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Civil Service Reform Comes to Tennessee

Gov. Bill Haslam signed legislation to create a personnel environment more akin to the private sector.

On April 24, Tennessee Gov. Bill Haslam signed the Tennessee Excellence, Accountability and Management (TEAM) Act into law, ushering in a new era of civil service reform marked by the executive branch’s increased control over the hiring and firing of its state workers.

Like other states that have implemented civil service reform -- including Florida, Georgia and Indiana -- Tennessee will create a personnel environment more akin to the private sector. Once fully implemented, the TEAM Act will create two service divisions: "executive service," made up mainly of senior-level positions, and "preferred service," mostly comprised of middle management and front-line employees. Those in executive service will remain at-will, meaning they can be fired at any time for any reason; while those in preferred service (formerly known as career service) will maintain a streamlined appeals process for wrongful termination.

In addition, the new law will: abolish the current hiring system in place of a new one; maintain the hiring preference given to veterans if two candidates are equal in experience and skill level; overhaul the state’s employee performance evaluation system; make job performance the primary consideration during layoffs; reduce the layoff notice timeframe to 30 days; and end “bumping,” the practice of laid-off employees snagging jobs away from less-experienced employees in similar positions.

To learn more about Tennessee’s civil service reform and its potential impact on state workers, I spoke with Alexia Poe, the Director of Communications for the governor’s office, and Robert O’Connell, the Executive Director of the non-union Tennessee State Employees Association. Their edited responses appear below.

Why was the governor committed to civil service reform?

Alexia Poe: When he took office back in January 2011, he tasked commissioners to do a top-to-bottom review of their departments. The number one thing he heard was [that] our hiring and our employment system is broken. The way hiring happens here is there is a registry, and folks get on a registry through a point system, so you are not able to go out and recruit somebody to come work for you in a department under civil service. [But] just because they have the highest points, doesn’t mean they’re the best candidate for the job. We also had a system of “bumping and retreating,” where an employee could be laid off and go to another department that had a similar position and bump someone with a week’s less experience out of their job.

We’ve got a lot of outdated processes that are not going to ensure that we have a workforce that’s customer-focused, that’s efficient and effective. And in the next five years, we have about 15,000 state employees [approximately one-third of the workforce] eligible for retirement. This is a crucial time when we need to be looking at our workforce, and we have an opportunity to really recruit and hire and get the best and brightest employees we can. We’re going to be in bad shape if we can’t look for the best and brightest because we have to take [candidates] off a [registry] list.

What pushback did he receive to his proposals?

AP: Really none. When we talked about this as a likely initiative, myself and the others said, “This is going to be ugly, ugly, ugly.” The administration worked very hard, and it didn’t get terribly ugly. That surprised a lot of folks that had been around state government for a long time.

Some of the credit goes to the governor being adamant from the beginning about having conversations with [the Tennessee State Employees Association]. He really had a desire to bring them to the table.

We did hear some concerns like cronyism. Employees would say, “We trust this governor but what do you get with future governors?” The governor made the point that if you get the culture right and you get the employment system right, then that kind of mitigates some of that concern. For people that are good at what they do and do a good job, they will continue to have a job.

How did the governor's office work with the Tennessee State Employees Association (TSEA) throughout the reform process?

AP: Initially, they weren't thrilled at all. And at one point, they walked away. [But] we ultimately got to a point where they supported the bill and actually worked with us to lobby members in favor of the bill in the last couple of weeks.

One of the things that the TSEA fought really hard for is taking seniority into account when you talk about laying off employees. But instead of it being the only driver, it's taken into account along with performance, skills, capabilities, experience. [TSEA] felt strongly that seniority couldn't just be thrown out the window. We were okay as long as it was one element -- not the element.

When the governor first announced his intention for civil service reform, what concerns did you have?

Robert O'Connell of the TSEA: We were afraid that the bill could reopen the door to political patronage and cronyism and favoritism in the hiring and retention of state employees.

What the governor wanted to do was replace the use of seniority during reductions in force with performance. It's understandable to look to performance if it can be objectively measured, [but] here in Tennessee, our performance evaluation system is broken. The governor had to commit to reforming the performance evaluation system before we could talk about using it as a measure to determine who would be let go in reductions in force and who would receive merit pay.

How did TSEA work with the governor's office throughout the reform process?

RO: We sat down on three occasions [with members of the Haslam administration and the bill's authors] and went over what gave us heartburn, what needed tweaking. We got some minor concessions. But, we eventually got to the place where they weren't going to move anymore, and we didn't have enough to be able to support the bill.

We decided to talk to the legislators. They helped us out and agreed to carry our amendments. We started to have a pretty big response from state employees and from our membership contacting their legislators. We had a lobby day. At the last minute, we were able to get across the finish line. We made the bill better. [The administration] agreed the bill was better. We weren't jumping up and down saying, "Hooray civil service reform," but we did get to the point where we could support it.

What concessions did you receive?

RO: One example is for reductions in force. Originally, seniority was entirely out, whereas presently it's the main thing you look at. They wanted only performance evaluations. Well, in the end, we got performance evaluation as number one, and seniority is back in as something that has to be considered.

The other thing is that we are going to have a seat at the table in developing the rules that are going to guide this reform implementation. And we'll have a seat at the table in the development of the new performance evaluation system.

How will you monitor the ongoing impact of reform?

RO: Basically, what I foresee is involving all state employees, all of our membership, in this monitoring project by asking them to tell us when they see any of the things that we were fearful of, and also to tell us any parts of the bill that we wanted to see happen to make sure those things are happening. We are communicating to all state employees that we're going to be a clearinghouse for information on this. The administration wants this information. They want to avoid the potential disaster of things going bad.

Do you have any continuing concerns about civil service reform in Tennessee?

RO: The one thing to worry about would be reductions in force and whether they use a layoff as a subterfuge to get rid of people they don't like. The way we keep that from happening is by making sure that the criteria that they use to establish this are as objective as possible, including the performance evaluation system. We don't expect morale to go plummeting unless [bad] things start to happen.

What has been key to helping alleviate employee fears?

RO: We have remained in close communication with employees as things have been going on. People can deal with change a lot better if they're well-informed.

When we establish the monitoring project, we'll publicize it. That, I'm sure, will help state employees feel more secure that their advocates are out there watching this and that they're going to have a place, a group, that is on their side that they can funnel information to if they see bad things happen. And I think that's really, really important.

Tennessee isn't the first state to undertake civil service reform -- and it likely won't be the last. Next month, we'll take a look at the good and bad of how civil service reform has played out in other states like Georgia and Indiana. Are you a state employee who has gone through civil service reform? Email to tell us about your experience.

Caroline Cournoyer is GOVERNING's senior web editor.
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