Management & Labor

Open Season on Middle Managers

In the latest round of budget cuts, mid-level managers are considered the easiest and most defenseless target.
by | July 2005
 

It's hard to say exactly when states declared the current open season on middle managers. While they always seem to be a tempting target for politicians who want to trim the bureaucrat fat, their profile seems to rise with state budget crises. The last de-layering craze coincided with the recession in the early 1990s. The most recent effort seems directly tied to the budget malaise that has dogged states for the past several years. The spring of 2001 may represent the clearest opening salvo. That's when Florida took thousands of middle managers out of civil service and made them at-will employees, subject to summary dismissal. Since then, states have been pushing them out, buying them out, bumping them and generally bashing them, a phenomenon that's also induced many longtime and high-level managers eligible for retirement to simply pack it in, leaving behind empty chairs that haven't been filled.

But if it's hard to identify an exact date for when states generally started aiming at middle managers this time around, pinpointing the official launch in Washington State is easy. It was last March 16, the day that Democratic Governor Christine Gregoire laid out her plan for fixing what she described as broken government. Among the main problems, she said, was "bloated management" clogged with "too many people pushing paper. Instead of pushing paper, we need to push people out of management and into delivery of real services to real people."

It was red-meat rhetoric worthy of the toughest "cut bureaucratic waste" Republican, and to back it up, Gregoire had a very specific prescription. This wouldn't be any vague swipe at those pesky paper pushers; the governor had a nice round number in mind: 1,000.

How states define middle managers varies widely--from staff operating just above the front line to just below cabinet secretary. Moreover, traditional roles of middle managers are shifting, as more state bureaucrats are called upon to oversee programs, projects and contracts, in addition to--or instead of--supervising people.

But if expanding definitions make for some ambiguity over who, exactly, is a middle manager, that hasn't slowed down politicians any when it comes to firing away at their favorite personnel target. In Wisconsin, Democratic Governor Jim Doyle ran on a promise to cut 10,000 employees, including a raft of middle managers. In Ohio, an ambitious reorganization and consolidation plan recently floated in the legislature would cut layer upon layer of administration, adding up to 11,500 positions wiped off the books. In Minnesota, the Senate proposed a bill this spring to eliminate 150 upper-level administrative positions that lawmakers said were packed with political appointees.

Not all the staff-cutting efforts being proposed or executed around the country are aimed specifically at mid-level managers, but they are certainly considered the easiest and most defenseless target. When the Ohio Civil Service Employees Association expressed concern about the proposed reorganization coming out of Columbus, and its impact on rank-and-file employees, Bruce Wyngaard, the association's operations director, says he was told by one state senator, " 'Bruce, don't worry, it's all about middle management.'" Indeed, in testimony before the House State Government Committee in support of the reorganization legislation, Attorney General (and aspiring gubernatorial candidate) Jim Petro argued that the state's executive branch "is top heavy; we simply have too many managers in government."

So middle managers might be excused these days if they feel like they're walking around with bull's-eyes on their backs. And nowhere is that more clearly delineated than in Washington, where specific agencies have been given hard numbers by which they have to reduce middle management by the end of the 2005-07 budget biennium.

The place where most of those mid-level managers reside is in the Washington Management Service, a special class of employee created in 1993 to provide agencies with some mechanism for recruiting and grooming a cadre of top-flight career managers. WMS offers agencies an avenue for paying hard-to-recruit and hard-to-retain employees outside the regular civil service system, with its tight restrictions on pay and promotion (WMSers are compensated on a sliding scale and make between $36,500 and $165,500 a year).

As envisioned in Washington, WMS employees would circulate in and through state government, bringing their specialized, high-level management skills to the various and complicated problems facing government. It wasn't a new idea. Other governments--federal, state and local--have created their own versions of such senior executive services aimed at building a stable group of career managers to keep the ship of state on course from administration to administration. It certainly became a popular idea in Washington State. Since 1993 agencies have loaded up on WMSers, starting with about 400 in the mid- 1990s; growing to around 5,300 today.

According to those who support cutting Washington's middle managers, such numbers are a clear indication of bloat run amok. "A big chunk of agencies' money goes to employees," says state Representative Mike Armstrong, who has been pushing legislation for the past few years to cut middle management. "If you want to make government more efficient, then you do just as private business and cut, and the front line for a long time has been the ones being cut and they're the ones putting the work forward for the citizens of state." Too many agencies, Armstrong argues, have "managers managing managers."

Pressure to cut back middle management in Washington hasn't come solely from the legislature. Armstrong, a conservative Republican, had an interesting ally in his crusade to render the fat: organized labor. When asked why the big push on middle management, Greg Deveraux, executive director of the Washington Federation of State Employees (an AFSCME affiliate) points to what he argues is powerful circumstantial evidence of government saddled with love handles. "Unfortunately, many of our stories from our members [about unnecessary middle managers] were anecdotal. But there were enough that is seemed like there was quite a bit of smoke there." According to statistics compiled by his organization, nearly half of all new state agency positions created between 1998 and 2003 were either in the WMS, or higher up the organizational ladder in the state's "exempt" class of employee.

Such arguably vague impressions that WMS was out of control might not satisfy hard-nosed span-of-control and workflow analysts. But they were enough to get the governor's attention. Gregoire's advisers say she decided to act preemptively, before the legislature forced her hand. According to a Gregoire spokeswoman, the suspiciously round number of 1,000 wasn't symbolic; it represents cuts that the governor "believes are achievable," and were inspired by personnel figures that showed a much higher percentage growth in the WMS than in front-line ranks over the past six years--42 percent versus 4 percent. Washington agency administrators aren't so sure that the number wasn't just pulled out of thin air. "We heard that it was the lowest number they could come up with that had four digits," quips one high-level state administrator.

Regardless of the avenue Gregoire took to get to 1,000, the cuts are real: The $121 million for the positions has been eliminated from the 2005-07 biennial budget. And Gregoire has designated a middle- management cutting czar, Eva Santos, director of the state's personnel office, to certify to the governor that each agency has followed through on its assigned excisions.

"WMS was a program with good intentions behind it," Santos says. "In essence, it was created as a developmental program, and to give management flexibility to move managers around and to bring people in at higher salaries that were more comparable to the market than was allowed in the classified service." But now, she says, it's time to take stock. "I see this as an opportunity for agencies to take a look at their organizations and say, 'Is my structure the proper one? Do I have clear lines of responsibility? Do I know who is accountable for what? Or do I have multiple people responsible for the delivery of some service?'"

Not surprisingly, high-level agency administrators in Olympia aren't quite as excited by the opportunity presented by the gubernatorial directive as is Santos. In fact, the overall response of agencies in Washington can probably best be described as annoyed resignation. With a reputation for being a well-run state, and having experienced numerous budget cuts and downsizings over the past few years, agency leaders seemed especially put off by the governor's assertion that their organizations were deep harbors for "bloat." "Central administration at DSHS has been consistently cut every fiscal year for years," says Liz Dunbar, deputy secretary at the Washington State Department of Social and Health Services, the state's largest agency. Taking further cuts is going to be tough, she says. The Department of Natural Resources has already been cutting middle managers, says Bonnie Bunning, executive director of policy and administration--28 of them in the last four years.

Nor did veterans of state government appreciate the characterization of middle managers as "paper pushers." "I was personally offended by that," says Bunning, a 25-year veteran of state service. "Our managers do not just manage. In fact, they struggle to get the time to do their managerial duties because they're working managers out in the field a lot of the time."

Indeed, in digging around Washington to look for abuse of the WMS system, what's easier to turn up are WMS employees who seem to be working very hard at very important jobs. Take Cullen Stephenson, a program manager with the Washington State Department of Ecology and a member of the WMS, who oversees a $23 million biennial budget and an $80 million grants program. He admits to doing plenty of paperwork, but in many cases it involves millions of dollars in grants and contracts. "I get a purple folder once a day with the grants in them and I make sure they're done correctly so I can sign off on them. I guess that's paper pushing a little bit, but I need to make sure that I understand what the grants are and that the request lines up with the dollars."

Even critics of WMS would probably agree that Stephenson represents the best use of WMS. He manages large programs, big money and a staff of 104 people. The state couldn't possibly compensate him for what he delivers through the classified (civil service) system, and so he and the WMS are a perfect fit.

How then to deal with Stephen Simmons, risk management administrator in the social and health services department? Simmons manages no programs, no people and no money. Rather, he is the traffic cop for all tort claims and lawsuits filed against the department, which is under constant legal bombardment. At any given moment, Simmons is juggling hundreds of cases and claims. When asked how he can possibly keep track of them all, he says, "Well, I've been doing this job since 1994, so I sort of have a system. I know a lot of people and people know me, so I can navigate issues pretty quickly." Yet those pushing for a stricter definition of manager in Washington might immediately disqualify Simmons for WMS and its more flexible, generous compensation packages.

What is the institutional knowledge represented by Simmons' 11 years of managing cases worth, and how does a state compensate him for it? Such questions defy easy answers or across-the-board solutions, argue those who understand the complexities of staffing up a high- functioning government in complex and demanding times.

PICK A NUMBER

And yet, in many places the notion of complexity doesn't seem to be playing into the current downsizing craze. Bleeding budgets and high- stakes politics have led to more of a pick-a-number-out-of-the-hat approach, bolstered by plans to magically cope and backfill by streamlining, consolidating, computerizing and privatizing.

"New York State is in fiscal decline," says one long-time personnel insider there. "And so 'head count' has become critical from both a fiscal and political perspective." There, the state has simply kicked open the back door for longtime staff--most of whom are in middle and upper management--to walk out with generous retirement benefits jammed in their pockets. "What they did essentially is rip out the most seasoned middle managers and then turned to the people left behind and said, 'Okay, you're now acting manager,'" says the New York official. It's not an approach that has led to higher-performing government, he says, but rather an approach that has led to burnout, resentment and serious morale problems.

Critics of Wisconsin Governor Jim Doyle's most recent budget, which calls for eliminating 1,800 jobs, say the move is motivated more by politics than by any sophisticated analysis of personnel needs. When he was campaigning for governor, Doyle promised to cut 10,000 from the state payroll, a number that critics charged was chosen for impact. Doyle's office responds that the proposed cuts are focused and "based on areas where we have duplication of services."

In Ohio, Senator Tim Grendell sponsored Senate Bill 78, which aimed to whittle state government down from 23 departments to nine, cut thousands of middle managers, and is projected to save $1.2 billion. Grendell asserts that "we didn't pull this out of thin air." He says the consolidation plan is based in large part on audits done by Attorney General Jim Petro, which have highlighted, he says, "where there are efficiencies and inefficiencies." Grendell's bill has been rolled up with its House companion into a proposal that a government reorganization study commission be convened to look at overhauling Ohio state government. On the personnel side, the goal is very clear. "We're going to cut from top middle management down," Grendell says.

REDEFINING "MANAGER"

Nobody, of course, is saying that state governments aren't in need of a hard look from the standpoint of efficiency and effectiveness. And inasmuch as the majority of state operating budgets are spent on personnel, it's natural that personnel is the area that comes in for the most scrutiny. Even maligned managers in Washington agree that it's always worthwhile to review operations to ensure things are running efficiently.

What those in the trenches of government management and administration resent, though, is the assumption that middle managers are by definition schlubs. What they are asking for is a more sophisticated approach to the problem than simply taking a meat ax to "full-time equivalents," the budgeting catch phrase for all the warm bodies doing the work of government.

Despite some misgivings, upper-level agency administrators in Washington State are now struggling gamely with their assignments. The Department of Transportation has to cut 130 middle managers; Social and Health Services has to chop 330 (out of 1,700); Natural Resources' magic number is 26; at the Department of Ecology it's 45.5 (begging the question of who gets cut in half). A working group made up of agency staff has been pulled together by Eva Santos and is currently hashing out who, exactly, counts as a manager and how an agency will get credit for cuts.

At the same time, the group is looking at larger issues, including how to create some system that allows government to recruit and promote highly skilled individuals, which may also involve looking at new definitions of "manager." Such a redefinition is required because the nature of government work has changed dramatically, note agency administrators, along with who and what is being managed. It's not just people being managed but also projects, programs and contracts, particularly in an era when outsourcing and privatization are being considered as options more and more frequently by states as a way to do business.

"We have a sizable group of people who I would call professional and technical experts, who maybe don't manage a bunch of people but who might be the person overseeing a multi-million-dollar transportation project," says Paula Hammond, chief of staff in the Washington State Department of Transportation, another one of the state's largest departments. "The classifications within our civil service system don't pay enough for us to be able to hire electrical or civil engineers, project designers, contract experts, consultant managers-- those kind of people--and so we've used WMS."

If "manager" isn't a comfortable fit for those sorts of staffers, argue administrators such as Hammond, then the state is going to have to figure out what new description and system might be created for those who don't fall comfortably into the technical definition; people who are accountable for million-dollar projects or contracts and who need to be paid for taking on that sort of responsibility.

The issue of management and accountability is especially topical in Washington State these days. One of the governor's other major initiatives is G-Map, an effort to bring the "city-stat" model to state government, using clear performance measures to hold managers accountable for concrete results. One of the things that both agency administrators and WMSers say they like about WMS is that it makes managers directly accountable for their performance. "The WMS was a major move in this state toward a more private industry type of organizational structure that allows us to hire people in a whole different fashion and hold them accountable," says Ken Harden, director of personnel for the social and health services department. "What we should be measuring is whether we do the job, not how many FTEs we've got in certain positions."

And right now, managers in Washington are being handed some very big jobs for which they will be held very accountable. While being asked to cut 130 middle managers, the transportation department is, at the same time, being asked to manage billions of dollars in new transportation projects made possible by two recent state gas tax hikes. Paula Hammond estimates that even given her department's more aggressive use of outside consultants and contractors, the agency is going to need around 300 new staff to manage contracts and projects.

At Social and Health Services, Liz Dunbar says her agency is under court order to beef up its policing of sexual predators. "So we need to hire forensic psychologists, and that's a very difficult area in which to attract people, and we did recently put some positions into WMS because otherwise we could not hire them. This is for our violent sexual predator program where we're under court supervision, and if we don't perform well, we're in deep trouble."

When told of the Washington initiative to cut middle managers, Ohio Senator Tim Grendell quickly interjects, "They won't miss them one bit." But those in the trenches of Washington State government aren't so sure. Dunbar says her department will look at who is responsible for what and where cuts and consolidations might be made. But in an agency that's already been ordered by a judge to improve its performance, she has just one word to describe further cuts in the ranks of those who are both overseeing and carrying out some of the hardest jobs in government. "It's worrisome," she says.

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