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Civil Service Reform: Lessons from Georgia and Indiana

Several states this year are changing how public employees are hired and fired. They may be able to learn a thing or two from states that already have.

Back in 2002, Governing's Jonathan Walters wrote about civil service reform in Florida, Texas and Georgia and drew a few general conclusions: When done right, civil service reform can reduce the amount of time needed for personnel transactions and increase employee satisfaction with the personnel system. Additionally, Walters found no evidence to prove that political patronage increases when civil service protections -- which are partly designed to ensure employees are hired based on merit -- are weakened or revoked. But Walters' report had a couple of negative conclusions as well -- namely that civil service reform makes it easier for states to get rid of longtime, costly employees, which could negatively impact morale and contribute to brain drain. He also found a greater burden placed on personnel administrators.

But what does that mean for states like Tennessee, Arizona and Colorado seeking to reform their civil service systems this year? Does reform increase the cronyism that civil service protections are meant to prevent? Or does it increase performance and productivity by making the hiring process more flexible?

The Georgia Experience

Georgia, which passed the nation's most sweeping civil service reform in 1996, may provide some answers. When then-Gov. Zell Miller signed the Merit System Reform Act into law, it made all new hires unclassified, at-will employees who could be fired at any time for any reason. The law also made the hiring process more flexible, took seniority rights away from unclassified employees, and replaced annual pay increases with a performance pay system.

Today, more than 88 percent of Georgia's workforce serves in an at-will capacity. Since the act went into effect, the number of new hires has increased, and in the two years after its implementation, so did the number of raises, according to the State Personnel Administration (SPA). Also on the rise was employees' communication with their supervisors. In theory, a system that hires and rewards workers based on their skills and knowledge rather than political beliefs, personal networks or years on the job would lead to greater job satisfaction for some employees, but no recent studies have looked at this. However, a study conducted in 2000 by the State Personnel Administration (formerly the Georgia Merit System), the University of Georgia and Georgia State University found "no serious problems with regard to overall job satisfaction among state employees," according to Candy Sarvis, the interim commissioner and director of legal services for the SPA.

While Sarvis gives civil service reform in the Peach State a generally positive review, Dr. Paul Battaglio, associate professor of public affairs at the University of Texas-Dallas, paints a more negative picture. In a 2006 survey of more than 250 Georgia human resource professionals, Battaglio found that most "felt [at-will employment] created a less-trusting environment. They felt they could no longer trust their managers and supervisors, and they found the environment was less motivational," he says. Motivation, typically required for productivity, is often cited as an argument in favor of civil service reform. But Battaglio says there's no evidence that at-will employment increases productivity and performance. "Employees are less enthusiastic about the reforms and had a great deal of apprehension about the usefulness of them and the ability of them to actually induce performance," he says.

Additionally, the at-will employment environment, which removes many seniority considerations, reduces the likelihood that employees will speak their minds, especially to offer critical opinions, out of fear of being fired. In Georgia, those surveyed "did feel this atmosphere, this climate of apprehension," says Battaglio.

Results in Indiana (So Far)

While results in Georgia are mixed (depending on who you ask), in Indiana -- where the April 2011 budget put into effect a number of civil service changes -- the results seem positive so far. Similar to Georgia, Indiana weakened seniority rules, reduced the number of merit (or classified) employees in the executive branch, and implemented a performance pay system that eliminated across-the-board pay increases. In addition, Indiana also developed a more efficient complaint process and codified performance-based standards for every employee. Civil service reform in Indiana made personnel decisions more flexible and placed a greater emphasis on the knowledge, skills and ability needed to do a particular job rather than education or years of experience.

According to State Personnel Department Director Dan Hackler, “The transition from a merit system has been uneventful. Our formal complaints are down year over year, and lost time has not increased.” Hackler hasn't found any data to support an increase in cronyism or any trend in employees leaving state government, either voluntarily or involuntarily, since the reforms went into effect. “Today, our employees are better paid (on average) and have a codified right to a performance plan and an objective evaluation. Agency performance is up in almost every category, including customer service and teamwork.” So far, Hackler says the concerns employees voiced before civil service reform went into effect have not come to fruition. “We in the State Personnel Department have been watching closely for any trends in the complaint procedure and to date, we have not found any abuses. We do get, in the normal course of business, challenges filed related to adverse employment action, but that number has not trended up since the bill’s implementation.”

The positive attitude toward reform in Indiana might not always be around, though, according to Battaglio, whose research shows that in states where civil service reform has been in place for a while, “the less motivational and positive it seems to be.” As time goes on, “there seem to be more pessimistic attitudes,” says Battaglio.

To Avoid Repeating History

While there is recognition that states’ decades-old civil service systems are due for some form of overhaul, questions remain about what exactly needs to change, how those changes should be made, and what the long-term impact is on a state's public workforce. “No one is saying that civil service systems, at least from my perspective, [don’t] need to be reformed,” says Battaglio. And luckily for those who choose to pursue civil service reform, the expectation is that, in the long term, acceptance of policies like at-will employment will continue to grow as more baby boomers retire and are replaced by new employees who might not have as much knowledge about civil service protections and reforms.

Regardless, Battaglio says it's important to consider trial implementations of reform before making massive changes across the entire government to avoid some of the problems his studies have uncovered. “Reform can be a good thing, it’s just how you go about doing it.”

Caroline Cournoyer is GOVERNING's senior web editor.
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