States Push to Shake Up Personnel Practices

Your boss offers you a 5 percent raise. The only catch is that in return you risk being fired at any time, without any right to an explanation. Would you take it?

This is the dilemma that 26,000 Arizona state employees may soon face if Governor Jan Brewer’s proposed overhaul of the state’s personnel system becomes a reality. Her budget calls for a 5 percent raise for employees who voluntarily give up all civil service protections. Brewer argues that there’s no reason in this day and age for state workers to be treated differently than employees in the private sector, who generally have “at will” status and are promoted or fired based on their performance rather than being protected by seniority.

Some employees would certainly be tempted.  “These are people who desperately need the money,” says Sheri Van Horsen, president of AFSCME Local 3111 in Arizona. Since 2008, their pay has been cut by 2.75 percent. Even so, Van Horsen doesn’t expect many would be desperate enough to take the bait, which she believes would lead to a system where rank-and-file state employees are hired and fired based on political affiliation rather than merit.

Brewer, a Republican, has made clear that what she calls “modernizing” the state’s personnel operation is among her top priorities. She envisions a system that rewards high-performing employees and doesn’t tolerate poor performers. “Either we provide state supervisors the flexibility they need to manage their workforce, or we accept a personnel system bound up with bureaucratic red tape,” she said in a February 14 statement . “Either we institute these reforms, or we continue outdated policies that provide most state workers with protections enjoyed by virtually no one in the private sector.” 

Brewer’s proposal would automatically eliminate civil service protections — including the ability to file a grievance or appeal disciplinary actions — for new hires and some current employees. Anyone who accepts a promotion or transfers to another position in state government would also become “at will.” Because of high levels of expected turnover, the governor’s office expects that, under the proposal, 82 percent of the workforce would become “at will” within the next four years, compared to 26 percent currently. The measure is scheduled for a committee hearing today (February 16).

Traditional structure

State civil service systems were put in place to combat the cronyism and patronage that was pervasive at all levels of government in the early 20 ^th century. Rigorous testing methods and job protections were created to ensure that employees would be hired based on their merits, rather than political affiliations, and would be shielded from political influence. Due process and grievance and appeal procedures were put into place to guarantee that rank-and-file employees wouldn’t be thrown to the curb every time there was a change in administration.

“The public sector has to serve the people, and it should serve all people — not whatever party happens to be in power,” says Joseph Cayer, professor emeritus at Arizona State University’s School of Public Affairs. “It’s far more likely that [partisanship] would happen under an at-will system where employees don’t have any right to due process job protections.”

Still, Brewer isn’t alone in arguing that state civil service systems could use some updating to account for the realities of the modern job market. Over the past few decades, a number of states have gradually shifted toward a more flexible and less traditional civil service structure, often exempting a greater percentage of employees from merit protection. The approaching wave of baby boomer retirements, and the influx of new hires that this will generate, are adding urgency to the debate over changes to state hiring practices in general.   

Georgia’s experiment

Georgia was the first state to make an aggressive change to its civil service system, eliminating merit status for all new employees in 1996. Most Georgia workers now serve at-will, and the state places a strong emphasis on rewarding high-performing employees. Last year, Indiana overhauled its personnel code for the first time in 70 years, largely eliminating its existing merit system and placing most employees in at-will status. “We equalized it so that the same rules apply to everybody,” says State Personnel Director Daniel Hackler. An existing appeals process was kept intact to ensure that employees aren’t terminated without good reason.

The key when considering such changes, public management experts say, is to find the right balance between increased flexibility and the controls necessary to prevent discriminatory practices. “Reform is not a bad thing, but we don’t want to throw the baby out with the bath water,” says Paul Battaglio, associate professor of public affairs at the University of Texas-Dallas. Increased job security is part of the reason that public employees are often willing to accept lower salaries than they would receive in the private sector. Battaglio worries about government’s ability to recruit and retain a talented workforce without civil service protections — or an accompanying boost in pay for high achievers, which is often promised by reformers but rarely lives up to expectations.

Battaglio says that while no one has been able to determine the effects on employee productivity and performance, his own research on Georgia state worker attitudes toward at-will employment has turned up some troubling findings. He says the new system has created a less trusting environment in which employees are skeptical of their managers. “These reforms are doing the exact opposite of what they’re supposed to do,” he says. “From our assessment, they’ve produced an environment of distress that isn’t really very motivational.”

Antiquated rules?

Arizona isn’t the only state where current leaders are pushing to ease a host of civil service requirements they view as antiquated. In Colorado and Tennessee, respectively, Democratic governor John Hickenlooper and Republican Governor Bill Haslam have made civil service changes a key part of the public agenda.

The debate in Colorado is particularly tricky because many of the rules the governor believes to be inefficient are enshrined in the state constitution and would require a vote of the people to change. For that reason, they have been largely untouched for the past 40 years. “The state Constitution is riddled with personnel rules and administrative procedures that are obsolete and should be reformed,” Hickenlooper said in his state of the state address on January 12.

Kathy Nesbitt, executive director of the Colorado Department of Personnel and Administration, says the package of changes the administration wants the legislature to place on the ballot takes an incremental approach to change. The goal is to modernize the civil service system that has been in place for 92 years, not eliminate it. Even that won’t be easy: Voters rejected a similar proposal that made it through the legislature in 2004, a casualty of inadequate outreach and education on the state’s part, Nesbitt believes.

Current rules in Colorado allow the state to interview only the three highest-ranking candidates for a vacant position, as determined by a complicated calculus usually involving competitive testing, degree of experience and résumé review. This so-called “Rule of Three” often makes it difficult to find a candidate whose skill set and personal attributes seem to be a good all-around match for a department’s needs, Nesbitt says. Younger candidates don’t often make it into the running — a problem as the state thinks about succession planning and building a replacement workforce for the exodus of retiring baby boomers.

Attack on bumping

The administration would like to move toward a more flexible pool of candidates and is proposing a “Rule of Six.” Candidates would be evaluated through “comparative analysis” rather than the current formal scoring system, lessening the emphasis on written tests. It doesn’t make much sense to ask someone applying for a high-level position to take a basic math test, Nesbitt says. Asking applicants to go through such rigmarole can deter highly qualified candidates from applying. 

Another central focus of discussions in both Colorado and Tennessee is ending, or at least minimizing, the practice of “bumping.” That happens when employees whose positions are being eliminated force others with less seniority into lower positions, or even out of the workforce altogether. The practice often sets off a chaotic chain reaction that can undo years of training.

A video released by the Haslam administration to promote legislation in Tennessee illustrates this phenomenon, with employees displacing other employees across broad geographical regions at great inconvenience to everyone. “The amount of churn that takes place is very disruptive,” Nesbitt says of bumping in Colorado. “You often end up with a person who is more interested in retaining their pay than in the type of work they’ll be doing.”

Proponents of the changes being discussed in Tennessee and Colorado insist that much of what they’re proposing is just common sense. “There is more agreement than disagreement on many of the provisions,” says Senate Majority Leader Mark Norris, who is sponsoring Tennessee’s legislation.

Still, it’s so early in the process that it’s hard to know what’s in store or even what shape the final legislation might take. Norris realizes that the battle lines haven’t fully been drawn yet in Tennessee and that the proposed changes to procedures for laying off employees will be a big deal to many of them. “It has created uncertainty for a lot of folks who have never worked under that sort of arrangement in the private sector,” he says.