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Gutting state's merit system: Return of Boss Tweed?

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Gutting state's merit system: Return of Boss Tweed?

Gov. Jan Brewer wants to reform how the state manages its workforce of 25,000 public servants, with she and like-minded legislators believing the current merit system – a method of hiring and promotion intended to be based on competence rather than patronage – has outlived its usefulness.

Brewer & Co. claims that employing the “best practices” of private industry is the best way to revitalize Arizona’s civil service.

Lawmakers recently took a giant leap toward realizing the governor’s cornerstone priority by advancing House Bill 2571, legislation that would make it easier to reward top performers and fire underachievers. The bill passed 39-19 in the House and 8-4 in a Senate committee along party lines, with Democrats voting in lockstep opposition.

There is little doubt that the public would benefit from a modernized state personnel system that yielded more capable employees. The question is whether the Brewer Remedy is the best prescription for the proposed overhaul.

Critics worry that the reliance on private-sector tactics will backfire and re-invite cronyism, something the current system was designed to prevent. Cynics recall the days of William M. “Boss” Tweed and Tammany Hall.

HB 2571 is sweeping in scope and the proverbial devil is in the details. But in a nutshell it would:

  • Replace the merit system with an at-will system modeled after private-sector practices
  • Make it easier to fire and discipline most non-university state workers and new hires
  • Affect worker categories, including supervisors, technology employees and attorneys
  • Exclude sworn law-enforcement officers (but affect most civilians at police agencies)
  • Remove protections such as grievance rights and disciplinary or termination appeals over time
  • Give the governor more hiring and firing authority over more agency directors

Transforming government to an “at-will” system over time is at the heart of the legislation (and the controversy). Under this schema, workers can be fired at any time for any legal reason. Governor Brewer has proposed sweetening the deal by budgeting a 5 percent pay increase for state workers who volunteer for at-will status.

Proponents characteristically frame the debate as if state agencies are operated like subsidiaries of General Motors. “Imagine if your company wasn’t able to reward its best employees with raises … was forced to tolerate poor performers and malcontents because of a bureaucratic maze that made firing almost impossible,” wrote Arizona Chamber of Commerce CEO Glenn Hamer in an Arizona Republic op-ed article. “Unfortunately, that’s the situation Arizona state government finds itself in.”

Well, not exactly.

First, the hint that Arizona’s government is brimming with sluggards living on the taxpayers’ dime is fiction. A U.S. Office of Personnel Management (OPM) study found that poor performers made up only 3.7 percent of the federal workforce. The ratio is probably about the same for Arizona public workers, the listless DMV clerk of popular lore at Window 12 notwithstanding.

Second, worker management practices at, say, the Arizona Department of Mines & Mineral Resources do not necessarily equate to those used at Freeport-McMoRan Copper & Gold Inc. – nor should they. State agencies and businesses pursue fundamentally different goals with vastly different organizational eco-systems.

Apart from dreading Boss Tweed’s return, HB 2571 opponents predict exploitation and turmoil will result from modernization schemes involving private sector remedies. “Your boss offers you a 5 percent raise. The only catch is that in return you risk being fired at any time, without any right to an explanation. Would you take it?” wrote Melissa Maynard for Stateline, a Pew Center news outlet. “This is the dilemma that [25,000] Arizona state employees may soon face.”

Well, again, not exactly.

Since most state workers perform competently, most would have little to fear in an at-will environment. And given the paucity of state government pay – which averages 7.1% below market and has been cut 2.75% since 2008 – public servants would likely welcome a bump in wages. But will it spur productivity? Is money even a prime motivator for the typical civil servant?

Oddly, neither side has looked deeply into these kinds of key questions. In fact, the opposing arguments well illustrate a maxim coined by Albert Einstein: “A perfection of means, and confusion of aims, seems to be our main problem.”

What really is HB 2571 meant to achieve? Perfecting the Trumpian art-of-firing and related stratagems is meaningless if, as is evident, the basic motivation of public workers and purpose of government are misunderstood or ignored.

Advocates profess great faith in the magic of markets and the lessons they hold for the proposed makeover. They tout similar personnel-reform measures enacted in Georgia (1996) and Florida (2001). Quoting former Georgia Gov. Zell Miller, the Chamber’s Hamer said the merit system “offers little reward for good workers.” And by reward, Hamer and Miller mean performance pay, the elixir that juices motivation in much of private industry.

And yet, study after study has shown:

  • Public employees are more greatly influenced by intrinsic rewards than extrinsic monetary rewards. (Public Sector Employee Motivation, Dr. R. Moniz & R. Croxton, 2009)
  • Civil servants are principally motivated by a desire to make a difference in public affairs. (Public Personnel Management, G. Mann, 2006)
  • Performance-related pay (PRP) appears to motivate only a minority in the public sector. Most employees do not regard it as a significant incentive. (Policy Brief: Paying for performance, Organization for Economic Co-operation and Development, 2005)
  • Job content and career development prospects are the strongest incentives for public employees. (Ibid, OECD)
  • Bonuses and quality-step increases become expected over time and generally are not specific or timely enough to encourage repeat behavior. (Building a Better Carrot, K. Rutzick,, 2007)
  • Private sector use of the at-will system is different from the public sector because the tradeoff for job security is better compensation, an area in which cash-strapped governments can rarely compete. (At-Will Employment in the Public Sector: A Case Study of the Georgia Reform, O. Tejuoso, Kennesaw State University, 2010)

Furthermore, a comprehensive study (A Return to Spoils? Revisiting Radical Civil Service Reform) by the universities of Georgia and Texas at Dallas found that there is “no empirical evidence to date that at-will employment is improving state operations”; and that “proponents’ aims of imposing neomanagerialist values and superior performance have yet to materialize.” In fact, the analysis found that recruitment and retention of workers could suffer if the attractiveness of employment is reduced.

In view of this evidence, the sanguine words of HB 2571 promoters ring hollow. And in the rush to fix what ails current practices, the merit system – albeit flawed – has been caricaturized and its strengths ignored. Two of its anchors involve patronage prevention and civil service protections.

Although fears that HB 2571 will re-open the doors to Tammany Hall-style cronyism are overblown, the potential for smaller-bore misconduct is real. It doesn’t take much imagination to envision how pressure might be brought to bear on employees who enforce regulatory statutes, for example. True, the Gilded Age is history, but corruption is not – and it will find a way to bloom if given half a chance, especially in state agencies inherently informed by politics.

Joseph Cayer, professor emeritus at Arizona State University’s School of Public Affairs, told Stateline: “It’s far more likely that [partisanship] would happen under an at-will system where employees don’t have any right to due process job protections.”

There’s no avoiding the reality that the wholesale adoption of such a system comes with a price: Less job security for workers (who prize tenure over salary) and more opportunity for influence-peddling or coercion by higher-ups. The only question is how best to minimize it.

But lawmakers pushing HB 2571 appear oblivious to these issues. Consequently, we’ve heard nary a word about how to fix what’s really broken: inefficient or outdated processes that are unique to the public sector workplace. Instead of forcing a square-peg “IBM solution” into the round hole of a government-sector problem, reform-minded lawmakers should be focusing on OPM-recommended remedies that include:

  • Managing hiring, firing and promotion as critical business processes, not a separate HR function
  • Identifying internal procedures that act as barriers to quality and cost-effective hires
  • Assessing strategies that emphasize selection quality instead of cost and speed alone
  • Evaluating what works and what doesn’t routinely

None of these potential solutions require the vaunted magic of the marketplace to affect meaningful change. This more neutral approach plus a clear understanding of how the public sector workplace actually functions seem to be missing from the legislative equation thus far.

Pro-bill legislators, perhaps in the grip of “government is the problem” dogma, fixate on the civil service grievance process that prevents employees from being fired without cause. This fail-safe procedure was intended to stymie cronyism and discrimination, not as an end in itself. That context is conveniently forgotten. True, dismissing bad workers today is cumbersome. But is junking all due process protections the most prudent way to fix the problem?

This question goes to the heart of what is problematic about the rationale for HB 2571. Yet, the measure’s sponsors seem determined to use a jackhammer when a scalpel and deft touch would likely suffice.

Yes, smartly modernizing the state personnel system is appropriate. The governor and the Legislature are right to pursue the matter. But the obvious disparity between the private sector remedies proposed by the bill and the reality of the public sector workplace should give thoughtful government leaders pause.

Although the old saying, “What’s good for General Motors is good for America,” still rings true, the real question is whether it is also good for government. The evidence suggests government should find its own solutions. It should also remain mindful that its offices exist “not for the benefit of those who are to fill them, but for the public convenience,” as Massachusetts Sen. Daniel Webster argued in 1835 near the apex of the patronage system.

Lawmakers hell-bent on transforming government into a hybrid-conglomerate would be wise to ponder Webster’s insight instead of clinging to the old diktat: “to the victors belong the spoils …"

Morrison Institute for Public Policy is a leader in examining critical Arizona and regional issues, and is a catalyst for public dialogue. An Arizona State University resource, Morrison Institute uses nonpartisan research and communication outreach to help improve the state's quality of life.

Ed Perkins is a policy analyst at the Morrison Institute for Public Policy, an ASU think tank.

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