Week 6 - Assignment: Prepare Job Descriptions and Calls for Applicants and Week 7 - Assignment: Appraise Strategies to Assist in Effective Job Evaluations

C o p y r i g h t 2 0 1 6 . C Q P r e s s .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

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P U B L I C H U M A N R E S O U R C E M A N A G E M E N T

S i x t h E d i t i o n

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This book is dedicated to Steven W. Hays

Scholar, mentor, and friend.

—R.C.K., J.D.C.

SAGE was founded in 1965 by Sara Miller McCune to support the dissemination of usable knowledge by publishing innovative and high-quality research and teaching content. Today, we publish more than 850 journals, including those of more than 300 learned societies, more than 800 new books per year, and a growing range of library products including archives, data, case studies, reports, and video. SAGE remains majority-owned by our founder, and after Sara’s lifetime will become owned by a charitable trust that secures our continued independence.

L o s A n g e l e s | L o n d o n | N e w D e l h i | S i n g a p o r e | Wa s h i n g t o n D C

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P U B L I C H U M A N R E S O U R C E M A N A G E M E N T

P r o b l e m s a n d P r o s p e c t s

S i x t h E d i t i o n

Richard C. Kearney North Carolina State University

Jerrell D. Coggburn North Carolina State University

EditorsSAGE was founded in 1965 by Sara Miller McCune to support the dissemination of usable knowledge by publishing innovative and high-quality research and teaching content. Today, we publish more than 850 journals, including those of more than 300 learned societies, more than 800 new books per year, and a growing range of library products including archives, data, case studies, reports, and video. SAGE remains majority-owned by our founder, and after Sara’s lifetime will become owned by a charitable trust that secures our continued independence.

L o s A n g e l e s | L o n d o n | N e w D e l h i | S i n g a p o r e | Wa s h i n g t o n D C

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Copyright  2016 by CQ Press, an Imprint of SAGE Publications, Inc. CQ Press is a registered trademark of Congressional Quarterly Inc.

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v

T A B L E O F C O N T E N T S

P r e f a c e viii

P a r t 1 : T H E S E T T I N G 1

1 . C O M P E T I N G P E R S P E C T I V E S O N P U B L I C P E R S O N N E L A D M I N I S T R A T I O N : C I V I L S E R V I C E , N O N S T A N D A R D W O R K A R R A N G E M E N T S , P R I VA T I Z A T I O N , A N D PA R T N E R S H I P S 2

Donald E. Klingner, University of Colorado at Colorado Springs

2 . W H A T E V E R Y P U B L I C S E C T O R H U M A N R E S O U R C E M A N A G E R S H O U L D K N O W A B O U T T H E C O N S T I T U T I O N 1 6

David H. Rosenbloom, American University

Joshua Chanin, San Diego State University

3 . T H E D E A T H A N D L I F E O F P R O D U C T I V I T Y M A N A G E M E N T I N G O V E R N M E N T 3 2

Albert Hyde, San Francisco State University

Frederik Uys, University of Stellenbosch, South Africa

4 . H U M A N R E S O U R C E M A N A G E M E N T I N T H E F E D E R A L G O V E R N M E N T D U R I N G A T I M E O F I N S T A B I L I T Y 4 9

James R. Thompson, University of Illinois–Chicago

Robert Seidner, U.S. Office of Management and Budget

5 . A F T E R T H E R E C E S S I O N : S T A T E H U M A N R E S O U R C E M A N A G E M E N T 6 1

Sally Coleman Selden, Lynchburg College

6 . S T R A T E G I C H U M A N R E S O U R C E S M A N A G E M E N T A T T H E L O C A L L E V E L : B A L A N C I N G E N D U R I N G C O M M I T M E N T S A N D E M E R G I N G N E E D S 7 9

Heather Getha-Taylor, University of Kansas

7. T H E N O N P R O F I T S E C T O R L A B O R F O R C E 9 0

Beth Gazley, Indiana University–Bloomington

P a r t 2 : T E C H N I Q U E S 1 0 5

8 . S T R A T E G I C H U M A N C A P I T A L 1 0 6 Joan E. Pynes, University of South Florida

9 . S U P P L A N T I N G C O M M O N M Y T H S W I T H U N C O M M O N M A N A G E M E N T : T H E E F F E C T I V E I N V O L V E M E N T O F V O L U N T E E R S I N D E L I V E R I N G P U B L I C S E R V I C E S 1 1 8

Jeffrey L. Brudney, University of North Carolina, Wilmington

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vi t a b l e o f c o n t e n t s

1 0 . P E R S O N N E L A P P R A I S A L N O M A T T E R W H A T : D Y S F U N C T I O N A L , D E T R I M E N T A L , D A N G E R O U S , S E L F - D E F E A T I N G 1 3 2

James S. Bowman, Florida State University

1 1 . T R E N D S I N P U B L I C S E C T O R C O M P E N S A T I O N – P AY A D M I N I S T R A T I O N 1 4 4

Jared J. Llorens, Louisiana State University

1 2 . E M P L O Y E E B E N E F I T S : P A T T E R N S A N D C H A L L E N G E S F O R P U B L I C O R G A N I Z A T I O N S 1 5 4

Rex L. Facer II, Brigham Young University

Lori L. Wadsworth, Brigham Young University

1 3 . P O S T E M P L O Y M E N T B E N E F I T S : P E N S I O N S A N D R E T I R E E H E A L T H C A R E 1 6 9

Thad Calabrese, New York University

Justin Marlowe, University of Washington

1 4 . M O T I VA T I N G P U B L I C S E R V I C E E M P L O Y E E S I N T H E E R A O F T H E “ N E W N O R M A L ” 1 8 2

Gerald T. Gabris, Northern Illinois University

Trenton J. Davis, Georgia Southern University

1 5 . E M O T I O N A L L A B O R : T H E R E L A T I O N A L S I D E O F P U B L I C S E R V I C E 1 9 8

Mary Ellen Guy, University of Colorado Denver

Meredith A. Newman, Florida International University

1 6 . M E A S U R I N G A N D B E N C H M A R K I N G H U M A N R E S O U R C E M A N A G E M E N T 2 0 8

David N. Ammons, University of North Carolina at Chapel Hill

1 7. M A N A G I N G E M P L O Y E E P R O B L E M S : S T A T E G O V E R N M E N T G R I E VA N C E A N D C O M P L A I N T R E S O L U T I O N S Y S T E M S A N D P R A C T I C E S 2 2 5

Jessica E. Sowa, University of Colorado Denver

P a r t 3 : T H E I S S U E S 2 3 9

1 8 . C O M B A T I N G D I S C R I M I N A T I O N A N D I T S L E G A C Y : A F F I R M A T I V E A C T I O N A N D D I V E R S I T Y I N T H E P U B L I C S E C T O R 2 4 0

J. Edward Kellough, University of Georgia

1 9 . G E N D E R E D O R G A N I Z A T I O N S A N D H U M A N R E S O U R C E M A N A G E M E N T P R A C T I C E S T H A T F O S T E R A N D S U S T A I N G E N D E R E D N O R M S 2 5 2

Sharon Mastracci, University of Utah

Lauren Bowman, University of Illinois at Chicago

2 0 . V E T E R A N S ’ P R E F E R E N C E A N D T H E F E D E R A L S E R V I C E 2 6 7

Gregory B. Lewis, Georgia State University

2 1 . T H E A M E R I C A N S W I T H D I S A B I L I T I E S A C T : C O N T R A D I C T I O N S I N P U B L I C P O L I C Y 2 8 0

Bonnie G. Mani, East Carolina University

2 2 . E T H I C S A N D H U M A N R E S O U R C E M A N A G E M E N T 2 9 7

Jonathan P. West, University of Miami

2 3 . P U B L I C S E C T O R L A B O R I S S U E S : R I G H T S , R E T R E N C H M E N T , A N D D E M O C R A C Y 3 1 2

Patrice Mareschal, Rutgers University–Camden

Patricia Ciorici, Rutgers University–Camden

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t a b l e o f c o n t e n t s vii

2 4 . H U M A N R E S O U R C E S M A N A G E M E N T A N D G O V E R N M E N T C O N T R A C T I N G 3 2 6

Sergio Fernandez, Indiana University Bloomington

Deanna Malatesta, Indiana University–Purdue University, Indianapolis

Craig Smith, University of Arizona

2 5 . H U M A N R E S O U R C E M A N A G E M E N T I S S U E S W I T H S O C I A L M E D I A 3 4 0

Shannon H. Tufts, University of North Carolina at Chapel Hill

Willow S. Jacobson, University of North Carolina at Chapel Hill

P a r t 4 : P R O S P E C T S 3 5 3

2 6 . P U B L I C S E C T O R W O R K P L A C E D E S I G N : N E W C H A L L E N G E S A N D F U T U R E D Y N A M I C S 3 5 4

Katherine C. Naff, San Francisco State University

2 7. T H E C I V I L S E R V I C E U N D E R S I E G E 3 7 5

Richard C. Kearney, North Carolina State University

Jerrell D. Coggburn, North Carolina State University

I n d e x 3 8 5

A b o u t t h e E d i t o r s 4 0 8

A b o u t t h e A u t h o r s 4 0 9

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viii

P R E F A C E

T he first edition of this volume was published in 1983. When that book appeared, the Civil Service Reform Act of 1978 was just five years old, and words such as managerialism, reinvention, outsourcing, and the new public management had not yet been coined, at least in the context of public sector human resource manage- ment (HRM). Subsequent editions of the anthology have attempted to keep students apprised of the massive changes that have occurred in this field over the years. As such, the tables of contents from the previous five editions mirror shifting emphases, values, techniques, and—consistent with our enduring focus—differing problems and prospects.

In attempting to characterize the unstable ground upon which this discipline sits, we have used many dif- ferent adjectives, including such hyperbolic expressions as paradigm shift (perhaps the least original of all choices) and technical revolution. However phrased, the central mes- sage that we have tried to convey—and which we continue to address in this version of the book—is that of rapid transformation and adjustment to diverse environmental stimuli. Today’s students would not recognize the merit systems that typically existed in 1983, nor would practi- tioners of that era have been able to anticipate or appreci- ate many of the topics that are now central to this field. For that matter, the name of the field itself has been changing: from public personnel management (PPM) to public per- sonnel administration (PPA), to human resource manage- ment (HRM) to strategic human resource management (SRHM) to human capital management (HCM). Such

evolution (confusion?) of nomenclature is partly placing old wine in new bottles, but it is also reflective of the field’s dynamic qualities and its shifting values. We con- tinue to believe that Public Human Resource Management: Problems and Prospects best captures the breadth of topics contained in this edition and, arguably, earlier ones.

We begin this anthology with a recommendation to readers that they take a moment to contemplate just how different the field is compared with that of thirty years ago. Already one of the original editors, Steve Hays, has retired to his lake house in South Carolina. From such an historical perch one marvels at the accomplishments (and, perhaps, recoils at the mistakes) that have occurred during a long and especially critical period in the evo- lution of public administration. Readers would be well served to familiarize themselves with the historical con- text that helped to spawn the changes documented in the twenty-seven original chapters contained in this volume. We think you will find the differences in contemporary HRM to be both extraordinary and profound.

As has been our intent since the beginning, the basic purpose of this anthology is to provide readers with a concise overview of the challenges (problems) and adjustments (prospects) of modern public HRM. To keep pace with developments in real-world HRM, this means that major alterations have been made in the con- tent of this volume. Past editions of the book invested perhaps inordinate amounts of space on such topics as workplace diversity, affirmative action and equal employment opportunity (AA/EEO), merit system

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p r e f a c e ix

operation, and the like. While these traditional topics have become less salient, new topics have emerged. We hope that we have captured the essence of these shifting priorities in the readings that follow. Although the tra- ditional challenges and techniques retain much of their significance, no contemporary work on HRM would be complete without paying attention to such topics as nonprofit management, postemployment benefits, emo- tional labor, benchmarking, and social media. Not one of these topics was contained in the previous edition of this book, but all now merit a complete chapter.

Consistent with past practice, this volume consists of originally authored manuscripts that represent a cross-section of the timeliest and best-informed schol- arship in the area of public HRM. The book contains a mix of thought pieces, descriptive analyses, overviews of HRM in various settings, and theoretical essays. To be true to our promise of providing a solid overview of both problems and prospects, the selections sum- marize the biggest challenges confronting HRM practi- tioners and offer substantive suggestions for improving the practice of HRM. Obviously, then, the chapters focus more on the future of the field than its past (which provides one more incentive to the reader to examine the precursors of contemporary HRM reform). We are more concerned with providing the reader with a sense of where the discipline is headed, rather than where it has been.

Each chapter was prepared specifically for inclusion in this volume. The authors are established figures in public sector HRM; many of them practice and consult in the field as well. They were selected on the basis of their recognized competence in, and past contributions to, the topical areas that are addressed in their essays. The present volume is almost completely different from its immediate predecessor. Of the twenty-seven chapters (seven more than in the last edition), ten are authored by individuals who were not included in previous edi- tions of the book. Only a few of the chapters might be considered updated versions of previous writings (and even these are each significantly updated). The num- ber of new authors and topics provide clear evidence

of the changing nature of HRM, the expanding ranks of scholars, and the inherent value found in the “new scholarship” of HRM (a promise that was made in the first edition). We confess to being quite pleased with the group that has been assembled to share their perspec- tives and hope that you will agree that their insights are worthy of recognition.

The contributions are organized into four broad sections: The Setting, The Techniques, The Issues, and Prospects/Conclusion. Section One provides a thorough treatment of the political, legal, institutional, and mana- gerial trends that serve as catalysts in the transformation of HRM. These chapters also contain sufficient contex- tual background to help contemporary students under- stand the significance of current developments across this panoramic field.

Section Two summarizes developments in the prac- tice of HRM, with special emphasis on emerging person- nel techniques and the ways that traditional approaches to the staffing function are being revised. Selections within Section Two address what are perhaps the most troublesome technical challenges of the age, including strategic HRM, performance appraisal, compensation dilemmas, benchmarking, and employee rights.

Section Three provides incisive discussions of eight critical issues in the field, including AA/EEO, gender issues, ethics, disability issues, veterans preference, labor relations, social media in the workplace, and HRM contracting.

Section Four—the conclusion—contains two chap- ters that offer both a prospective and retrospective cap- stone treatment of the field. Despite previous efforts to forecast the future that have humbled us, we venture once again fearlessly into the murky unknown.

As in the case with all four previous editions, a prime consideration in the design, preparation, and organi- zation of the book was that it be sufficiently readable for both graduate and undergraduate students. For this reason, the authors were asked to provide enough background information so that both beginning and advanced students could understand and benefit from the content. Additionally, the authors were requested to

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x p r e f a c e

furnish concrete examples and practical information to enhance the volume’s applicability to practitioners wish- ing to broaden their perspectives in the field. We are sat- isfied that these objectives have been met in every respect.

Our principal debt in assembling this anthology is to our contributing authors. They richly deserve our sincere thanks, for their efforts are obviously the heart and soul of what follows. Because there are so many luminaries and emerging scholars in the area of public sector HRM, it was very difficult to decide which ones to ask for contributions. One of our continuing objectives is to bring new perspectives to this work. In so doing, we sincerely hope that anyone not included in this par- ticular volume is not offended. With luck, there will be a seventh edition within a few years, thereby enabling us to call upon the talents of other leading scholars.

The contributors to the sixth edition of Public Human Resource Management: Problems and Prospects produced quality manuscripts and exhibited remarkable patience with our repeated requests for revision, clarification,

and elaboration. We hope that all of the contributors are aware of the depth and sincerity of our appreciation.

Finally, we wish to thank those kind academic souls who have adopted previous editions or their courses in public HRM. This book has proven to have remarkably long legs in the profession, a reality that could only be made possible by the support and thoughtfulness of our fellow HRM faculty colleagues. Should any of you wish to communicate with us about this volume, or to pro- pose future amendments or clarifications, please do not hesitate to do so.

The first five editions were coedited by Steve Hays of the University of South Carolina. Steve is content to allow HRM to move on without him, but he has left an indelible mark not only on this book, but on research and teaching in the field. We dedicate this sixth edition to Steve and his legacy in public HRM.

Richard C. Kearney Jerrell D. Coggburn

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PART I THE SETTING

Chapter 1 Competing Perspectives on Public Personnel Administration: Civil Service, Nonstandard Work Arrangements, Privatization, and Partnerships

Chapter 2 What Every Public Sector Human Resource Manager Should Know About the Constitution

Chapter 3 The Death and Life of Productivity Management in Government

Chapter 4 Human Resource Management in the Federal Government During a Time of Instability

Chapter 5 After the Recession: State Human Resource Management

Chapter 6 Strategic Human Resources Management at the Local Level: Balancing Enduring Commitments and Emerging Needs

Chapter 7 The Nonprofit Sector Labor Force

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2

C h a p t e r 1

C O M P E T I N G P E R S P E C T I V E S O N P U B L I C P E R S O N N E L A D M I N I S T R A T I O N : C I V I L S E R V I C E , N O N S T A N D A R D W O R K A R R A N G E M E N T S , P R I V A T I Z A T I O N , A N D P A R T N E R S H I P S

Donald E. Klingner University of Colorado at Colorado Springs

a b s t r a C t This chapter (1) presents a historical perspective on public human resource management; (2) examines the effect of privatization and partnerships on traditional HRM values and systems; (3) discusses how privatiza- tion, partnerships and nonstandard work arrangements affect productivity, and (4) explores how the structure of HRM and the role of managers and HR managers changes under these alternative values, systems, and strategies.

a h i s t o r i C a l p e r s p e C t i v e o n p u b l i C h u m a n r e s o u r C e m a n a g e m e n t Public human resource management (HRM) in the United States can be viewed from at least four perspec- tives (Klingner, Nalbandian, and Llorens 2010). First, it is the functions (planning, acquisition, development, and discipline) needed to manage HR in public agen- cies. Second, it is the processes by which public jobs, as scarce resources, are allocated. Third, it is the interaction

among fundamental societal values that often conflict. These values are responsiveness, efficiency, employee rights, and social equity. Responsiveness means a budget process that allocates positions and therefore sets priorities and an appointment process that consid- ers political or personal loyalty along with education and experience as indicators of merit. Efficiency means staff- ing decisions based on ability and performance rather than political loyalty. Employee rights mean selection and promotion based on merit, as defined by objective measures of ability and performance, and employees who are free to apply their knowledge, skills, and abili- ties without partisan political interference. Social equity means public jobs allocated proportionately based on gender, race, and other designated criteria. Fourth, public human resource management is the embodiment of human resource systems: the laws, rules, organiza- tions, and procedures used to fulfill personnel functions in ways that express the abstract values.

Historically, U.S. public HRM systems developed in evolutionary stages or eras, analytically separate but,

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C o m p e t i n g p e r s p e C t i v e s o n p u b l i C p e r s o n n e l a d m i n i s t r a t i o n 3

in practice, overlapping (see Table 1.1). As discussed in more detail below, in the patrician era (1789–1828), the small group of upper-class property owners who had won independence and established the national govern- ment held most public jobs. As this generation passed, an era of patronage emerged (1829–1882) during which public jobs were awarded according to political loyalty

Table 1.1 The Evolution of Public HRM Systems and Values in the United States

Stage of Evolution Dominant Value(s) Dominant System(s) Pressures for Change

Patrician Era (1789–1828)

Responsiveness “Government by elites” Political parties + Patronage

Patronage (1829–1882)

Responsiveness Patronage Modernization + Democratization

Professionalism (1883–1932)

Efficiency + Individual rights

Civil service Responsiveness + Effective government

Performance (1933–1964)

Responsiveness + Efficiency + Individual rights

Patronage + Civil service

Individual rights + Social equity

People (1965–1979)

Responsiveness + Efficiency + Individual rights + Social equity

Patronage + Civil service + Collective bargaining + Affirmative action

Dynamic equilibrium among four competing values and systems

Privatization (1980–present)

Responsiveness + Efficiency + Individual accountability + Limited government + Community responsibility

Patronage + Civil service + Collective bargaining + Affirmative action + Alternative mechanisms + Flexible employment relationships

Dynamic equilibrium among four progovernmental values and systems, and three antigovernmental values and systems

Partnerships (2002—present)

Responsiveness + Efficiency + Individual accountability + Limited government + Community responsibility + Collaboration

Patronage + Civil service + Collective bargaining + Affirmative action + Alternative mechanisms + Flexible employment relationships

Dynamic equilibrium among four progovernmental values and systems, and three antigovernmental values and systems

or party affiliation. Next, the increased size and com- plexity of public activities led to an era of professionalism (1883–1932) that defined public HRM as a neutral administrative function so as to emphasize moderni- zation through efficiency and democratization by allo- cating public jobs, at least at the federal level, on merit (Heclo 1977). The unprecedented demands of a global

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4 t h e s e t t i n g

depression and World War II led to the emergence of a hybrid performance model (1933–1964) that combined the political leadership of patronage systems and the merit principles of civil service systems. Next, social upheavals (1965–1979) presaged the emergence of the people era in which collective bargaining emerged to rep- resent collective employee rights (the equitable treat- ment of members by management through negotiated work rules for wages, benefits, and working conditions), and affirmative action emerged to represent social equity (through voluntary or court-mandated recruitment and selection practices to help ameliorate the under- representation of minorities and women in the work- force). Thus, by 1980 U.S. public HRM could be described as a dynamic equilibrium among four competing values, each championed by a particular system, for allocating scarce public jobs.

t h e e m e r g e n t p a r a d i g m s : p r i va t i z a t i o n a n d p a r t n e r s h i p s The privatization paradigm emerged at the end of the 1970s when President Carter campaigned by running against the national government as a Washington “outsider.” Following his election, he proposed the 1978 Civil Service Reform Act on grounds that included poor performance in the public service and difficulty in controlling and directing bureaucrats. Beginning in 1981, the Reagan administration, though starting from fundamentally different values and policy objectives, continued to cast government as part of the problem. Consequently, this paradigm shift was marked by increasing reliance on market-based forces, rather than program implementation by government agencies and employees, as the most efficacious tools of public policy. The emphasis on economic perspectives and adminis- trative efficiency reflected the intense pressures on the public sector to “do more with less.” This caused gov- ernments to become more accountable through such techniques as program budgeting, management by objectives, program evaluation, and management infor- mation systems. It also caused efforts to lower expen- ditures through tax and expenditure ceilings, deficit

reduction, deferred expenditures, accelerated tax collec- tion, service fees and user charges, and a range of legisla- tive and judicial efforts to shift program responsibilities and costs away from each affected government.

The 1990s and 2000s brought continued efforts to reduce government—either by increasing its respon- siveness and effectiveness or by “shrinking the beast” and putting more resources in the hands of indi- viduals and businesses. These were exemplified by Vice President Gore’s National Performance Review (National Performance Review 1993a, 1993b), aimed at creating a government that “works better and costs less” through fundamental changes in organizational structure and accountability, epitomized by the terms “reinventing government” or “new public manage- ment” (Osborne and Gaebler 1992). The Republican Party swept into control of Congress in 1994, 2002, and 2010 as a result of a shift toward three emergent nongovernmental values: personal accountability, limited and decentralized government, and community responsibility for social services. Proponents of per- sonal accountability expect people to make individual choices consistent with their own goals and accept responsibility for the consequences of these choices, rather than passing responsibility for their actions on to society. Proponents of limited and decentralized gov- ernment believe that government is to be feared for its power to arbitrarily or capriciously deprive individuals of their rights. They also believe that public policy, ser- vice delivery, and revenue generation can be controlled efficiently in a smaller unit of government in a way not possible in a larger one. And for some, a reduction in government size and scope is justified by perceived government ineffectiveness; by a high value accorded to individual freedom, responsibility, and accountability; and finally, by a desire to devote a smaller share of personal income to taxes. The most significant conse- quence of the emergence of the third value (community responsibility), at least as far as public HRM is con- cerned, has the delivery of local governments social services through NGOs funded by taxes, user fees, and charitable contributions.

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C o m p e t i n g p e r s p e C t i v e s o n p u b l i C p e r s o n n e l a d m i n i s t r a t i o n 5

Third-party social service provision has become more complex with an ideologically driven emphasis that directs contracting strategies towards faith-based organizations (FBOs). With the passage of the “charitable choice” component of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act, charitable choice has expanded to include a range of federal programs, such as Temporary Assistance to Needy Families (1996); Welfare to Work Formula Grants (1997); Community Services Block Grants (1998); and drug abuse treatment programs (2000). The White House Center for Faith-Based and Communities Initiatives (CFBCI) and five similar offices in the Departments of Education, Justice, Health and Human Services, Labor and Housing and Urban Development were established to contract with faith-based agencies nationwide. According to a study conducted by the Rockefeller Institute of Government (2003), thirty-two states had also contracted with FBOs to provide some social services, and eight states had enacted legislation requiring the inclusion of FBOs in contracting. More recently, state departments of labor received direc- tives from the U.S. Department of Labor (DOL) CFBCI requiring the development of state DOL strategic plans specifically aimed at increasing the number of faith- based grantees by providing training and technical assistance to these organizations as they competed for service provision contracts.

This emerging partnerships paradigm rests on the same values of personal accountability, limited and decentralized government, and community responsibility for social services that characterized the privatization paradigm, with an added strategic emphasis on coope- rative service delivery among governments, businesses, and NGOs. The strategic element of this paradigm is undergirded by the belief that concrete results in pub- lic service delivery can only be achieved by the skilled deployment of human assets regardless of the framework within which it occurs. This new framework’s advocates also argue that the skilled deployment of human assets is best accomplished outside of the traditional civil service model. This has combined with anti-union sentiment,

due also to public and legislative pressure to reduce the negative impacts of health care costs and defined benefit pension systems on state and local governments. These pressures increased dramatically due to the ideological effects of “Tea Party” Republicans in the 2010 midterm congressional elections. Because state and local govern- ments depend heavily on property taxes, the collapse of real estate markets beginning in 2008 stressed their budgets. At the same time, the “Great Recession” of 2008– 2011 resulted in decreased equity prices and returns and thus posed a long-term threat to the financial solvency of public employee pension systems.

As a result of combined financial pressures and anti- union sentiment, many states are rethinking and rein- venting their public personnel systems, from far-reaching efforts in Georgia and Florida, the abolition of public sector collective bargaining in Wisconsin, and other more nuanced efforts to enhance third-party service delivery options (Selden 2006; Cayer and Kime 2006; Naff 2006; Hays, Byrd, and Wilkins 2006; Fox and Lavigna 2006; Nigro and Kellough 2006; Bowman, West, and Gertz 2006; Coggburn 2006; Battaglio and Condrey 2006).

Privatization and partnerships both rely upon the same two basic HRM strategies: using alternative orga- nizations and mechanisms to deliver public services, and increasing the flexibility of employment relationships for the remaining public employees through a variety of nonstandard work arrangements (NSWAs).

Alternative Organizations and Mechanisms These alternatives include purchase-of-service

agreements, privatization, franchise agreements, subsidy arrangements, vouchers, volunteerism, and regulatory and tax incentives (International City Management Association 1989). These are not new. But they are increasingly common, and they supplant traditional service delivery by civil service employees hired through appropriated funding of public agencies.

Purchase-of-service agreements with other govern- mental agencies and NGOs have become commonplace. They enable cities and counties to offer services within a

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6 t h e s e t t i n g

given geographic area, utilizing economies of scale. They offer smaller municipalities a way of reducing or avoid- ing capital expenses, personnel costs, and political issues associated with collective bargaining, and legal liability risks. In addition, the use of consultants (individuals or businesses hired under fee-for-service arrangements on an as-needed basis) increases available expertise and managerial flexibility by reducing the range of qualified technical and professional employees that the agency must otherwise hire.

Privatization, as the term is generally used in the United States, means that while a public agency provides a particular service, the service is produced and deliv- ered by a private contractor (Savas 2000). It may result in the abolition of the agency (at times an intended ideo- logical goal). Privatization offers all the advantages of service purchase agreements but holds down labor and construction costs on a larger scale. It has become com- monplace in areas like solid waste disposal where there is an easily identifiable “benchmark” (standard cost and service comparison with the private sector) and where public agency costs tend to be higher because of higher pay and benefits (Kosar 2006; Siegel 1999; O’Looney 1998; Martin 1999).

Franchise agreements often allow businesses to monopolize a previously public function (e.g., cable TV and jitneys as a public transit option) within a geogra- phic area, charge competitive rates for it, and then pay the appropriate government a fee for the privilege. Cities encourage franchising because it reduces their own costs, provides some revenue in return, and results in continuation of a desirable public service.

Subsidy arrangements enable private businesses to provide public services funded by either user fees to clients or cost reimbursement from public agencies. Examples are emergency medical services provided by private hospitals and reimbursed by public health systems, and rent subsidies to enable low-income resi- dents to live in private apartments as an alternative to public housing projects.

Vouchers enable individuals to purchase public goods or services from competing providers on the open

market. For example, educational voucher systems allow parents to apply a voucher to defray the cost of education for their children at competing public or private institu- tions, as an alternative to public school monopolies.

Volunteers contribute services otherwise performed by paid employees, or not at all. These include commu- nity crime watch programs in cooperation with local police departments, classroom teachers’ aides who provide tutoring and individual assistance in many public schools, and community residents who volunteer services as individuals or through churches, and other nonprofit service agencies. Frequently, such contribu- tions are required to “leverage” a federal or state grant of appropriated funds. Though they would probably not consider themselves volunteers (and still less as public agency “clients”), prison inmates are often responsible for laundry, food service, and facilities maintenance.

Regulatory and tax incentives encourage the private sector to perform functions that might otherwise be performed by public agencies with public funds. These include the zoning variances for roads, parking, and waste disposal granted to condominium associations. In return, the association provides services normally performed by local government (e.g., security, waste disposal, and maintenance of common areas).

Nonstandard Work Arrangements All these alternative mechanisms provide public

services without using public employees and in many cases without using appropriated funds. Yet even in those cases where public services continue to be provided by public employees working in public agencies funded by appropriations, massive changes have occurred in employment practices. Chief among these are increased use of temporary, part-time, and seasonal employment and increased hiring of exempt employees (those outside the classified civil service) through employment contracts. Increasingly, public employers reduce costs and enhance flexibility by meeting minimal staffing requirements through career civil service employees and hiring other employees “at will” into temporary or part-time positions (Mastracci and Thompson 2005).

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C o m p e t i n g p e r s p e C t i v e s o n p u b l i C p e r s o n n e l a d m i n i s t r a t i o n 7

These temps usually receive lower salaries and benefits than their career counterparts and are certainly unpro- tected by due process entitlements or collective bargain- ing agreements. Alternatively, where commitment and high skills are required on a temporary basis, employers may seek to save money or maintain flexibility by using contract or leased employees in exempt positions. While contracts may be routinely renewed with mutual approval, such “employees” may also be discharged at will in the event of a personality conflict, a change in managerial objectives, or a budget shortfall. These professional and technical workers usually receive higher salaries and benefits than can be offered to even highly qualified civil servants, and they enable mana- gement to cut personnel costs quickly if necessary with- out having to resort to seniority-based layoffs and the bureaucratic chaos precipitated by the exercise of civil service “bumping rights.”

As this trend continues, the workforce of the future will include multiple work arrangements for workers hired under different terms and conditions. At a mini- mum, these include traditional employees hired to “per- manent” full-time or part-time positions to civil service positions that may also be covered by collective bargain- ing agreements. They also include other workers hired to NSWAs—temporary workers (neither unionized nor covered by civil service), contract workers (hired through temp agencies, individual performance contracts, or contracts with their private employers), and volunteers.

Recalling that the first definition of HRM is the policies and procedures that determine how employees are managed, these multiple systems have developed because of the advantages they offer employers. We see a shift toward NSWAs because of their presumed greater flexibility, efficiency, and ideological conformance with market values. In practice, this means less concern for traditional hiring, training, and performance evaluation practices and more concern for contract-based employ- ment. Contract workers are expected to have current competencies. Because their work is time-limited by the terms of a contract, counseling and performance appraisal are less vital than under collective bargaining

or civil service systems. Given the lack of career empha- sis or protection, sanctions increasingly involve nothing more than the nonrenewal of a contract with individuals or with a firm.

The new strategies diminish employee rights. It is more likely that employees hired at will into temporary and part-time positions will receive lower pay and ben- efits and will be unprotected by civil service regulations or collective bargaining agreements. Whether or not the political neutrality of public employees suffers in this environment is unknown presently, but it seems logical to assume that as the criteria for success become more arbitrary or capricious, civil service employees— particularly those in mid-management positions— will begin to behave more like the political appointees whose jobs depend on political or personal loyalty to elected officials (Brewer and Maranto 2000).

The new strategies also threaten social equity (Wilson 2006). Pay comparisons over the past twenty years have uniformly concluded that minorities and women in public agencies are closer to equal pay for equal work than are their private sector counterparts. Managerial consultants are overwhelmingly white and male. Many part-time and temporary positions are exempt from laws prohibiting discrimination against persons with disabilities or family medical responsibilities.

These complex systems create conflicting expec- tations and accountability based on political, admini- strative, and market perspectives. An organization that primarily manages contracts may not be able to ade- quately manage performance. When an organization’s workforce includes both NSWA workers and traditional employees, the result is always complexity and often confusion and uncertainty over the psychological con- tract (terms of employment) between the organization and its employees.

t h e e f f e C t s o f p r i va t i z a t i o n , p a r t n e r s h i p s , a n d n s Wa s o n p e r f o r m a n C e The impact of the new strategies on efficiency has been mixed. On the plus side, the change in public agency

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8 t h e s e t t i n g

culture toward identifying customers and providing market-based services increases productivity. And the threat of privatization or layoffs has forced unions to agree to pay cuts, to reduced employer-funded bene- fits, and to changes in work rules (Cohen and Eimicke 1994). But the personnel techniques that have become more common under these emergent systems may actually increase some personnel costs, particularly those connected with employment of independent contrac- tors, reemployed annuitants, and temporary employees (Peters and Savoie 1994). Downsizing may eventually lead to higher recruitment, orientation, and training costs and loss of the organizational memory and “core expertise” necessary to effectively manage contracting or privatization initiatives (Milward 1996). Minimum staffing usually results in increased payment of overtime and higher rates of employee accidents and injuries. As the civil service workforce shrinks, it is also aging. This means increases in pension payouts, disability retirements, workers’ compensation claims, and health- care costs.

What is emerging, then, is a human resource frame- work that paradoxically embraces both collaborative and control-oriented managerial styles, exposing the underlying tensions inherent in the values of moni- toring (compliance) and empowerment (outcomes). The tensions are evidenced by the debates over the desire to maintain control mechanisms associated with tra- ditional civil service systems (risk adversity) and the strategic attractiveness of responsiveness and mana- gerial empowerment (stewardship). Yet rising levels of ambiguity and turbulence at the national and state levels of government demand understandings that move beyond either/or thinking (Kisfalvi 2000).

Opposing and interwoven elements are evident throughout government as citizens and public officials struggle with the coexistence of authority and democ- racy, efficiency and creativity, freedom and control (Lewis 2000). The new HRM paradigm may be increasingly about the management of both control and collaboration and, more critically, about developing understandings and practices that accept, accommodate, and even

encourage these tensions. As an example, increasingly state government agencies are using a model of collabo- rative social service provision and approaches to address- ing social problems. These often involve overlapping partnerships with various public sector organizations, a recognition that the complexity of social issues is in part due to its residence within an interorganizational frame- work, and a recognition that these problems cannot be tackled by any one organization acting alone. These new and often confusing organizational relationships suggest that HR managers will not only need to manage control and collaboration simultaneously but also become much more sophisticated in the competencies needed to work across organizational boundaries (Klingner 2008).

However, collaboration brings its own sets of prob- lems in that contract compliance, rather than traditional supervisory practices, becomes the primary quality control mechanism. This creates a real possibility of fraud and abuse (Moe 1987). In this regard, state and local governments’ experience suggests that privatiza- tion and service contracting outcomes are most likely to be successful when governments:

• Pick a service with clear objectives that can be measured and monitored

• Use in-house or external competition and avoid sole source contracting

• Develop adequate cost accounting systems to com- pare service alternatives and monitor contractor performance

• Consider negative externalities such as impacts on an existing workforce, impacts on the local economy, other governments or functions, gov- ernmental policies, or certain societal groups (Siegel 1999)

The impact of contemporary HRM strategies on the last traditional value (political responsiveness) is also problematic. Public-private partnerships raise fundamental accountability and performance issues for elected officials and public managers (Klingner, Nalbandian, and Romzek 2002). The emergent values

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C o m p e t i n g p e r s p e C t i v e s o n p u b l i C p e r s o n n e l a d m i n i s t r a t i o n 9

and systems alter the fundamental role of government by placing greater emphasis on individuals and by shifting the focus of governmental social service delivery from a national to a state and local level. Continual budget cuts and pressures can result in a budget-driven rather than mission-driven agency. Budget-driven agen- cies that address public problems with short-term solu- tions designed to meet short-term legislative objectives are not likely to be effective. Long-range planning, or indeed any planning beyond the current budget cycle, is likely to become less important. Agencies will not be able to prepare effective capital budgets or to adequately maintain capital assets (human or infrastructure).

The conflict between traditional and emergent paradigms represents a fundamental conflict over the appropriate role of government in society. Supporters of privatization and partnerships see them as an oppor- tunity to reduce the size of government (“downsizing”) and reaffirm the basic competitive advantage of market-based models and the legitimacy of individual accountability and community responsibility. Critics see them as a retreat from hard-won historical advances in health, education, and welfare, and the acceptance— implicit or explicit—of increased income inequality and lack of opportunity for our country’s poorest and most disadvantaged citizens. For them, the elected and appointed officials who preside over the dismantling of social and public infrastructure for the sake of short- term political gain are abdicating their responsibility to the public welfare. Realistic budget and policy analysis requires that Republicans agree to raise at least some taxes and simplify the tax code by reducing loopholes and that Democrats agree to reduce some entitlement programs (e.g., Social Security and Medicare) by tying them to income or life expectancy. The alternative is an increased national debt that increasingly undermines economic growth and represents a profoundly inequi- tably transfer of wealth from future generations to current ones. Our current national political stalemate (2010–?), based on Republican control of the House and Democratic control of the Senate and presidency, represents the failure of both parties to engage in the

fundamental legislative process of rational decision making based on common acceptance of facts and compromise among competing values.

t h e C h a n g i n g s t r u C t u r e a n d r o l e o f p u b l i C h u m a n r e s o u r C e m a n a g e m e n t Three main groups share responsibility for public HRM. Political leaders are responsible for authorizing personnel systems and for establish ing their objec tives and funding levels. Personnel directors and specialists design and implement personnel systems or direct and help those who do. In civil service systems, they usually work within a personnel department that functions as a staff support service for manag ers and supervisors. Their main responsibility is achieving agency goals within a prescribed budget and a limited number of positions. HR directors and specialists both help line managers to use human resources effectively and con- strain their personnel actions within the limits imposed by political leaders, laws, and regulations. Managers and supervisors are responsi ble for implementing the rules, policies, and procedures that constitute personnel sys- tems, as they work with employees on a day-to-day basis.

While the basic HRM functions remain the same, the relative emphasis among functions and how they are performed differ depending on the system. HR under a patronage system heavily emphasizes recruitment and selection of applicants based on personal or political loyalty. Once hired, political appointees are subject to the whims of the elected official. Few rules govern their job duties, pay, or rights, and they are usually fired at will. Nor is development a priority.

In a civil service system, HR is a department or office that functions as an administrative support service to the city manager, school superintendent, hospital director, or other agency administra tor. Because civil service is a complete system, HR has a balanced emphasis on each of the four major personnel functions—planning, acqui- sition, development, and sanction. HR is responsible for maintaining the classification system of positions that have been categorized according to type of work and level of responsibility. The pay system is usually tied to

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10 t h e s e t t i n g

the classifica tion system, with jobs involving similar degrees of difficulty being compensated equally. HR is also responsible for developing and updating the agen- cy’s retirement and benefits programs. It also handles eligibility and processing of personnel action requests (retirements and other related changes in job status). HR is responsible for advertising vacant or new positions, reviewing job applications, administering written tests, and providing a ranked list of eligible appli cants to man- agers in units where vacancies actually exist. After the manager conducts interviews and selects one applicant, HR then processes the paperwork required to employ and pay the person. HR is responsible for orient ing new employees to the organization, its work rules, and the benefits it provides. It may conduct training itself or contract for it. HR implements employee grievance and appeals procedures, advises supervisors through- out the organiza tion of appro priate codes of conduct for employees, establishes the steps necessary to discipline an employee for violations of these rules, and develops procedures to follow in the event the employee appeals this disciplin ary action or files a grievance. If employees are covered by a collective bargaining agreement, HR is usually responsible for negotiating the agreement (or hiring an outside negotiator who performs this function), bringing pay and benefit provisions into accord with con- tract provisions, orienting supervisors on how to comply with the contract, and representing the agency in internal grievance resolution or outside arbitration procedures.

HR is responsible primarily for implementing HR acquisition rules emphasizing social equity for minori- ties, women, and persons with disabilities. Thus, it most heavily affects recruitment, selection, and promotion policies and procedures. The affirmative action director shares responsibility with the personnel director in this area. Once members of these protected classes are hired, other personnel systems (civil service or collective bargaining) influence the ways planning, development, and discipline occur.

In general, reliance on NGOs reduces the abso- lute number of public employees, thereby reducing the HR department’s functions. But it also increases

the importance of planning and oversight because these are necessary to estimate the type and number of contract employees needed to provide a desired level of service, develop requests for proposals to outside contractors, evaluate responses to proposals by comparing costs and services, and overseeing contract administra tion. HR directors, staff, and managers work increasingly with citizen volunteers and community- based organizations to supplement paid staff. In these cases, public managers need to become more skilled in recruiting, selecting, training, and motivating volunteer workers (Pynes 2009).

Flexibility in employment relationships is achieved primari ly by the increased use of tempo rary, part-time, and seasonal employ ment and by increased hiring of exempt employees (those outside the classified civil service) through employment contracts. Employee deve lopment is largely irrelevant: Most contingent workers are hired with the skills needed to perform the job immediately. Objective performance evaluation may still be required to maintain effectiveness, but not to maintain equity or discipline. Because at-will employees have no job retention rights, it’s easy for employers to control the terms of the relationship. If employees do their jobs adequately, they get paid; if not, they are simply released at the end of their contract and not called back when workload once again increases.

The evolution of public personnel management in the United States adds emergent systems without replacing their predecessors. Instead, new and emergent systems interact and conflict in ways that reflect the dynamic interaction of laws, conditions, and policies. But regard- less of the particular system or combination of systems that control HR policy and practice within a particular agency, the organizational structure and relationships within which public HR functions are carried out are established and regulated by law. Usually, the organiza- tion of public HRM follows a pattern that is tied closely to the evolution of personnel systems themselves. In the United States nationally, this process was represented by passage of the Pendleton Act (1883) and creation of the U.S. Civil Service Commission. This in some cases

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C o m p e t i n g p e r s p e C t i v e s o n p u b l i C p e r s o n n e l a d m i n i s t r a t i o n 11

followed and in other cases encouraged the establish- ment of similar state and local civil service agencies. As public personnel management tried to unify the oppo- sing roles of civil service protection and management effectiveness, the organizational location and mission of the central personnel agency became increasingly significant. In some cases it remained an independent commission. In others, it split into two agencies like the U.S. Merit Systems Protection Board and the U.S. Office of Personnel Management, one responsible for protecting employees against political interference under civil service rules, and the other responsible for administering and enforcing the chief executive’s HRM policies and practices in other executive branch agen- cies. As collective bargaining and affirmative action emerged as separate personnel systems, separate agen- cies were often created at all levels of government to focus on these responsibilities. Other agencies like a Department of Labor (federal, state, or local) may have additional personnel responsibilities for regulating public employee pay, benefits, and working conditions. Often, these agencies have conflicting or overlapping roles in particular HRM functions.

Over time, the role of HR in public agencies has evolved with changes in the political and administra- tive context. The primary roles have been watchdogs against the spoils systems, collaboration with legisla- tive restrictions, cooperation with management, and compliance with legislative mandates. During the professionalism era (1883–1932), HR professionals championed merit system principles because public HRM was generally viewed as a conflict between two systems, one evil and the other good. Public HR managers were considered responsi ble for guarding employ ees, appli cants, and the public from the spoils system. This required knowledge of civil service policies and procedures and the courage to apply them in the face of political pressure.

During the performance era (1933–1964), HR sought to maintain efficiency and accountability, and legislators and chief executives sought to maintain bureaucratic compliance through budgetary controls and position

management. Through such devices as personnel ceilings and average grade-level restric tions, it became the role of public personnel management to control the behavior of public managers and to help assure com- pliance with legislative authority. In effect, it was the responsibility of HR to synthesize two distinct values (bureaucratic compliance as the operational definition of organizational efficiency, and civil service protection as the embodiment of employee rights). There was ten- sion between them because they were both symbiotic and con flicting. And together with the value of bureau- cratic neutrality, they supported the concept of political responsiveness.

During the people era (1965–1979) the focus of public HRM shifted to consultation as HR managers demanded flexibility and equitable reward allocation through such alterations to classification and pay systems as rank- in-person personnel systems, broad pay banding, and group performance evalua tion and reward systems. This trend coincided with employee needs for utiliza tion, develop ment, and recognition.

In the privatization era (1980–present), public HR still works consultatively with agency managers and employ- ees and with compliance agencies. But its role and objectives are more contradictory. First, HR is required, more than ever, to manage government employees and programs in compliance with legislative and public man- dates for cost control. Given the common public and legisla tive presumption that the public bureau cracy is an enemy to be controlled rather than a tool to be used to accomplish public policy objectives, its authority may be diminished by legislative micromanagement, or the value of cost control may be so dominant as to preclude concern for employee rights, organizational efficiency, or social equity. Second, HR may work increasingly with volunteers and NGOs (particularly FBOs). Because many public employees (particularly school teachers and administra tors, police, and firefighters) are still covered by union contracts and collective bargaining agreements, civil service and colle ctive bargaining are still important. But as risk management, cost control, and management of other types of employment contracts

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12 t h e s e t t i n g

become more impor tant, a calculating perspective of the joint possibili ties for organiza tional productivity and individual growth tends to supplant a uniform and idea- listic view of public services motivations. This represents a narrowing of the public HR perspective.

Third, and somewhat paradoxically, even as this minimalist view of personnel management emerges, there are countervailing pressures to develop an employment relation ship characterized by commitment, teamwork, and innovation. Productivity is prized, risk taking is espoused, and variable pay systems that reward indi- vidual and group performance are touted. Perhaps the key to the paradox is the emerging distinc tion between “core employees” (those regarded as essential assets) and “contingent workers” (those regarded as replaceable costs). It is likely that public HR success will continue to require the ability to develop two divergent personnel systems, one for each type of worker within a dual labor

market system and to maintain both at the same time despite their conflicting objec tives and assumptions.

With the emergence of the partnership era (2002– present), public HR is increasingly expected to operate within a framework of structures, process, and people that are to a large extent outside of immediate control yet are part of the collective enterprise. The ability to manage tensions will be the defining charac- teristic in shaping and managing collaborative agendas. Managing these tensions will be even more difficult as frequent changes in government policy and in part- ner organizations impact the roles of and job changes for public sector employees. Recognizing the effects of emerging structures and processes on employment systems, mobilizing and capacity building will be the benchmarks of collaborative success.

The impact of changing values and systems can be seen in Table 1.2.

Table 1.2 The Role of Public Human Resource Management in the United States

Stage of Evolution Dominant Value(s) Dominant System(s) HRM Role

Patrician Era (1789–1828)

Responsiveness “Government by elites” None

Patronage Era (1829–1882)

Responsiveness Patronage Recruitment and political clearance

Professional Era (1883–1932)

Efficiency + Individual rights

Civil service “Watchdog” over agency managers and elected officials to ensure merit system compliance

Performance Era (1933–1964)

Responsiveness + Efficiency + Individual rights

Patronage + Civil service

Collaboration with legislative limits

People Era (1965–1979)

Responsiveness + Efficiency + Individual rights + Social equity

Patronage + Civil service + Collective bargaining + Affirmative action

Compliance + Policy implementation + Consultation

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C o m p e t i n g p e r s p e C t i v e s o n p u b l i C p e r s o n n e l a d m i n i s t r a t i o n 13

Stage of Evolution Dominant Value(s) Dominant System(s) HRM Role

Privatization Era (1980–present)

Responsiveness + Efficiency + Individual accountability + Limited government + Community responsibility

Patronage + Civil service + Collective bargaining + Affirmative action + Alternative mechanisms + Flexible employment relationships

Compliance + Policy implementation + Consultation + Contract compliance + Strategic thinking about HRM

Partnerships (2002—present)

Responsiveness + Efficiency + Individual accountability + Limited government + Community responsibility + Collaboration

Patronage + Civil service + Collective bargaining + Affirmative action + Alternative mechanisms + Flexible employment relationships

Compliance + Policy implementation + Consultation + Contract compliance + Strategic thinking about HRM + Tension management + Boundary spanning

C o n C l u s i o n Public HRM can be viewed from several perspectives. First, it is the planning, acquisition, development, and discipline functions needed to manage human resources in public agencies. Second, it is the process by which public jobs are allocated as scarce resources. Third, it reflects the influence of seven symbiotic and competing values (political responsiveness, efficiency, individual rights, and social equity under the traditional pro- governmental paradigm; and individual accountability, downsizing and decentralization, and community res- ponsibility under the emergent privatization and partner- ships paradigms) over how public jobs should be allocated. Fourth, it is the personnel systems (i.e., laws, rules, and pro- cedures) used to express these abstract values—political appointments, civil service, collective bargaining, and affir- mative action under the traditional model; and alternative mechanisms and flexible employment relationships under the emergent privatization and partnerships paradigms.

Conceptually, U.S. public HRM can be understood as a historical process through which new systems emerge to champion emergent values, integrate with

the mix, and in turn supplement—but not supplant or replace—their predecessors. From a practical perspec- tive, this means that the field of public HRM is laden with contradictions in policy and practice resulting from often unwieldy and unstable combinations of values and systems and fraught with the inherent difficulties of uti- lizing competitive and collaborative systems to achieve diverse goals. Civil service is the predominant public HRM system because it has articulated rules and proce- dures for performing the whole range of HRM functions. Other systems, though incom plete, are nonetheless legitimate and effective influences over one or more HRM functions. While HR functions remain the same across different systems, their organizational location and method of performance differ depending upon the system and on the values that underlie it.

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Brewer, G., and R. Maranto. 2000. Comparing the Roles of Political Appointees and Career Executives in the U.S. Federal Executive Branch. American Review of Public Administration, 30(1), 69–86.

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Accountability. American Review of Public Administration, 32(2), 117–144.

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C h a p t e r 2

W H A T E V E R Y P U B L I C S E C T O R H U M A N R E S O U R C E M A N A G E R S H O U L D K N O W A B O U T T H E C O N S T I T U T I O N

David H. Rosenbloom American University

Joshua Chanin San Diego State University

C onstitutional law is central to public human resource management (PHRM) at all levels of American government. Judicial branch interpretation of constitutional law regulates in one way or another merit examinations, recruitment, selection, training, promotions, affirmative action and diversity efforts, drug testing, and disciplinary procedures. These court decisions are not just another concern to be balanced among the many competing pressures that public managers face; they form the basis of our public admin- istration and are central to its operation. Because public administrators take an oath to support the Constitution, the values embodied in constitutional law decisions are ethical and normative guides for the exercise of administrative discretion (Rohr 1978, 1986). If indi- vidual administrators or local governmental agencies violate the constitutional rights of applicants or employ- ees, they are subject to legal action and may be held lia- ble for monetary damages. Consequently, public human resource managers are expected to maintain a sophis- ticated knowledge of constitutional law. This chapter

explains the basic structure underlying current consti- tutional doctrine and reviews the leading cases in the areas of greatest concern to today’s PHRM. The follow- ing eight sections will rely on an up-to-date survey of relevant case law to familiarize those interested in PHRM with the application of the U.S. Constitution’s First, Fourth, Fifth, and Fourteenth Amendments to public employment; as well as with the structure of pub- lic administrators’ potential liability for constitutional torts arising out of breaches of their subordinates’ or others’ constitutional rights. The chapter concludes with a brief summary of these constitutional concepts and a few examples of the critical role constitutional law plays in maintaining the integrity of our public administration.

C o n s t i t u t i o n a l D o C t r i n e Constitutional law has not always been central to the operation of our public administrative agencies. As surprising as it may seem, prior to the 1950s public employees in the United States had very few federally

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protected constitutional rights, and even less of an ability to assert these rights effectively within the framework of their employment. These public positions were governed by the “doctrine of privilege,” a constitutional reasoning that held that because public employment was a privilege rather than a right, it could be offered on almost any terms the governmental employer saw fit, no matter how arbitrary. Not having a right to a position in the public service, the employee, upon dis- missal, lost nothing to which he or she was entitled. As Justice Oliver Wendell Holmes made clear in an early case establishing the constitutionality of disciplining public employees for the content of their speech, “The petitioner may have a constitutional right to talk politics, but he has no constitutional right to be a police- man” (McAuliffe v. New Bedford 1892: 220). Under this approach, the Constitution failed to provide public employees and applicants with the very basic protections enjoyed by private citizens.

Although the doctrine of privilege had a certain logic, it also ignored the realities of citizens’ interactions with government in the modern administrative state. If the Constitution did not protect public employees and applicants fired or denied jobs for virtually any reason, would not the same principle apply to other kinds of privileges, such as welfare benefits, government con- tracts, passports, public housing, drivers’ licenses, and so forth? Could those be denied, as public employment sometimes was, partly because the individual favored racial integration, read Tom Paine or The New York Times, failed to attend church services, or engaged in a host of nonconformist and unconventional activi- ties (Rosenbloom 2014: 119–122)? To the extent that “big government” creates a dependency of the people on government benefits, which were considered privi- leges, strict adherence to the doctrine of privilege would enable government to attach conditions to their receipt that could undermine recipients’ constitutional rights. For instance, eligibility for unemployment benefits could require one to be willing to work on Saturday in violation of her constitutional right to free exercise of religion (Sherbert v. Verner 1963).

Notwithstanding a variety of twists and turns in the development of case law since the 1950s, the courts eventually developed an alternative method for analy- zing the constitutional rights of public employees. The fundamental underlying premise is that “the govern- ment’s interest in achieving its goals as effectively and efficiently as possible is elevated from a relatively sub- ordinate interest when it acts as sovereign [dealing with citizens] to a significant one when it acts as employer. The government cannot restrict the speech of the pub- lic at large just in the name of efficiency. But where the government is employing someone for the very purpose of effectively achieving its goals, such restrictions may well be appropriate” (Waters v. Churchill 1994: 675). The contemporary approach, generally termed the “public service model,” calls on judges to balance four often competing concerns: (1) the public employee’s or appli- cant’s interests as a member of the political community in exercising constitutional rights and enjoying consti- tutional protection from arbitrary, discriminatory, or repressive treatment by the governmental employer; (2) the government’s interest as an employer in hav- ing an efficient and effective workforce; (3) the public’s interest in the operation of public administration and government more generally; and (4) the judiciary’s inter- est in avoiding undue involvement in day-to-day PHRM decisions (Harvard Law Review 1984; Garcetti v. Ceballos 2006; Rosenbloom 2014: 149–152).

Importantly, depending on the specific circum- stances, the public’s interest can coincide with either that of the employee or the government. For instance, the public shares a strong interest in robust First Amendment protection of whistle-blowers who alert the media to gross governmental mismanagement or government-created or -abetted dangers to the community’s health or safety. Conversely, the govern- ment and the public share an interest in having very limited constitutional constraints on the dismissal of inefficient, dishonest, or unreliable civil servants. It is important to note that under the public service model all public employees can assert some of the rights they have as citizens or legal residents against

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their governmental employers. Consequently, the term at-will employment is a misnomer in the public sector. It refers to employees who lack a property right or interest in their positions (e.g., those who lack civil service protections against arbitrary treatment). Such employees have no constitutional procedural due pro- cess protections against dismissals or other adverse actions for ordinary work-related causes, such as ineffi- ciency or insubordination. However, due process also applies to liberty interests and public employees retain First, Fourth, Fifth, and Fourteenth Amendment rights to some degree of freedom of speech, association, and exercise of religion, privacy, and equal protection of the laws.

Despite its imperfections, the public service model is certainly an advance over less complicated approaches such as the doctrine of privilege. However, because this approach requires a subjective and often elaborate bal- ancing of the interest of employees, government, and the public, reasonable judges and human resource managers will often disagree on what the Constitution requires in specific circumstances. Judicial decision making under the public service model not only has the potential to cause disagreement; it can also generate constitutional decisions that are difficult to follow and apply to specific personnel decisions. As then Supreme Court Justice, and later Chief Justice, William Rehnquist noted:

This customary “balancing” inquiry conducted by the Court . . . reaches a result that is quite unobjec- tionable, but it seems to me that it is devoid of any principles which will either instruct or endure. The balance is simply an ad hoc weighing which depends to a great extent upon how the Court subjectively views the underlying interests at stake. (Cleveland Board of Education v. Loudermill 1985: 562)

Rehnquist was specifically addressing procedural due process issues involved in the dismissal of a munic- ipal employee. Much the same can be said of judicial decision making regarding free speech and other areas under the public service model, as is demonstrated by

the following review of the contemporary constitutional law of public personnel.

F r e e D o m o F s p e e C h Rankin v. McPherson (1987) outlines the current approach for analyzing public employees’ constitutional rights to nonpartisan free speech. Ardith McPherson was a nineteen-year-old probationary clerk in the office of Constable Rankin in Texas. While talking with a coworker (who was apparently also her boyfriend) shortly after the assassination attempt on President Ronald Reagan, she remarked, “Shoot, if they go for him again, I hope they get him” (322). Another office employee overheard her remark and reported it to Constable Rankin, who fired McPherson after she admitted making the comment. Believing that the dismissal violated her right to free speech under the First and Fourteenth Amendments,1 McPherson sued for reinstatement, back pay, and other relief. In analyzing the case, the Supreme Court’s majo- rity noted that “even though McPherson was merely a probationary employee, and even if she could have been discharged for any reason or for no reason at all, she may nonetheless be entitled to reinstatement if she was discharged for exercising her constitutional right to freedom of expression” (324). This is an example of why so-called at-will employment is an inapt term in contemporary PHRM.

The Court went on to explain the logical structure of public employees’ right to free speech, beginning with whether the employee’s remark touched on a matter of public concern (that is, of potential interest to the public). If a remark relates to a matter of public concern, it is con- sidered of value to the public’s informed discussion of government and public policy. Such comments are part of the free marketplace of ideas that is vital to the operation of our constitutional democracy. By contrast, statements of purely private concern, such as what one employee thinks of another’s personality, intelligence, or clothes, are afforded minimal (if any) protection when they inter- fere with the proper functioning of government offices.

In Rankin, a 5–4 majority concluded that McPherson’s remark touched upon a matter of public concern. It had

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been made in the context of a discussion of Reagan’s policies, and McPherson, an African American, appa- rently offered it as a way of punctuating her disdain for the administration’s approach to minorities.2 Next, upon determining that McPherson’s comment touched on a matter of public concern, the Court proceeded with the balancing required by the public service model. When weighing the government’s interest in discharging an employee for statements that somehow undermine the mission of the public employer, courts must consider the responsibilities of the employee within the agency. An employee’s burden of caution and responsibility for the words he or she speaks will vary with the extent of authority and interaction with and accountability to the public that the employee’s role entails. Where, as in McPherson’s case, “an employee serves no confiden- tial, policymaking, or public contact role,” the potential harm to the public office due to that employee’s private speech is minimal and is outweighed by the employee’s First Amendment rights (328).

Public employees’ free speech protections include a right to “whistle-blow,” which generally involves alert- ing elected officials or the public to gross waste, fraud, abuse, mismanagement, or specific government-created or abetted dangers to the health, security, or safety of the community. The Supreme Court has reasoned that due to their positions inside government, public employees are sometimes uniquely able to contribute to the “free and open debate, which is vital to informed decision-making by the electorate” and “accordingly it is essential that they be able to speak out freely with- out fear of retaliatory dismissal” (Pickering v. Board of Education 1968: 571–572).

A public employee’s First Amendment protection for whistle-blowing and speaking out about their agencies’ decision making and performance was narrowed by the Court’s decision in Garcetti v. Ceballos (2006). There, the Court held that the First Amendment does not protect public employees’ speech made pursuant to their pro- fessional duties, regardless of whether the content of the remarks is deemed a matter of public concern. In the 5–4 Garcetti holding, the Court’s conservative majority

conjured up the doctrine of privilege in determining that “Restricting speech that owes its existence to a public employee’s professional responsibilities does not infringe any liberties the employee might have enjoyed as a pri- vate citizen. It simply reflects the exercise of employer control over what the employer itself has commissioned or created” (Garcetti v. Ceballos 2006: 421–422). In short, a public employee’s expression as part of his or her work product does not enjoy First Amendment protection.3

The Court’s majority opinion in Garcetti drew a con- fusing distinction between the rights of individuals as public employees and as citizens: “refusing to recognize First Amendment claims based on government employ- ees’ work product does not prevent them from participat- ing in public debate. The employees retain the prospect of constitutional protection for their contributions to the civic discourse. This prospect of protection, however, does not invest them with a right to perform their jobs however they see fit” (Garcetti v. Ceballos 2006: 422). This seems to suggest that whistle-blowers have more consti- tutional protec tion in their role as private citizens than they do as public employees. In other words, an employee garners more First Amendment protection if he or she raises a concern through external channels such as the media rather than through the professional chain of com- mand or other internal channels established to protect whistle- blowers. Furthermore, rather than relying on the First Amendment to shield them from retaliatory action, the Court urged public employees who whistle-blow to familiarize themselves with and rely on protective stat- utes, such as the federal Civil Service Reform Act of 1978, as well as relevant state and local statutory provisions. If a statement is covered by the terms of such statutes, it is automatically considered a matter of public concern and the government is prohibited from retaliating, regardless of how disruptive the comments may be.

In Lane v. Franks (2014: 2), the Court attempted to further clarify the Garcetti holding by drawing a distinc- tion between work product speech and “speech [on a matter of public concern] that simply relates to public employment or concerns information learned in the course of public employment,” which continues to enjoy

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constitutional protection. In practice, however, distin- guishing between speech that is part of a work assign- ment and speech resulting from something learned on the job is sometimes likely to be difficult. Consequently, public sector human resource managers should be cau- tious in applying the Garcetti and Franks rulings.

Public employees’ constitutional right to free speech does not extend to partisan management or campaign- ing. In the Supreme Court’s view, the governmental interests in workplace efficiency and the appearance of partisan neutrality outweigh the damage that gov- ernmental restrictions on political activity do to pub- lic employees’ rights. Such measures also protect civil servants from being coerced by elected and politically appointed officials to support parties and candidates (United Public Workers v. Mitchell 1947; Civil Service Commission v. National Association of Letter Carriers 1973). The Court has given wide berth to governmental employers in this policy area by allowing considerable flexibility in the drafting of restrictions (Broadrick v. Oklahoma 1973).

Of course, the fact that political neutrality regula- tions are apt to be constitutional does not mean that governments will choose to impose them. The trend has been away from comprehensive restrictions on public employees’ participation in partisan activities. For example, the 1993 Federal Hatch Act reform mod- ified a variety of restrictions, some of which reached back to the early 1900s (see Rosenbloom 1971: 94–110). The Hatch Act reforms allow most federal employees to distribute partisan campaign literature, make speeches, hold offices in political organizations, stuff envelopes with campaign literature, make phone calls as part of a partisan political campaign, and solicit votes (though not funds). The amended law does not extend to mem- bers of the Senior Executive Service, however, and exempts some agencies, including the Merit Systems Protection Board, and positions, such as Administrative Law Judge, on grounds that overt partisanship would undermine their missions or functions. The Hatch Act Modernization Act of 2012 reduced restrictions on state and local employees’ right to run for partisan office

and exempted District of Columbia employees from many of the Hatch Act restrictions previously applying to them. The federal Office of Special Counsel receives complaints of violations of the Hatch Act and provides advisory opinions on its application.

Can whistle-blowing and related speech on matters of public concern always be distinguished from partisan expression? The answer is clearly no, but the Supreme Court has yet to be confronted with the need to create a legal distinction between them. In terms of PHRM, therefore, some uncertainty remains in this area, espe- cially during electoral campaign periods.

Applying the public service model to employees’ speech can sometimes be further complicated by dis- putes over the exact content of the remarks at issue. In cases where the interpretations of speakers and bystand- ers differ, the public employer is permitted to act on what it reasonably believes was said, even in the absence of substantial evidence. The Supreme Court case law requires merely that the employer take reasonable steps to find out what the employee may actually have said. However, the Court’s guidance in this area has been exceptionally vague: “only procedures outside the range of what a reasonable manager would use may be con- demned as unreasonable” (Waters v. Churchill 1994: 678).

It is clear that the Supreme Court has given public human resource administrators much to think about regarding the scope of public employees’ constitu- tionally protected speech. In sum, the following must be considered: What did the employee actually say? Were the remarks on a matter of public concern? Were they made pursuant to an employee’s official duties as opposed to being based on something that he or she may have learned on the job? What was the specific context in which they were uttered? What is the nature of the employee’s position with reference to confiden- tiality, policy making, and public contact? What is the relative value of the remarks to the public discourse? How great are the remarks’ potential for disruption? To these factors must be added others from earlier case law, including whether the speech involves prohibited political partisanship, suggests disloyalty to the United

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States, or is so without foundation that the employee’s basic competence is called into question. Under the circumstances, it is not surprising that the Supreme Court admits, “competent decision-makers may reason- ably disagree about the merits of a public employee’s First Amendment claim” (Bush v. Lucas 1983: note 7).

F r e e D o m o F a s s o C i a t i o n The contemporary constitutional law regarding public employees’ First Amendment right of freedom of associa- tion is also central to some aspects of PHRM. In general, public employees’ right to join organizations voluntarily (including political parties, labor unions, and even extremist racist and other antisocial groups) is well estab- lished, as is their right to refrain from associating with or supporting organizations (AFSCME v. Woodward 1969; Elfbrandt v. Russell 1966; Shelton v. Tucker 1960; Elrod v. Burns 1976; Abood v. Detroit Board of Education 1977). However, two areas of PHRM that have been specifically “constitutionalized” in this context should be noted.

First, it is possible for union security agreements to violate public employees’ constitutionally protected freedom not to associate; no public employee can be required to join a union as a condition of holding his or her job. However, an agency shop is permitted: This arrangement requires nonunion members to pay a “counterpart” or “fair share” fee to the union that rep- resents their collective bargaining unit. In Abood v. Detroit Board of Education (1977) the Supreme Court “rejected the claim that it was unconstitutional for a public employer to designate a union as the exclusive collective-bargaining representative of its employees, and to require nonunion employees . . . to pay a fair share of the union’s cost of negotiating and administer- ing a collective bargaining agreement” (Chicago Teachers Union v. Hudson 1986: 243–244). But the Court also held that “nonunion employees do have a constitutional right to ‘prevent the Union’s spending a part of their required service fees to contribute to political candidates and to express political views unrelated to its duties as an exclu- sive bargaining representative’” (Chicago Teachers Union v. Hudson 1986: 244).

Certain procedural safeguards accompany a public employee’s First Amendment protection against being compelled to underwrite a union’s political agenda. In the Supreme Court’s words, “the constitutional require- ments for the Union’s collection of agency fees include an adequate explanation of the basis for the fee, a rea- sonably prompt opportunity to challenge the amount of the fee before an impartial decision maker, and an escrow account for the amounts reasonably in dispute while such challenges are pending” (Chicago Teachers Union v. Hudson 1986: 249). In Knox v. Service Employees International Union (2012), the Supreme Court added the requirement that “when a public-sector union imposes a special assessment or dues increase,” as opposed to annual dues, “the union must provide a fresh . . . notice [to nonmembers in the bargaining unit] and may not exact any funds from nonmembers without affirmative consent” (Knox v. Service Employees International Union 2012: 22). In other words, with special assessments and increases, the nonmember employees must have the opportunity to opt in before the union can deduct funds from their paychecks rather than to opt out afterward. Knox strengthens public employees’ First Amendment right not to be compelled to support causes that they oppose. Undoubtedly, though, it will make it more difficult for unions to raise funds to oppose unforeseen political initiatives, such as efforts to reduce public employees’ compensation to limit state or local govern- mental budgetary shortfalls.

Second, beginning with its holding in Elrod v. Burns (1976), the Court began to establish substantial consti- tutional barriers to the use of political partisanship in public personnel decisions. Elrod was triggered when the newly elected sheriff of Cook County, Illinois, fired or threatened to dismiss sheriff’s office employees who were not members of or sponsored by the Democratic Party. The employees bringing the suit were all Republicans holding non-civil service positions and had no statutory or administrative protection against arbitrary discharge. The Court held for the first time that patronage dismissals could violate public employees’ freedom of association and belief. However, it was divided and unable to form

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a majority opinion on the standard that the government must meet when dismissing someone based on partisan affiliation.

Four years later, in Branti v. Finkel (1980), the Court revisited the issue of patronage dismissals. Two employ- ees of the Rockland County, New York, Public Defenders Office were dismissed solely due to their affiliation with the Republican Party. The Court’s majority now agreed that “the ultimate inquiry is not whether the label ‘policy maker’ or ‘confidential’ fits a particular posi- tion; rather, the question is whether hiring authority can demonstrate that party affiliation is an appropriate requirement for the effective performance of the pub- lic office involved” (518). This standard places a heavy burden of persuasion on elected officials and political appointees who would dismiss employees based on their partisan affiliation.

The next patronage case to reach the Supreme Court was Rutan v. Republican Party of Illinois (1990). The gov- ernor of Illinois ordered a hiring freeze prohibiting state officials from filling vacancies, creating new positions, or recalling furloughed employees without his “express permission.” About 5,000 positions became open annu- ally and several employees who were denied promo- tions, transfers, or recalls charged that the governor was “operating a political patronage system” by granting permission to fill openings only with employees hav- ing “Republican credentials” (62, 67). The Court held that “the rule of Elrod and Branti extends to promotion, transfer, recall, and hiring decisions based on party aff i- liation and support” (79). Accordingly, for most intents and purposes, partisanship is an unconstitutional justi- f ication for taking public personnel actions.

In reaching these decisions regarding public emplo- yees’ freedom of association, the Supreme Court consid- ered the various claims that union security arrangements strengthen labor-management relations and that patro- nage promotes democracy and loyalty to elected offi- cials, as well as governmental efficiency. However, using the public service model, the Court concluded that these interests could be secured by means that were less invasive of public employees’ First Amendment rights.

The patronage cases illustrate that constitutional law is forever changing and that even “a practice as old as the Republic” may eventually succumb to new constitu- tional thinking (Elrod v. Burns 1976: 376).

p r i va C y The Fourth Amendment affords protection to private individuals against “unreasonable” government searches and seizures. Traditionally, courts have addressed Fourth Amendment issues in the criminal justice con- text. During the 1980s, however, as drug testing became common practice, the scope of the amendment’s applica- tion to public employees emerged as an important issue in PHRM. In law enforcement cases, the amendment requires that searches and seizures be pursuant to war- rants, or, where these are impracticable, probable cause (reasonable suspicion that an individual is engaged in criminal wrongdoing). In applying the public service model, courts have construed the Fourth Amendment to permit government employers to meet a much lower standard to justify administrative (non-law enforcement) searches. Consistent with the public service model, this lower threshold both manifests and facilitates the government’s significant interest in the performance of its employees and the efficiency of its agencies.

In O’Connor v. Ortega (1987), a divided Supreme Court held that “individuals do not lose Fourth Amendment rights [against unreasonable government searches and seizures] merely because they work for the government instead of a private employer” (723). The justices also agreed that the relevant threshold question is whether the employee has a reasonable expectation of privacy in the workplace. Such an expectation is defined as one that, according to the courts, society is prepared to share. If there is no reasonable expectation of privacy, then the search will not violate the Fourth Amendment. If there is such an expectation, then the search must be reason- able in its inception and scope. In practice, this approach often requires that judges analyze cases individually on their own merits rather than according to broad principles. O’Connor requires that workplace searches of offices, desks, files, and so forth be based on a reasonable

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suspicion that an employee may have engaged in behav- ior for which discipline would be appropriate.

In City of Ontario v. Quon (2010), the Supreme Court extended O’Connor’s logic to the “electronic sphere” (760). The extent to which a governmental employer can obviate its employees’ Fourth Amendment protec- tions against administrative searches through policy statements regarding expectations of privacy remains uncertain. In Quon, Ontario’s “Computer Policy stated that ‘[u]sers should have no expectation of privacy or confidentiality when using’ City computers” (758). Whether that policy extended to Quon’s text messag- ing was in dispute. However, the Court held that even if Quon had a reasonable expectation in his texting, the City’s search of his messages was reasonable in its incep- tion and scope because “a reasonable employee would be aware that sound management principles might require the audit of messages to determine whether . . . pager[s] [were] being appropriately used” (762). While ruling against Quon based on the specific facts of the case, the Court left open the issue of when, if ever, public employees might have a reasonable expectation of privacy in their use of government owned computers, pagers, and other electronic devices because “[a] broad holding concerning employees’ privacy expectations vis-à-vis employer-provided technological equipment might have implications for future cases that cannot be predicted” (760).

The Supreme Court has also held that in certain cases where the “special needs” of the government outweigh the privacy rights of individuals, public employers may conduct warrantless searches, even in the absence of a reasonable suspicion that an employee has engaged in wrongdoing. In most of these situations, the govern- ment’s interests (as well as the public’s) are asserted through suspicionless drug-testing programs, which randomly test certain public employees, regardless of whether there is a reasonable basis for believing that any of these employees use illegal drugs. For example, in Skinner v. Railway Labor Executives Association (1989), the Court held that the Federal Railroad Administration (FRA) may subject certain railroad employees, although

working for private corporations, to random, suspi- cionless blood and urine tests for the presence of drugs or alcohol. The Court reasoned that the government’s legitimate interest in protecting its citizens from railroad employees under the influence of alcohol or drugs sig- nificantly outweighed the Fourth Amendment privacy interests of the employees. In National Treasury Employees Union v. Von Raab (1989), the Court extended this ratio- nale to those public employees who carry firearms or are engaged in drug interdiction. Accordingly, the Court noted that such employees have a reduced expectation of privacy “by virtue of the special, and obvious, physical and ethical demands of those positions” (711). HIV and other health-related testing programs present similar legal issues. In this context, blood- and urine-testing regimes must be reasonable in terms of purpose and procedure. However, as such practices become more common it is increasingly difficult for employees and applicants to claim that they violate a reasonable expec- tation of privacy (see, e.g., Fowler v. New York 1989).

Further, anyone engaged in law enforcement, public safety, and national security positions can be subjected to a reasonably designed suspicionless drug-testing program. Public human resource managers should rem- ember that such testing programs are only for admini- strative objectives, such as greater cost- effectiveness, safety, health, and productivity. Searches for potential criminal punishment require warrants or probable cause, without which evidence generated by them usually may not be used as a basis for prosecution.

l i b e r t y The broad issue of public employees’ constitutional liberty has also been the subject of significant litigation. This area of jurisprudence, called substantive due process, focuses on the meaning of the word liberty in the Fifth and Fourteenth Amendments, which respectively prohibit the federal government and states (and their political subunits) from depriving anyone within their jurisdic- tions of life, liberty, or property without due process of law. Courts have interpreted the due process clause to include those fundamental rights that are “implicit in

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ordered liberty” and are “deeply rooted” in our society’s history and traditions. Many of these rights, including, for example, the right to use contraception or the right to travel, are not mentioned explicitly in the text of the Constitution.

It is common, even natural, for government employ- ers to exercise control over public employees, par- ticularly where matters of public policy, workplace efficiency, and employee morale are concerned. To this end, Senator Sam Ervin found that in the 1960s public employees were requested “to lobby in local city councils for fair housing ordinances, to go out and make speeches on any number of subjects, to supply flower and grass seed for beautification projects, and to paint other people’s houses” (United States Senate 1967: 9). Today, it is more common for federal employers to pressure employees to participate in blood drives, charitable cam- paigns, and similar programs. A court will deem such conditions unconstitutional only if they are found to violate an employee’s fundamental rights, or if the court determines the conditions to be nothing more than ten- uously connected to the interests of the government (see United States v. National Treasury Employees Union 1995). The liberty interests of public employees have the poten- tial to affect government employment practices, but to date have not done so significantly. Public employees’ reproductive decisions are an exception; their grooming preferences and residency requirements illustrate the general tendency.

Cleveland Board of Education v. LaFleur (1974) focused on the constitutionality of a policy requiring mandatory, unpaid maternity leave for public school teachers. The Court found the mandatory leave policy unconstitution- ally restrictive, but used language broad enough to provide protection for public employees’ reproductive choices. The Court stated that it “has long recognized that freedom of personal choice in matters of marriage and family life is one of the liberties protected by the Due Process Clause of the Fourteenth Amendment” and that “there is a right ‘to be free from unwarranted governmental intrusion into matters so fundamentally affecting a person as the decision whether to bear or beget a child’” (639).

In the Court’s view, the liberty to bear children must remain free of undue or purposeless governmental inter- ference. Choices with regard to grooming and residence have been given lesser protection. In Kelley v. Johnson (1976) the Court found no constitutional barrier to grooming regulations applying to male police officers. Although a lower court held that “choice of personal appearance is an ingredient of an individual’s personal liberty” (241), the Supreme Court placed the burden of persuasion on the employee challenging the regulation to “demonstrate that there is no rational connection between the regulation . . . and the promotion of safety of persons and property” (247). The challengers were unable to do this despite the government’s questionable rationale: The government claimed that the grooming standards would make the police more readily identi- fiable to the public (ignoring, apparently, that police officers wear uniforms) and that they would promote esprit de corps, despite the police union’s vehement opposition to them.

Finally, in McCarthy v. Philadelphia Civil Service Commission (1976), the Court upheld the constitution- ality of residency requirements for firefighters. It did so without much discussion and in the face of petitioner McCarthy’s rather compelling concern for the well- being of his family. The decision remains good law and, consequently, public employees can be required to live within the jurisdictions in which they work or a specified distance from it. Though these issues are not frequently litigated and are no longer capturing headlines, the prin- ciples are still very much alive in current constitutional jurisprudence; public sector human resource managers should understand and follow the law established in this line of cases.

e q u a l p r o t e C t i o n Contemporary equal protection analysis under the Fourteenth and Fifth Amendments is of critical impor- tance to PHRM. Equal protection doctrine regulates government affirmative action policies, procedures having a disparate impact on different social groups, and overt discrimination against individuals based

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on race, ethnicity, citizenship, gender, age, and other factors. The threshold question in an equal protection inquiry is whether a law, policy, decision, custom, or practice classifies individuals according to some cha- racteristic such as race, gender, wealth, residency, or education. Such categorizations—either explicit or implicit—must be present in order to justify an equal protection challenge.

What distinguishes an actual classification, such as one created by law, from practices that are ostensibly neutral but have a disparate impact on different catego- ries of people, such as racial groups or males and females? The Court addressed that difference in Washington v. Davis (1976), a case in which unsuccessful candidates for the Washington, DC, police academy sued on grounds that the department’s use of an exam testing verbal skills, which African Americans failed disproportionally, amounted to a racially discriminatory hiring practice. In finding for the police department, the Supreme Court made clear that public human resource practices that appear neutral on their face but bear more harshly on one racial group than another, as has often been the case with merit examinations, will not be unconstitutional simply because of their disparate impact. To violate the equal protection clause, public practices must mani- fest a discriminatory purpose of some kind. The Court emphasized that such a purpose need not be “express or appear on the face of the statute” and made clear that it could be “inferred from the totality of the relevant facts” (Washington v. Davis 1976: 241–242). Such implicit clas- sifications are treated identically to explicit ones. Once they have determined that a classification exists, courts rely on a three-tiered structure to determine its consti- tutionality. What follows is a brief description of this framework, with a particular focus on the application of each tier in the context of PHRM.

Suspect Classifications Courts consider legal classifications based on race or

ethnicity as “suspect,” or highly likely to violate equal protection principles. These suspect classifications, historically employed to disadvantage members of

minority groups, can be very difficult for governments to justify. Reviewing courts subject laws that create sus- pect classifications to “strict scrutiny,” the most intense and exacting form of judicial review. In these cases, the government will bear a heavy burden of persuasion and receive little if any deference. Courts deem suspect clas- sifications constitutional only if they are found to serve a compelling governmental interest and are “narrowly tailored” to achieve that purpose. To date, workforce diversity has not been considered a compelling gov- ernmental interest by the Supreme Court.4 Affirmative action for members of minority groups may be viable if its purpose is to remedy past, proven discrimination against racial or ethnic groups. The leading case in this area is United States v. Paradise (1987), in which a federal judge imposed hiring and promotion quotas for African Americans in the Alabama Department of Public Safety. The case so divided the Supreme Court that it was unable to form a majority opinion. Nevertheless, most of the justices agreed that the remedy was a constitu- tional means to overcoming decades of discrimination and resistance to equal protection in the Alabama state patrol. A majority also agreed that the relief was adequately narrowly tailored.

In the public personnel context, narrow tailoring requires that five conditions be met:

1. Less drastic and equally efficacious remedies, such as fines, are impractical or unavailable.

2. There must be a fixed stopping point at which use of the classification ends. This may be based on time, for example, three to five years, or successful remediation of the previous violation of equal protection, such as minorities having gained 25 % of the positions the governmental workforce involved.

3. The quotas, goals, or targets must be proportio- nate to the racial and/or ethnic composition of the relevant population or workforce base. For example, a 25 % quota for African Americans would be disproportionate in Vermont, but not in Alabama.

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4. Waivers must be available so that if the agency is unable to find qualified candidates then it will not be forced to hire or promote incompetents, on the one hand, or remain understaffed, on the other.

5. The approach cannot place a harsh burden on “innocent third parties.” The general principle is that those employees to whom the classification does not apply (e.g., non-minorities) should not be made objectively worse off by the government’s efforts to promote inclusion and diversity, as in affirmative action. Consequently, firing or furloughing nonminorities to free up positions for minorities is considered a harsh burden, whereas not providing training to nonminorities, which reduces their opportunities for advancement but does change their rank, pay, or other working conditions, is not (see Wygant v. Jackson Board of Education 1986; United Steel Workers of America v. Weber 1979).

In Grutter v. Bollinger (2003), dealing with affirmative action for applicants to the University of Michigan Law School, the Court added a sixth condition that logically applies in the public personnel context as well: that each candidate be afforded an individualized assessment of his or her qualifications.

It is important to note that racial and ethnic classi- fications are considered suspect even if their purpose is to enhance minority employment opportunities. At various times since the 1970s, when the Supreme Court began hearing affirmative action cases, efforts have been made to distinguish between classifica- tions based on “invidious discrimination” and those that are deemed “benign,” or intended to promote the employment interests of minorities and women. In Adarand Constructors v. Pena (1995), a 5–4 majority of the Supreme Court deviated from previous Court juris- prudence and defied considerable academic and pundit commentary suggesting that benign racial or ethnic classifications pose little threat to equal protection because they lack a discriminatory purpose. The Court held that “all racial classifications, imposed by whatever

federal, state, or local governmental actor, must be ana- lyzed by a reviewing court under strict scrutiny” (227). In the majority’s view, requiring such scrutiny is the only way to ensure that there is no intent to discriminate, or if there is one, it is somehow justified by a compel- ling governmental interest and is narrowly tailored.5 In a concurring opinion, Justice Clarence Thomas took pains to explain that, in his view, the entire distinction between invidious and benign was untenable and irre- levant: “government-sponsored racial discrimination based on benign prejudice is just as noxious as dis- crimination inspired by malicious prejudice. In each instance, it is racial discrimination, plain and simple” (241). In Johnson v. California (2005), a case involving prison administration, the Supreme Court held that racial classifications purported to be neutral rather than invidious or benign are also subject to strict scrutiny.

Quasi-Suspect Classifications Classifications based on biological sex are “quasi-

suspect” and subject to an intermediate level of scrutiny. In these cases, the burden of proof is on the government to show that the classification is substantially related to the achievement of important governmental objectives. Originally, courts considered these classifications non- suspect and evaluated them using a much less rigorous standard of review. As society and the judiciary became more conscious of the discriminatory effects of efforts to “protect” women from long working hours, physically demanding jobs, participating on juries in cases involv- ing depravity, and so on, these classifications were raised to an intermediate level. In practice, courts evaluate sex-based classifications using a standard comparable to that of a strict scrutiny review, requiring govern- ments to provide an “exceedingly persuasive justifica- tion” for their use (United States v. Virginia 1996: 533). Intermediate scrutiny poses a challenge to government employment practices based on traditional thinking about “male” and “female” jobs, workplace behavior, physical strength, and other capacities. Practices based on outdated perceptions of gender roles may be vulner- able to constitutional challenge. Although it is currently

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easier in a technical sense to justify affirmative action for women than for racial or ethnic minorities because classifications based on biological sex do not receive strict scrutiny, public sector human resource managers should be alert to the likelihood that such programs will be unconstitutional in the absence of a very strong governmental interest.

Nonsuspect Classifications The federal courts consider classifications based on

residency, wealth, age, education, and similar factors to be nonsuspect. Public policies use such classifica- tions frequently and for a variety of reasons—eligibility for benefits of some kind such as social security, voting, drivers’ licenses, and so forth. Judges subject these clas- sifications to a lower level of scrutiny through what has become known as the “rational basis” test. The burden of persuasion is generally on the challenger to show that such classifications are not rationally related to the achievement of a legitimate governmental purpose. Courts typically grant a great amount of deference to the judgment of lawmakers and governmental employ- ers in such cases. For instance, the Supreme Court found a rational connection between the state’s inter- est in public safety and its policy requiring police offi- cers to retire at age fifty. No equal protection violation was found, despite the fact that many officers would be physically and mentally fit to continue in their jobs well beyond age fifty (Massachusetts Board of Retirement v. Murgia 1976). At present, classifications based on sexual orientation are nonsuspect. However, as with other nonsuspect classifications, they must serve a legitimate governmental purpose.

p r o C e D u r a l D u e p r o C e s s In addition to their substantive aspects, the due pro- cess clauses of the Fifth and Fourteenth Amendments guarantee certain procedural rights to individuals being deprived of life, liberty, or property by the federal or a state or local government. In determining the extent of procedural due process to be afforded in administrative matters, courts balance three factors: (1) the individual’s

interests at stake; (2) the risk that the procedures used, if any, will result in an erroneous decision, and the probable value of additional procedures in reducing the likelihood of error; and (3) the government’s interests, including administrative burdens and financial costs, in using the procedures in place. The underlying assumption in this formula is that although additional procedures will gen- erally reduce mistakes, they also add costs. For example, the high cost of guaranteeing a full-fledged adjudicatory hearing, which includes the right to witness confronta- tion, cross-examination, and legal representation, might be considered necessary in cases where the interest at stake is substantial enough to require a very low error rate. Conversely, where an individual’s interest is min- imal, the government may be required to provide noth- ing more than notice of the decision-maker’s rationale and an opportunity to challenge the decision in writing. Cases involving the rights of public employees illustrate that procedural due process balancing takes place within the framework of the public service model.

In Board of Regents v. Roth (1972), the Supreme Court identified four individual interests that would give public employees a right to a full hearing in dismissals: (1) where the dismissal was in retaliation for the exercise of constitutionally protected rights, such as freedom of speech; (2) “where a person’s good name, reputation, honor or integrity is at stake because of what the gov- ernment is doing to him” (573); (3) where the dismissal diminishes a public employee’s future employability; and (4) where the employee has a property right or prop- erty interest in the position, such as tenure or a contract.

The public service model is important in determi- ning both the timing and the nature of the hearing. In Cleveland Board of Education v. Loudermill (1985), the Supreme Court held that a security guard who allegedly lied on his application was entitled to notice of the allega- tions, an explanation of the employer’s evidence, and an opportunity to respond—all prior to being terminated. The Court noted that Loudermill had a property right in his job by virtue of being a “classified civil servant.” The pretermination requirement is an “initial check against mistaken decisions—essentially, a determination of

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whether there are reasonable grounds to believe that the charges against the employee are true and support the proposed action” (545–546). This serves the inter- ests of the employee as well as those of the public and the government. In cases involving employment termi- nations, such as those at issue in Roth and Loudermill, a pretermination hearing frequently helps the state avoid additional personnel costs caused by unnecessary turn- over and complex posttermination litigation.

A court’s procedural due process balancing changes when employee suspensions are at issue. In Gilbert v. Homar (1997), the Supreme Court reasoned that no due process was required prior to suspending a law enforce- ment officer who had been charged with a felony. In this case, the governmental and public interests in an effective workforce outweighed those of the employee. As the Court explained, “So long as a suspended employee receives a sufficiently prompt post-suspension hearing, the lost income is relatively insubstantial, and fringe benefits such as health and life insurance are often not affected at all” (932). The Court also noted that the government has rea- sonable grounds for suspending an employee who has been formally charged with criminal behavior.

An adverse action triggering procedural due process protections may be based on a mix of factors, some of which involve constitutional rights and others that do not. For instance, an employer may also consider an employee who has engaged in controversial speech to be incompetent or disruptive for reasons unrelated to his or her remarks. In such a case, the employer will have the opportunity to demonstrate “by a preponde- rance of the evidence that it would have reached the same decision . . . even in the absence of the pro- tected conduct” (Mount Healthy School District Board of Education v. Doyle 1977: 287).

Because procedural due process analysis considers the probability that the government is acting in error, the public employer will often investigate an employee before taking disciplinary action. In LaChance v. Erickson (1998), the Supreme Court held that employees sus- pected of lying to or attempting to mislead investigators in an effort to defend themselves may be disciplined

for their falsehoods without any violation of their due process rights. Courts have determined that the due pro- cess “right to be heard” does not protect an employee from sanctions resulting from lying. However, where an investigation may lead to criminal charges, the public employee does maintain the right to remain silent under the Fifth Amendment.

As in other areas, the public service model’s balanc- ing approach in procedural due process cases provides public sector human resource managers with a rough set of guidelines, but it may not prove sufficient to inform particular administrative decisions. Individual facts and circumstances may ultimately determine close legal questions. For example, it is difficult in the abstract to know how quickly after suspending an employee an employer must provide a hearing in order to meet the current “prompt post-suspension hearing” requirement. As always, the best way to keep track of answers to such questions is to follow the case law in one’s jurisdiction, including rulings by the federal district courts and courts of appeals in one’s judicial circuit.

l i a b i l i t y It cannot be overemphasized that a public manager’s need for knowledge and understanding of relevant con- stitutional doctrine is much more than academic. As a result of several Supreme Court decisions over the past three decades, such knowledge has become a positive job requirement (Rosenbloom, O’Leary, and Chanin 2010: 271–287). Today, a public sector manager occupying a position at any level of government may well be person- ally liable for compensatory and even punitive damages, if found to have violated “clearly established . . . consti- tutional rights of which a reasonable person would have known” (Harlow v. Fitzgerald 1982: 818; see also Smith v. Wade 1983; Hafer v. Melo 1991). “Clearly established” in this context itself is not altogether clearly established. In Hope v. Pelzer (2002) the Court held that “clearly established” does not require a judicial precedent in a case with materially similar facts, only that the public employee has “fair warning” from constitutional law and values that his or her behavior will violate someone’s

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rights. However, in Reichle v. Howards (2012), “clearly established” was defined as such “that every ‘reasonable official would [have understood] that what he is doing violates’” a right (Reichle v. Howards 2012: 2093; brackets in the original text). The Supreme Court essentially reit- erated this standard with reference to police in Plumhoff v. Rickard (2014): “a defendant cannot be said to have violated a clearly established right unless the right’s contours were sufficiently definite that any reasonable official in the defendant’s shoes would have understood that he was violating it” (2023).

An exception to personal liability exists for federal personnel in some cases where the individual whose rights have been violated is able to obtain a remedy in alternative fashion established by legislation or, presum- ably, executive order, such as through appeal to the Merit Systems Protection Board (Bush v. Lucas 1983). Moreover, public employees have absolute immunity from civil suits for damages for violations of individuals’ constitutional rights when they are performing adjudicatory functions, such as hearing examiners or “prosecuting” adverse actions (Butz v. Economou 1978; Forrester v. White 1988; Burns v. Reed 1991). Nevertheless, it must be emphasized that absolute immunity attaches to the specific function rather than the job title. Thus, a hearing examiner has absolute immunity when engaged in adjudication, but not when hiring or firing his or her secretary.

In addition to the federal constitutional principles outlined in this chapter, public sector human resource experts must be aware of state constitutional law, which may also affect public sector human resource matters. Where a state’s protection of public employees’ rights such as privacy or substantive due process exceeds that of the federal Constitution, state and local governments must meet the higher state standard. Public managers at all levels of government may avoid liability by exercising their constitutional “right to disobey” any order request- ing implementation of an unconstitutional law or policy so as to prevent infringement of others’ protected rights (Harley v. Schuylkill County 1979). This ability, of course, is premised on an understanding of the constitutional rights at issue and a facility with the public service model

for balancing all the interests at stake. Gaining reason- able knowledge of the constitutional law—both state and federal—that governs one’s actions is the best way to avoid violating rights. Public managers need not be lawyers, but they must develop the ability to recognize if and when decisions, actions, procedures, or policies run afoul of the law.

C o n C l u s i o n Contemporary efforts to improve public sector perfor- mance serve two components of the public service model—the governmental and public interests. However, the interests and rights of employees may receive limited attention. The tools of contemporary public administration—downsizing, performance mea- surement and management, newer electronic commu- nication technologies and social media, outsourcing, competitive sourcing, and collaborative governance arrangements—can increase the immediacy of the Constitution in dealing with human resources. For instance, downsizing and competitive sourcing can bump up against procedural due process and equal protection rights. Where civil service status or other property interests in employment are involved, dis- missals cannot constitutionally be arbitrary, capricious, discriminatory, or unauthorized by law. If individual employees are picked as targets for reductions in force, they will almost certainly have substantial due process rights. Depending on the circumstances, and especially in cases where agencies have been under court order to increase diversity (as in United States v. Paradise), down- sizing that has a harmful impact on the employment interests of minorities or women will be subject to challenge under the equal protection clause.

In an age in which employers can monitor employees’ computer usage, including key strokes, email, and use of pagers and other communication devices, new Fourth Amendment privacy questions are certain to arise, as in Quon.

Outsourcing and collaborative governance present a special set of constitutional issues when they involve a public function (such as incarceration) or so entwine

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the government and a private organization that it is impo ssible to tell where one begins and the other ends (e.g., public-private partnerships). In those cir- cumstances, under current “state (i.e., governmental) action” doctrine, at the state and local levels, the private organization and its employees may well become liable for violating individuals’ constitutional rights. A private individual working directly for a state or local government is likely to have the same qualified immu- nity as public employees (Filarsky v. Delia 2012). Yet one working for a private organization under contract with a government may not. For example, in Richardson v. McKnight (1997), a prison guard employed by a private prison management firm was held to a higher liability standard. Unlike a public employee, he was subject to liability for violating prisoners’ constitutional rights regardless of whether they were clearly established or a reasonable person would have known of them. Private organizations that become state actors by virtue of their contractual or other cooperative arrangements with the federal government are not liable for money damages in constitutional tort suits (Correctional Services Corporation v. Malesko 2001). Neither are their employees, at least in so far as state tort law offers an alternative through which the injured party may be compensated (Minneci v. Pollard 2012).

A human resource expert aware of constitutional principles and current doctrine could bring this consti- tutional dimension to bear on organizational decisions concerning outsourcing and collaborating with private entities. Will the private organizations, whether for profit or nonprofit, seeking government contracts be working in policy or program areas in which consti- tutional rights are relevant? Will their organizational cultures and staffing levels ensure that such rights will be protected? Could they and their employees with- stand liability suits? Would it be better public policy to keep the function within a government agency in order to make sure that the employees are properly trained with respect to their constitutional responsibilities?

By taking a proactive role in alerting decision-makers to constitutional issues, particularly those presented in First, Fourth, Fifth, and Fourteenth Amendment

jurisprudence, public sector human resource experts will not only protect individual rights but also reduce susceptibility to lawsuits. Incorporating a constitutional dimension into public administration will give manag- ers better and more consistent information and skills to protect employees’ rights as well as to achieve organi- zational goals within the framework of our democratic- constitutional government.

n o t e s 1. The first ten amendments to the Constitution, known as

the Bill of Rights, apply directly to the federal government. The Fourteenth Amendment, which was ratified in 1868, prohibits the states (and their political subunits) from vio- lating many of these rights as well. The due process clause of the Fourteenth Amendment protects individuals from the deprivation of life, liberty, or property by sub-national governments. Over the years, the term liberty has been read by the Supreme Court to “incorporate” much of the Bill of Rights, including the First and Fourth Amendments, which are of particular importance to PHRM. This is why McPherson can argue that her First Amendment rights, which are incorporated into the Fourteenth Amendment, have been violated. Because the Fourteenth Amendment is what applies the First Amendment to state and local gov- ernments, she argues that it has been violated as well. As is discussed later in the chapter, the Fourteenth Amendment also prohibits the states and their subunits from depriving any person within their jurisdiction “equal protection of the laws.” Known as the equal protection clause, this pro- vision is interpreted to apply to the federal government through the word liberty in the Fifth Amendment, a process called “reverse incorporation.”

2. Connick v. Myers, 461 U.S. 138 (1983), establishes that courts must consider a public employee’s comment in its original context when evaluating whether the comment touches on a matter of public concern.

3. The Court noted that an exception might be made for faculty at public universities and colleges, whose work product involves teaching and writing.

4. In Grutter v. Bollinger (2003), the Supreme Court held that diversity in higher education can constitute a compelling governmental interest. The Court’s reasoning would seem to apply to diversity in public sector human resource man- agement as well: “In order to cultivate a set of leaders with legitimacy in the eyes of the citizenry, it is necessary that

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w h a t e v e r y p u b l i C s e C t o r h u m a n r e s o u r C e m a n a g e r s h o u l D k n o w 31

the path to leadership be visibly open to talented and quali- fied individuals of every race and ethnicity” (332).

5. As an interesting and relevant aside, courts may also hold local governments and agencies liable for monetary dam- ages when their policies are closely connec ted to violations of individuals’ constitutional rights, regardless of whether those rights can be said to be clearly established or should be reasonably known (Monell v. New York City Department of Social Services 1978; Pembaur v. Cincinnati 1986).

r e F e r e n C e s Abood v. Detroit Board of Education, 431 U.S. 209 (1977). Adarand Constructors v. Pena, 515 U.S. 200 (1995). AFSCME v. Woodward, 406 F.2d 137 (8th Cir. 1969). Board of Regents v. Roth, 408 U.S. 564 (1972). Branti v. Finkel, 445 U.S. 507 (1980). Broadrick v. Oklahoma, 413 U.S. 601 (1973). Burns v. Reed, 500 U.S. 478 (1991). Bush v. Lucas, 462 U.S. 367 (1983). Butz v. Economou, 438 U.S. 478 (1978). Chicago Teachers Union v. Hudson, 475 U.S. 292 (1986). City of Ontario v. Quon, 560 U.S. 746 (2010). Civil Service Commission v. National Association of Letter

Carriers, 413 U.S. 548 (1973). Cleveland Board of Education v. LaFleur, 414 U.S. 632 (1974). Cleveland Board of Education v. Loudermill, 470 U.S. 532 (1985). Connick v. Myers, 461 U.S. 138 (1983). Correctional Services Corporation v. Malesko, 534 U.S. 61 (2001). Developments in the Law—Public Employment. 1984. Harvard

Law Review, 97(7), 1611–1800. Elfbrandt v. Russell, 384 U.S. 11 (1966). Elrod v. Burns, 427 U.S. 347 (1976). Filarsky v. Delia, 132 S.Ct. 1657 (2012). Forrester v. White, 484 U.S. 219 (1988). Fowler v. New York, 704 F. Supp. 1264 (S.D.N.Y. 1989). Garcetti v. Ceballos, 547 U.S. 410 (2006). Gilbert v. Homar, 520 U.S. 924 (1997). Grutter v. Bollinger, 539 U.S. 306 (2003). Hafer v. Melo, 502 U.S. 21 (1991). Harley v. Schuylkill County, 476 F. Supp. 191 (E.D. Penn 1979). Harlow v. Fitzgerald, 457 U.S. 800 (1982). Hope v. Pelzer, 536 U.S. 730 (2002). Johnson v. California, 543 U.S. 499 (2005). Kelley v. Johnson, 425 U.S. 238 (1976). Knox v. Service Employees International Union Local 1000, 132

S.Ct. 2277 (2012).

LaChance v. Erickson, 522 U.S. 262 (1998). Lane v. Franks, U.S. 134 S.Ct. 2369 (2014). Massachusetts Board of Retirement v. Murgia, 427 U.S. 304 (1976). McAuliffe v. New Bedford, 155 Mass. 216 (1892). McCarthy v. Philadelphia Civil Service Commission, 424 U.S.

645 (1976). Minneci v. Pollard, 132 S.Ct. 617 (2012). Monell v. New York City Department of Social Services, 436

U.S. 658 (1978). Mount Healthy School District Board of Education v. Doyle, 429

U.S. 274 (1977). National Treasury Employees Union v. Von Raab, 489 U.S. 656

(1989). O’Connor v. Ortega, 480 U.S. 709 (1987). Pembaur v. Cincinnati, 475 U.S. 469 (1986). Pickering v. Board of Education, 391 U.S. 563 (1968). Plumhoff v. Rickard, 134 S. Ct. 2012 (2014). Rankin v. McPherson, 483 U.S. 378 (1987). Reichle v. Howards, 132 S.Ct. 2088 (2012). Richardson v. McKnight, 521 U.S. 399 (1997). Rohr, John. 1978. Ethics for Bureaucrats. New York, NY: Marcel

Dekker. Rosenbloom, David H. 1971. Federal Service and the Constitution.

Ithaca, NY: Cornell University Press. ———. 2014. Federal Service and the Constitution (2nd ed.).

Washington, DC: Georgetown University Press. Rosenbloom, David H., Rosemary O’Leary, and Joshua Chanin.

2010. Public Administration and Law (3rd ed.). Boca Raton, FL: CRC/Taylor & Francis.

Rutan v. Republican Party of Illinois, 497 U.S. 62 (1990). Shelton v. Tucker, 364 U.S. 479 (1960). Sherbert v. Verner, 374 U.S. 398 (1963). Skinner v. Railway Labor Executives Association, 489 U.S. 602

(1989). Smith v. Wade, 461 U.S. 30 (1983). United Public Workers v. Mitchell, 330 U.S. 75 (1947). United Steel Workers of America v. Weber, 443 U.S. 193 (1979). United States Senate. 1967. “Protecting Privacy and the Rights

of Federal Employees” S. Rept. 519. 90th Cong., 1st Sess. August 21.

United States v. National Treasury Employees Union, 513 U.S. 454 (1995).

United States v. Paradise, 480 U.S. 149 (1987). United States v. Virginia, 518 U.S. 515 (1996). Washington v. Davis, 426 U.S. 229 (1976). Waters v. Churchill, 511 U.S. 661 (1994). Wygant v. Jackson Board of Education, 476 U.S. 267 (1986).

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32

C h a p t e r 3

T H E D E A T H A N D L I F E O F P R O D U C T I V I T Y M A N A G E M E N T I N G O V E R N M E N T

Albert Hyde San Francisco State University

Frederik Uys University of Stellenbosch, South Africa

I n t r o d u C t I o n : W h y d o e s n ’ t p r o d u C t I v I t y M a t t e r t o p u b l I C s e C t o r h u M a n r e s o u r C e M a n a g e M e n t ?

“As society makes demands beyond the private sector’s ability to fulfill, government responds with two tools— regulation or money. But both approaches are incur- ring greater frustrations. We are coming to realize that we have a more finite resource base than previously suspected. Public expenditure may simply bid up the price rather than improve the results.

Thus we understand why it is that as government grows more expensive, not only public sector, but also total national productivity may decline. This effect is not inevitable; government is not necessarily less productive than other sectors of the economy. In fact, government often plays a catalytic role, enhancing the productivity of business. But unless government incorporates a pro- ductivity consciousness in all of its activity, it will tend to grow stagnant as it grows larger.”

—George Gilder, National Commission on Productivity and

Work Quality, 1975, Public Productivity Review, 1(1), 6.

W riting for the inaugural issue of a new public sector journal in 1975 devoted to government productivity management, George Gilder warned of an impending era where the economy of the United States could be significantly threatened in terms of its compe­ titiveness, growth, and ultimately its standard of living. Gilder was greatly concerned, as were many economists, business executives, and political leaders at that time, with the emergence of a new period of stagnation in productivity in the U.S. Coming out of the Second World War with minimal damages to its industrial infrastructure, the U.S. would become the dominant economy of the world. This was fueled by average annual rates of national productivity growth of 2.8% from the late 1940s to early 1970s. So when productivity rates fell by more than half to 1.1% in the 1970s (and, more significantly, the U.S. lagged behind emerging reindustrialized competitors Japan and Germany), and despite much national consternation could still improve to only 1.4% in the 1980s, various commissions were formed to find solutions to the “productivity crises.”

In the center of all this was the public sector. The post–World War II period in the United States is his­ torically regarded as a new plateau for the public sector

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t h e d e a t h a n d l I f e o f p r o d u C t I v I t y M a n a g e M e n t I n g o v e r n M e n t 33

because government was bigger at all levels. Federal, state, and local governments would account for 25% of national gross domestic product and government organizations were larger; employing some 2.4 million federal, 1.5 million state, and 4.8 million local govern­ ment workers1 (Shafritz and Hyde 2012: 80). Those levels beginning in the 1970s were now being seen in the context of larger U.S. economic change and global competiveness.

Victor Fuchs in his definitive economic assessment of the post–World War II era noted that this period marked the emergence of the world’s first service econ­ omy. U.S. employment would increase from 57 million jobs to nearly 75 million jobs by 1967, and the vast majority of the new jobs added to the economy would be in the service industry. Government’s now nearly 9 million workers were a significant part of a now larger American workforce where more than half provided services as opposed to producing things. Among many implications, Fuchs noted two other key points: First, he noted that unlike the industrial production sector where quality of labor inputs was at best stable or declining, the quality of the labor inputs (education and skill levels) was increasing. Second, he pointed to several service industry examples and noted that while overall productivity levels showed modest annual increases, measurements of productivity, quality, and technology demanded more analysis to understand service sector differences and would require more robust measurement techniques (Fuchs 1968: 3–4). In a truly classic case, he compared beauty shops to barbershops (sorry, that is what they were called in the 1960s) and found beauty shops a benchmark of service growth, high quality and variety of services offered, and high productivity (and low idle time) while the barbershop was at best a hold­over place of stable tech­ nology, minimal range of service, and low productivity (Fuchs 1968: 6).

The student of public sector human resource man­ agement (HRM) in the modern era may well wonder what this old historical crisis about economic growth and productivity, barbershops, and the rising services industry has to do with current HRM theory and practice.

After all, not many HRM books devote much attention to productivity or how it is defined and measured, much less how it can be applied to sustain performance or drive innovation. But the larger point is that for over 25 years—from 1967 to 1994—productivity was sys­ tematically measured in most of the federal government agencies and test measured across a good sample of state and local governments. Public management in the last third of the 20th century expended some credible effort in gauging labor inputs, output, and costs while grappling with how to measure the quality and value of government effort.

An understanding of the basics of productivity management (i.e., goals, objectives, metrics, and applica­ tions), why productivity programs were abandoned, and how productivity management integrates technology and information resources goes beyond simple lessons learned. This chapter has three learning objectives for public sector human resource managers and students:

• First, how government organizations work is still important. In a current era where high performance and outcomes­focus dominate, the tendency is to just look at results and ignore the means. But government agencies and their partners and contractors need to focus on the means and the ends—in part because they are also high­reliability organizations and because resources are going to be more limited as govern­ ment budgets tighten to meet rising debt limita­ tions. If government is to be “competitive” in an all but certain era of growing resource scarcity and chronic fiscal stress, it must be able to demon­ strate some sense of “productivity consciousness.” Further, if government expenditure is going to come under increased scrutiny and fiscal pres­ sure, it would help to have “productivity growth” re­established in public management so that it can demonstrate the return on investment for both its workforce and the intermediate outputs it uses through contractors and suppliers.

• Second, in this new century an increasingly loud and polarizing political debate about the role,

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34 t h e s e t t I n g

size, debt levels, and effectiveness of government programs now includes questions and challenges about the compensation levels, work value, and performance levels of public sector workers. The latter is the essence of productivity, which might contribute essential information and objective analysis to balance the often overheated rhetoric dominating current discussions.

• Third, the development of much more sophis­ ticated productivity methodologies that include capital intensity, labor composition, R&D levels, and multifactor productivity that show the effects of technology, efficiency, resource real­ location, and other capital­labor interactions. This offers public sector human resource man­ agers new perspectives on innovations, quality, and service growth. A better understanding and potential application of current productivity metrics offer an opportunity to reassess the value proposition of government effort and its service work ethic. They also can shed light on the value of different strategies for workforce composition and work disposition; for example, are part­ time or contract employees as productive as full­time employees, and are employees who tele­ work as productive as employees who come to offices every day?

For a beginning, this chapter returns to the 1960s, a period in the United States where confidence in government was high and government agencies were expanding their roles and tackling a range of new social and economic problems. Overlapping interests of congressional members and political and business leaders about slowing national productivity rates and economic anxieties over rising inflation and unem­ ployment rates would ultimately result in the estab­ lishment of a productivity measurement program for the federal government. By the early 1970s the newly reformed Office of Management Budget would take the lead in establishing a statistical reporting system that began with data that would cover about half of the federal civilian workforce for a base year in 1967

and reach almost nearly 70% by 1994 (Fisk and Forte 1997: 19–20).

h o W t o M e a s u r e p r o d u C t I v I t y I n g o v e r n M e n t a n d W h y ? Measuring productivity is essential to any serious econ­ omy. Any nation that desires to be competitive, provide an adequate standard of living for its citizens, and generate some level of wealth transfer for its future gen­ erations begins with a goal of meeting a level of produc­ tivity growth that will cover its birth and immigration rates and provide for its elderly citizens—conventionally about 2%. Productivity growth is also traditionally cor­ related with compensation and employment. Throu­ ghout most of the 20th century, rates of productivity change were “procyclical”—meaning productivity rates increased during periods of economic growth and expansion but tended to contract during business downturns (McGratten and Prescott 2012).

Following the Second World War, productivity growth in the U.S. was solid and substantial, outstrip­ ping most of the international competition. When the great productivity slowdown hit the U.S. in the 1970s, the discussion of what government should do to foster productivity largely focused on what were perceived failings in government economic and regulatory policies that were seen as hampering private sector productivity growth. Critics of government pointed to deficit spen­ ding, byzantine tax systems, regulatory interventions in markets, and lack of effective public investment in research & development (R&D) and education. Some of these criticisms—or “unnecessary burdens” as they were called in a 1984 White House Conference—are “the usual suspects,” so to speak (White House Conference 1984: 4). However, underlying this reexamination of private and public sector poor performance was the recognition that the United States was in the midst of a major transition to a new economy—one based pri­ marily on services and information—and that the old industrial management and workforce control systems and strategies were no longer adequate.

In the early 1970s, congressional interest led directly to creating a formal productivity measurement program

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t h e d e a t h a n d l I f e o f p r o d u C t I v I t y M a n a g e M e n t I n g o v e r n M e n t 35

in the federal government (Fisk and Forte 1997: 19). While the politics and institutional arrangements that surrounded the program to be launched by the Office of Management Budget, the Office of Personnel Management (then the Civil Service Commission), and the Government Accountability Office (then named the General Accounting Office) with measurement via the Bureau of Labor Statistics is interesting, the focus here is on the who, what, and how of measurement.

Once baselines were created with the measure­ ment system, the program (usually acronymed FPMP for the Federal Productivity Measurement Program) would include about half of the civilian federal work­ force at the start and reach about two­thirds of the workforce by the mid­1970s (Fisk and Forte 1997: 20). There were some major missing agencies, such as the intelligence agencies, the State Department, and large portions of the Defense Department. But even among these excepted agencies, some support functions were included for measurement (logistics and administrative support for Defense, contractors for NASA, etc.).

Determining what would be measured was seen as the real challenge. Agencies had to designate some form of final output. The primary focus was on some form of physical count—such as volume of mail for the Post Office, or number of inspections, claims or

invoices paid, student days taught, licenses processed, health care visits, and so on. To be fair, this challenge to identify outputs was neither a formidable nor a new phenomenon for government. The prevailing bud­ geting system for the federal (and many state govern­ ments) coming out of the midcentury was performance budgeting, which included extensive program work output measurements both as efficiency indicators and the basis for using work measurement to establish staff­ ing levels for programs. Performance budgeting was a precursor for productivity management; as one early budgeting textbook noted, “The contentions for the new productivity field in the 1970s are very reminis­ cent of the earlier claims for performance budgeting. Performance budgeting sought to establish manage­ ment’s right and responsibility to ascertain how much work was being accomplished, at what cost, and for what results as measured against specified performance standards. In the 1970s the questions are still the same, only it seems they are being asked by different people” (Hyde 1978: 78).

Under the FPMP, agencies established different program output measurements and integrated them into a final organizational output index. Box 3.1 outlines the calculation elements that are part of conventional productivity measurement.

Traditional Productivity Measurement Output Metrics Input Metrics

Y= f(L, C, IX)t

Where,

Y = Output L = Labor C = Capital IX = Intermediate Products

Output per employee year

Final Output (Tangible)

Examples:

• Post Office: Mail Volumes • Social Services: Claims Paid • Forest Service: Fire Acres

Or Intermediate Activities

(Contracts, Personnel, Supply, Maintenance, Investigations, etc.)

Number of employee years

Compensation per Employee

Unit Labor Costs

No estimates of capital or computing included

Source: Federal Productivity Measurement Program (FPMP) (1972–1994).

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36 t h e s e t t I n g

Labor was measured by counting the total number of employee years, compensation levels for each employee year, and a unit labor cost. The resulting calculation is then indexed at 100 for the first measurement year for the FPMP, as illustrated in Figure 3.1 which shows changing rates of federal productivity versus the private sector over the period. Federal productivity actually rose by a respectable rate of 1.5% annually from 1967 to 1982 before slowing to a .6% annual rate during the “produc­ tivity slowdown” era from 1982 to 1994. The 1.5% rate slightly exceeded private sector productivity of 1.4% but trailed the private sector rate of 1.3% in the next period.

In commenting on what this quarter century of productivity output data shows, some major qualifica­ tions must be noted. First, the labor input in the federal

productivity calculation (shown in Table 3.1) was an aggregate workforce input number. It did not include submeasures of capital, equipment, technology, or other factors that could affect outputs. Second, while the cost of labor input numbers did include full wage numbers (salary, benefits, incentives, etc.), qualitative submea­ sures of skill levels or qualifications were not included. Third, labor functions were measured in the FPMP but with an aim of showing productivity comparisons across different functions. FPMP provided average annual productivity rates for 24 federal occupational groups, with two functions showing negative productivity index rates: electric power utility personnel and medical ser­ vices. These are also the two functions with the highest unit labor costs compared with the function (Finance)

Figure 3.1 FPMP Annual Rates of Change—Labor Productivity in Federal Government vs. U.S. Private Sector Rates, 1967–1994

−5

−4

−3

−2

−1

0

1

2

3

4

5

1967 1971 1975 1979 1983 1987 1991

US Private Sector Federal

Source: U.S. Monthly Labor Review, May 1997, and U.S. Bureau of Labor Statistics, Labor Productivity Database (data.bls.gov/time series/PRS85006092).

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t h e d e a t h a n d l I f e o f p r o d u C t I v I t y M a n a g e M e n t I n g o v e r n M e n t 37

with the highest productivity, which had the lowest unit labor costs; this points to the sensitivity of the FPMP to wage factors.

In productivity management terms, this effort by the FPMP certainly qualified as a good start. It demon­ strated that federal productivity levels were certainly in line with the national experience and in the same league as the private sector. While the data qualifications weren’t trivial, there was a decent foundation to make assessments about federal productivity contributions in macroeconomic terms and solid trend data for agencies to review unit productivity performance levels.

However, in 1994, the FPMP was a victim of a major round of federal budget cuts and the Bureau of Labor Statistics suspended the measurement side of the pro­ gram. Thereafter, no systematic productivity measure­ ment would be undertaken at the federal level except for the U.S. Postal Service. It is certainly safe to say that few managerial tears were shed on the loss of the federal productivity program. And, as will be noted, the dismantling of the FPMP did not leave a vacuum. Following the National Performance Review at the outset of the Clinton­Gore administration in 1993, total quality management2 was essentially the succes­ sor to productivity management. Quality management was a better or perhaps more comfortable fit for most federal agencies, with its blend of participatory man­ agement groups and measurement methodologies that appealed to a predominantly white collar workforce and to labor groups that championed labor­management partnerships.

Before assessing the federal productivity manage­ ment effort, productivity efforts at the state and local level should also be mentioned. While no systematic effort was made to report on subnational public produc­ tivity levels, there was interest in testing measurement strategies and methodologies. BLS—as their exemplary 1998 final study attests—selected ten different state and local services to develop and report productivity statistics on. While the big three (police, fire, and education) were excluded from the study—the range of services stud­ ied made quite clear that calculating productivity was

both feasible and methodologically defensible. These early investigations grappled with how to determine output measurements for services ranging from more blue collar–oriented activities in enterprises (utilities and transit services) to mostly white collar (parole and corrections to employment and social services). BLS also chose three services where numerous private sector systems existed for comparison. Table 3.1—taken from the 1998 study—highlights the comparisons.

In the three state and local services in which public and private sector comparisons were made, public sector productivity tracked and compared favorably. But it should be noted that these three services were among the least personnel intensive. The service area with the lowest productivity rates was local jails, although the longer­term counterpart of state prisons had better productivity rates even though labor inputs were about the same. BLS’s assessment of the corrections area (jails and prisons) is all the more interesting because it devel­ oped means to account for overcrowding. Further they pointed to the recidivism issue—which they weren’t able to factor in a meaningful way—which would clearly alter the output measurement. Another interesting distinction drawn in this productivity study was how mass transit productivity rates showed improvement when the output metric was vehicle revenue miles as opposed to number of trips.

One final contribution—worth further reflection— was BLS’s estimates of rates of labor intensity for gov­ ernment services. Although this was soon to change with the full arrival of the computer and Internet technology era starting around 1995, Figure 3.2 (which calculated for one baseline year, 1992) shows labor compensation as the percentage of total operating expenditures for different government functions. Human resource man­ agers, of course, would appropriately point to functions like police, fire, and education and conclude that when over 80% of the operating budget is human resources, the quality and skill levels of those resources are paramount. Productivity management advocates would certainly concur but add that tracking the labor productivity rates of these invaluable assets is also critical.

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38 t h e s e t t I n g

While the agency productivity output and labor costs measurements were the primary quantitative emphasis, BLS also attempted more qualitative evaluations. Agency

managers were surveyed about their explanation for shifts in productivity that perhaps foretold of the per­ ceived value of FPMP as an important human resources

Table 3.1 Annual Labor Productivity—State & Local Governments—10 Functions over Select Years

Service (Years Measured) Output

Labor Input

Labor Productivity

(Government)

Comparison Labor Productivity

(Private Sector Counterparts)

Electric power (1967–1992)

3.6% 1.5% 2.1% 2.3%

Natural gas (1974–1992)

–0.7% 0.9% –1.6% –2.2%

Water supply (1967–1992)

1.8% 1.2% .6%

Mass transit (passenger trips) 1967–1992

.5% 2.6% –2.1%

Mass transit (vehicle revenue miles) 1967–1992

2.2% 2.6% –.5%

Alcohol beverage sales (1967–1992)

–.1% –1.2% 0.9% 0.9%

State prisons (1973–1992)

7.8% 7.8% .1%

Local jails (1970–1992)

4.7% 7.3% –2.4%

Juvenile institutions (1971–1992)

.3% 1.4% –1.1%

Unemployment insurance (1967–1992)

3.7% 2.3% 1.3%

Employment services (1972–1987)

0% –.9% 1.0%

Source: U.S. Bureau of Labor Statistics, 1998, Measuring State and Local Government Productivity: 9.

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t h e d e a t h a n d l I f e o f p r o d u C t I v I t y M a n a g e M e n t I n g o v e r n M e n t 39

managerial tool. Fisk and Forte in their closing assess­ ment of the FPMP note that most agencies explained major shifts in productivity levels as driven by workload volatility and technology. In the 1970s unforeseen politi­ cal, financial, or environmental events were identified as the primary driving forces that would cause an agency to ramp up or scale down work efforts and staffing levels, which would then shifted productivity levels. Later, in the 1980s agency comments pointed to major changes in office automation and computing as major driving forces (Fisk and Forte 1997: 27). In other words, productivity measurement wasn’t seen as having much of an effect other than to register the impacts of external factors.

Another political development may have also shaped this managerial disinclination toward productivity mea­ surement. In 1985 the Reagan administration promu­ lgated an executive order as part of his newly re­elected administration’s federal management improvement pro­ gram. Entitled the President’s Productivity Improvement Program, the 23 designated primary federal agencies under OMB’s direct purview were to institute formal programs that would establish a productivity office and publish a productivity improvement plan with a formal measurement system. On the first page on the executive order draft, OMB announced that a 20% improvement goal by 1992 for all agencies would be set. Further in the

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Liquor Sales

Welfare

Gas

Electric Power

Housing

Solid Waste

Sewerage

Water

Air Trans

Health

Water Trans

Parks & Rec

Nat. Resources

Transit

Highways

Finance

Hospitals

Libraries

Corrections

Education

Fire

Police

8.8%

11.6%

14.3%

17.6%

26.9%

34.5%

38.6%

39.1%

41.0%

42.1%

45.9%

54.3%

58.0%

60.6%

61.3%

62.2%

65.9%

66.0%

76.5%

82.8%

89.5%

90.4%

Figure 3.2 Personnel Compensation as Percentage of Total Operating Expenditures for Select State and Local Government Functions, 1991–1992

Source: U.S. Bureau of Labor Statistics, 1998, Measuring State and Local Government Productivity: 23.

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40 t h e s e t t I n g

document, OMB proclaimed that these implemented productivity goals would “be translated into projected cost savings” (Wright 1984).

Federal agency managers certainly understood and both resented and resisted this type of “productivity math”—where productivity gains were “pre­ordered” to be used to decrease agency budgets as opposed to increasing service quality, investing in agency capabi­ lities, or supporting innovation efforts. NASA, having launched a major contractor and agency effort around productivity improvement a year earlier, was typical of agency response—notifying OMB that under this pro­ gram they were essentially being penalized for their efforts and therefore were disinclined to participate (NASA­JSC 1985). As the Reagan administration’s poli­ tical capital was diverted to other more pressing matters (the Iran­Contra affair, etc.), the OMB initiative was set aside and quietly left to expire at the end of Reagan’s second term.

There is a long history of “lapsed” public sector man­ agement efforts driven by executive mandate to reduce agency budget levels whether at the federal or state government level. Politically, programs launched from auspices of one executive are almost always let go when a new administration takes over. However, this instance entails the additional peril of using productivity mea­ surement primarily as a budget tool for cost­cutting as opposed to a management reinvestment tool for ser­ vice quality improvement, upgrading infrastructure or technology, or enhancing public service commitment. The latter is what makes productivity management an important management tool—its use in ensuring that economies and industries innovate and grow, and don’t stagnate.

o l d l e s s o n s l e a r n e d — n e W Q u e s t I o n s n e e d e d As mentioned, budget cutbacks in the first two years of the Clinton administration would result in termina­ tion of the federal productivity measurement effort. In addition to changing budget priorities, new manage­ ment initiatives (some call them fads) like total quality

management, and lack of political support from agency managers with long memories about the ill­fated OMB 1985 productivity program, the productivity environ­ ment itself was changing. For the student of human resources management to make sense out of the change in the 1990s and in order to draw appropriate lessons for the future, five factors need to be examined.

First and foremost, national productivity improved dramatically, emerging out of its two­decade slumber. Driven primarily by new technology and capital invest­ ment, private sector productivity annual growth rates reached 2.1% in the mid­1990s and over 2.5% by 2000, as Figure 3.3 illustrates. Debates among economists about Robert Solow’s famous query in 1987—“You can see the computer age everywhere but in the productivity statis­ tics”—now shifted from what the problem was to what was now driving the solution and whether it would last (Brynjolfsson 1993). In the late 1990s, after productiv­ ity soared nationally and federal government budgets reached surplus levels for the first time in seemingly decades, interest in productivity plummeted.

It also should be noted that productivity measure­ ment also changed in an effort to capture the increas­ ing complexity of the now ascendant digital revolution. Coming out of the productivity slowdown period, there remained great concern that a services­dominated economy would hamper productivity and economic growth (Baumol, Batey Blackman, and Wolff 1989). Remarkably, economists looking at productivity trends in a so­called stagnant sector found—as a Brookings symposium of leading economists noted—“services now lead the way.” The consensus estimate was that ser­ vice industries contributed over 73% of labor productiv­ ity growth in the 1990–2000 period and 76% of U.S. total productivity growth (Triplett and Bosworth 2004: 2).

Obviously U.S. productivity growth improved dra­ matically, as Figure 3.2 shows. Not quite as obvious was why, given the new domination of services in the U.S. economy. During the 1990s the American eco­ nomy added more than 19 million jobs while manu­ facturing goods production sectors were basically flat. This doesn’t mean that manufacturing productivity

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t h e d e a t h a n d l I f e o f p r o d u C t I v I t y M a n a g e M e n t I n g o v e r n M e n t 41

decreased. Quite the opposite: Since 2000, U.S. manu­ facturing jobs have declined by over 30% while manufa­ cturing output has increased by almost 50% (de Rugy 2011). Basically, the U.S. manufacturing labor force has dropped to under 12 million workers who are now producing the equivalent total output as the previous 17 million workforce.

u . s . M a n u f a C t u r I n g : o u t p u t v s . J o b s s I n C e 1 9 7 5 To many economists and management analysts, it was clear that something else was in play. It became increas­ ingly obvious that the impact of “other dimensions” of productivity had not been adequately measured before. To be fair, organizational purchases of capital—even computers and other technology investments—were part of the productivity equation that included the total costs of labor and capital equipment. As economists debated both if and when the investments made by the U.S. in both the private and public sector would mate­ rialize up to the mid­1990s productivity turnaround, pressure mounted to augment the methodology for

measuring productivity. The resulting metric called multi-factor productivity still produced an output ratio per labor hour, but it was expanded to include labor­capital interactions to estimate what contributions were made by technology, other efficiency actions, and resource reallocations.

Currently—if one looks at the 2011 multifactor productivity trends from the U.S. Bureau of Labor Statistics of U.S. national averages (excluding govern­ ment services)—the following larger view is possible (Figure 3.4). The introduction of multifactor produc­ tivity not only enlarged the organization view of capital and labor resources, it also provided a means for assess­ ing different strategies for human resource investments. Capital intensity also included a separate breakout for the contribution of information processing equipment and software. So, for example, a state government’s motor vehicle registration and licensing department could reassess how to align its technology support, capital equipment ratios, workforce mix of service emplo­ yees and contractors, and Internet services provision to achieve the most optimal productivity levels.

0

1

2

3

4

5

A v e ra

g e a

n n

u a l

p e rc

e n

t c

h a

n g

e

2.8

1.1 1.4

2.1

2.5

1.8

1947-73 1973-79 1979-90 1990-2000 2000-2007 2007-2011

Figure 3.3 U.S. National Rates of Average Productivity Growth, 1947–2011, Private Sector Nonfarm business (excludes all levels of government)

Source: Bureau of Labor Statistics (2011).

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42 t h e s e t t I n g

A second factor entailed internal shifts in public sec­ tor workforces. The movement towards a super­majority white collar workforce had been underway for some time. Government agencies at all levels contracted out support functions and blue collar jobs, accelerating this trend. By the mid­1990s, the federal workforce was below 15% blue­collar positions; by 2010 the percentage went below 10%. But much more importantly, government work­ forces were becoming more highly compensated as aver­ age grade levels increased. Productivity measurements capture this of course when labor costs are attached to labor hours. So when viewing the FPMP statistics in Table 3.1, both the effects of annual salary increases given across the board to the workforce and rising costs from promotions and labor compositions are in play.

Figure 3.5 shows a 50­year decadal perspective of how the federal workforce has shifted from a 50%–25% split

between the lowest six grades and the highest five grades, By the end of the FPMP, the split was 30% for lowest grades and 45% for the top five for white collar workers. In 2014, the top five grades accounted for just under 62% of the federal workforce. Of course, those grade increases reflect higher education levels, greater skill qualifications, longer tenure, and an older force. But similarly, productiv­ ity measurement using today’s methodologies are capable of measuring impacts of labor composition and if in place might have been useful in assessing the impacts of these shifts. For example, one factor often mentioned in looking at current workforce dynamics in government is contract management. Instead of framing the question in terms of staffing—that is, aligning employee grade levels with the level and award amounts of contracting—the producti­ vity question might produce a different assessment of the optimal mix of organizational and contractual staffing.

Figure 3.4 National Productivity Growth Rates for Private Nonfarm Business Sector, 1987–2011

0

1 9 8 7 -1

9 9 0

1 9 9 0 -1

9 9 5

1 9 9 5 -2

0 0 0

2 0 0 0 -2

0 0 7

2 0 0 7 -2

0 1 1

1 9 8 7 -2

0 1 1

0.5

1

1.5

2

2.5

3

Multifactor Productivity Labor Composition Contribution Capital Intensity Contribution

Source: Bureau of Labor Statistics, May 9, 2012 Office of Productivity and Technology.

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t h e d e a t h a n d l I f e o f p r o d u C t I v I t y M a n a g e M e n t I n g o v e r n M e n t 43

So externally the national productivity picture brightened, and internally the labor structure of many government organizations shifted toward a high quality in terms of human factors workforce. Two other factors emerged in the 1990s that pushed the demise of produc­ tivity management. The advent of quality management, already mentioned, in effect superseded productivity. Quality management in the public sector also got some help from a major effort in the American service indus­ try to embrace the principles of quality management. Telecommunications, banking, insurance, and even health care organizations began to develop their own versions of quality with a distinct service focus. These industries all had major counterparts in the public sec­ tor at federal, state, and local levels (along with being suppliers, contractors, and partners), and they strongly encouraged benchmarking and sharing of best practices

with government agencies. Many of these service indus­ try corporations helped fund studies on quality practices among state and local governments and set up advisory committees to help launch government­wide efforts.

At the federal level, when the September 1993 National Performance Review report was issued, quality management was not a primary reference point. How­ ever the report’s second chapter—“Putting Customers First”—was quality management 101 from top to bot­ tom. The administration issued Executive Order 12862 embedding all of these quality expectations into agency management requirements. All federal agencies deal­ ing with the public were required to identify their cus­ tomers, set quality standards for service, survey their customers, and act to make government services “equal to the best in business.” Unlike the aforementioned for­ mal productivity programs where improvements might

Figure 3.5 Grade Level Change in the Federal Government in the Civilian White Collar Workforce by Decade, 1962–2014

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

GS 1-3 GS 4-6 GS 7-10 GS 11-13 GS 14-15

1962 1972 1982 1992

PFMP Ends 2002 2012 2014

Source: Compiled by the authors using federal employment data from www.fedscope.opm (2002, 2012, 2014), the 1962, 1972 Civil Service Commission Federal Civilian Workforce Statistics Report, and the 1982 and1992 Office of Personnel Management Federal Civilian Workforce Statistics Reports.

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44 t h e s e t t I n g

be translated into cost savings and staffing reductions, quality improvements were reinvestments in the agency’s performance.

Quality management also was highly compatible with the aims and natural interests of a highly skilled workforce. Quality management called for very high levels of workforce participation or what was gener­ ally called “empowerment.” Workers at all levels were expected (and trained) to join together in any number of variations of quality groups or project efforts to analyze quality problems (improvement teams) or to devise new solutions (process redesign teams). Most of these teams operated outside of the classic formal hierarchical and representation structures of government bureaucracy. Many of the efforts included contractors, partners, and even client and customer groups.

Essentially, the core dimensions of quality management—internal process measurements, external customer focus, employee participation, and contrac­ tor involvement—were all highly compatible with the public management premises and goals embodied in the Reinventing Government movement. For much of the decade, quality management was seen as a preferred framework for organizational change that emphasizes work groups and processes with a customer focus that was superior to more formal organizations focused on work through functional specializations. But formal quality management would face a similar fate as produc­ tivity with the presidential election change in 2000. One of the first acts of the Bush administration was to issue an executive order ending labor­management partnerships. While the executive order neither prevented government agencies from labor consultations nor promoting qua­ lity program aspects, the management emphasis at the federal level shifted to competitive government, tech­ nology innovations, new personnel systems, and new budget priorities.

A fourth factor—the emergence of performance results management—also played a pivotal role in pro­ ductivity’s demise as both management change strategy and methodology for assessing performance. Following passage of the Government Performance Results Act

in 1993, federal agencies went through a five­year trial period putting in a budgeting system that asked agencies to prepare five­year strategic plans with performance goals based on outcomes. Indeed, reliance on outputs— the core numerator in productivity metrics—was seen as a problem with underperformance. Both the Office of Management and Budget and the GAO (then the General Accounting Office—soon to be renamed the Government Accountability Office) championed this new direction.

There were few dissenters. It was difficult to argue with the strong current of performance management— or, as an assessment of the demise of FPMN by the research staff at the Minneapolis Federal Reserve Bank quoted one Beltway expert, “I don’t care how fast a gov­ ernment worker goes through a pile of paper until I know whether the pile of paper needs going through in the first place . . . . productivity numbers tell me nothing until I have a measure of the benefit” (Wirtz 2000: 6). So the federal emphasis (and many state governments likewise pursued performance results budgeting variations) was on measuring the effects—or social outcomes—of gov­ ernment programs. Productivity was equated with more simplistic efficiency while performance was to be best understood in terms of measuring effectiveness.

This is a pivotal issue that productivity management has always recognized but been unable to reconcile. One of the most influential early management theorists in productivity—Michael Packer3—addressed this in an MIT white paper in 1982 aptly titled “What’s Wrong with Organizational Productivity Analysis?” Packer sorted through the different measurement issues highlighting the degrees of difficulty and reliability in various service industry and government organizations, especially those with substantial R&D efforts, intelligence roles, or those that produce more intangible outputs. He also noted all the objections that managers would have about mea­ surement and data analysis methods, especially if the numbers were going to be used to make comparisons to other private sector entities. But his point was that man­ agers weren’t going to be impressed by simply knowing how the organization’s current productivity rates were

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t h e d e a t h a n d l I f e o f p r o d u C t I v I t y M a n a g e M e n t I n g o v e r n M e n t 45

trending. Packer urged that organizational productivity data be used to interpret the range management flexibil­ ities and potential scale of improvement and innovation in the same vein that business enterprises use market research and economics (Packer 1982: 9–10).

Packer’s concerns are still valid today. If human resource managers want to understand how much pro­ gress is being made in pursuit of organizational goals and concurrently how effective the use of human, capital, technology, and information resources is, they will need analytical tools for measuring productivity. Productivity analytical tools go beyond simply adopting a vocabulary of management efficiency used to proclaim that new initiatives (the movement to cloud computing in govern­ ment comes readily to mind) will make the workforce more productive.

But perhaps a case example is needed to illustrate this point. Federal agencies today are striving to comply with requirements to allow teleworking in their agen­ cies. Most use surveys of workers in their teleworking programs that show higher job satisfaction, more time spent doing task work, and less time doing administra­ tive work. A study at the Patent and Trademarks Office found teleworking employees processed more patent applications per year than their in­office counterparts, according to the Commerce Department Office of Inspector General. That makes them more or equally productive, except that the Inspector General noted that teleworkers didn’t process applications at a greater rate; they simply reviewed patents for more hours than their office­bound counterparts (U.S. Dept. of Commerce 2012). Of course, the program is successful on a number of other fronts, but in terms of Packer’s organizational productivity analysis framework challenge, the questions still remain: How productive is teleworking and how do you know?

This basic human resource management question deserves more than subjective answers. In another detailed assessment of teleworking using national government employee survey data, Mahler provides a sterling examination of the benefits of teleworking programs and questions whether there may be a rift

between those who are and those who are not allowed to participate. The survey results point to strong agree­ ment that those who telework report higher levels of job satisfaction and improved personnel productivity (Mahler 2012: 413). But how do they know, since there are no basic quantitative measurements of organiza­ tional, unit, or much less individual productivity in place? No disparagement of teleworking or any other form of flexible work arrangements using new tech­ nologies is intended; the point is simply to reinforce the need for organizational productivity measurement, especially in government services.

There remains an unranked fifth factor that, despite a great amount of activity that occurred and continues to be made, is of less certain significance. This would include organizational change management strategies based on participatory management in the workplace. When these “change strategies” have been charted in the private sector, results in terms of productivity mana­ gement are mixed.

Some change management strategies have pursued linking compensation to productivity. Results here have generally followed Blinder’s conclusion that chang­ ing the way workers are treated increases productivity more than changing compensation practices (Blinder 1990: 13). A 1999 NBER–MIT metastudy on produc­ tivity improvement concluded that progressive human resource policies and practices produced little net orga­ nizational productivity benefits, as increased labor costs tended to offset increases in productivity improvements, where they were measured (Lester 1999) or even resulted in lower performance and diminished organizational reputation (Keating et al. 1999).

Other multiple organizational case reviews are more positive, as Black and Lynch have noted in a 2004 Fed­ eral Reserve Bank of San Francisco research note. They found that those organizations supporting workplace innovations—specifically work teams, more flexible job definitions, and up­skilling of the workforce—tended to be more productive than traditional organizations (Black and Lynch 2004: 2), These efforts also have multi­ ple objectives—to support workforce retention, enhance

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46 t h e s e t t I n g

morale, and promote engagement and commitment to organizational values. Of course, in government agen­ cies where productivity is no longer measured, these are the only managerial objectives that remain.

a C o n C l u d I n g n o t e a n d a p o s t s C r I p t This chapter, despite its odd title, began with three objec­ tives and a hope. The objectives were to recast productiv­ ity measurement methods and management strategies to promote better understanding of several key debates about whether governments are competitive, workforces are compensated appropriately, and organizations are using their resources optimally.

It’s already clear that the national debate about the size and role of government is most likely to be argued on political grounds. Whatever the shape of the 2016 federal budget, discretionary program spending or the remaining programs after entitlements and interest requirements are destined to be further crowded in the coming decade. This was apparent back in 2006 when McKinsey published a study calling for a renewal of the federal productivity program so that federal produc­ tivity could be part of what they called “performance transparency” (Danker et al. 2006). That the study was basically ignored, even by the largely pro­business Bush administration, proves once again that sector productiv­ ity comparisons are neither compelling nor convincing.

However, the organizational productivity challenge is going to be of increasing interest. As the public­private pay comparability debate continues, human resource managers are going to face increasing pressure (and media scrutiny) to explain how staffing, productivity, and compensation levels are linked. Debates about the necessary numbers of police, teachers, nurses, and other public work functions are going to go deeper than arguing trends in crime rates, test scores, and health care outcomes. Many government functions are already on the defensive about why well­intentioned efforts are not always translating into improved out­ comes. Governments may find that to obtain additional resources to achieve better results, they will have to demonstrate that their good intentions are matched by

high productivity levels and optimal use of resources. This will become even more apparent as technology alters every aspect of work from content to methods to work skill competencies.

Public managers may well want to revisit the current quality of performance paradigm in which being respon­ sive and delivering services that meet citizen preferences seems to be all that matters. The means (i.e., produc­ tivity) in which organizations determine that the right things are being done using the right mix of resources most efficiently is also essential. Again, this is going to be even more critical as technology and connectivity transform the production and service processes. Public services, especially those that are human interaction intensive, are not going away. However, productivity measurement can provide human resource managers with critical information about how to use technology shifts in support of the next stages of public service innovation. Hopefully, the need for organizational pro­ ductivity metrics and opportunity for using multifactor productivity analysis in the public sector will bring pro­ ductivity management back to the forefront of human resources management.

Finally, it is altogether fitting and indeed ironic, that there is a renewed debate about national productivity levels. In this new decade since 2010, U.S. productivity growth rates have slumped dramatically, to dismal levels, even below the terrible 1970s (Blinder 2014):

1870–2013 2.3%

1948–1973 2.8%

1973–1995 1.4%

1995–2010 2.6%

2010–2013 0.7%

While economists have been somewhat surprised by this and there is disagreement about the causes, this time there is consensus about the long­term consequences and potential negative effects. Governments will also find that they are part of the debate about what to do.

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Robert Solow, of the “computers and productivity” link­ age mentioned earlier, noted in a recent interview that what is most different now is the recognition that what drives productivity growth most is management differ­ ences. Paraphrasing Solow, it’s not how capital intensive or technological advances that matter most. It’s “failure in management decisions”—the inability or unwilling­ ness to rethink and reallocate tasks within organizations to compete successfully (Solow 2014). Of course, that reallocation of tasks to an organization’s workforce is the essence of human resources management and a reminder of why productivity measurement matters.

n o t e s 1. The 9 million total government workers in the 1970s com­

pares with 14 million total full­time government workers (there are also over 5 million part­time employees) accor­ ding to the last available census of government in 2012. About 90% of that growth has been in state and local government (U.S. Census 2014).

2. Although the literature on quality management in the pub­ lic sector is extensive—beginning with quality circles in the 1980s merging into full blown total quality management programs in the 1990s, an Executive Order mandating customer service quality standards and reviews—that goes beyond the scope and space allotted for this review.

3. Michael Packer died in the World Trade Center in New York City during the September 11 terrorist attacks; he was delivering a keynote address at a conference there.

r e f e r e n C e s Baumol, William J., Sue Anne Batey Blackman, and Edward

Wolff. 1989. Productivity and American Leadership. Cambridge, MA: MIT Press.

Black, Sandra A., and Lisa M. Lynch. 2004. Workplace Practices and the New Economy. Federal Reserve Bank of San Francisco, CSIP Notes Number 2­4­10, April.

Blinder, Alan S. 1990. Paying for Productivity. Washington, DC: Brookings Institution Press, 13.

Blinder, Alan S. 2014. The Unsettling Mystery of Productivity. Wall Street Journal, November 24.

Brynjolfsson, Erik. 1993. The Productivity Paradox of Information Technology: Review and Assessment. Communications of the ACM, December.

Danker, Tony, Thomas Dohrmann, Nancy Killefer, and Lenny Mendonca, L. 2006. How Can American Government Meet Its Productivity Challenge? McKinsey & Company, July.

Dertouzos, Michael L., Richard K. Lester, and Robert M. Solow. 1989. Made in America: Regaining the Productive Edge (MIT Commission on Industrial Economy). Cambridge, MA: MIT Press.

De Rugy, Veronique. 2011. U.S. Manufacturing: Outputs vs. Jobs since 1975. Mercatus Center White Paper, George Mason University, January.

Fisk, Donald M. 1985. The Federal Productivity Measurement System: The Process and Selected Statistics. Management Science and Policy Analysis Journal-Letter, 2(3).

Fisk, Donald, and Darlene Forte. 1997. The Federal Productivity Measurement Program: Final Results. Monthly Labor Review, May, 19–28.

Fuchs, Victor. 1968. The Service Economy. New York: National Bureau of Economic Research/Columbia University Press, 1968.

Gilder, George. 1975. Public Sector Productivity National Commission on Productivity and Work Quality. Public Productivity Review, 1(1), 4–8, 6.

Hyde, Albert C. 1978. Performance Budgeting. In Government Budgeting: Theory, Process, Politics. Oak Park, IL: Moore Publishing, 77–81.

Keating, Elizabeth K., et al. 1999. Overcoming the Improvement Paradox.” European Management Journal, 17(2), 120–134.

Lester, Richard K. 1999. The Productive Edge. New York: Norton. Mahler, Julianne. 2012. The Telework Divide: Managerial

and Personnel Challenges of Telework. Review of Public Personnel Administration, 32(4), 407–418.

McGratten, Ellen R., and Edward C. Prescott. 2012. The Labor Productivity Puzzle. Federal Reserve Bank of Minneapolis, Working Paper 694, May.

NASA­JSC. 1985. An Assessment of NASA’s Productivity Management Program—Johnson Space Center. University of Houston Clear City Consulting Report, ed. Albert C. Hyde, July.

National Academy of Sciences. 1979. Measurement and Interpretation of Productivity. Washington, DC: NAS.

Packer, Michael B. 1982. What’s Wrong with Organizational Productivity Analysis? MIT Laboratory for Manufacturing and Productivity, Paper LMP­MRP­81–15, July.

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48 t h e s e t t I n g

Shafritz, Jay M., and Albert C. Hyde. 2012.  Classics of public administration, 7th ed. Boston: Wadsworth.

Solow, Robert. 2014. Prospects for Growth: An Interview. McKinsey Quarterly, September.

Triplett, Jack E., and Barry Bosworth (Eds.). 2004. Productivity in the U.S. Services Sector: New Sources of Economic Growth. Washington, DC: Brookings Institution Press.

U.S. Census. 2014. 2012 Census of Governments: Employment Summary Report, G12­CG­EMP, edited by Lisa Jessie and Mary Tarleton, March 6.

U.S. Department of Commerce, Office of Inspector General. 2012. The Patent Hoteling Program Is Suc ceeding as a Business Strategy. Report OIG­12­018­A. February.

U.S. Department of Labor, Bureau of Labor Statistics. Measuring State and Local Government Productivity: Examples from Eleven Studies. Bulletin 2495. June.

White House Conference on Productivity. Productivity Growth: A Better Life for America. April.

Wirtz, Ronald. 2000. Icebergs and Government Productivity. Minneapolis Federal Reserve Bank. June. Available at https://www.minneapolisfed.org/publications/the­ region/icebergs­and­government­productivity. Accessed on November 7, 2012.

Wright, Joseph R. Jr. 1984. Memorandum on Productivity Improvement Program. Office of Management and Budget, September 27.

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49

C h a p t e r 4

H U M A N R E S O U R C E M A N A G E M E N T I N T H E F E D E R A L G O V E R N M E N T D U R I N G A T I M E O F I N S T A B I L I T Y

James R. Thompson University of Illinois–Chicago

Robert Seidner U.S. Office of Management and Budget

T he period 2006–2014 can be characterized as one of instability in federal human resource management (HRM) practices and policies. The most significant reforms of the preceding period, the creation of separate personnel systems at the Departments of Homeland Security and Defense, were repealed. The substantial immunity that the federal workforce had enjoyed from the effects of the economic recession that began in 2008 ended when employee pay was frozen and pension contributions for new employees increased in 2011. A showdown between President Obama and congres­ sional Republicans over an increase in the federal debt ceiling in the summer of 2011 forced agencies to develop contingency plans for a government shut­down; and although a shut­down was avoided at that time, the compromise that was reached simply postponed the showdown. Throughout 2013, hundreds of thousands of federal employees were furloughed without pay. The culmination occurred on October 1, 2013, when the lack of a budget forced much of the government to shut down for 16 days. These conditions contributed to the onset of the long­awaited “tsunami” of retirements by

federal employees as members of the baby boom gene­ ration headed for the exits.

This discussion of recent HRM developments in the federal government is organized into three sections. The section on “Discontinuities” includes a discussion of those HRM developments that represent a departure by the Obama administration from the policies of its pre­ decessor while the section on “Continuities” highlights programs where linkages between the Obama and Bush administrations can be identified. The section on “New Initiatives” reviews those areas of activity in which the Obama administration has left its own distinctive mark.

Discontinuities Repeal of MaxHR and the National Security Personnel System

The exemption of the Departments of Homeland Security and Defense from key provisions of Title 5 of the United States Code in 2002–2003 was among the most radical changes to the civil service system in decades.1 The civil service has long been characterized by a relatively consistent set of employment rules across

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50 t h e s e t t i n g

agencies.2 The intent was to create a sense of cohesion within the workforce and to counteract centrifugal ten­ dencies. Although there had been occasional, small­scale exemptions to this policy over the decades, the creation of the MaxHR system at the Department of Homeland Security (DHS) in 2002 and the National Security Personnel System at the Department of Defense (DoD) in 2003 represented exemptions of such magnitude as to represent a change in the system itself.

DHS and DoD include a combined 46% of all civi­ lian federal employees (Congressional Research Service 2011). Thus, when these agencies were exempted from portions of the Title 5 rules relating to compensation, performance management, and labor­management relations, it appeared to signal the demise of the tradi­ tional civil service model and the triumph of a “stra tegic” approach to HRM in which each agency would be allowed to customize HRM policies to the agency’s spe­ cific mission and strategy (Thompson 2006). However, such predictions proved to be premature. A coalition of federal employee unions successfully challenged both programs in court, and Congress subsequently with­ drew authorization, leaving the pre­2002 status quo substantially in place.

Union opposition to the National Security Personnel System (NSPS) and MaxHR was provoked primarily by the proposed labor­management relations provisions, which would have narrowed the scope of issues subject to collective bargaining and provided for agency­specific and management­controlled labor­relations boards to resolve collective bargaining disputes (Thompson 2007a). A coalition of federal employee unions sued to stop implementation of MaxHR on the grounds that those rules would deny employees their statutory right to bargain over working conditions. The courts sided with the unions and forced DHS back to the drawing board. By the time the court case was resolved in 2006, the polit­ ical landscape had shifted. Members of both parties in Congress called upon the department to consult with the unions on the terms of a new system. The department instead decided to put the entire initiative on hold while retaining the traditional Title 5 personnel rules. The few

HRM changes that have been made at DHS since have been incremental rather than radical in nature.

Early developments at the Department of Defense paralleled those at DHS: Rules with provisions similar to those proposed by DHS were challenged by the unions in court on the grounds that they violated the right of employees to bargain collectively. Although a District Court decision favored the unions, a panel of judges of the U.S. Court of Appeals for the District of Columbia ruled in 2007 that the proposed rules were in compli­ ance with the law and allowed NSPS implementation to go forward. After Congress intervened to suspend authority for the proposed labor­management relations provisions, the department determined that only non­ bargaining unit personnel would be included in NSPS. By late 2008, over 200,000 such employees had been transitioned to NSPS. However, after President Obama took office in 2009, the federal employee unions pre­ vailed upon their congressional allies to repeal NSPS entirely. In October 2009, President Obama signed the 2010 National Defense Authorization Act repealing NSPS and directing that all DoD employees who had transitioned to NSPS be converted back to the tradi­ tional Title 5 rules.

Compensation and Classification

Although the demise of both NSPS and MaxHR represent a setback for those who regard the provisions of Title 5 as out of date, pressures for reform of the civil service system have persisted. The General Schedule system of compensation and classification has been sub­ ject to particular criticism. The General Schedule (GS) is widely regarded as outdated, overly rigid, not compatible with the needs of an increasingly professional workforce, and insufficiently sensitive to performance in matters of pay setting (Office of Personnel Management 2002).

In a 2012 report entitled “Bracing for Change: Chief Human Capital Officers Rethink Business as Usual,” the Partnership for Public Service (PPS) reported that “nearly all CHCOs [chief human capital officers] agreed that the current 1949­era GS pay and classification system is outdated and doesn’t meet the needs of a dynamic

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h u m a n r e s o u r C e m a n a g e m e n t i n t h e f e d e r a l g o v e r n m e n t 51

and changing 21st century workforce” (Partnership for Public Service 2012a: 16). The chief human capital officers expressed preference instead for a system of “paybanding.” With paybanding the narrow grades that characterize the General Schedule would be replaced with broad salary bands and managers would be per­ mitted more discretion in setting the pay of their subordinates (Thompson 2007b). Under this approach there is less need for classification experts from the per­ sonnel office to make fine distinctions between the relative responsibilities of positions at different grade levels. Instead, a supervisor or manager equipped with some technical support can decide the band to which a position is assigned. Paybanding was first introduced to the federal sector in 1980 at a naval research facility in California and has subsequently been implemented in a number of additional agencies and units with generally positive results (Thompson and Seidner 2008).

The Renewal of Labor-Management Partnerships

In no area has the contrast between the Bush and Obama administrations been greater than in the area of labor­management relations. The Bush administra­ tion took a generally hostile stance toward the federal employee unions as exemplified by the proposed MaxHR and NSPS personnel rules, which would have signifi­ cantly compromised the collective bargaining rights of employees in those two agencies. In 2001, soon after tak­ ing office, President Bush issued Executive Order 13203 repealing an executive order issued by his predecessor that mandated the creation of labor­management part­ nership councils throughout the government.3 In 2002, the Bush administration denied collective bargaining rights to employees in the newly created Transportation Security Administration.

As an early indicator of the Bush administration’s general demeanor on labor­management matters, the repeal of President Clinton’s executive order on partner­ ships took on special importance. Labor­management relations in the federal government have traditionally been adversarial in character. In 1993, as part of his effort to “reinvent” the federal government, President Clinton

issued Executive Order 12871 creating a National Partnership Council and directing that similar councils be created within each of the major departments and agencies.4 The intent was to encourage an attitude of col­ laboration between labor and management in address­ ing workplace issues. A 2001 evaluation of the program found that the partnership initiative had improved the labor­management climate in many agencies and had resulted in a reduced number of grievances and unfair labor practice charges (Office of Personnel Management 2001). However, President Bush’s 2001 executive order dissolved the National Partnership Council and rescinded any “orders, rules, regulations, guidelines, or policies implementing or enforcing” EO 12871.

The partnership concept proved resilient, how­ ever. During his first year in office, President Obama issued Executive Order 13522 directing the creation of a new National Council on Federal Labor­Management Relations to include both union and management representatives and led by the director of the Office of Personnel Management (OPM) and the deputy director of OMB. With more than 60% of the Executive Branch unionized, a significant proportion of all federal employees are represented on the Council. Similar to the Clinton program, Obama’s executive order directed the creation of agency­level “forums” to “promote part­ nership efforts between labor and management in the executive branch.”5 Also similar to the Clinton program, attention has been directed to section 7106(b) of Title 5, which lists matters on which agencies may choose to bargain but on which they are not required to bargain. When President Clinton directed that bargaining take place on these “permissive” subjects of bargai ning as part of EO 12871 he met with resistance from agencies. President Obama took a different approach, creating a set of eight “pilots” “to evaluate the impact of bargain­ ing over permissive subjects under 5 U.S.C. 7106(b) (1).” Performance management practices (discussed further below) have also been a subject of discussion within the Council, with several unions partnering with their respective agencies to improve employee engagement and organizational effectiveness.

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52 t h e s e t t i n g

In another labor relations matter, the Obama administration reversed the decision by the Bush administration to deny collective bargaining rights to the 40,000­plus airport screeners employed by the Transportation Security Administration. In November 2012, those employees approved a contract negotiated by the American Federation of Government Employees, which the employees had selected as their bargaining agent (Davidson 2012).

The “Deprivileging” of Federal Employees

Until 2011, federal employees had experienced only limited repercussions from the effects of the Great Recession of 2008–2010. Government data shows that whereas the number of state and local government employees dropped by over 500,000 between July 2008 and July 2011, federal government employment actu­ ally increased by 86,000 jobs during this same period.6 This disparity could be attributed to the fact that unlike state and local governments, the federal government can run budget deficits. In fact, the Obama adminis­ tration made deficit funding a part of its strategy for counteracting the effects of the recession. However, by 2011, political pressure to reduce the size of the deficit grew and as part of deficit reduction negotiations between Congress and the president, the pay of federal employees was frozen effective January 1, 2011. The pay freeze was subsequently extended for three years, end­ ing when federal employees were granted a 1% increase in 2014. Also as a consequence of the deficit reduction negotiations, federal employees hired after December 31, 2012, will contribute 3.1% of their pay to the cost of their pensions, up from .8% for employees hired before that date (Lunney 2012a).

Proponents of the pay freeze have contended that federal employees are overpaid relative to their pri­ vate sector counterparts. A 2010 study by the Heritage Foundation concluded that the total compensation of federal employees with health and retirement benefits included is 30%–40% higher than that of their private sector counterparts (Heritage Foundation 2010). A subsequent report by the Congressional Budget Office

found that while employees at lower pay levels were overpaid relative to their private sector counterparts by approximately 15%, employees at higher levels were underpaid by as much as 25% (Congressional Budget Office 2010).

The debate over federal pay and the imposition of a freeze on federal pay signifies a sharp departure from past practices. In the past, with the federal workforce widely distributed geographically, political consider­ ations had mitigated in favor of an attitude of accom­ modation between the two parties with regard to federal pay. The change symbolized by the 2011 pay freeze and subsequent pronouncements critical of federal employ­ ees was driven in part by the aggressive antigovernment ideology espoused by members of Congress associated with the Tea Party movement.7 For federal employees the shift in attitudes has meant that positive aspects of the federal work environment once taken for granted are increasingly at risk.

Workforce Planning and Management

A central element of President Bush’s “President’s Management Agenda” was the “strategic management of human capital,” to which workforce planning was central (Office Management and Budget 2002). Although such planning remains a priority, its execution has proved problematic in light of the turbulent political environ­ ment. Congress did not pass a single timely budget during the first six years of the Obama administration. Instead, each year saw “continuing resolutions” that simply pushed decisions forward for several months. Further, each such resolution kept funding at the same level as the previous period, thus equating to cuts in agency budgets because of the failure to reflect increased costs built into contracts, inflation, and unforeseen costs.

Between 2009 and 2013 the federal government was within hours of shutting down three different times because of budget disputes with the threat finally becom­ ing a reality in October 2013. Occasional furloughs have occurred at agencies such as at the Federal Aviation Administration where more than 3,000 employees were sent home after their 26th temporary budget failed to

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h u m a n r e s o u r C e m a n a g e m e n t i n t h e f e d e r a l g o v e r n m e n t 53

pass in Congress. The most notorious of the budget scuf­ fles started with the 2011 debate over the debt­ceiling limit. What is normally a procedural move to approve an increase in the debt ceiling morphed into an epic political debate over the size of government. Agencies were left to plan for a possible government shut­down. The settlement, dubbed “sequestration,” called for $109 billion in automatic, across­the­board spending cuts on January 2, 2013, that would translate to a cut of approx­ imately 8.5% for most departments. Instead of thinking 5–10 years ahead as rational planning would dictate, agencies have been left in constant crisis mode with deci­ sions required about each project and employee. Senior leadership in each agency has had to divert their atten­ tion to this effort, and employee morale has plummeted.

The Retirement “Tsunami”

The continuing crisis over the federal budget may have been a factor in the decision of many retirement­age feds to finally pull the plug. The so­called retirement “tsunami” had been anticipated since the early 2000s as large numbers of baby­boom generation employees approached retirement age. Little evidence of such a tsunami emerged until 2011, however, when 105,000 retirement applications were filed by federal emplo­ yees, a 24% increase over 2010 levels. From January 1– September 30, 2012, OPM processed more than 93,000 retirement applications, 10,000 more than they had in a comparable period the year before (Lunney 2012b). With retirements continuing at an annual rate of approx­ imately 100,000, the federal government is losing about 5% of its workforce each year.

The retirements have left some agencies stretched thin. Agencies generally aren’t allowed to hire until the incumbent has officially left the payroll, meaning there is no chance to train a replacement in the interim. Further, agencies have been reluctant to hire in light of continuing uncertainty over the budget.

Continuities Notwithstanding these “discontinuities,” in some areas

of activity the Obama administration has built on the work

of its predecessor including those of workforce engage­ ment and the “blended” or “multisector” workforce.

Workforce Engagement

The issue of worker engagement has gained pro­ minence in the federal HRM community in recent years largely as a consequence of the efforts of the Partnership for Public Service (PPS), a nonprofit organization that promotes government service. Beginning in the mid­ 2000s, PPS has issued an annual report entitled Best Places to Work in the Federal Government.8 The report com­ piles data from the Office of Personnel Management’s Federal Employee Viewpoint Survey (FEVS) to calculate a Best Places to Work “score” for each federal agency based on an index that measures employees’ agreement or dis­ agreement with three statements included in the survey:

• I recommend my organization as a good place to work.

• Considering everything, how satisfied are you with your job?

• Considering everything, how satisfied are you with your organization?

The PPS describes its index as one of “employee satis­ faction and commitment” rather than as one of “engage­ ment.” However, the job attitudes assessed correspond to those used in other studies where worker engagement is a focus. For example, the Merit Systems Protection Board (MSPB) issued a 2008 report entitled “The Power of Federal Employee Engagement” in which it devised a measure of engagement based on “pride in one’s work or workplace,” “satisfaction with leadership,” “opportunity to perform well at work,” “satisfaction with the recogni­ tion received,” “prospects for future personal and profe­ ssional growth,” and “a positive work environment with some focus on teamwork” (Merit Systems Protection Board 2008).9 According to the MSPB, “engaged employ­ ees are absorbed intellectually and emotionally in their work and vigorously invest their best efforts in producing the outcomes needed for the organization to achieve its goals” (Merit Systems Protection Board 2009: i).

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54 t h e s e t t i n g

The Best Places to Work report has garnered atten­ tion in part as a consequence of the rankings generated. Separate rankings are generated for large agencies, medium agencies, small agencies, and agency “subcom­ ponents.” The media have picked up on the results to highlight those agencies at both the top and bottom of the rankings. Particular prestige is accorded those agencies that score well.

The rankings have also served to stimulate some agencies to make improving engagement a priority. For example, the U.S. Department of Transportation (DOT) ranked near the bottom of the rankings in 2009. Then­Secretary LaHood set as a priority the goal that the department be among the top­rated large agencies. A constant focus on improvement led to programs such as IdeaHub, a portal where any employee can make a suggestion on which other employees are then allowed to vote. If enough employees agree, the secre­ tary’s Innovation Council explores implementation. DOT implemented more than 40 suggestions in three years. Also, SES members were required to adopt new employee communication tactics, including hosting listening sessions to hear feedback. Since DOT started to focus on engagement, it has become one of the top ten places to work in government.

In part as a consequence of the continued attention being directed at working conditions, employee enga­ gement was made one of the metrics in the President’s Management Agenda. Also, whereas results of the FEVS were only available at the agency level, OPM now releases FEVS results for more than 20,000 organiza­ tional units, along with trend data and index scores for employee engagement and global satisfaction. Agencies are increasingly able to use the data to link to mission outcome and target specific areas for improvement.

The Blended Workforce and “Nonstandard” Work Arrangements

During the 2000s, attention within the federal HRM community was directed at what was labeled the “blended” or “multisector” workforce (Thompson and Mastracci 2005). The focus was on how federal agencies

could balance the use of full­time employees with work­ ers in alternative arrangements including part­time workers, seasonal workers, and contract workers. As an example, agencies such as the Internal Revenue Service and the National Park Service that experience seasonal fluctuations in workload have found it advantageous to make extensive use of seasonal employees. The Naval Research Laboratory enters into contracts with staffing firms whereby individuals with specialized skills are brought in on a temporary basis to work alongside reg­ ular employees on a research project. Once the project is complete, the contract worker can be reassigned or simply released.

From the agency perspective, the use of contract workers in place of permanent employees offers signi­ ficant advantages. First, staffing firms are not bound by federal hiring and pay restrictions and thus have recruit­ ment advantages over the agencies. Second, permanent employees cannot be let go at the end of a project without going through lengthy reduction­in­force procedures. After the September 11 terrorist incident, the intelli­ gence community relied heavily on contract employees in responding to congressional and executive branch demands that it ramp up its counterterrorism activities. By 2007, it was estimated that contract employees made up a third of the CIA’s workforce (Pincus 2007). Although the Bush administration was generally sympathetic to the use of contract employees, subsequent to 2006 when the Democrats took control of the House of Representatives, pressure was exerted to reduce the proportion of con­ tract employees in favor of hiring more federal emplo­ yees. In 2010, the Office of Federal Procurement Policy issued a policy memo instructing agencies to “avoid an overreliance on contractors for functions ‘closely asso­ ciated with inherently government’ or that are ‘critical’ for the agency’s mission” (Brodsky 2010).

The Obama administration added a new element to the blended workforce discussion when a new policy facilitating the use of phased retirement was approved in 2012. Phased retirement is when a full­time employee retires but continues to work on a part­time basis. The new law permits agencies to allow select employees to

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h u m a n r e s o u r C e m a n a g e m e n t i n t h e f e d e r a l g o v e r n m e n t 55

retire but to remain employed on a half­time basis. These employees collect half their full­time salary as well as a corresponding proportion of their retirement annuities. The advantage of phased retirement from the perspec­ tive of the agency is that it is able to retain the knowledge and experience that long­time employees bring to the workplace. For example, some agencies use the part­time retirees to train or mentor new employees. Many older employees in turn prefer to remain active while working less than a full­time schedule.

The Obama administration has also promoted the use of telework by federal employees and in 2010 Congress passed the Telework Enhancement Act. Tele­ work arrangements allow employees to work from their homes or from a remote location. Studies have shown that telework can assist with employee retention and recruitment, for example by reducing commuting time. Telework can also facilitate continuity of operations in case of an emergency or natural disaster. OPM has updated its procedures to direct employees with a tele­ work agreement to work from home when the govern­ ment closes an office for weather or as a consequence of other emergency conditions. Previously employees were provided administrative time off for those days. By the end of 2013, about half of federal employees were eligi­ ble to telework (Office of Personnel Management 2013).

New Directions Hiring Reform

One area of activity where the Obama administration has left its mark is that of hiring reform. Hiring reform was a natural issue in which to get involved in light of the president’s appeal to members of the millennial gen­ eration and because of his interest in promoting pub­ lic service. The slow and opaque nature of the federal government’s hiring process has long been identified as a deterrent to government service for newer work­ force entrants. In 2006, the Merit System Protection Board issued a report in which it reported that “prom­ ising candidates interested in public service turn away from careers with the Federal Government because they cannot decipher the application process, cannot wait 6

to 9 months for a hiring decision, or cannot find a job offer that is competitive with other employees” (Merit Systems Protection Board 2006: 1).

In May 2010, President Obama issued a memoran­ dum on “Improving the Federal Recruitment and Hiring Process.”10 The primary goal was to improve the noto­ riously complex hiring process while simultaneously making working for the government “cool again.” The president’s mandate made explicit demands that agen­ cies overhaul the technical and structural aspects of hiring. Specifically, it mandated “plain language” and shorter job announcements, resume­only applications, expanded assessment and applicant referral (known as “category rating”), and significantly reduced time­ to­hire periods. From a cultural standpoint, hiring reform requires that managers be held accountable for their role in the hiring process as part of their performance evalu­ ation. Within a year, OPM announced that the average time­to­hire had dropped from 160 days to 105 days and that nearly 90 % of job announcements were five or fewer pages long.

Hiring the Next Generation

Consistent with its intent to make government service attractive to students and newer workforce entrants, the Obama administration overhauled the federal govern­ ment’s internship programs. Prior to the new Pathways program, students interested in government employment were confronted with a confusing array of internship pro­ grams, each designed for a separate purpose. For example, under the Federal Career Intern Program (FCIP), students were hired for two­year internships that could be con­ verted to permanent positions upon completing the pro­ gram without having to compete with other applicants. The Student Temporary Experience Program (STEP) was intended to help students pay for college, while the work performed under the Student Career Employment Program (SCEP) had to relate to the academic and career goals of the student. Under STEP, the work did not have to relate to the student’s academic or career interests, and STEP participants were not eligible for noncompetitive conversion to permanent employment.

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56 t h e s e t t i n g

The FCIP and SCEP programs in particular were pop­ ular with agencies because of the flexibility they afforded in recruiting, assessing, and selecting job candidates. However, in 2010, the Merit Systems Protection Board found that FCIP violated provisions of Title 5 govern­ ing veterans’ preference and fair competition for jobs. Rather than revamp FCIP, President Obama determined to scrap the program along with SCEP and STEP in favor of a new set of Pathways student employment programs.

In December 2010, President Obama issued Executive Order (EO) 13562 entitled “Recruiting and Hiring Students and Recent Graduates.” The EO cites the bene­ fits to the federal government from hiring students and recent graduates “who infuse the workplace with their enthusiasm, talents, and unique perspectives.”11 The executive order created three Pathways programs each targeting a different audience:

• Internship Program: The Internship Program is targeted at current undergraduates as well as at high school and trade school students with tar­ geted skills sets. The primary purpose is to provide students with a means of financial support during their years in school.

• Recent Graduates Program: The purpose of the Recent Graduates Program is to promote careers in the federal government. Individuals within two years of graduation from qualifying educational institutions are eligible to apply.

• Presidential Management Fellows Program: Acc­ ording to the executive order, the Presidential Management Fellows Program “aims to attract to the Federal service outstanding men and women from a variety of academic disciplines at the gra­ duate level who have a clear interest in, and commitment to, the leadership and management of public policies and programs.” To qualify, an individual must have received an advanced degree within the preceding two years. The goal is to appoint each fellow to a career­ladder position upon completion of the program. PMF graduates can generally enter the federal workforce at a level

higher than others with similar qualifications and receive special recognition as prospective organi­ zational leaders.

Unfortunately, as a consequence of continuing fiscal pressures faced by agencies, the number of internships and recent graduate hiring has plummeted, from a high of about 46,000 in 2010 to about 6,000 in 2013.

Workforce Diversity

A second area in which the Obama administra­ tion has left its mark is that of workforce diversity. Separate executive orders have been issued requiring agencies to improve the hiring of individuals with dis­ abilities,12 Hispanics,13 Asian and Pacific Islanders,14 Native Americans,15 African­Americans,16 and women.17 In the 2013 Federal Equal Opportunity Recruitment Program Report, the Office of Personnel Management reported that the federal workforce was 17.9 % Black, 8.2 % Hispanic, 5.8 % Asian/Pacific, and 1.7 % Native American. Overall minorities constituted 34.6 % of the federal workforce while women constituted 43.5 %. Figure 4.1 shows the percen tage of the federal workforce represented by each group compared with the percent­ age each group represents in the civilian labor force as a whole. The figure shows that with the exception of Hispanics, the government’s record in hiring women and minorities is relatively strong (Office of Personnel Management 2013).

The Obama administration has extended diversity to include the hiring of veterans. Although veterans’ pre­ ference has existed since the Civil War, President Obama has placed additional demands on agencies to increase the number of veterans hired. Executive Order 13518, Employment of Veterans in the Federal Government, directed each agency to establish a Veterans Employment Program Office, to develop an operational plan for promoting veteran employment, and to provide annual training to human resource personnel on veterans’ pre­ ference.18 In 2012, OPM reported that the number of veterans employed by the federal government grew from 512,000 in 2009 (25.8% of the workforce) to 567,000

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h u m a n r e s o u r C e m a n a g e m e n t i n t h e f e d e r a l g o v e r n m e n t 57

(28.3% of the workforce) in 2011.19 Additionally, a new focus has centered on hiring the spouses of military members.

Performance Management

Performance management has long been an area of concern within the federal government. One problem has been a reluctance on the part of supervisors to make meaningful distinctions in employee performance. In a 2011 speech, then­OPM director John Berry commented that “Employees may be getting useful feedback from their manager, but the formal review process seems to take place in Garrison Keillor’s Lake Wobegon where everyone is above average” (Davidson 2011). Berry offered a “blueprint for changing the way we manage personnel performance” to include performance stan­ dards that are, detailed, objective, aligned to agency mission and goals and had employee buy­in.”

The National Council on Federal Labor­Management Relations subsequently approved a package of reforms to overhaul performance management practices in the

government. The Council agreed to pilot the new pro­ gram, called GEAR (Goals, Engagement, Accountability, and Results) at six agencies. The changes, more evolu­ tionary than revolutionary, provide for quarterly reviews of employee performance and improvements to “the assessment, selection, development, and training of supervisors.”20 In a departure from the recommenda­ tions of other reform groups, under GEAR, performance ratings would not be linked to pay.

Senior Executive Service Reforms

The Senior Executive Service, consisting of the top tier of career civil servants as well as a small percentage of political appointees, was created by the Civil Service Reform Act of 1978. The intent was that SES members serve as a corps of generalist executives whose careers would traverse agency lines and who would thereby pro­ mote interagency collaboration and cooperation. In a 2012 report, the Partnership for Public Service (PPS) and McKinsey & Company cited the benefits of this model: “Executive mobility increases the government’s ability

Figure 4.1 Comparison of Permanent Federal Workforce and Total Civilian Labor Force (September 2012)

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Source: OPM (2013).

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58 t h e s e t t i n g

to fulfill cross­agency missions. It also allows individual agencies to build executive managerial skills, fill vacancies strategically and infuse new thinking into the organiza­ tion” (Partnership for Public Service 2012b: 1). However, in concluding that “The original vision for the SES as a mobile corps of leaders has never come to fruition,” PPS and McKinsey & Co. cited data showing that only 8% of SES members have worked at more than one agency during their careers. Options for increasing mobility and listed in the report include (1) requiring SES candidates to demonstrate “multisector, multiagency or multifunc­ tional experience,” (2) allowing agencies to pilot a variety of mobility programs, (3) having agencies report on cross­agency mobility and (4) centralizing management of SES mobility. To date, OPM has not acted on these rec­ ommendations. However, in 2012, OPM did act to create a new SES performance management system centered on the same five “core qualifications” used for selection into the SES: leading people, leading change, results driven, business acumen, and building coalition.

Perhaps the most dramatic change for the SES was the passage of the Department of Veterans Affairs Management Accountability  Act of 2014 in response to scandals where leaders manipulated the wait times of veterans seeking medical care from one of the Veterans Health Administration hospitals. For the first time, an SES member could be fired with their appeal process curtailed. Previously, SES would be placed on paid administrative leave and could appeal their termination to the Merit System Protection Board (MSPB). The new law allows the secretary to immediately fire a member of the SES, and MSPB must adjudicate the appeal within 21 days.

C o n C l u s i o n As of early 2015, it was unclear whether and to what extent reform of the civil service and of HRM practices in general would be a priority during the remaining years of the Obama administration. In November 2014, Republicans won a majority of seats in the U.S. Senate giving them control of both houses of Congress. The incoming chair of the Senate Homeland Security and

Government Affairs Committee expressed his support for reforms that would give agency heads “the tools and flexibility to discipline the workforce to effectively man­ age” (Clark 2014). Similarly, the incoming chair of the House Oversight and Government Reform Committee said in an interview that the government needs to make it easier “to root out the bad apples” in the federal work­ force (Davidson 2014). He further expressed support for a measure that would extend to other agencies the author­ ity granted the Department of Veterans Affairs to expe­ dite the removal of senior executives. Any such changes, however, would have to secure the approval of President Obama, whose term of office extends to January 2017.

n o t e s The views expressed in this paper are those of Mr. Seidner personally and not those of either the Office of Management and Budget or the federal government.

1. Title 5 of the United States Code includes those laws relating to federal personnel matters.

2. Various groups of federal employees including those in the Department of Veterans Affairs, the intelligence commu­ nity, and the Foreign Service have been exempted from pro­ visions of Title 5 over the decades, but a large proportion of federal employees remain under traditional Title 5 rules.

3. Executive Order 13203 of 2001, Revocation of Executive Order and Presidential Memorandum Concerning Labor­ Management Partnerships.

4. Executive Order 12871 of 1993, Labor­Management Partnerships.

5. See Executive Order 13522, at http://www.whitehouse .gov/the­press­office/executive­order­ creating­labor­ management­forums­improve­deliver y­government­ servic. Accessed December 8, 2014.

6. Data retrieved from Bureau of Labor Statistics, www.bls.gov. 7. See http://en.wikipedia.org/wiki/Tea_Party_movement.

Accessed December 8, 2014. 8. See www.bestplacestowork.org. Accessed December 8, 2014 9. Categories assessed include employee skills/mission

match, strategic management, teamwork, effective lead­ ership, performance­based rewards and advancement, training and development, support for diversity, family friendly culture and benefits, pay, and work/life balance (http://www.bestplacestowork.org).

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h u m a n r e s o u r C e m a n a g e m e n t i n t h e f e d e r a l g o v e r n m e n t 59

10. See Presidential Memorandum—Improving the Federal Recruitment and Hiring Process, http://www.whitehouse . g ov / t h e ­ p r e s s ­ o f f i c e / p r e s i d e n t i a l­ m e m o ra n d u m ­ improving­federal­recruitment­and­hiring­process.

11. See Executive Order 13562, Recruiting and Hiring Students and Recent Graduates, http://www.whitehouse .gov/the­press­office/2010/12/27/executive­order­ recruiting­and­hiring­students­and­recent­graduates.

12. Executive Order 13548, “Expanding Federal Employment for Individuals with Disabilities.”

13. Executive Order 13555, White House Initiative on Educational Excellence for Hispanics.

14. Executive Order 13515, White House Initiative on Asian Americans and Pacific Islanders.

15. Executive Order 13592, American Indian and Alaska Native Educational Opportunities.

16. Executive Order 13621, White House Initiative on Educational Excellence for African Americans.

17. Executive Order 13506, White House Council on Women and Girls.

18. Executive Order 13518, Expansion of Employment Opportunities in the Federal Government for Veterans, http://www.gpo.gov/fdsys/pkg/FR­2009­11­13/pdf/ E9­27441.pdf. Accessed November 9, 2012.

19. Feds@Work: Initiative Grows Government Employment for Veterans. AOL Government, August 31, 2012, http://gov .aol.com/2012/08/31/opm­initiative­grows­number­of­ federally­employed­veterans/. Accessed November 14, 2012.

20. “Update on GEAR Pilots,” presented January 18, 2012, to the National Council and Federal Labor­Management Relations, http://www.lmrcouncil.gov/meetings/handouts/ GEAR%20Update%20January%2018­2.pdf. Accessed November 10, 2012.

r e f e r e n C e s Brodsky, R. 2010. Administrative puts its stamp on “inher­

ently governmental.” Nextgov.com, March 31. http://www .nextgov.com/defense/2010/03/administration­puts­ its­stamp­on­inherently­governmental/46345/. Accessed December 8, 2014.

Clark, C. 2014. Sen. Johnson speaks on aligning public­ private sector pay, keeping hearings polite. www.govexec .com, November 10. http://www.govexec.com/oversight/ 2014/11/sen­johnson­speaks­aligning­federal­private­ sector­pay­keeping­hearings­polite/98630/. Accessed December 8, 2014.

Congressional Research Service. 2010. Federal Employees: Pay and Pension Increases since 1969. http://assets .opencrs.com/rpts/94­971_20100120.pdf. Accessed December 8, 2014.

———. 2011. The Federal Workforce: Characteristics and Trends. http://assets.opencrs.com/rpts/RL34685_20110419 .pdf. Accessed December 8, 2014.

Davidson, J. 2011. Federal HR Boss Calls for New Employee Evaluation System. www.washingtonpost.com, March 16. http://www.washingtonpost.com/blogs/federal­eye/ post/federal­hr­boss­calls­for­new­employee­evaluation­ system/2011/03/15/ABBQ7hZ_blog.html. Accessed December 8, 2014.

———. 2012. TSA Contract Proposal Calls for New Perform­ ance Management System, Higher Clothing Allowance. www .washingtonpost.com, August 2. http://www.washington post.com/blogs/federal­eye/post/tsa­contract­proposal­ calls­for­new­performance­management­system­higher­ clothing­allowance/2012/08/02/gJQALwbUSX_blog .html. Accessed December 8, 2014.

———. 2014. Chaffetz, Incoming Committee Chair, Seeks to Fire “Bad Apples” in Federal Workforce. Washington Post, November 20. http://www.washington p o s t . c o m / p o l i t i c s / f e d e r a l _ g o v e r n m e n t / c h a f f e t z ­ incoming­ committee­ chair­seeks­to­fire­bad­apples­ in­federal­workforce/2014/11/20/e6034640­70ed­11 e 4 ­ ad12­3734c461eab6_story.html. Accessed December 8, 2014.

Heritage Foundation. 2010. Inflated Federal Pay: How Americans Are Overtaxed to Overpay the Civil Service. Rep. No. CDA 10­05. Washington, DC: Heritage Foundation.

Lunney, K. 2012a. Protecting Federal Pay and Benefits Remains Top Priority for Union. www.govexec.com, November 7. h t t p : / / w w w. g o v e x e c . c o m / p a y ­b e n e f i t s / 2 01 2 / 11 / protecting­federal­pay­and­benefits­remains­top­priority­ union/59346/. Accessed November 9, 2012.

———. 2012b. Retirement Claims Surge in September. www.govexec.com, October 5. http://www.govexec .com/pay­benefits/2012/10/retirement­ claims­spike­ September/58627/?oref=workforce_week_nl. Accessed December 8, 2014.

Merit Systems Protection Board. 2006. Reforming Federal Hiring: Beyond Faster and Cheaper. Washington, DC: Government Printing Office.

———. 2008. The Power of Federal Employee Engagement. Washington, DC: U.S. Government Printing Office.

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60 t h e s e t t i n g

———. 2009. Managing for Engagement—Communication, Connection, and Courage. Washington, DC: U.S. Government Printing Office.

Office of Management and Budget 2002. The President’s Management Agenda. Washington, DC: U.S. Office of Management and Budget.

Office of Personnel Management. 2001. A Final Report to the National Partnership Council on Evaluating Progress and Improvements in Agencies’ Organizational Performance Resul­ ting From Labor­Management Partnerships. Washington, DC: Office of Personnel Management.

———. 2002. A Fresh Start for Federal Pay: The Case for Modernization. Washington, DC: Office of Personnel Management.

———. 2012. Federal Equal Opportunity Recruitment Program Report. http://www.opm.gov/policy­data­oversight/ diversity­and­inclusion/reports/feorp­2012.pdf. Accessed April 15, 2015.

———. 2013. Telework Report to Congress. http://www.tele w o rk . g ov / Re p o r t s _ a n d _ S t u d i e s / A n n u a l _ Re p o r t s / 2013teleworkreport.pdf. Accessed December 8, 2014.

Partnership for Public Service. 2012a. Bracing for Change: Chief Human Capital Officers Rethink Business as Usual. Washington, DC: Partnership for Public Service.

———. 2012b. Mission­Driven Mobility: Strengthening our Government Through a Mobile Leadership Corps. Washington, DC: Partnership for Public Service.

Pincus, W. 2007. Hayden Works to Absorb New Hires at CIA— After Almost a Year as Director He Calls Huge Personnel Surge His “Biggest Challenge.” Washington Post, April 15, p. A9.

Thompson, J. R. 2006. The Federal Civil Service: The Demise of an Institution. Public Administration Review, 66, 496–503.

———. 2007a. Federal Labor­Management Relations Reforms under Bush: Enlightened Management or Quest for Control? Review of Public Personnel Administration, 27, 105–124.

———. 2007b. Designing and Implementing Performance­ Oriented Payband Systems Washington, DC: IBM Center for the Business of Government.

Thompson, J., and S. Mastracci. 2005. The Blended Workforce: Maximizing Agility through Nonstandard Work Arrangements Washington, DC: IBM Center for the Business of Government.

Thompson, J. R., and R. Seidner. 2008. A New Look at Pay­ banding and Pay for Performance: The Views of Those Parti­ cipating in Federal Demonstration Projects. In H. S. Sistare, M. H. Shiplett, and T. F. Buss (Eds.), Innovations in Human Resource Management: Getting the Public’s Work Done in the 21st Century. Armonk, NY: M.E. Sharpe, pp. 147–169.

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61

C h a p t e r 5

A F T E R T H E R E C E S S I O N : S T A T E H U M A N R E S O U R C E M A N A G E M E N T 1

Sally Coleman Selden Lynchburg College

I n t r o d u C t I o n For the past five years, human resource management (HRM) professionals in state government have helped implement changes needed to adapt to the recession and to respond to fiscal constraints within their states. Changes have included making workforce reductions, reducing budgets, and reforming state civil service systems and procedures to be more efficient (Galinsky and Bond 2009). Although government jobs are typi­ cally considered among the most stable, states have implemented employee layoffs or reductions­in­force, pay freezes, furloughs, and pay cuts, resulting in slightly smaller state workforces (Duggan, Lewis, and Milluzzi, 2010). For example, rather than cutting pay directly, Nevada’s legislators had state employees take off one unpaid day each month, reducing their salaries by 4.6% for a savings of $333 million. As an experiment, employ­ ees in Utah moved to a four­day work week to save the state money in 2008 (Galinsky and Bond 2009). In 2011, the state abandoned the practice after determining that cost savings were not realized (Loftin 2011). Some states have seen a drop in full­time equivalent (FTE) positions. Georgia, for example, saw its number of FTEs decline by 3% from 2010 to 2011 and then another 8.33% between 2011 and 2012.

Pennsylvania implemented workforce reductions in fiscal years 2008–2009 and 2009–2010 due to a signi­ ficant reduction in revenues. A statewide hiring freeze began in September 2008 and continued throughout 2010. The state also closed multiple facilities, including state hospitals, schools, and regional state government offices. Overall in a two­year period, Pennsylvania rea­ lized a workforce reduction of over 1,200 employees and an additional 2,200 unfilled vacancies. These actions represented an estimated monthly savings of $19.2 mil­ lion to the Commonwealth. When implementing these workforce cost­cutting strategies, the state attempted to be sensitive to the adverse impact on staff laid off by enacting measures intended to ease state workers’ tran­ sition from Commonwealth employment. A testimony to the success of this initiative has been reflected in the fact that the challenges to the workforce reduction have been successfully defended in multiple employee appeal forums since its implementation.2

Even as the economy continues its recovery, state human resource (HR) professionals will continue to grapple with improving efficiency. During the reces­ sionary period, the state of Washington’s Department of Personnel (DOP) focused on improving efficiency with three key initiatives. First, the DOP implemented

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62 t h e s e t t I n g

a centralized security and monitoring for the Human Resource Management System (HRMS), which released 243 DOP personnel from security administration duties and helped standardize how HRMS roles were used across agencies (survey of Washington in 2012). Second, DOP implemented a “no print option” for payroll and gave employees 24/7 secure access to view their earnings statements via the on­line Employee Self Service (ESS) portal. From 2008 through 2011, 79% of employees were converted to “no print option,” which saved about 4.6 cents printing cost per statement (survey of Washington in 2012). Considering that the state of Washington employs about 58,932 persons, this represents a little over $2,000 per pay period. Third, DOP implemented a system that allowed employees to request and super­ visors to approve leave electronically, through the online ESS portal. This reduced the handling time required of time/attendance keepers and HR staff and minimized leave reporting error rates (survey of Washington in 2012). One agency found a 67% decrease in payroll staff time after implementing the online leave program.3

Much has been written in recent years regarding changes that are taking place within the field of pub­ lic personnel management (human resource manage­ ment). Scholars have focused on civil service reforms with studies examining the erosion of civil service pro­ tections and the effects of those changes (e.g., Bowman and West 2006; Coggburn et al. 2010; Crowell and Guy 2010; French and Goodman 2012; Green et al. 2006; Kellough and Nigro 2006; Nigro and Kellough 2008; Williams and Bowman 2007). Scholars and prac­ titioners have emphasized the role human resource management played as a strategic partner within state government organizations (e.g., Effron, Grandossy, and Goldsmith 2003; Selden 2006). HR in the public sector continues to change, but it is difficult to discern whether this is merely the evolution of the field or a by­product of the recession (Herring 2013). Many of the changes have been related to technology. Across states, HRM departments have been leveraging tech­ nology systems and processes to do things with fewer people (Herring 2013).

This chapter draws upon the experience of state governments as documented by surveys and interviews of state human resource management directors in 2000, 2007, and 2012.4 Over the past 12 years, the field has witnessed many changes in state civil service systems, and the most recent results indicate that the political pressures on civil service systems are increasing. First, this chapter discusses the concept of civil service in state governments. Second, it explores characteristics of state human resource management systems, highlighting the complexity and differences that exist across states. Third, it describes broad change strategies witnessed in states during the recession, including workforce cost­cutting. Fourth, it discusses employee retention within state governments and highlights practices associated with lower voluntary turnover. Fifth, the chapter discusses recruiting and hiring state government employees. Sixth, it highlights state efforts to train and develop their work­ force. Finally, the chapter explores the impact of the recession on state government employees.

C I v I l s e r v I C e I n s t a t e g o v e r n m e n t s The origins of state merit systems are inextricably linked to the depoliticization of the civil service (Aronson 1974; Conover 1925). Over 125 years ago, the Pendleton Act provided the blueprint for a modern, unified, and poli­ tically impartial civil service. The hallmarks of a “merit” system include relative security of tenure in office, the use of written, competitive examinations, and neutral administration (Sylvia and Meyer 2001). New York enacted the first civil service system in 1883—the same year Congress passed the Pendleton Act (Conover 1925). The following year, Massachusetts implemented its civil service (Conover 1925). It took more than twenty years before another state, Wisconsin, established a merit sys­ tem for its state government (Aronson 1974; Conover 1925). In the 1920s and 1930s, technical developments in the field of personnel, including testing and classifica­ tion, laid the groundwork for a more scientific approach to HRM. Despite the advances, many states did not adopt civil service legislation until the passage of the Social Security Act in 1935, which included a provision

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a f t e r t h e r e C e s s I o n 63

for grants to states. The act stipulated that states must be “federally approved,” which meant that states needed to guarantee proper and efficient administration to receive funding. Leonard White proclaimed in a 1945 article in the Public Personnel Review, “the importance of this amendment to the steady improvement of personnel standards in the State and county government cannot be exaggerated” (Aronson 1974: 136). The legacy of the type of civil service system established by the Pendleton Act is evident. Today, some states have a civil service sys­ tem characterized by an elaborate, and sometimes frag­ mented, web of laws, rules, regulations, and techniques embracing the merit principle. For example, New York’s structure governing its civil service system is, according to Riccucci (2006: 305), “fragmented and overlapping. This is statutorily driven. For managers and human resources specialists, it engenders a good deal of frustra­ tion and tension.” States, however, vary in terms of the percentage of employees covered by their classified civil service system.

Employees covered by civil service systems are often referred to as classified or merit system employees. As shown in Table 5.1, the percentage of classified employees across states did not change significantly between 1999, 2007, and 2012. In the mid­ to late 1990s, a few states, such as Florida and Georgia, shifted a significant amount of their workforces from the classified service to the non­ classified service or an employment­at­will system. Today, more than 88% of Georgia’s workforce is in the nonclas­ sified service, up from 80% in 2007 (Kerrigan 2012b).

Most civil service systems provide employees certain administrative and legal due process rights before dis­ charging them for cause, although the rights vary across classified merit systems (Lindquist and Condrey 2006). The rationale for providing such protections is to pro­ tect public sector employees from partisan pressure and removal. “Employment at will” typically connotes an employer’s right to terminate an employee without a reason and an employee’s right to leave when she or he elects. Both federal legislation and state laws provide exceptions to the doctrine of employment at will, inclu­ ding, but limited to, participation in union activities, whistleblowing, public policy, employer motivation, race, ethnicity, religion, national origin, sex, and disabilities. Montana, for example, is the only state that has passed legislation that prohibits employers from discharging employees without “good cause.”

States take different approaches to managing their nonclassified employees. Employees in the nonclassified service in some states, such as Alabama and Connecticut, are subject to the same rules and regulations of employ­ ment that apply to employees in the classified service regarding appointment and dismissal. In other states, such as Nebraska and New Hampshire, the central HR department does not have any authority over nonclas­ sified employees and therefore they do not maintain records in the central HR department on those emplo­ yees. In Virginia, state agencies with nonclassified employees are responsible for establishing their own set of HR policies for those employees.

Table 5.1 State Government Workforce Characteristics

1999 2007 2012

Percent of state workforce classified 87% 87% 85%

Percent of state workforce that are political appointees n/a 3.8% 3.5%

Percent of state workforce that is covered by labor agreements 46.3% 47.3% 38.6%

Percent of state workforce that is temporary 6.3% 7.1% 4.5%

Source: Survey of states by author in 1999, 2007, and 2012.

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64 t h e s e t t I n g

In recent years, civil service reformers have sought to remove civil service protections from a critical mass of state employees (e.g., Crowell and Guy 2010; Goodman and Mann 2010; Kellough and Nigro 2006). These reforms sought to redefine the relationship between public employees and their employers by allowing for at­will termination without the protection of procedural due process (Kellough and Nigro 2006). In practice, although some states have implemented system­wide civil service reforms, the percentage of employees covered by the civil service system has fluctuated over time as administrations have changed (Goodman and Mann 2010). Some administrations may grant employ­ ees in the nonclassified service civil service protections before leaving office. Other states may exempt particular departments, employee classes, or agencies either per­ manently or temporarily to create more personnel flex­ ibility (Goodman and Mann 2010). Many civil service reformers and opponents of civil service contend that states will have more flexibility to manage their work­ forces if state employees serve “at­will” and, therefore, do hold a property interest in their positions.

However, the nature and form of civil service protec­ tions, including due process protections, can vary from state to state. Moreover, due process procedures may vary across nonclassified personnel systems. The under­ lying assumption of reformers is that employees serving in nonclassified personnel systems have few, if any, due process protections. Since reformers often focus on how difficult it is to terminate tenured state employees serv­ ing in the classified service, it is instructive to examine variations in due process procedures for disciplinary actions adopted by states for both their classified and nonclassified employees.

Based upon the recommendations of a focus group of state personnel directors, a set of five questions were developed and included on the 2007 and 2012 surveys. States were asked “for employees in the classified system, does your state: allow employees to appeal disciplinary actions; require pre­termination hearings; have an exter­ nal review of all termination requests; have an external source review termination requests when appealed by the employee; and require notification of termination.” States responded: yes, no, or varies by agency. These

Table 5.2 Employment Security Classified and Nonclassified Systems

2007 2012

Classified Service

Nonclassified Service

Classified Service

Nonclassified Service

Employment Security Index (additive index of the following five measures)

3.7 1.4 2.6 .8

Allow employees to appeal disciplinary actions? 98% 43% 93% 29%

Require pre­termination hearings? 74% 14% 43% 7%

Have an external source review all termination requests?

21% 10% 7% 7%

Have an external source review termination requests when appealed by the employee?

83% 26% 62% 0%

Require notification of termination? 93% 45% 93% 50%

Source: Survey of states by author in 2007 and 2012.

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a f t e r t h e r e C e s s I o n 65

same questions were posed to state personnel executives for the nonclassified service.

The analysis focused on states which provided protec­ tions to all persons serving in either the classified or non­ classified service, since it is not possible to discern what share of agencies provided each of the aforementioned protections when the response was “varies by agency.” The five items were summed to create an index from 0 to 5. As shown in Table 5.2, employees serving in the classi­ fied service in 2012, on average, had more procedural due process protections (2.6) than employees serving in the nonclassified service (.8). However, across both the classified and nonclassified services, the data indicated that states were providing fewer procedural due process protections to all employees than they were in 2007.

C h a r a C t e r I s t I C s o f s t a t e h u m a n r e s o u r C e m a n a g e m e n t s y s t e m s Historically, in a traditional classified civil service system, the authority to administer HR activities belonged to a central personnel or HR department. The purported benefits of this approach included equitable treatment of employees, consistency in the delivery of services, efficiency gains through economies of scale, and clearly delineated roles between central HR department and state agencies. In the 1990s, many scholars and prac­ titioners pushed for state central HR departments to decentralize their authority over some HR practices and provide more flexibility to public agencies and their managers (for a discussion, see Kellough and Nigro 2006).

States have reduced their human resource man­ agement staff over the past five years. As shown in Table 5.3, states’ HR departments on average employ approximately .71 human resource management staff (both agency and central HRM) per 100 state emplo­ yees. In 2007, states had approximately 1.21 HRM staff per 100 employees. Between 2005 and 2012, the percentage of employees doing HR work declined by 66% (Hackler 2012).

The majority of HRM employees are housed in state line agencies but some states, such as Alabama, Iowa, Indiana, and Michigan, have over 30% of their HRM staff located centrally. In July of 2006, Utah’s Department of Human Resource Management grew from 38 to 182 staff members; but in 2012, the number of HRM professionals in the central office dropped to 16, with a total of 142 statewide (central and depart­ ments). On the other end of the spectrum of centrali­ zation is Florida, which has approximately 3% of its HRM staff in its central office.

h r m r e f o r m a n d r e s t r u C t u r I n g I n I t I a t I v e s I n t h e s t a t e s Over the past 12 years, state civil service systems have undergone considerable changes. The underlying philosophy that has driven public dialogue emerged as part of the new public management philosophy (NPM) (Condrey and Battaglio 2007). Advocates for reform have pushed for HRM systems that reduce civil service rules and emulate private sector HR practices.

Table 5.3 Characteristics of Central HRM Department

2007 2012

Total HRM staff per 100 state employees 1.2 .71

Central HRM staff per 100 state employees 0.25 .12

Percent of HRM staff working in central HRM office 23.19% 13.04%

Source: Survey of states by author in 2007 and 2012.

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66 t h e s e t t I n g

s y s t e m C h a n g e : C I v I l s e r v I C e r e f o r m In the late 1990s and early 2000s, Georgia and Florida implemented radical system­wide civil service reforms that changed the nature of civil service within those states. In 2002, Washington adopted system­wide changes to its personnel system but without abolish­ ing its civil service system. After more than a decade and much public dialogue on reducing civil service protections and increasing at­will employment for public sector employees, civil service reforms are on the rise again. In the past two years, Arizona, Indiana, and Tennessee adopted sweeping civil service reform. Colorado is continuing to pursue similar reforms.

In 2011, Indiana enacted civil service reform. The changes weakened seniority in its personnel system and reduced the number of employees in the civil service or merit system (Kerrigan 2012b). Prior to the change, approximately 80% of Indiana’s state workforce was classified. The percentage of classified state employees had fallen to approximately 13% as of December 2012 (Hackler 2012).

In 2012, two states—Arizona and Tennessee— adopted sweeping reforms to their civil service systems, which impacted selection and termination policies and grievance procedures. Arizona’s governor, Jan Brewer, made civil service reform a platform issue for the 2012 legislative session. Over time, Arizona’s system will shift away from a traditional civil service structure towards an at­will structure that more closely approximates the approach used by private sector organizations. New hires in Arizona state government are no longer part of the civil service system. Similar to the approach used in Georgia in 1996, current Arizona state government employees, who have civil service protections, who are promoted, transferred, or receive a raise will convert to an at­will status (Maynard 2012).

In April of 2012, Tennessee’s governor, Bill Haslam, signed the Tennessee Excellence, Accountability, and Management (T.E.A.M.) Act, which ushered in signif­ icant civil service reform in the state that is consistent

with reforms passed in Georgia, Florida, and Indiana (Kerrigan 2012a). According to the state,5

The T.E.A.M. Act established a system of person­ nel administration to help attract, select, retain and promote the best employees based on merit and equal opportunity, free from coercive political influ­ ence. . . . The T.E.A.M. Act removed requirements for testing, scoring and rank ordering applicants, allowing applicants to be approved based only on minimum qualifications. Rather than interviewing only those with a score that falls into the top 5 on a list, agencies may interview any qualified applicant who possesses the knowledge, skills, abilities and competencies identified for the position. Veterans’ preference in hiring is included. Reductions in force are no longer based strictly on seniority, and bump­ ing and retreating have been eliminated. Job perfor­ mance plans that are specific, measurable, achievable, and relevant to the strategic goals of the agency are required for all employees. The opportunity for merit pay is included in the Act. A cumbersome five­step grievance process which included a pre­termination due process hearing has been replaced with a stream­ lined three­step appeal process.

The state expects that the changes will provide more flexibility in Tennessee’s hiring process, streamline the appeals process, and revamp the performance evaluation system, linking it to pay increases and layoff decisions (Kerrigan 2012a).

The concerns about the constraints of state civil service systems became a rallying point for reformers in states since the economic recession began in late 2007, and it has intensified recently and resulted in signi­ ficant changes in three states. Efforts to roll back state civil service systems and eliminate employee job protec­ tions in Arizona, Indiana, and Tennessee, and efforts to repeal collective bargaining rights for public employees in Wisconsin and several other states, are direct results of this trend. The political impetus is being provided

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a f t e r t h e r e C e s s I o n 67

by activist governors, the reform movement is fueled by fiscal stress and the need for increased budget aus­ terity, and it is changing the face of state governments (Bowman et al. 2003; Goodman and Mann 2010; Hays and Sowa 2006; Kellough and Nigro 2006; Nigro and Kellough 2000).

h r m r e s t r u C t u r I n g I n I t I a t I v e s While not as sweeping as civil service reform, states have also implemented structural changes within their per­ sonnel systems (see Table 5.4). Between 2007 and 2012, states have implemented an array of HRM restructuring initiatives that are consistent with Hal Rainey’s observa­ tion that “the continuing complaints about the rigidity of the civil service personnel systems” have motivated governments to pursue flexibility using many different paths (Rainey 2006: 36). A review of state efforts shows that efforts targeted toward shared services have con­ tinued, while states have decreased efforts at improving specific HRM processes (see Table 5.4).

In the past few years, some states have implemented a service delivery model that balances centralized and decentralized delivery of human resources—shared services—which had diffused through the private sector in the mid­2000s (Ulrich, Younger, and Brockbank 2008; Selden and Wooters 2011). A shared services model of

human resource management creates a centralized service function that considers employees and agency­ based HRM professionals as internal customers. This approach is designed to enable a state to better lever­ age existing resources, to reduce duplication of human resource management activities across state agencies, and to provide more consistent, higher­quality services to internal customers by concentrating existing resources and streamlining processes (Selden and Wooters 2011). Idaho, for example, took a two­fold approach to HR in the state. Large state agencies in Idaho maintained their HR office. HR units and professionals within smaller agencies were consolidated into a “shared services” HR unit that provided HR services to all small agencies within the state.

Utah also has implemented a consolidated decentra­ lized model of human resource management. In 2005, the governor consolidated HRM but did not fully cen­ tralize it. Transactional HR activities, such as payroll processing and retirement calculations, were centralized in the Employee Resource Information Center, a shared services call center. Service delivery was decentralized to HR within the agencies so that strategic decisions would be executed at the agency level, but the central HR department supported agency HR through its shared consultant services.

Table 5.4 Percentage of States Implementing HRM Restructuring Initiatives in 2007–2011 compared with 2004–2006

2004–2006 (%) 2007–2011 (%)

Process improvement 65.9 28.1

Shared services 39.0 37.5

Consolidation 26.8 28.1

Centralization 24.4 31.3

Decentralization 24.4 15.6

Outsourcing 19.5 12.5

Source: Survey of states by author in 2007 and 2012.

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68 t h e s e t t I n g

Pennsylvania also implemented an HR Service Center to unify high­volume HR transactions into a single, state­ wide organization. According to the state,2

The center provides state­wide customer service to 80,000 employees, 43 agency HR offices and execu­ tive leadership. The center is supported by a complex array of technology, including the commonwealth’s ERP system; a hybrid cloud HR knowledge base that plugs into our ERP employee self service functiona­ lity; call center telephony, management and metric packages; third­party provided customer relationship management applications; document management applications and more.

The Commonwealth has also achieved one of the most highly integrated shared service centers, providing enterprise­wide support for employees, personnel/ position transactions, application/ERP operational support and HR data reporting. By answering routine HR inquiries and processing common HR transactions centrally, agency HR staff is freed up to pursue more strategic work, such as safety initiatives, succession planning, recruitment and training and development.

Today, approximately 66 % of employee HR needs are met by employee self service and 28 % are met at the HR Service Center level, leaving only 6 % that require the input or involvement of a program or policy expert. With an implementation cost of $1.4 million and an annual delivery cost of just $78 per employee, the center is a cost­effective shared services initiative. The implementation of the center also has improved HR service to agencies and employees of the common­ wealth by providing efficient transactions processing and consistent communications across agencies. The HR Service Center is expected to save approximately $3.5 million each year by reducing the overall number of HR staff statewide; eliminating many costly errors; and reducing benefits appeals.

The Commonwealth of Pennsylvania is a leader in shared services within the public administration sector.

Due to the scope of change, the implementation of the HR Service Center had wide internal impacts for both employees and agencies.

The examples illustrate how states are changing their delivery of HRM services, with an effort to pro­ vide better, more efficient services to internal custom­ ers. Under the shared services model, central HRM works in partnership with agency HRM professionals to determine what services they need. Adopting shared services is not as radical as reforms that remove civil service protections of public employees. Instead, the shared services model seeks to modernize state human resource management systems by utilizing new tech­ nologies and partnerships and by better supporting services to agencies and departments (Selden and Wooters 2011).

W o r k f o r C e C o s t - C u t t I n g s t r a t e g I e s As noted in the beginning of the chapter, states have adopted different strategies to reduce their labor costs due to fiscal challenges. We asked state HR directors which workforce cost­cutting strategies the state had implemented during FY 2009, FY 2010, FY 2011, and FY 2012. The results of the 2012 survey showed that states have adopted varied approaches when planning their workforce cost­cutting strategies. After four years, states have continued to adopt one or more of the cost­cutting strategies highlighted in Table 5.5. In FY 2012, layoffs were still being implemented in 80% of states to help balance budgets. The long­term impact of continued layoffs is unknown. Research documents that survi­ vors of layoffs may find that their jobs have changed; they may have more responsibilities and report to dif­ ferent managers; their colleagues may have changed; or they may have new rules, policies, and procedures to follow (Allen et al. 2001; Datta et al. 2010). All of which creates stress for the employee, decreases commitment, lowers job satisfaction, and decreases morale (e.g., Armstrong­Strassen 2002; Ashford, Lee, and Bobko 1989 Datta et al. 2010).

Furloughs function like “temporary layoffs” and result in a reduction in pay for employees during that fiscal

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a f t e r t h e r e C e s s I o n 69

year. Furloughs were used by almost half of the states in FY 2010, but their use has decreased the past two years. When furloughed, state employees suffer real wage losses for the fiscal year, which impacts their standard of living. Over the past four years, states have utilized hiring and pay freezes to reduce expenditures. More than 30% of states maintained hiring freezes in 2012. States with hiring freezes were not able to replace employees that left, which may have increased the level of stress within the state workforce. Like survivors of layoffs, employees working in environments with hiring freezes may find they are asked to take on additional responsibilities without additional compensation or recognition, until the hiring freeze is lifted. States were much less likely to use early retirement buy­outs, pay cuts, and benefit reductions to reduce their workforce costs.

When implementing its cost­cutting strategies, Utah relied heavily upon the leadership of state agencies and the Department of Human Resource Management (DRHM) to guide its effort:6

The overarching strategy used by Utah’s governor was to focus on finding operational efficiencies. This included allowing each agency head to determine how and where budget cuts would be implemen­ ted. Agency heads were able to consult with their

management teams and employees to determine where they could find efficiencies while minimizing the negative impact on their employees and customer service. This approach resulted in each agency tailor­ ing its own strategy(s) to best meet its needs inclu­ ding better utilization of technology, elimination of unnecessary programs and processes, redesign of processes, as well as reductions in staff. DRHM over­ hauled the State’s reduction­in­force (RIF) rules, policies, and procedures. This overhaul shifted the focus of RIFs from seniority to proficiency. Empha­ sizing proficiency over seniority allowed agency managers to reduce staff while retaining key skill sets necessary to accomplish their agency missions and to maintain customer service levels.

In evaluating its options in 2010, Pennsylvania decided to reduce costs by restructuring the health plans offered throughout the state. The Commonwealth selected one national Medicare PPO and three regional Medicare HMOs. The selected health plans provided similar coverage and minimal disruption to members and greatly simplified administrative processes. In addition, the Commonwealth was able to cut its 2010 expenditures for this coverage by 16% or approximately $16 million annually.2

Table 5.5 Workforce Cost-Cutting Strategies Implemented by States FY2009–FY 2012

FY 2012 (%) FY 2011 (%) FY 2010 (%) FY 2009 (%)

Hiring freezes 31.3 43.8 56.3 68.8

Pay freezes 31.3 56.3 62.5 43.8

Layoffs 81.3 87.5 87.5 62.5

Furloughs 18.8 31.3 50.0 37.5

Early retirement incentives 12.5 25.0 31.3 18.8

Pay cuts 6.3 6.3 0 0

Benefits cuts 12.5 18.8 6.3 6.3

Source: Survey of states by author in 2012.

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70 t h e s e t t I n g

r e t e n t I o n o f s t a t e e m p l o y e e s Nearly all states worry about their workforces, especially given the workforce reduction strategies that have been implemented during the recessionary period and the large percentage of state employees who remain eligible to retire. The good news is that voluntary turnover fell during the recession; however, this trend is expected since there were fewer alternative employment opportunities in the market. On average, the percentage of the state workforce leaving voluntarily fell from about 7% in FY 2007 to 6.3% in FY 2012. The recession did not seem to impact turnover patterns of new hires, however. On aver­ age, about 22% of new hires quit or were fired in FY 2012, which was consistent with the percentage in FY 2007.

For example, Washington’s total turnover was 8.6% in FY 2008 and fell to 7.7% in FY 2009.3 Even though the turnover reduction was perceived as positive, the state recognized that the economic downturn created risks associated with retention in the workforce such as disen­ gaged employees remaining in jobs, losing key talent and top performers, bad job fit for employees landing in new roles as a result of layoff process, delayed retirements, and discouraged managers. To mitigate these risks, Washington focused on employee engagement. The state compared and analyzed data from the Washington State Employee Survey between November 2007 and October 2009 with the Gallup Q12 survey to determine if there was an issue of employee disengagement in the work­ force. Based on the results, the state’s senior executives identified the following strategic roles for leadership in

challenging times to engage staff: aligning and engaging (or re­engaging) middle and line managers; fostering open, honest communication with employees; articula­ ting the organization’s strategy, future, and job expecta­ tions; focusing on development—encouraging learning and growth; giving feedback and recognition; and com­ municating progress on the goals. Voluntary turnover in Washington did not vary significantly over the past three fiscal years: 3.5% in FY 2010, 4.1% in FY 2011, and 4% in FY 2012.3

When examining factors correlating with voluntary turnover across states, one trend stood out in the 2012 findings (analysis not shown): factors predicting volun­ tary turnover of state workers differed from factors pre­ dicting new hire voluntary turnover. Consistent with the 2007 findings, the data showed that total compensation, salary plus benefits, was the most important predictor of voluntary turnover of state employees, predicting over 56% of the variance in 2012 compared with 54% in 2007. Base pay and benefits contribute to a state’s ability to attract and retain employees, while performance­based pay is argued to increase employee productivity. In 2012, 55% of states indicated that the state provided increased compensation to some extent for individual high per­ formers. About 33% of states connected pay increases to group or team performance.

Table 5.6 presents the average cost of total compen­ sation, which includes salary and benefits, as of June 30, 2003, June 30, 2007, and June 30, 2012. On average in 2012, states spent $64,877 on salary and benefits per

Table 5.6 Average Cost of Total Compensation for Classified State Employees (as of June 30, 2003, 2007, and 2012)

25th percentile Mean Median 75th percentile

2003 $42,631 $49,471 $47,405 $53,493

2007 $48,843 $57,042 $56,611 $64,252

2012 $55,840 $64,877 $64,962 $76,008

Source: Survey of states by author in 2003, 2007, and 2012.

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a f t e r t h e r e C e s s I o n 71

classified state employee, an increase of 14% since 2007 and 31% since 2003. As of June 30, 2012, on average, salary comprised 69.1% of total compensation, up from 64% in 2008. In 2012, expenditures on benefits account for the remaining 30.9% of total compensation.

An analysis of factors expected to impact new hire turnover revealed that employee referrals in the hir­ ing process, formal on­the­job training by experienced supervisors or employees, self­managed teams, exter­ nally competitive salaries, and pay increases tied to team performance were associated significantly with lower new hire turnover. These factors accounted for 80% of the variance in 2012 new hire voluntary turnover.

As the economy improves, states are concerned about whether or not they will be able to retain employees, especially in particular fields when there is significant competition with the private sector. In Alabama, the HR director is worried about the retention of engineers. The state has been successful in recruiting and retaining engineers during the recession because fewer alternative employment opportunities existed. In 2013, the state implemented changes to its retirement system that will make state employment less attractive to job candidates. With the new plan, people working for Alabama will no longer be eligible to retire after 25 years of service, and their benefits are reduced slightly.

r e C r u I t I n g a n d h I r I n g n e W s t a t e g o v e r n m e n t e m p l o y e e s Despite the adoption of hiring freezes in some states, the overall hiring patterns across states were similar between 2007 and 2012. On average, states hired 2,181 new employees in 2007 or 1.1 new hires per 10 state emplo­ yees, compared with a slight increase in 2012 of 2,310 new employees or 1.2 new hires per 10 state employees. Similarly, the average age of new hires in state govern­ ment in 2012 was 37.4 years, which was consistent with the average age of hires in 2007. However, in 2012 states received more job applications per job opening. On aver­ age, states received 74.8 applications per job opening in 2012, which was 19% higher than the number of appli­ cations received in 2007. As this suggests, the demand

for state government jobs appeared to increase during the recessionary period. Alabama’s HR director noted that the state has been able to recruit people in high­ level positions such as chief information officers and chief operating officers who were working in the private sector and who would never have considered state gov­ ernment prior to the recession. Applications in Alabama were up the past few years, and the perception is that people are interested in working for the state because of job security. The majority of positions in Alabama are civil service, which offers certain job protections that are attractive in the labor market (Graham 2013).

As shown in Table 5.7, states have not focused their recruiting efforts on strategies that would attract recent college graduates to state service. Job fairs were the most commonly used recruitment strategies with more than 70% of states using them to some extent. Less than one­ third of states operated a centralized college recruiting program or offered paid internships at least to some extent. Even fewer states utilized a recent graduates program or management fellow programs. The use of social media as a recruiting tool had not diffused across states as illustrated by the percentages of states using Facebook, Twitter, and LinkedIn to connect to prospec­ tive employees. Maine is particularly concerned about the age of its workforce. The state has developed new pro­ tocols for internships and is in the process of conducting focus groups with individuals under 28. The objective is to develop recruiting and retention plans that target younger members of the labor force (Oreskovich 2013).

During the 2007–2012 period, some states, such as Montana and Louisiana, implemented online recruitment systems to improve the efficiency of their hiring systems. Louisiana’s LA Careers allows applicants to apply online for state employment opportunities and then the system automatically tracks job announcements and hiring processes.6 Even though the state implemented a centra­ lized system, hiring remains a decentralized function. The online system affords agencies the capability to attract highly qualified applicants with an easy­to­use online job posting and application system. LA Careers provides prospective employees with a direct application

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72 t h e s e t t I n g

method that, in turn, provides agencies with a poten­ tially shorter time­to­hire. LA Careers also provides HR with a means to easily screen electronic applications for minimum qualifications by effectively utilizing sup­ plemental questions and offers reporting tools to find, track, and measure critical data. The state also migrated from written exam grade records to the online system in order to provide agencies with one efficient and com­ prehensive system to review electronic applications and exam scores. Prospective job candidates may walk in and take the civil service exam. Once a candidate tests, grade notices are sent out within 24 hours in most cases unless testing occurs over the weekend. Since going live with LA Careers in February of 2012, the system has received

and tracked more than 286,000 applications, with 97% of applications being submitted online versus in paper format.7 Another feature of the online system is its Job Interest Card service. Job applicants can elect to receive an email notification each time a position opens with the State of Louisiana whose job category matches one of the categories the applicant has entered on their Job Interest Card. In a six­month period, over 171,000 Job Interest Cards were submitted to the state. 7

t r a I n I n g a n d d e v e l o p I n g s t a t e e m p l o y e e s Training and development programs contribute to state government performance by ensuring that employees

Table 5.7 Recruiting Practices in States, 2012

To what extent do you use the following practices: Not at all (%)

To a very small extent (%)

To some extent (%)

To a great extent (%)

To a very great extent (%)

A centralized recruitment program 20.0 13.3 26.7 6.7 33.3

A centralized college recruitment program

53.3 13.3 20.0 0.0 13.3

Paid college internships 26.7 40.0 33.3 0.0 0.0

A recent graduates program 66.7 20.0 13.3 0.0 0.0

Management fellows program 86.7 6.7 6.7 0.0 0.0

Employee referral program 40.0 26.7 33.3 0.0 0.0

Monster.com 46.7 40.0 13.3 0.0 0.0

Jobster 93.3 6.7 0.0 0.0 0.0

Twitter 60.0 20.0 6.7 13.3 0.0

Facebook 47.7 26.7 13.3 13.3 0.0

LinkedIn 66.7 26.7 0.0 0.0 6.7

Other social networking sites 73.3 26.7 0.0 0.0 0.0

Job fairs 0.0 26.7 46.7 13.3 13.3

Source: Survey of states by author in 2012.

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a f t e r t h e r e C e s s I o n 73

have the knowledge, skills, and competencies they need to meet the current demands of their jobs and to advance their careers with the organization. Training is a direct means of helping people acquire capabilities to perform their present jobs whereas development focuses on building employees’ capabilities beyond those needed to perform in their current job. States noted that during the fiscal challenges, they were forced to revise their approach to training. Some states, such as Alabama and Louisiana, used in­house training more frequently during the recession rather than supporting outside training. To bridge the gap in resources, Oklahoma relied upon state workers to volunteer to train other state workers. Other states, such as Pennsylvania, New Mexico, North Carolina, and South Carolina, increased their use of online training.

Statutorily, Florida requires each state agency with Career Service (civil service) employees to implement and evaluate training programs that encompass modern

management principles, that foster employee develop­ ment, and that improve the quality of services. For FY 2011–2012, Florida agencies expended $27,821,092 on training, representing a 12.5% decrease from the $31,806,434 expended during FY 2010–2011.8 Examples of training provided by the agencies included sexual harassment awareness, professional development, ethics, public records, civil rights, leadership, diversity, performance management, customer service, informa­ tion security awareness, presentation skills, and safety.

While expenditures related to training have decreased, as shown in Table 5.8, some states continue to support training and development. For example, Utah’s central HR office responded to the decrease in agency funding of training by developing and delivering “short courses” focused on critical issues of interest such as liability and other management­related topics. These courses are shorter in duration and cost significantly less than exter­ nal courses. More than 50% of states provided leadership

Table 5.8 Training and Development in States, 2012

To what extent do you use the following practices: Not at all (%)

To a very small extent

(%) To some

extent (%) To a great extent (%)

To a very great extent

(%)

Job assignments and rotations as a career development tool

13.3 40.0 40.0 6.7 0.0

Formal investments in leadership development

6.7 20.0 53.3 20.0 0.0

Formal assessment of training needs 13.3 20.0 53.3 0.0 13.3

Formal program of on­the­job training conducted by experienced workers and/or supervisors

13.3 13.3 53.3 20.0 0.0

Personal development program for employees

13.3 33.3 33.3 6.7 13.3

Employee leadership potential evaluations

33.3 60.0 0.0 0.0 6.7

Source: Survey of states by author in 2012.

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74 t h e s e t t I n g

development and formal on­the­job training to some extent. Few states have implemented formal evaluation processes to identify employees with leadership poten­ tial. Job assignments and rotations were used to some extent by almost 47% of states.

t h e I m pa C t o f t h e r e C e s s I o n o n s t a t e e m p l o y e e s : k e y h r m W o r k f o r C e I n d I C a t o r s Research indicates that when agencies implement workforce­cutting strategies, employees may become anxious about their job security, which may impact their morale, job satisfaction, and engagement with work (Green and Medlin 2010). Green and Medlin found that stressed and disengaged employees negatively impact an organization. HRM state directors were asked to assess the impact of the recession on key workforce indica­ tors. As shown in Table 5.9, some states perceived that the recession had negatively impacted their ability to recruit and retain workers, but, surprisingly, most did not believe the state was worse off during the recession. However, on other workforce indicators, more than 50% of states perceived that employee morale, employee motivation, job satisfaction, employee stress, employee engagement, and the public’s perception of state workers was worse than before the recession—an issue that may result in future recruitment and retention problems when the economy fully recovers. Of particular note was that almost 86% of states perceived workforce morale as worse than before the recession and almost 79% believed that employee stress was higher than before the recession. These findings are consistent with the research cited in the workforce­cutting section (e.g., Armstrong­Strassen 2002; Ashford, Lee, and Bobko 1989; Datta et al. 2010). In Alabama, morale is a concern as state government workers have not received merit or cost of living increases in over four years. At the same time, they have had to increase their contributions to the state retirement system and to pay more for health insurance.9

W h a t t h e f u t u r e h o l d s As the economy continues to recover, states have both opportunities and challenges ahead. States will continue

to grapple with the exit of the baby boomers’ impact on the overall labor participation (Toossi 2005). While job applications were up in 2012, states have not adopted programs to recruit younger workers, which may be a key untapped labor pool. The average age of new hires remains high, and younger members of the labor force may not view state government employment as a viable option. States should continue to engage in succession planning, invest in training and development benefits, and position themselves—in terms of total compensa­ tion and employee development—to recruit and retain a diversity of workers. Factors that predict turnover of new hires were different than those of veteran emplo­ yees. New hires were more likely to stay when they were receiving formal job­appropriate training and develop­ ment. Such strategies provide guideposts for state HR departments.

The biggest potential challenge facing state gov­ ernments is the long­term impact of the array of cost­ cutting strategies employed for the past four fiscal years on the remaining state workers. HR directors indicated that employee stress, morale, satisfaction, and enga­ gement have been negatively impacted during the reces­ sion. Given the constrained resources, most states have not adopted programs explicitly to address the conse­ quences of workforce cost­cutting on their workforce. When unemployment decreases and more job opportu­ nities open, states, like the federal government, may find that employees, especially the ones they wish to retain, may choose to leave for new positions.

Finally, given the groundswell of activity related to civil service reform, the field is likely to see civil ser­ vice reforms implemented in other states. As a whole, “state employees have fewer civil service protections than they did a decade ago.” One director of HR noted concerns about the movement toward fewer job protec­ tions for employees. Under the state’s reformed system, an employee can be let go for any reason as long as the release does not violate a state policy. While the state has trained managers that HR will only approve terminating employees for merit, the question remains whether managers will start to exercise their new power by releasing people for nonmerit reasons.

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75

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76 t h e s e t t I n g

These and other changes will continue in state HRM systems as the field evolves. State will continue to utilize technology to create efficiencies within the HRM function and to provide better services to internal and external customers.

n o t e s 1. Produced by Sally Selden in partnership with the Pew

Center on the States. The views expressed are those of the author and do not necessarily reflect the views of the Pew Center on the States.

2. Pennsylvania survey response, 2012. 3. Washington survey response, 2012. 4. The Government Performance Project collected data from

state government human resource management profes­ sionals between the months of June and December in 1998, 2000, 2003, and 2007. The GPP administered a survey and collected over twenty­five documents from the central HRM departments. In 2003 and 2007, the GPP surveyed two state agencies about their HR practices. In addition, the GPP interviewed HRM professionals in the central HR department and selected state agencies. In 2012, the author surveyed states with support of the Pew Center on the States. As of February 1, 2012, half of the states had completed the online survey and preliminary interviews. In 2007, forty­one states completed the survey.

5. Tennessee survey response, 2012. 6. Utah survey response, 2012. 7. Louisiana survey response, 2012. 8. Florida survey response, 2012. 9. Alabama interview, 2012.

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Datta, Deepak K, James P. Gutherie, Dynah Basuil, and Alankrita Pandey. 2010. Causes and Effects of Employee Downsizing: A Review and Synthesis. Journal of Management, 36, 281–348.

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a f t e r t h e r e C e s s I o n 77

Relations. In J. Edward Kellough and Lloyd Nigro (Eds.), Civil Service Reform in the States: Personnel Policy and Politics at the Subnational Level. Albany, NY: State University of New York, pp. 279–302.

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C h a p t e r 6

S T R A T E G I C H U M A N R E S O U R C E S M A N A G E M E N T A T T H E L O C A L L E V E L : B A L A N C I N G E N D U R I N G C O M M I T M E N T S A N D E M E R G I N G N E E D S

Heather Getha-Taylor University of Kansas

I n t r o d u C t I o n Local government workforces are experiencing rapid and unprecedented change. Some of the most prominent chal- lenges include managing reductions in force, succession planning for an increasingly aging workforce, address- ing pressures for outsourcing, and responding to ever growing demands for services. Further, the gap between expected performance and available resources continues to grow. Local government employees are responsible for critical public service commitments, including public health and safety, and are at the same time dealt the deep- est personnel management cuts. This chapter considers this stark situation by examining the need to strategically balance enduring commitments and emerging needs.

In 2012, Ann Arbor council member Christopher Taylor wrote about the difficulty of managing such challenges. While writing specifically about governance in Michigan, his statement could certainly be applied more broadly:

We live in an economically and politically challenged state. Michigan’s political culture has for years now

driven us to become a low-service state that cabins cities’ ability to solve local problems and provide exemplary municipal services; systematically dimin- ishes support of public and higher education; and deemphasizes and underresources long-standing infrastructure needs. (Taylor 2012)

Many local governments across the United States are facing similar circumstances. A key question is how to maintain a strong public workforce amid these con- straints. Despite difficulties, trade-offs are not mandatory. For instance, the city of Albany, Oregon, has successfully balanced effective management with emerging local trends such as an unemployment rate that exceeds the national average and poverty rates (especially among disabled citizens) that exceed state averages. While service gaps may be expected in this context if growing needs outstrip public resources, the city’s performance was recognized four years in a row by the International City/County Management Association (ICMA), and in 2011 and 2012, the city received the ICMA Certificate of Excellence Award. Albany’s city manager, Wes Hare,

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cites strategic planning as key to the city’s success during what has been an otherwise trying time.

A well run city, in the end, is a place where people want to live. Albany’s Strategic Plan calls for us to achieve that goal by maintaining safety, a healthy economy, great neighborhoods, and effective gov- ernment services. By most measures, the community has been successful over the past decade, although many challenges remain. I believe we will overcome those challenges by maintaining a commitment to rigorously analyze our weaknesses, measure our per- formance, and take corrective action when we know there is a need to do so. (Hare 2012)

Scholarship and practice together advocate for stra- tegic management approaches. When applied to work- force issues, strategic human resources management (HRM) moves an organization toward a specific vision via practices aimed to meet key objectives (Daley 2002). SHRM offers a road map to guide organizations from their current realities to expected end goals. Yet it is difficult to maintain a strategic map when boundaries shift. Understanding how to effectively manage the local government workforce when budgets shrink, demands increase, and goals change is a priority. Given the impact of external forces on internal planning practices, it is important to consider ways in which local governments can maintain a strategic focus during times of turbulence.

There are a number of key dimensions impacting the practice of strategic HRM, including planning, struc- ture, process, values and culture, organizational context, leadership and management, labor-management rela- tions, environmental elements, and technological con- siderations (Farazmand 2007). This chapter considers local government HRM from a systems perspective by examining the external and internal forces that together impact the ability to bridge organizational, employee, and societal expectations. This chapter presents illu- strations of ways in which local governments have successfully sustained a strategic workforce management emphasis during turbulent times. Finally, while this

chapter highlights some of the most pressing workforce management issues facing local government, it also provides recommendations for engaging in strategic practices at the local level.

L e a r n I n g f r o m t h e p a s t Historical foundations shed light on current challenges and illustrate previous efforts to reform, reshape, or revitalize the public service. Emergent forces call atten- tion to the ongoing value tensions between patronage and merit, neutrality and responsiveness, and efficiency and effectiveness (Ingraham 1995). These long-standing tensions are well rooted in the Jacksonian or spoils era, which was marked by political partisanship, regular turnover, and overt corruption. While originally framed as an opportunity to return government employment to “the common man,” patronage hurt the image of public employment at all levels. Yet it served political purposes, including responsiveness and party loyalty (Loverd and Pavlak 1983). Freedman (1994) summarizes both sides of the coin: “While there have been periods when patron- age achieved widespread acceptance and the practice has at all times had its defenders, for much of our history patronage has been considered undemocratic and unsa- vory if not downright corrupt and immoral” (pp. 8–9).

The patronage system thrived in the years leading up to the assassination of President Garfield by a disgrun- tled office seeker in 1881. Corruption and inefficiencies affected all levels of government. Kickbacks, overpay- ments, and work stoppages led to pushes for reform, but entrenched bosses didn’t see the potential of politics without patronage and vocally criticized the “snivel service” reform efforts (Van Riper 1958: 62, in Freedman 1994). High-profile, publicized cases of opportunistic grift helped turn the tide, including examples like the New York County clerk who retained up to $80,000 in fees as part of his salary (Hoogenboom 1961: 256 in Freedman 1994).

The landmark Pendleton Act of 1883 ushered in merit reform at the federal level but did not include city provisions. It was not long, however, before local reforms were underway. The National Municipal League

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wrote the model legislation to introduce municipal merit provisions. The original draft served to counter mayoral power; the law was amended in 1916 to city manager form (Martin 1989). Civil service reform and the intro- duction of merit system tenets at the local level served to insulate personnel from political influence and also “rationalize” administration (Tolbert and Zucker 1983). The effort spread quickly: By 1935, merit legislation was enacted in over 450 U.S. cities (Van Riper 1951). Tolbert and Zucker (1983) summarized the local level reform efforts: “Local government structure became clearly patterned by the wider culture over time; civil service procedures became ubiquitous” (25).

The intervening years have witnessed an ebb and flow of reform initiatives aimed to enhance such aspects as responsiveness and performance in the bureaucracy. Yet, beginning with the effort to replace patronage in large scale, Martin (1989) notes: “Civil service and other reformers were destroying party power without replac- ing it with democratic alternatives. Once their reforms caused abuses, having no fresh ideas, they continued to call for even more unsuccessful reforms” (324). These reform efforts, however, focused on the extrinsic push for change without consideration of implementation or internal management factors. Freedman (1994) notes: “Many of the merit systems are incomplete and/or riddled with loopholes. Even when a civil service law looks good on paper, it is often evaded. . . . In the real world, there are no foolproof systems” (25).

According to Ingraham (1995), reform alone is not the answer. “All the management techniques in the world will falter in the public sector if the environment in which they are implemented is one of distrust and constant challenge” (13). It is difficult to learn the lesson that recognizes the interplay that exists among exter- nal forces, organizational performance, and individual investment. For instance, Arthur Proctor’s 1921 text on public personnel administration (among the first of its kind) also complained of similar concerns, including resource constraints and high public employee turnover. Further, Fred Telford’s pioneering 1927 and 1929 pub- lications on the topic also identified underfunding and

external forces as major contributors to government’s inability to meet personnel management goals. When we fast-forward to present day, we find that contem- porary approaches to HRM still present difficulties in balancing external forces and internal needs. Dominant societal and political values determine the ways in which organizations set goals and conceptualize the role (and priority) of HRM now and for the future (Condrey 2012).

C u r r e n t C o n t e x t The challenge of balancing multiple expectations is exacerbated by contemporary economic forces, which reshaped the local government workforce in dramatic ways (Government Accountability Office 2010; Martin, Levey, and Cawley 2012). Namely, in the aftermath of the Great Recession of 2007–2008, local government employment was at its lowest level in over 30 years (Greenstone and Looney 2012), and all but nine states experienced reductions in their local government work- forces (U.S. Census Bureau 2011). Cuts in local govern- ment jobs, including the critical areas of public safety and education, have both short-term and long-term implications for service delivery and societal outcomes. When the goal is saving money, personnel costs are generally considered first as they constitute the greatest portion of local government spending.

In addition to adding more part-time workers (Maciag 2012), some localities responded by suggesting solutions such as mass privatization in an effort to cut costs. Perhaps one of the most dramatic recent examples is the case of Costa Mesa, California. In March 2011, the city faced a projected $15 million deficit in the city’s $114 million budget. The city council voted 4–1 to lay- off nearly half of the city’s 450 employees and outsource jobs in order to cut costs (Medina 2011). The ensuing battle made national headlines as it highlighted a variety of contentious issues that divided employees, citizens, and elected officials, including public employee collec- tive bargaining provisions, growing retirement costs, and the potential of contracting out government services. Following the layoff announcement, 29-year-old Costa Mesa maintenance worker, Huy Pham, committed

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suicide at city hall (Marinucci 2011). Accounts indicate that Pham was affected by the “demonizing” of public employees, which may have contributed to taking his life (Washburn, Santana, and Elmahrek 2011).

Especially in times of economic strain, public employ- ees, and their associated benefits, can become targets for attack (Befort 2012). Negative sentiment toward public workers generally, and public unions specifically, is a pal- pable force (McDermott 2011). Yet the reasons for such animosity, namely concerns surrounding unfair public pay plans, are largely unfounded (Buntin 2010; Keefe 2012). Dramatic reforms, then, must be considered care- fully. In the case of Costa Mesa, in August 2012, a ruling by a panel of appellate court justices prevented the layoffs and outsourcing, but proponents of the actions planned to pursue charter city status. This change would allow them to privatize city services, thereby saving money on pensions and other employee benefits (Appellate Court: No Costa Mesa Layoffs 2012). The expected savings would support capital improvement projects, but the plan violated the city’s collective bargaining agreement with employees (Dobruck and Zint 2014). At the time of this writing, the legal battle between Costa Mesa and the Costa Mesa Employees Association continues. In an interesting juxtaposition, the city has withdrawn the pink slips but remains committed to outsourcing. In this case and others, the challenges of balancing external forces, such as the need to meet revenue shortfalls, with internal forces, such as the need to protect employee rights, are painfully apparent.

The postrecession economic constraints were felt most strongly at the local government level. Local reve- nues dropped for six years in a row (Greenblatt 2012), and this was illustrated in a shrinking municipal and county workforce. The 2011 Annual Survey of Public Employment and Payroll reported a total of 10.7 million full-time employees working at the local government level and 3.3 million part-time employees, which represented an overall reduction of 3% from peak pre-recession local government employment levels (U.S. Census Bureau 2011). Pay and hiring freezes, layoffs, and furloughs were expected to constrain the local government workforce for

years (Center for State and Local Government Excellence 2012). These practices are still occurring but are now accompanied by other promising trends, including the move to hire employees. Still, the size of the local work- force remains smaller than it was pre-recession (Center for State and Local Government Excellence 2014).

Further, in the most recent report of state and local government workforce trends, survey respondents indicated that recruiting and retaining qualified pub- lic servants is a top priority for the future (Center for State and Local Government Excellence 2014). And at the same time, managing the workload is a concern as well. Together, these factors can create a volatile mix. For example, a report revealed that some government staffing shortfalls resulted in caseload backlogs of over a year for teacher misconduct investigations in California, backlogs of over six months for child protective service visits in Arizona, and elevator inspections that may be nine years overdue in Iowa (Maynard 2011). Simply put, public safety can be seriously threatened as a result of HRM gaps at the local level.

e x t e r n a L f o C u s : a L I g n I n g C o n s t r a I n t s a n d e x p e C t a t I o n s Perlman and Benton (2012) consider the variety of adaptations taking place at the local government level in response to these “new normal” expectations. The authors conclude that cost-cutting measures that rely on staffing cuts alone illustrate a preference for addressing “low hanging fruit that can be snatched without great exertion” (10), but such decisions do not transform orga- nizations and improve outcomes. Rather, the authors argue that instead of focusing only on labor costs/ inputs, policy makers and reformers should broaden the focus to include the demand side of the equation. In such high-profile cases as teacher misconduct investigation, child protective services, and public safety, the demand side is clear. Yet it will take systematic change to address broader issues.

A systems perspective helps highlight the contem- porary local government HRM challenges. Local govern- ments are interconnected with (and dependent on) their

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external environment, including the variety of societal and political stakeholders that contribute resources and determine direction. As a result of this structure, external forces permeate internal processes and actions. This holistic perspective provides a framework for understanding complexity. Effective internal adaptation is difficult in systems marked by conflict, ambiguity, and uncertainty. This represents a chaotic reality in any system and especially for local government human resource managers.

Recent events demonstrate these tensions. Debates surrounding public employee rights, including merit systems protections and collective bargaining provi- sions, have been hotly contested across the United States and specifically in Wisconsin and Ohio in 2011. In the Wisconsin case, Governor Scott Walker worked to curb public employee unions, which spurred thousands of protestors to descend on the steps of the state capitol. It also led to a gubernatorial recall initiative. The recall was unsuccessful and Walker’s restrictions on public unions were overturned in September 2012 as violations of union members’ freedom of speech and association and equal protection of the laws (Greenhouse 2012). In 2013, a federal court ruling upheld Walker’s initiative, known as Act 10, which restricts unions from bargaining about employee benefits and employment conditions aside from base pay. Union membership has withered as Wisconsin’s public employees “have little reason to pay dues to a union that can no longer do much for them” (Greenhouse 2014). In Ohio, voters rejected Governor John Kasich’s efforts to curb public employee unions. While most state-level civil service reforms do not apply to municipal workers, some local governments are also considering reforms that center on streamlining reg- ulations and enhancing flexibility on such matters as dismissal (Cuda 2012).

Preserving employee protections during calls for more responsive and cost-effective processes can be daunting, especially when local governments must address loom- ing, competing needs for the future. In addition to invest- ments that will ensure a strong municipal workforce for the future, cities face imminent physical infrastructure

investments as well (Abels 2012). This requires tough choices, especially given the confounding impact of a depressed labor market (Bivens 2014). The question, it seems, is whether employee protections and cost- effective public value creation are two mutually exclusive concepts. What we do know is the importance of the professional local government workforce in achieving outcomes of interest. Folz and Abdelrazek (2009) found that the presence of professional managers at the local level translates into higher levels of services and commu- nity value. Simply finding a cheaper alternative does not make it a better one in the short term or the long run.

These and other dilemmas challenge municipalities in their ability to recruit and retain their best employees. Specifically, external forces threaten the core under lying principles that characterized government work and the people who have chosen a public service career. For instance, Liff (2007) notes that government employees were traditionally drawn to the public workplace by bet- ter job security, developmental and advancement oppor- tunities, and the chance to make a difference. Those and other expectations are tempered in the contemporary environment: Local governments risk both broken formal agreements and unsubstantiated psychological contracts (Berman et al. 2013). The latter, “unwritten understanding about mutual needs, goals, expectations and procedures” (228), are important motivational tools: They help managers understand employee interests and align individual expectations with organizational needs. In absence of resources to meet shared expectations, organizations risk alienating employees.

On the one hand, it seems that local employees and their organizations face external forces that present potentially insurmountable odds for success. Yet there are resources that may not be fully acknowledged. For instance, polls show that citizens attribute the highest level of trust to local government employees (Conley 2012). Local government employees represent the clearest link between the people and democracy. It is expected that mutual trust developed between local employees and citizens will contribute to social cap- ital creation. It is also expected that trust will induce

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reciprocal capacity building that will help both citizens and employees jointly respond to shared challenges (Mathie and Cunningham 2002).

I n t e r n a L f o C u s : e n g a g I n g I n s t r a t e g I C I n I t I a t I v e s a m I d C h a n g e a n d C o n s t r a I n t s While the role of human resource managers could be rea- ctionary and short-sighted in response to external forces, a focus on strategic management counters that risk. The contemporary strategic emphasis reflects the evolu- tion of the role of HRM within public organizations. This process transformed human resource managers from a technical role to working alongside organizational lea- ders to jointly design a strategic focus that aligns human resources with organizational goals (Ban and Gossett 2010; Pynes 2013). Further, the contemporary public management values of performance and partnership undergird this transformation (Klingner 2012).

Given that external forces impact internal decisions, translating external pressures for performance into internal mechanisms that support performance can be a challenge. For instance, in absence of an environment that could provide sufficient financial incentives for performance, one particularly promising development is related to the developing work on employee engagement. High levels of individual-organizational engagement are expected to contribute to improved performance as well as employee motivation. A 2012 Governing Institute survey of state and local government workers revealed that while over half of public employees were actively engaged in their jobs, nearly 40% said they would be likely to leave if working conditions do not improve. This attitude is more prominent among those 34 years of age or younger (also known as Generation Y and the millennial generation). The survey revealed the value of engagement in employee retention, satisfaction, and the employees’ willingness to recommend their work- place to others.

An important question follows: how to enhance engagement? Bilmes and Gould (2009) press this ques- tion further by highlighting the distance separating

typical government agencies from what they refer to as “people-focused” private companies. According to the authors, “people-focused” companies offer flexibility, promotions, and perks and align individual develop- ment with strategic goals. By comparison, typical gov- ernment agencies are inflexible, focus more on mission than on people, and provide few meaningful avenues for recognition (63). Engagement is strained in contexts where people are not prioritized. Yet, a decade before Bilmes and Gould’s work, Hays and Kearney (2001) surveyed HRM professionals who predicted that recog- nition, in the way of performance appraisals and merit pay, would be top concerns for the future. A follow-up study by French and Goodman (2012) offered additional support for those findings. Further, according to their study, French and Goodman found that the broader employee benefit of “employee recognition” is expected to take on even greater priority in the years ahead (69). Given expected retirements and the need for the next generation of public employees, it is important to give this benefit additional attention, even in an environment of constrained resources.

L e a r n I n g f r o m s u C C e s s f u L e x a m p L e s Given the complexities of balancing external forces and internal needs, a question emerges: What can be lea rned from local governments that have effectively bal- anced enduring commitments and emergent needs in the era of the “new normal?” Examples of successful muni- cipalities are presented using Selden’s (2009) strategic human capital framework (see Figure 6.1). The frame- work includes the following five components: (1) strate- gic planning, (2) recruitment and selection, (3) retention, (4) training and development, and (5) performance man- agement. Together, these elements contribute to alignment of mission and goals. Each component is presented via an award-winning local government example. Details for each example are publicly available and accessible online (see the award granting organizations’ websites).

Coconino County, Arizona, illustrates the first component, strategic human capital planning, and was recognized by the International Public Management

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Association for Human Resources (IPMA-HR) in 2011 when the county received the IPMA-HR Award for Excellence. The county’s award application highlighted their Premier Employer Committee (PEC). This com- mittee includes employees across the county that work together with the human resources department to brain- storm and develop innovative strategies and also elevate the organizational status of human resources. As a result of this initiative, a variety of new efforts were introduced, including a revised performance management system, cross-training strategies, a retention survey, a knowledge retention survey, and prioritization of employee pro- grams during budget reductions to effectively prepare for and overcome obstacles in the future.

The second component of the framework is strategic recruiting and selection. To illustrate this component,

local governments in San Mateo and Santa Clara coun- ties, California, are presented. These local governments together received honorable mention for the Center for State and Local Government Excellence’s 2011 Local Government Workforce Excellence Award. This reco- gnition highlighted their regional, multigovernment initiatives to recruit new employees. The governments work together and with local university career centers to provide an internship program, job shadow experiences, and an annual forum. Not only does this effort align with the goal of strategic hiring, but it also illustrates the con- temporary public management value of partnership.

The next component of the framework centers on strategic efforts to retain employees. For this element, the example of the city of Beverly Hills is offered. In 2010, Beverly Hills received the IPMA-HR Award for

Figure 6.1 Strategic Human Capital Management (Selden 2009)

Strategic human capital

planning

Retaining employees

Alignment of agency

mission and goals

Recruiting and

selecting employees

Developing employees

and leaders

Managing employee

performance

Source: Selden, Sally Coleman. 2009. Human Capital: Tools and Strategies for the Public Sector. Washington, DC: CQ Press.

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Excellence for its efforts to utilize technology to relieve human resource managers of some more standard processing tasks to allow them to engage in more stra- tegic initiatives, including those intended to help retain employees. As a result of this change, human resource managers are now able to focus on designing and deliv- ering programs focused on staff development, enhanc- ing effectiveness, and improving morale. It is expected that this redirection of human resource staff will result in multiple positive outcomes, including improved overall productivity and city excellence.

Strategic training and development is the next com- ponent of the framework. In 2011, Coconino County, Arizona, received honorable mention for the Center for State and Local Government Excellence’s Local Government Workforce Excellence Award. The award recognized the Coconino County’s innovative strategies to balance the need to cut costs with the desire to continue to develop and retain employees. The county provides training and education opportunities to employees at every stage of their career, including planning classes for those phasing into retirement. In addition, it prioritizes succession planning and is supporting cost-effective cross-training activities. These investments help transfer valuable expertise from mentors to their successors and also prepare the next generation of leaders for additional responsibilities in the years to come.

The final component of the framework is strategic performance management. In 2011, the City and County of San Francisco was recognized by the Center for State and Local Government Excellence’s for the Local Government Workforce Excellence Award. The award highlighted San Francisco’s collective performance management efforts, including attention to employee feedback and utilizing the resulting information for continual improvement. For instance, supervisors and managers receive 360-degree feedback. Further, there is alignment between performance appraisals and subse- quent annual performance expectations. Finally, orga- nizational performance data is shared via cost-effective communication channels such as an organization news- letter and website.

Together, these examples illustrate the promise of applying strategic actions to achieve goals and mediate external turbulence. To meet the demands of the future, even more initiatives like these will be necessary. The goal of showcasing these prominent examples is to high- light success and inspire additional creativity, so it seems appropriate to conclude with two additional examples of local government ingenuity that spring from exter- nal necessity. In 2011, the County of Los Angeles was recognized by the IPMA-HR Award for Excellence for efforts to address increasing health care costs and also enhance employee engagement. The county partnered with a variety of public, private, and not-for-profit orga- nizations to offer a “Countywide Fitness Challenge.” The partnership revealed creative methods to improve employee health and also engage employees in sharing both the problem and the solution. Rising health costs are expected to affect government employers at all levels, so identifying cost-effective tools to meet this hurdle will be a priority in the years ahead.

Further, the City of Livermore, California, received the 2009 IPMA-HR Award for Excellence for its efforts to foster a diverse workforce and also cut costs. The city’s “Support Our Staff” (SOS) program supports temporary workers with developmental disabilities who provide administrative support at no cost to the city. The participants receive on-the-job-training and have received high marks for their contributions to the city’s operations. The SOS program allows employees to focus on other responsibilities and also work along- side individuals with disabilities. Livermore finds this accomplishes a variety of goals, including dispelling stereotypes and increasing overall productivity. The partnership has been effective in this context and indi- cates the value of finding other strategic solutions for the future.

C o n C L u s I o n While these examples serve to illustrate a variety of successful, strategic, contemporary innovations, it is clear that the resizing and reshaping of the local government workforce represents a “new normal” that will influence

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choices and capacity now and in the future. While responding to budget cuts is an important priority, it should not be the only one. Collectively, scholars, practi- tioners, and citizens need to think carefully about how to best balance current demands for a smaller, more efficient workforce with future aspirations. Short-term fixes may undercut long-term needs.

These examples show that the challenges facing local governments are daunting but not insurmountable. The solutions, however, rest with the men and women work- ing in public service. It is important to note that it will be difficult to sustain a strong municipal workforce in light of increased demands for services, accompanying cuts in resources, and public sentiment that does not support public employees. These strong external forces must be balanced with an internal focus and investment in strategic HRM in order to continue to deliver high-quality services and produce public value.

Unfortunately, strategic approaches are often neg- lected in times of (real or perceived) crisis. For many local governments, the current context may present such a situation and perpetuate the “paradox of strategic planning” (Bryson and Roering 1988) where “it is most needed where it is least likely to work” (1002). Namely, the authors indicate that governmental strategic plan- ning works best when a number of contextual factors are in place, including “enough slack to handle potentially disruptive crises.” While external forces can certainly affect the ability to plan effectively, it is not the only reason that strategic human resource management fails. Rather, internal management issues such as resistance, poor communication, and lack of support/interest can also impact strategic efforts.

To avoid these pitfalls, organizations need to focus on developing individuals to confront the internal and external management challenges of the future. Bowman et al. (2004) identify three sets of competencies that are critical for public managers in the future. Those compe- tency clusters include leadership competencies (includ- ing assessment, negotiation, and change management); ethical competencies (including moral reasoning, values management, and prudent decision making); and

technical competencies (including program manage- ment, resource stewardship, and strategic planning).

To circle back to the start of this chapter, it is expected that Albany, Oregon’s city manager, Wes Hare, would likely endorse this list, given his comments on the importance of strategic management. Hare considers this approach to be much more than just a tool to best utilize public resources amid changing conditions: He considers it an accountability issue as well. Comments from his professional blog illustrate this point: “The most important city asset is the trust of our citizens, and nothing will erode that trust more quickly than mis- management of city funds” ( July 20, 2012). At the same time, Hare seems quite ready to face the road ahead with confidence: “Resources will continue to be constrained, however, and that circumstance is unlikely to change anytime soon.”

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