THE GOVERNMENT PERFORMANCE PROJECT
Human Resources50-State Average Grade: B-
The single biggest component of any state budget is payroll, and the most important element in the execution of any statewide project is a well-trained workforce, ready to make things happen. The single factor that most often forms citizens’ impressions of state government—for good or ill—isn’t usually the condition of the statehouse roof or the consistency of financial planning. It’s the smiling (or frowning) clerk who helps renew licenses at the Department of Motor Vehicles.
For many years, most state leaders acted as if these fundamental human resources realities didn’t exist. They perpetuated personnel systems that were rigid, rule-bound and unresponsive to the ordinary citizens who came into contact with them. Now, that is beginning to change. States as diverse as Minnesota, Oklahoma and South Carolina are engaged in stem-to-stern personnel management reform. Georgia is phasing out its civil service system altogether—though the jury is still out on how well that experiment will ultimately work.
None of these efforts are easy. Personnel offices can’t make major changes in state civil service codes without the legislature’s support. Unions, though far more of a problem in some states than others (Rhode Island, New York, Alaska and Hawaii, to name a few), often stand in the way of tying pay or bonuses to performance, preferring seniority rules that guarantee equity but stifle efficiency. Managers are constantly battling the consequences of hasty and poorly thought-out decisions.
Alabama is an extreme example. The governor and legislature decided last year that they needed to save money by cutting the workforce, so the state offered very generous early-retirement incentives, with a one-month window of opportunity. As a result, the state suddenly lost some 2,000 employees, with no plans for making up the slack.
Even worse, the legislature didn’t actually fund the early-retirement incentives, so agencies must find the cash themselves, reducing further their ability to fill positions they need.
Granted, Alabama is nobody’s model of an efficiently run state. But it’s not alone in short-sightedness. North Carolina, well managed in many ways, has been reluctant to fund its performance pay program or back up its promise of individual bonuses for high achievers. This year, employees had to wait months for their annual raises because the legislature hadn’t completed its budget bill on time. “Morale is lousy right now,” admits Ronald Penny, director of the state personnel office. “Employees have a bad taste in their mouth because of the sluggishness in giving them a raise.”
One of the major obstacles to personnel reform in many places is the sheer absence of information needed at the statewide level. Personnel tends to be one of the most decentralized of management areas, and while it makes sense to give agencies a fair amount of control over hiring, firing and supervision of their own workers, it also makes sense for the central personnel office to know what’s happening out in the field. In quite a few states, it doesn’t.
California doesn’t even have a centralized computer system for human resources; the agencies run their own. Connecticut has no figures on state employee turnover. Nevada officials don’t have any idea how quickly its agencies can hire staff. They know it takes 34 calendar days from the time the central office is notified of a vacancy until it sends out a list of applicants; after that, all bets are off. Other states can easily find out the turnover and hiring rates in the agencies, but have little or no detailed information about employees’ ages or skills.
It’s no surprise, then, that the very idea of statewide workforce planning—extrapolating demographic trends among employees to make sure state government is prepared for the future—remains a far reach for many of the states. “It really hasn’t been an emphasis for the state as a whole in the past,” says Joseph Lefkowski, personnel services unit manager in Connecticut. “We’ve gone from fiscal year to fiscal year.” Lefkowski says Connecticut is finally beginning to “look beyond the current year to see what the workforce will be.”
Florida is a particularly sad case. It had a great deal of data pertaining to its workforce, useful for many kinds of focused analysis. However, when the state decided to decentralize the personnel efforts to its agencies, much of that information went into the equivalent of a black hole. Now, the state can only hope that the individual agencies are watching out for their own futures.
The lack of workforce planning is particularly hazardous for states with an aging employee base and for those that have undergone major shifts in employee structure. In Vermont, an early-retirement program involving about 450 employees shrunk the size of the state workforce by about 6 percent, while the use of temporary employees went up. Still, even as the state launched this new retirement program, it had no clear idea which workers were most likely to leave, an obvious problem. “It was a very broad process, without precision,” says Eileen Boland, commissioner of the department of personnel. The state now has a blue-ribbon commission, set up by the legislature, to study the need for better workforce planning.
Depressed? Don’t be. There is a lot of good news from the front as well, particularly when it comes to removing some of the most constrictive elements of the civil service codes and easing up the hiring process. This is particularly important because almost no state government can compete with the private sector’s salary offers.
Many states have reduced their testing requirements, for example, allowing managers to consider applicants who look promising even if they do not satisfy a rigid list of prescribed credentials. Others have sought to broaden the applicant pool by administering the tests in several locations around the state.
Some have cut back on the testing requirements altogether. Wisconsin, with one of the lowest unemployment rates in the country, has taken a number of useful steps to ensure a steady flow of good workers into state government. Last spring, it got rid of limited certified lists (in which only five or 10 of the top-scoring applicants could be considered for a job). It also has arranged for walk-in testing for the 20 percent or so of vacancies still filled through written examinations. In the past, applicants had to sign up for a test about five or six weeks before it was given. The state also has begun accepting some job applications online.
Result: The time it takes to hire someone after a job posting has been cut from 70 days in 1992 to less than 40 days now, with critical positions, such as those in high-tech occupations, taking only 20 to 25 days. In rare instances, for example, at college job fairs, recruiters are authorized to offer jobs to particularly strong applicants on the spot. “Seven years ago, by the time we finished explaining all the hoops people at a job fair had to jump through to compete for a job, they were at the next booth,” says Bob Lavigna, Wisconsin’s Merit Recruitment and Selection administrator.
Naturally, some states remain mired in traditional civil service intransigence. The extreme case is Rhode Island. Managers are presented only with the top six test-takers, and in some cases union contracts reduce that choice down to the three most senior bargaining-unit members. In some cases, it can take up to nine months to fill a position.
A positive trend seen from coast to coast is reduction in the number of job classifications. This, too, matters a great deal, because the greater the number of classes, the narrower the focus of the individual job titles and the less flexibility managers have to give adequate raises or to shift employees around where they are needed. West Virginia has reduced the number of its classification titles from 1,800 to about 750, Illinois from almost 1,700 to a little over 1,000. Indiana, Kentucky and Nebraska are all hard at work getting their numbers down as well.
It isn’t an easy process. In the late 1980s, Ohio undertook a classification reform program. There were so many complaints from employees and unions that the state backed away, and hasn’t returned to the effort since. Tennessee, which reduced its number of titles to 1,200 almost 15 years ago, has seen the number creep up again to 1,800 in the executive branch, largely because of agency demand for unique titles. New Jersey has reduced its number of classes by 1,000, but still is burdened by an astonishing 8,000 of them. The Garden State, in the understated words of one observer, is waging an “uphill battle” to achieve classification reform.
In the final analysis, all these human resource reforms are uphill battles. But any hope for managerial efficiency and productivity is dependent on winning a few.
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