper safeguards.
Snyder arrived in Turin, Italy on Sunday for an eight-day investment mission to strengthen relationships and attract new job-creating investments. He will spend Friday in Ludwigshafen and Lippstadt, where he and Michigan business owners and local economic developers will meet with executives from several German companies before returning to Michigan on Saturday.
https://michbusiness.com/wp-content/uploads/2023/08/MichBusiness_logo_horizontal.png00michbusinesshttps://michbusiness.com/wp-content/uploads/2023/08/MichBusiness_logo_horizontal.pngmichbusiness2012-04-03 16:00:302015-10-08 00:00:00Snyder Calls State a ‘launching pad’ For Global Firms During German Visit