Citation
The Colorado personnel system : systems analysis and recommendations

Material Information

Title:
The Colorado personnel system : systems analysis and recommendations
Creator:
Price, Courtney Hart
Place of Publication:
Denver, CO
Publisher:
University of Colorado Denver
Publication Date:
Language:
English

Thesis/Dissertation Information

Degree:
Master's ( Doctor of public administration)
Degree Grantor:
University of Colorado Denver
Degree Divisions:
School of Public Affairs, CU Denver
Degree Disciplines:
Public administration
Committee Members:
March, Michael S.
Shafritz, Jay M.
Kurtz, Maxine

Notes

Abstract:
This is a comprehensive study of human resource management in the public sector using a systems analysis approach to evaluate the Colorado State Personnel System (CSPS) . An analytical model is used to establish relationships between personnel administration and effective overall state governmental management. The performance of the CSPS is analyzed first as a key overall executive branch management system and then with respect to each of its 13 functional activities. Variegated research methods were used in the project. From the literature of human resource management the history, philosophy, goals, performance, trends, and methods of public personnel administration in the United States were identified. Personnel systems which were modernized by other states within the last 5 years were reviewed. A broad analysis of the CSPS was then made, carefully examining its history , principles, laws, regulations, organization, operating procedures, financing, and strengths and weaknesses. Previous studies of the person nel system were analyzed. Attitudes and information regarding the performance of the CSPS were ascertained and gathered through hundreds of interviews by many researchers with Colorado legislators, personnel board members, union officials, department and division heads, super visors , personnel staff, and employees. Greatly contributing to this effort was the 1978 Common Cause survey with responses from approximately 1,100 employees. Lastly, an analytical model was created and used for identifying cros~-relationships between 13 traditional personnel functions of human resource. The comprehensive overall review of the CSPS revealed a number of problems. The personnel system is poorly supported both financially and managerially; is weak and not well organized; and is not contributing adequately to the efficient and effective management of the state government. The constitutionally-mandated merit principle has been neglected, undercut, and given inadequate support by top state govern ment administrators. The Department of Personnel is underbudgeted and understaffed. Personnel functions have been haphazardly decentralized with inadequate monitoring and are run by poorly trained or unqualified agency staff, resulting in inconsistent personnel actions. Eighteen recommendations are made to solve these overall problems . The functional activities were analyzed both in their impact on overall state management and by individual processes. They were planning, classification, recruitment, selection, equal employment opportunity and affirmative action, labor and employee relations, appeals and grievances, performance evaluation, training and human resource development, employee counseling, separation, and retirement. Key principles were outlined for each personnel function. Issues were identified and analyzed for each function and solutions were recommended. The major findings were that: Human resource planning was limited, lacking coordination and integration with State management. Classi fication was poorly organized and inconsistently applied. Recruitment was passive, fragmented, unresponsive, and unimaginative. Selection was slow, inefficient, and often unsupervised. Many performance evaluations were not performed annually as required, were poorly related to performance, and results were often ignored. Employee counseling programs were limited to a portion of State employees. Employee training and development programs were poorly funded and inadequate. Equal employment opportunity and affirmative action programs were weak and poorly supported. Labor and employee relations policy was undefined; action was passive and slow. Grievance and appeal processes were unknown to many employees, ineffective, and tardy - resulting in backlogs. The compensation plan was based on old data, used unrepresentative key classes, and a questionnable system for allocating funds for pay adjustments from a central appropriation. Employee turnover and separation rates were high and virtually unanalyzed. The retirement system was experiencing large increases in unfunded liabilities. Over 100 recommendations were made for improvement of these activities. This project was performed as a public service to the State of Colorado and influenced policy making by the State government. The recommendations will provide an agenda for the State for many years . Finally, this study should be of value to other state and local governments because it develops and applies an improved methodology for analyzing public personnel systems in the context of their con tribution to better overall management.

Record Information

Source Institution:
University of Colorado Denver
Holding Location:
Auraria Library
Rights Management:
Copyright [name of copyright holder or Creator or Publisher as appropriate]. Permission granted to University of Colorado Denver to digitize and display this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.

Downloads

This item has the following downloads:


Full Text
THE COLORADO PERSONNEL SYSTEM: SYSTEMS ANALYSIS AND RECOMMENDATIONS
by
Courtney Hart Price
B.S. University of Colorado, 1968 M.P.S. University of Colorado, 1969
A thesis submitted to the Faculty of the Graduate School of Public Affairs of the University of Colorado in partial fulfillment of the requirements for the degree of Doctor of Public Administration
1981


This Thesis for the Doctor
Of Public Administration Degree by Courtney Hart Price Has been approved for the Graduate School of Public Affairs by
Michael S. March
Jay M. Shafritz /
Date /S mi


Price, Courtney Hart, (D.P.A. Public Administration)
The Colorado Personnel System: Systems Analysis and Recommendations
ii
Thesis directed by Professor Michael S. March
This is a comprehensive study of human resource management in the public sector using a systems analysis approach to evaluate the Colorado State Personnel System (CSPS). An analytical model is used to establish relationships between personnel administration and effective overall state governmental management. The performance of the CSPS is analyzed first as a key overall executive branch management system and then with respect to each of its 13 functional activities.
Variegated research methods were used in the project. From the literature of human resource management the history, philosophy, goals, performance, trends, and methods of public personnel administration in the United States were identified. Personnel systems which were modernized by other states within the last 5 years were reviewed. A broad analysis of the CSPS was then made, carefully examining its history, principles, laws, regulations, organization, operating procedures, financing, and strengths and weaknesses. Previous studies of the personnel system were analyzed. Attitudes and information regarding the performance of the CSPS were ascertained and gathered through hundreds of interviews by many researchers with Colorado legislators, personnel board members, union officials, department and division heads, supervisors, personnel staff, and employees. Greatly contributing to this effort was the 1978 Common Cause survey with responses from approximately 1,100 employees. Lastly, an analytical model was created and used for identifying cross-relationships between 13 traditional personnel
functions of human resource.


iii
The comprehensive overall review of the CSPS revealed a number of problems. The personnel system is poorly supported both financially and managerially; is weak and not well organized; and is not contributing adequately to the efficient and effective management of the state government. The constitutionally-mandated merit principle has been neglected, undercut, and given inadequate support by top state government administrators. The Department of Personnel is underbudgeted and understaffed. Personnel functions have been haphazardly decentralized with inadequate monitoring and are run by poorly trained or unqualified agency staff, resulting in inconsistent personnel actions. Eighteen recommendations are made to solve these overall problems.
The functional activities were analyzed both in their impact on overall state management and by individual processes. They were planning, classification, recruitment, selection, equal employment opportunity and affirmative action, labor and employee relations, appeals and grievances, performance evaluation, training and human resource development, employee counseling, separation, and retirement. Key principles were outlined for each personnel function. Issues were identified and analyzed for each function and solutions were recommended.
The major findings were that: Human resource planning was limited, lacking coordination and integration with State management. Classification was poorly organized and inconsistently applied. Recruitment was passive, fragmented, unresponsive, and unimaginative. Selection was slow, inefficient, and often unsupervised. Many performance evaluations were not performed annually as required, were poorly related to performance, and results were often ignored. Employee counseling programs were limited to a portion of State employees.


iv
Employee training and development programs were poorly funded and inadequate. Equal employment opportunity and affirmative action programs were weak and poorly supported. Labor and employee relations policy was undefined; action was passive and slow. Grievance and appeal processes were unknown to many employees, ineffective, and tardy — resulting in backlogs. The compensation plan was based on old data, used unrepresentative key classes, and a questionnable system for allocating funds for pay adjustments from a central appropriation.
Employee turnover and separation rates were high and virtually unanalyzed. The retirement system was experiencing large increases in unfunded liabilities. Over 100 recommendations were made for improvement of these activities.
This project was performed as a public service to the State of Colorado and influenced policy making by the State government. The recommendations will provide an agenda for the State for many years. Finally, this study should be of value to other state and local governments because it develops and applies an improved methodology for analyzing public personnel systems in the context of their contribution to better overall management.
This abstract is approved as to form and content. I recommend its publication.
Signed


PREFACE
The purpose of this project report is to evaluate the performance of the Colorado State Personnel System and its various functional parts. An analytical model for evaluating public personnel systems was developed and served as a tool in this evaluation. Key principles for each of the 13 traditional personnel functions were developed and played a major role in the evaluation procedure. Approximately 118 recommendations are made in this study.
This report provides the basic research documentation for the summary report issued by the Colorado Chapter of the American Society of Public Administration (ASPA) circulated on October 1, 1980 and presented in final form to Governor Richard Lamm on November 24, 1980.
The ASPA summary report presented the highlights of this technical study. The highlight report was released prior to the completion of this research document, and draft chapters of this report were circulated in August 1980, to assist the several official study groups in their evaluations .
A multidisciplinary Steering Committee of public and private professional administrators guided this public service study throughout its course. The Steering Committee was chaired by Maxine Kurtz, Research Officer, Career Service Authority, City & County of Denver. Michael S. March, Professor of Public Affairs, University of Colorado, served as the Principal Investigator. Other members included Leo C. Reithmayer, Professor of Public Administration Emeritus at the University of Colorado; Norman Patrick, Vice President of Bell Plumbing and Heating Company; Louis Fair, Administrator at the Solar Energy Research Institute;


and Amy Truby, representing the Colorado League of Women Voters. The Dissertation Committee consisted of Jay Shafritz, Maxine Kurtz, and Professor March, who served as chairman.
From the summer of 1978, I served as the chief analyst for this study and wrote the detailed project report under the guidance of the interlocking committees. I was responsible for the development of its design, the execution of its analytical model, for analyzing the performance of various personnel functions, and for developing the principles in the functional chapters.
I was fortunate to have as a base about 64 fact-finding reports provided by approximately 80 graduate students from the Master of Public Administration and Doctoral programs from the University of Colorado and Denver University. Exceptional student papers by Paul Reiderer, Ray Griffith, Chris Gray, Gloria Morgan and Jerry Deignan contributed valuable resource information. Various other student papers are also cited in the report. All student papers are listed in Appendix A.
In addition, responses to the 1978 Common Cause survey of employees in the Colorado State Personnel System were integrated into the report findings. Gary Klein's analysis of the Common Cause questionnaire results was also of great help.
Therefore, I had much information on the Colorado State Personnel System from these papers as a resource to begin my analysis report. However, it was necessary to organize, check, update, re-write and summarize the available information. For many chapters field work and further research was necessary before they could be written. All resource information was validated, updated, and re-written many times over this three year period.


Typing and other incidental expenses for this three year public service project report were covered by a modest grant under the Intergovernmental Personnel Act from the Denver Region of the U. S. Office of Personnel Management. Both Governor Lamm and former State Director of Personnel, Rudy Livingston, assisted in obtaining this grant.
I am especially thankful to each of the Steering Committee members for their long hours, devotion, and dedication to completing this project. They provided invaluable guidance and professional direction.
I am also indebted to the excellent assistance of graduate student W. Allen Wilson, for providing much assistance in researching and summarizing information on the history of the Colorado State Personnel System, on developments of personnel administration, and on the statistics describing the personnel system. In addition, doctoral candidate Diana Kunz and intern Nancy A. Foreman filled many gaps and made many useful editorial suggestions.
A special thanks of appreciation goes to Maxine Kurtz who gave so much of her time in directing and helping me assess, shape, and formulate broad principles relating to public sector human resource management. Jay Shafritz was also instrumental in providing direction and contributing to my understanding of the history and development of public personnel systems. Robert F. Wilcox provided a special incentive to me in completing this project and pursuing my goals as a public administrator.
Michael S. March, my thesis advisor, significantly contributed to this study, the ASPA summary report, and to my professional and intellectual growth and development. He originated this project in 1977 when he was President of the Colorado ASPA Chapter and devoted many


hundred's of hours in assisting me with the design, development, preparation and polishing of this study. His unselfish committment to the advancement and understanding of public administration and better quality government is praiseworthy and inspiring.
I would also like to acknowledge Mary Bruinsma who typed several drafts and worked under severe deadlines; Corrine Glenn who typed all the charts and tables; and Lynne Beich who spent many hours proofreading this long manuscript.
I am also grateful for the constant motivation and advocacy of my family in achieving my career goals. And last and most important is the total support, encouragement, understanding and love of my husband, Gordy, who has been my source of strength, energy, and enthusiasm over these last three years.
Courtney Hart Price
Denver, Colorado May 1981


ix
TABLE OF CONTENTS SUM MAR Y
CHAPTER PAGE
L SUMMARY OF STUDY, FINDINGS, AND
RECOMMENDATIONS........................... 1
H PURPOSE, BACKGROUND, METHODOLOGY, AND
SIGNIFICANCE OF COLORADO STATE PERSONNEL
SYSTEM STUDY............................... 25
IE THE EVOLVING ROLE OF PUBLIC PERSONNEL
SYSTEMSIN GOVERNMENTAL MANAGEMENT.......... 50
IV A PROPOSED ANALYTICAL MODEL FOR PUBLIC
PERSONNEL SYSTEMS......................... 115
V HIST ORY AND PR EVIO US ST U DIES OF COLORADO
STATE PERSONNEL SYSTEM.................... 156
VI DATA ON COLORADO STATE PERSONNEL SYSTEMS
EMPLOYEE CHARACTERISTICS AND ATTITUDES.... 213
VH A DIAGNOSIS OF KEY COLORADO STATE PERSONNEL
MANAGEMENTPROBLEMS........................ 242
VIE HUM AN RESOUR CE PLANNING................... 311
IX CLASSIFICATION ............................. 340
X RECRUITMENT................................. 396
XI SELECTION................................... 427
XU EQUAL EMPLOYMENT OPPORTUNITY AND
AFFIRMATIVE ACTION PROGRAMS............... 477
XIH LABOR AND EMPLOYEE RELATIONS................ 504
XIV GRIEVAN CES AND APPEALS..................... 542
XV PERFORMANCE APPRAISAL....................... 561


X
XVI EMPLOYEE COUNSELING......................... 585
XVH TRAINING AND DEVELOPMENT.................... 602
XVm COMPENSATION................................ 627
XIX SEPARATION AND TURNOVER.................... 67*J
XX RETIREMENT.................................. 697
BIBLIOGRAPHY........................................... 737


TABLE OF CONTENTS
CHAPTER • PA^E
L SUMMARY OF STUDY, FINDINGS, AND
RECOMMENDATIONS...................................................... 1
Introduction......................................................... 1
Background on the Study and Its Importance........................ 2
Study Purpose ....................................................... 2
Organization of the Report........................................... 3
The Importance of Strong Personnel Administration
for Effective Governm ent......................................... 4
The Need for a More Effective Colorado State
P ersonnel Syste m................................................ 6
Problems in the Colorado State Personnel System...................... 9
Su m m ary of Study R eco m m endations............................... 11
Overall System Recora m endations................................... 11
Recom mendations Regarding Specific Personnel
Functions........................................................ 12
Top Priorities...................................................... 23
TL PURPOSE, BACKGROUND, METHODOLOGY, AND SIGNIFICANCE OF COLORADO STATE PERSONNEL SYSTEM STUDY
Introduction........................................................ 25
Project Purpose..................................................... 25
The Development of Merit Syste ms in the United
States........................................................... 26
Background of Colorado State Personnel System....................... 31
Problem sin the Colorado State Personnel
System .......................................................... 36
Attitudes Revealed by Common Cause Survey........................... 44
Analytical Model for Public Personnel Systems....................... 44
Methodology and Methods of Analysis................................. 45
Methods of Analysis................................................. H7


xii
CHAPTER PAGE
P otential Significance............................................. 48
UL THE EVOLVING ROLE OF PUBLIC PERSONNEL SYSTEMS IN
GOVERNMENTAL MANAGEMENT............................................. 50
Introduction........................................................ 50
Governmental Growth................................................. 50
Growth of Governmental Work Force................................... 54
Growth of Governm ental Services.................................... 54
Expansion of Government's Role...................................... 55
Major Approaches to Better Management in
Government.......................................................... 56
Budgetary Approach.................................................. 57
Human Resource Management Approach.................................. 57
A Brief History of M easures to Im prove
Government Management............................................ 59
Economy and Efficiency in Government................................ 59
Executive Budget Control........................................... 60
Executive Control of Personnel Policy.............................. 61
Line-Item Budgeting................................................ 62
Scientific Management Movement..................................... 62
Human Relations Movement............................................ 63
P OSD C 0 R B....................................................... 63
Performance Budgeting............................................... 64
Executive Development Programs and
Decentralization................................................. 65
Planning-Program ming-Budgeting System.............................. 67
Personnel Administration in the 1960s and
Early 1970s...................................................... 68
Management by Objectives............................................ 69
Organizational Development.......................................... 70


xiii
c H ApTER PAGE
Government Reorganization............................................. 71
Zero-Base Budgeting................................................... 72
Sum mary.............................................................. 72
Forces Impacting Governmental Management During
the 1970s and 1980s................................................... 73
Cost of Public Programs and Services.............................. 73
Scarcity of R esources................................................ 75
Dem and for Increased Productivity.................................... 76
Equal E m ploy m ent 0 pportunity................................. 78
Quality of Government Workers......................................... 79
Lack of Confidence in Governmental Performance........................ 80
New Public Demands Requiring Effective Government
A ction............................................................. 80
Public Personnel Systems................................................. 83
Definition of Public Personnel........................................ 83
Scope of Public Personnel Systems..................................... 84
Role of Public Personnel systems...................................... 85
Developm ent of Public Personnel Systems................................. 86
Bureaucratic Beginnings of Merit 1776-1819 ........................... 86
Spoils System, 1829-1880 ............................................. 87
Establishment of a Civil Service System,
1881-1883 .......................................................... 89
Expansion of Civil Service Systems, 1883-1975 ........................ 91
Civil Service Reform, 1976-1980 ...................................... 94
Trends in Public Personnel Management Since I960......................... 96
Human Resource Planning............................................... 97
Classification........................................................ 98
R ecriutm ent and Selection........................................... 99


xiv
CHAPTER PAGE
Compensation....................................................... 100
Productivity Management............................................ 101
Performance Appraisal and Incentive Systems........................ 102
Model Personnel Laws............................................... 103
Intergovernmental Personnel Relations.............................. 105
Equal Employm ent Opportunity...................................... 105
Labor-Management Relations......................................... 107
Verterans' Preference.............................................. 109
P olitical A ctivities of Public E m ployees....................... 110
M anagem ent Inform ation Systems.................................. 111
Personnel Decentralization......................................... 112
Executive Services................................................. 113
Su m m ary........................................................ 114
IV. A PROPOSED ANALYTICAL MODEL FOR PUBLIC PERSONNEL
SYSTEMS............................................................ 115
Introduction....................................................... 115
Performance Criteria for Good Government........................... 116
Earlier Model's For Human Resource Management System................. 117
National Civil Service League Laws................................. 117
Intergovemmental Personnel Act..................................... 121
Standards by Departments of Health, Education, and Welfare (HEW), Labor (D0L), and Defense (DOD) for
Grant and Contractural Operations............................... 123
1978 Federal Civil Service Reform Act.............................. 125
A Proposed Analytical Model for Public Personnel
Systems............................................................ 131
Interrelationships of Performance Criteria for
Good Government with Personnel Functions........................ 134
Effectivenss and Efficiency
137


XV
CHAPTER PAGE
Good Organization................................................... 140
Adequate Resources.................................................. 141
Qualified Human Resources........................................... 143
High Productivity and Motivation.................................... 144
Merit Service....................................................... 146
Career Development System........................................... 148
Equal E m ploy m ent 0 pportunity................................... 150
Social Responsibility............................................... 152
Accountability...................................................... 154
V. HISTORY AND PREVIOUS STUDIES OF COLORADO STATE
PERSONNEL SYSTEM ................................................... 156
Introduction........................................................ 156
History of Colorado State Personnel System............................ 156
Introduction........................................................ 156
Beginnings of Colorado State Personnel System:
1876-1907 ....................................................... 157
Development of Colorado State Personnel System
Policies: 1908-1919 ............................................. 160
Refinement of Colorado State Personnel System
Policies: 1919-1965 ............................................. 161
Reorganization of Colorado State Personnel System
Policies: 1966-1971 ............................................. 168
Developm ents in the Colorado State Personnel
System: 1972-1980................................................ 173
State Personnel Board............................................... 175
Sum mary of Legal History of Colorado State
Personnel System................................................. 177
Major Trends in Colorado Civil Service
Development...................................................... 179
Previous Studies of Colorado State Personnel System................... 180


xvi
CHAPTER PAGE
Introduction....................................................... 180
Sum maries of Previous Studies' Purposes, Major
Findings and Recom mendations....................................... 182
Sum m ary of the Implem entation of Previous Study
Recommendations..................................................... 197
Summary of Non-implemented Recommendations............................ 204
Description of 1979 and 1980 Studies of Colorado
State Personnel System.............................................. 205
Legislative State Auditor's Office Performance
Audit............................................................... 205
Office of State Planning and Budgeting
Decentralization Statistical Study: 1979 .......................... 208
Colorado Common Cause Classified Employee
Survey: 1977-1980 ................................................. 208
Other Studies of Colorado State Personnel System
in 1980 ........................................................... 209
VL DATA ON C 0 L 0 R A D 0 ST A TE PE RS0 N N EL S YSTE MS, E M PL 0 Y EE
CHARACTERISTICS AND ATTITUDES........................................ 213
Introduction......................................................... 213
Data on State Personnel System and Employee
Characteristics...................................................... 213
Identification of Public Employee Groups in
Colorado........................................................... 213
Classified Employeesin State Personnel System........................ 215
Non-Classified Exempt State Employees................................ 216
Classified Em ploy ees in State Judicial Personnel
System ............................................................ 217
Statistical Sum mary of Public Employees in State
G overa m ent...................................................... 217
Statisitical Overview of Classified State Employees
in State Personnel System . ....................................... 222
Major Findings from Statistical Tables 6-7
through 6-11 ...................................................... 233


xvH
CHAPTER
Social Service - County Welfare Merit System.....
Other County and Municipal Public Personnel
Programs....................................... .
Sum m ary........................................
VH. A DIAGNOSIS OF KEY COLORADO STATE PERSONNEL MANAGEMENT PROBLEMS
Introduction.....................................
Management Philosophy and Morale in State
Personnel System...............................
Purpose and Goals of State Personnel System......
Role of Chief Executive as Chief Manager............
Overall Organization of Colorado State Government for State Personnel Management and Administration . . . .
Decentralization Problems of Colorado State Personnel Syste m ............................................
Coverage of State Personnel System..................
Legal Provisions of State Personnel Syste m.........
State Personnel Information and Analysis Systems....
Budgets and Financing in State Personnel System.....
Professional and Ethical Standards in Colorado State Service.............................................
VUL HUMAN RESOURCE PLANNING...............................
Introduction.....................................
Background .........................................
Importance of Human Resource Planning............
Different Approaches to Human Resource Planning. . .
Government "Manpower" Programs for the
Labor Force....................................
Government Legislation Affecting Employment......
Future of Human Resource Planning................
PAGE
236
238
241
242
242
245
248
251
265
283
286
290
292
296
311
311
312 312
313
314
315
316


xviii
CHAPTER PAGE
Public Sector Human Resource Planning............................... 317
Problems with Public Sector Human Resource
Planning......................................................... 318
Key Principles........................................................ 319
Analytical Model Linkages............................................. 322
Colorado Human Resource Planning...................................... 32*1
Colorado Legal Provisions........................................... 324
Current Status of Colorado Human Resource
Planning......................................................... 325
Colorado Management Information System.............................. 326
Analysis of Colorado's Personnel Planning
System .......................................................... 328
Elements of an Effective Human Resource Planning
System .......................................................... 329
Key Issues............................................................ 331
Inadequate Human Resource Planning.................................. 331
Failure to Plan Ahead for Growth and Change......................... 334
Lack of Coordination Between Budgeting and
Human Resource Planning.......................................... 335
Lack of Integration of Human Resource Planning With
Overall State Management......................................... 337
Improve the Data Base for the Personnel System ..................... 338
IX. CLASSIFICATION ......................................................... 340
Introduction........................................................ 340
Background............................................................ 341
History............................................................. 341
Purpose............................................................. 346
Concept of Job Classification....................................... 347
Classification Development............................................ 348


xix
CHAPTER PAGE
Classfication Criticisms............................................ 348
Classification Achievements......................................... 350
Classification Challenges........................................... 351
Decentralization.................................................... 352
Classification Methods.............................................. 355
Future Trends....................................................... 356
Classification Principles.............................................. 359
Analytical Model Linkages.............................................. 362
Colorado Classification System......................................... 364
Colorado Constitutional Provisions.................................. 364
Statutory Provisions................................................ 365
Colorado State Personnel System Rules and
R egulations..................................................... 367
Unique Characteristics of Colorado Classification
System .......................................................... 368
Classification Case Law............................................. 371
Colorado Organizational Classification
Structure........................................................ 372
Key Issues............................................................. 379
Restructuring the Classification System............................. 379
Central and Uniform Decision-Making Authority....................... 380
Adequacy of Trained Agency Personnel Analysts....................... 381
Continous Problems with Classification
Decentralization................................................. 383
Lack of Consistently Applied Classification
Standards........................................................ 385
Poorly Constructed and Written Classification
Manual........................................................... 385
Lack of Qualified Hearing Officers for Classification Cases
386


XX
CHAPTER PAGE
Desirability of Five Year Review Cycles for
Occupational Studies............................................. 388
Accuracy of Job Descriptions........................................ 389
Division of Classification Responsibility........................... 390
Misuse of Multiple Range Classes.................................... 390
Reducing Number of Job Classifications.............................. 392
Revising Requirements for Entry Level Professional
Positions........................................................ 394
Establishment of a Senior Management and Technical
Corps............................................................ 394
X. RECRUITMENT............................................................. 396
Introduction........................................................ 396
Background............................................................ 397
The Status of Recruitment for Public Employment..................... 397
History............................................................. 399
R ecruitm ent Function.............................................. 400
Recruitment Methods................................................. 401
Relationship of Recruitment to Other Personnel
Functions........................................................ 403
R ecruitm ent Principles.............................................. 403
Analytical Model Linkages............................................. 406
Colorado R ecruitm ent System......................................... 407
Colorado Constitutional Provisisons................................. 407
Colorado Statutory Provisions....................................... 408
Colorado State Personnel Rules and Regulations...................... 408
Organization of Colorado Recruitment Program........................ 411
Characteristics of Colorado Recruitment Program..................... 413
K ey Issues........................................................... 417


xxi
CHAPTER PAGE
Lack of Highly Qualified Applicants................................. 417
Lack of Sufficient Funding and Staffing for
Recruitment Programs............................................. 418
Lack of Evaluation System for Recruitment
Function......................................................... 419
Lack of Timely Response in Recruiting Potential
Candidates....................................................... 419
Eliminate Duplication and Inefficiency in the
State Recruitment Process........................................ 420
Lack of Consistent Policy Concerning
Decentralization Recruitment Program............................. 421
Existence of State Residency Requirement............................ 424
Lack of Coordination with State Secondary and
Post-Secondary Educational Institutions.......................... 424
Restrictions Concerning Length of Announcement
Period for State Vacancies....................................... 425
IX. SELECTION............................................................... 427
Introduction........................................................ 427
Background............................................................ 428
Evolution of Testing Methods........................................ 428
National Legal Environment.......................................... 431
Public Sector Selection............................................. 434
Key Principles........................................................ 435
Analytical Model Linkages............................................. 439
Colorado Selection System............................................. 440
Colorado Legal Environment.......................................... 440
Organization of Colorado Selection Program ......................... 442
Characteristics of Colorado Selection Program....................... 442
Statistics.......................................................... 444
Key Issues............................................................ 453


xxii
CHAPTER PAGE
Adherence to the Merit Principle.............................. 453
Lack of Timeliness............................................ 454
Quality of Examiniation Process............................... 456
Excessive Use of Oral Tests................................... 458
Validation of Test Instru m ents.............................. 459
Examiniation Post Audit of Decentralized
Agencies.................................................... 461
Testing by Class.............................................. 461
Probationary Period........................................... 462
Internships................................................... 462
Contract Employment........................................... 463
Political and Favored Appointments............................ 464
Management Information System................................. 464
Effectiveness of Decentralization of Selection................ 465
Employee Perception of the Selection System................... 465
The Necessity for Increased Funding for the
Selection Process........................................... 467
X3L EQUAL EMPLOYMENT OPPORTUNITY AND AFFIRMATIVE ACTION
PROGRAMS...................................................... 477
Introduction.................................................. 477
Background and History........................................... 477
Equal Employment Opportunity.................................. 477
Purpose of Equal Employment Opportunity....................... 479
Affirmative Action Programs................................... 480
History of Affirmative Action Programs........................ 480
Characteristics of Affirmative Action............................ 481
Purpose of Affirmative Action Programs........................ 481
Affirmative Action v. Merit System Standards
482


xxiii
CHAPTER PAGE
Affirmative Action Program Format..................................... 484
Affirmative Action Principles......................................... ^86
Analytical Model Linkages............................................. 487
Statistics............................................................ 488
Colorado Affirmative Action System.................................... 491
Colorado Constitutional Provisions.................................. 491
Colorado Statutory Provisions....................................... 491
Colorado State Personnel Rules and Regulations...................... 493
Colorado Employee Handbook.......................................... 494
Other Affirmative Action Directives................................. 495
Key Issues............................................................ 497
Need for Affirmative Action in Colorado............................. 497
Lack of Top Leadership and Agency Management
Support for Affirmative Action................................... 497
Lack of Proper Organization for Affirmative
Action Programs.................................................. 498
Lack of Funding, Training and Personnel for
Implementing Affirmative Action.................................. 499
Increasing the Number of Eligibles CerLtifled....................... 500
Conflict Between the Colorado State Personnel
Board and the General Assemble................................... 501
XICL LABOR AND EMPLOYEE RELATIONS............................................ 504
Introduction........................................................ 504
History of Private Sector Collective Bargaining..................... 506
Public Sector Labor and Employee Relations............................ 507
History of Public Sector Collective Bargaining...................... 507
Issues Restricting Public Sector Collective
Bargaining....................................................... 508
Public Sector Employee Relations.................................... 510


xxiv
CHAPTER PAGE
Issues Involving Public Sector Collective Bargaining
Relationships....................................................... 519
Labor and Employee Relations Principles............................... 521
Analytical Model Linkages............................................. 524
Colorado Labor and Employee Relations System.......................... 526
Colorado Constitutional Provisions.................................. 526
Colorado Statutory Provisions....................................... 526
Colorado State Personnel Rules and Regulations...................... 527
Other Labor-Employee Relations Directives........................... 528
Colorado Legal History.............................................. 529
Colorado Employee Organizations..................................... 530
Key Issues............................................................ 534
Absence of Legal Framework and Statute Governing
Collective Bargaining Rights..................................... 534
Lack of State Policy Concerning the Right to
Strike........................................................... 535
Provision of Alternative Solutions to Strike........................ 536
Lack of Leadership and Responsiveness to Employee
Problems......................................................... 538
Inadequate Employee Participation in Rule-Making
Activities in State Classified Service........................... 540
XIV. GRIEVANCES AND APPEALS.................................................. 543
Background.......................................................... 542
Developm ent of Grievance and Appeal Systems........................ 534
Grievance Systems..................................................... 546
Grievance Procedure Format.......................................... 546
Grievance Principles................................................ 547
Appeal Systems........................................................ 548
Appeal Procedure Format............................................. 548


XXV
CHAPTER PAGE
Appeal Principles................................................ 549
Analytical Model Linkages........................................... 550
Colorado Grievance and Appeal System................................ 552
Colorado Constitutional and Statutory
Provisions..................................................... 552
Colorado State Personnel Rules and Regulations................... 552
Grievance Procedure ............................................. 554
Appeals Procedure................................................ 554
Greivances and Appeal Statistics................................. 555
Key Issues.......................................................... 556
Lack of Information for Employees About the
Grievance and Appeal System.................................... 556
Separation of Powers Between Setting Personnel
Policy and Hearing Appeals..................................... 557
Delays in Resolving Grievances and Appeals....................... 559
XV. PERFORMANCE APPRAISAL................................................. 561
Background....................................................... 561
Public Sector Performance Appraisal Systems......................... 563
History.......................................................... 563
Purpose.......................................................... 563
Legal Concerns................................................... 564
Performance Appraisal Formats.................................... 566
Performance Appraisal Principles.................................... 567
Analytical M odel Linkages.......................................... 569
Colorado Performance Appraisal System............................... 571
Colorado Statutory Provisions.................................... 571
C olorado State R ules and R egulations.......................... 571
Other Performance Appraisal Directives
572


xxvi
CHAPTER PAGE
Statistics......................................................... 575
Key Issues........................................................... 576
Linkages Between Performance Evaluation and
Overall Management.............................................. 576
Failure to Administer Required Annual Performance
Appraisals...................................................... 578
Lack of Relationship Between Performance Appraisal
and " M erit" Increases......................................... 580
Lack of Sufficient Supervisory Training and
Implementation.................................................. 582
XVL EMPLOYEE COUNSELING..................................................... 585
Introduction....................................................... 585
Counseling Programs.................................................. 587
History............................................................ 587
Public Sector Employee Counseling.................................. 589
Purpose............................................................ 590
Employee Counseling Program Format................................. 590
Employee Counseling Program Principles............................... 591
Analytical Model Linkages............................................ 593
Colorado Employee Counseling System.................................. 595
Colorado Constitution and Statutory Provisions..................... 595
Colorado State Rules and Regulations............................... 595
Colorado Employee Assistance Program............................... 596
Key Issues........................................................... 599
Lack of Comprehensive Coverage..................................... 599
Lack of Comprehensive Policy Concerning
Employee Personnel Problems..................................... 600
Lack of Supervisory Training....................................... 600


xxvii
CHAPTER PAGE
XV3L TRAINING AND DEVELOPMENT .......................................... 602
Background.................................................... 602
Public and Private Sector Training and Development
Programs...................................................... 603
History....................................................... 603
Private and Public Sector Training Costs.................... 604
Public Sector Training........................................ 604
Purpose....................................................... 606
Training and D evelop m ent Progra m Types.................... 608
Training and Development Principles.............................. 608
Analytical Model Linkages........................................ 611
Statistics.................................................... 612
Colorado Training and Development Programs....................... 61 ^
Colorado Statutory Provisions................................. 614
Colorado State Rules and Regulations and Employee
Handbook.................................................... 614
Executive and Legislative Support............................. 616
Key Issues....................................................... 618
Lack of Training Coordination Within State
Government.................................................. 618
Lack of Sufficient Funding of State Training and
Development Programs........................................ 619
Lack of Com mitment by the Governor and
Legislature................................................. 620
Lack of Sufficient Training Programs for State
Employees................................................... 621
Lack of Policy Concerning Attendance and
Reimbursement at Training Programs.......................... 621
Lack of Training Coordination with State
Universities, Colleges, and Other Postsecondary Institutions
622


xxvUi
CHAPTER PAGE
Lack of Career Development Opportunities......................... 624
Lack of Management Development and Executive
Training....................................................... 624
XVIIL COMPENSATION......................................................... 627
Background....................................................... 627
Compensation Elements............................................ 629
Development of Public Sector Compensation
Practices...................................................... 632
Public Sector Compensation Comparability......................... 635
History of Public Sector Compensation Policies................... 638
Key Elements of Public Sector Compensation
Programs......................................................... 641
Prevailing Wage Principle........................................ 641
Pay Plan......................................................... 642
Pay Range........................................................ 644
Salary Survey.................................................... 644
Key Classes...................................................... 645
Total Compensation Comparability................................. 646
Key Principles...................................................... 647
Analytical Model Linkages........................................... 651
Colorado Compensation System........................................ 652
Colorado Constitutional Provisions............................... 652
Colorado Statutory Provisions.................................... 653
Colorado State Rules and Regualtions............................. 655
Colorado State Employee Handbook................................. 655
Colorado Compensation Procedures................................. 656
Key Issues.......................................................... 660
Comparability Survey Data Problems............................... 660


xxix
CHAPTER PAGE
Key Classes Fail to Meet Established Criteria...................... 661
Selection of Organizations for Salary Survey Fail to Match Closely the State's Work Force
Distribution.................................................... 662
Failure to Appropriate Sufficient Funds for
Budgeted and Approved FTEs...................................... 664
Arbitrary Ceilings on Compensation of Top State
Executives...................................................... 667
Problems in Estimating Fringe Benefit Costs........................ 667
Lack of Timely Data Used for Salary Survey......................... 669
XIX. SEPARATION AND TURNOVER................................................ 674
Background......................................................... 674
Labor Turnover....................................................... 675
Types of Turnover.................................................. 675
Reasons for Turnover............................................... 676
Advantages and Disadvantages of Turnover........................... 678
Public Sector Turnover............................................. 680
Principles Relating to Separation and Turnover....................... 682
Analytical Model Linkages............................................ 684
Colorado Separation and Turnover System ............................. 686
Colorado Constitutional Provisions................................. 686
Colorado Statutory Provisions...................................... 686
Colorado State Rules and Regulations............................... 687
Colorado State Employee Handbook................................... 688
Colorado Separation and Turnover Procedures........................ 688
Key Issues........................................................... 693
Neglect of Separation and Turnover Analysis in
Personnel Planning and Management............................... 693


XXX
CHAPTER PAGE
Lack of Separation and Turnover Data and
Analyses........................................................ 694
Failure to Publish Statistical Reports on
Separation and Turnover......................................... 694
XX. RETIREMENT............................................................. 697
Background......................................................... 697
Retirement Programs.................................................. 698
History............................................................ 698
Retirement Benefits................................................ 699
Problems in Funding Public Retirement Plans........................ 701
Different Approaches to Funding Retirement
Plans........................................................... 702
Retirement Principles................................................ 704
Analytical Model Linkages............................................ 707
Colorado Retirement Program.......................................... 709
Organization of Colorado Retirement Program........................ 709
PERA............................................................... 710
C olorado R etire m ent Syste m...................................... 711
Colorado Statutory Provisions...................................... 711
Colorado State Rules and Regulations............................... 711
Colorado State Employee's Handbook................................. 712
Administration of PERA............................................. 712
K ey Issues.......................................................... 713
Lack of Consistency in State Retirement Plans...................... 713
Growing Lack of Actuarial Soundness in the PERA
Plan............................................................ 715
Use of Unrealistic A ssu m ptions in PERA
A cturial V aluations........................................... 718
Have PERA Contribution Rates Been Understated?
723


xxxi
CHAPTER PAGE
How Should PER A Unfunded A ctuarial Liabilities
be Funded? ................................................ 724
Refusal of PER A Staff to Release Full Actuarial
Reports.................................................... 727
Issuance of PER A of Erroneous Reports to Its
Members.................................................... 727
Problems With the Management of the PER A
System .................................................... 729
The Social, Personnel, and Economic Impact of
PER A Benefit Provisions................................... 731
Coordination of PER A and Social Security
Coverage................................................... 734
BIBLIOGRAPHY .............................................................. 737


xxxii
LIST OF APPENDICES
APPENDIX PAGE
5-A Colorado State Personnel Constitutional
Requirements ......................................... 210-212
7-A Executive Order, Colorado Code of Ethics ............ 303-310
11-A Legal Requirements Relating to Selection ............... 468
15-A Performance Value Definitions .......................... 584
18-A Key Classes, State of Colorado Salary
Survey, 1979 ............................................ 671
18-B Colorado State Department of Personnel,
National Salary Survey Questionnaire - 1979 .... 672
18-C Annual Calendar of Events for State Salary
Requirements ............................................ 673
A Research Papers Prepared For Colorado
State Personnel Study by Graduate Students ........... 765-769
B Public Employees Retirement Association of
Colorado, Combining Balance Sheet, Year Ended
June 30, 1979............................................770
C Public Employees Retirement Association of
Colorado, Financial Statement, June 30, 1979............771


xxxviii
LIST OF CHARTS
CHART PAGE
3- A Government/Employment Growth ........................... 53
A-A Relationships Between Governmental Performance
Criteria and Personnel Activities ................... 135
4- B The Analysis of a Personnel System..................... 136
5- A A Chronological Chart of Major Steps in the
Department of the Colorado State Personnel
System 1876-1978 ...................................... 178
7-A Organizations and Legal Systems Impacting
Colorado State Personnel System, by Functions,
in 1978 256
7-B Proposed State Organizational Chart ................... 260
7-C Department of Personnel - Organization
Structure - 1980 ...................................... 263
12-A Affirmative Action Model .............................. A85
18-A Total Nonsalary Benefits as a Percent of Salary . . 631


xxxviv
LIST OF TABLES
TABLE PAGE
3-1 Governmental Expenditures and Gross National
Product - Fiscal Year 1929-1975 .................... 51
3-2 Government Expenditures as a Percentage of
Gross National Product - Fiscal Year 1929-1975 . . 51
3-3 Government and Private Employment in the
United States - Fiscal Year 1957 and 1977 .......... 52
6-1 Average Number and Percent Increases in Full
and Part-Time State Employees from Fiscal Years
1970 to 1978 218
6-2 Breakdown in the Average' Number of State
Government Employees for the Legislative,
Executive, and Judicial Branches In Fiscal
Year 1978 ............................................ 220
6-3 Number of Actual Full-Time Equivalent Faculty
Employed in State Universities and Colleges in Fiscal Year 1978 221
6-4 Employees Covered Under the State Personnel
System 1971-78 223
6-5 Status of State Personnel System Appointments:
June 30, 1978 ........................................ 225
6-6 Reassignments in the State Personnel System:
1975-1978 ............................................ 228
6-7 State Classified Employee (Full and Part Time Only)
Characteristics of Sex, Age, Race, and Education Level Data for 25,491 Classified Employees as of June 30, 1978 ........................................ 230
6-8 State Classified Employee (Full and Part Time Only)
Characteristics of Pay Grade, Salary Level Data For 25,491 Classified Employees as of June 30,
1978 231
6-9 Analysis of State Classified Employees (Full
and Part Time Only) by Occupational Groups as of June 30, 1978 .................................. 232


XXXV
TABLE PAGE
6-10 Age, Education, and Pay Grade Characteristics
of State Classified Employees (Full and Part Time Only) Distributed by Employee Sex as of June 30, 1978 ..................................... 234
6- 11 Age, Education Level, and Pay Grade Charac-
teristics of State Classified Employees (Full
and Part Time Only) Distributed by Employee
Race as of June 30, 1978 ........................ 235
7- 1 Colorado State Department of Personnel
Decentralization Summary ............................. 270, 271
7-2 Optimal Locations for Administering Centra-
lized and Decentralized Functions Based Upon the Associated Costs and Effectiveness ............ 275
7-3 Expenditures and FTEs of the Colorado Depart-
ment of Personnel and the State Personnel Board,
Fiscal Years 1973-79 (Actual Expenditures, by Source, in Thousands of Dollars; Actual No. of FTES Used)......................................... 293
10- 1 Comparisons of Recruitment Activity Levels
Per Hire........................................... 422
11- 1 Workload Indicators for Examination Administration
Unit Colorado State Department of Personnel,
Fiscal Year 1978 ................................ 446
11-2 Average Time for Colorado Department of Per-
sonnel to Establish Eligible Lists from Open Competitive Examinations After Closing Dates,
1976-1979 ......................................... 446
11-3 Comparison of Time to Establish Open Competitive
Eligible Lists After Closing Dates of Examinations
Colorado and State Jurisdiction-Wide Merit
Systems - Fiscal Year 1977-78 ..................... 447
11-4 Comparison Between the Personnel Department and
Decentralized Agencies Regarding Oral vs.
Written Exams Set Up and Constructed - Fiscal
Year 1978-1979 .................................. 449
11-5 Use of Multi-Part Examinations Colorado
Department of Personnel and Decentralized Agencies - Fiscal Year 1978-79
451


xxxvi
TABLE PAGE
11-6 Perception of Accuracy of Job Announcements
by Department, 1978 ................................ 451
11-7 Perception of Accuracy of Job Announcements
by Salary Level, 1978 .............................. 452
11- 8 Perception of Adequacy of Testing Equipment
by Type of Instrument, 1978 ....................... 452
12- 1 Comparison by Ethnicity, State of Colorado
Classified Employees and State of Colorado
Labor Force......................................... 489
12- 2 Comparison by Sex, State of Colorado Classified
Employees and State of Colorado Labor Force .... 490
13- 1 Union Representation in The Federal Govern-
ment, November, 1978 ............................ 517
13-2 State and Local Organized Full-Time Employees,
October, 1977 ...................................... 518
13- 3 CAPE Employee Relation Cases, July 1979-
March 1980 ....................................... 532
14- 1 Colorado State Personnel System Grievance
Procedure........................................... 553
14-2 Time Lag Between Appeal Filing Date and Final
Decision 1975-1979 ............................... 560
14-3 Backlog of Formal Hearings 1975-1980 ............. 560
16- 1 Employee Assistance Program, Inc.
Client Summary Data................................. 598
17- 1 Training Program Types ............................. 609
18- 1 Percent Wage Gains, 1955-1973 ...................... 635
18- 2 Sample by Industry-Total Colorado .................. 663
19- 1 State Personnel System: Appointments, Promotions,
Terminations, and Turnover Rates by Agency July 1, 1977 through June 30, 1978 (in permanent and full- and part-time positions
only)................................................. 691, 692
19-2 State of Colorado Turnover Rates for Fiscal
Years 1974 through 1978 ............................ 695


CHAPTER I
SUMMARY OF STUDY, FINDINGS, AND RECOMMENDATIONS
Introduction
The purpose of this project is twofold: to render a public service and to develop and apply an improved methodology for analyzing public personnel systems. Its primary objective is to review comprehensively and evaluate the Colorado State Personnel System by utilizing a system analysis approach. The central evaluation objective in this study is to assess the effectiveness of the Colorado State Personnel System in the context of its contribution to overall State governmental management performance and program effectiveness. The overall structure and performance of the personnel system is assessed first. Then all of its 13 personnel activities are examined in depth.
An analytical model was created and used in evaluating the effectiveness and performance of the Colorado State Personnel System. This model focuses on the relationships between the primary elements of governmental performance and the 13 traditional functions of a personnel system which include human resource planning, classification, recruitment, selection, equal employment opportunity and affirmative action, labor and employee relations, grievances and appeals, performance appraisal, training and development, employee counseling, separation, and retirement.
Key principles are outlined for each of the personnel functions to follow in structuring a modern day personnel system that is responsive to the merit concept and protection of employee rights and also to the


needs of management.
This study emphasizes the importance of human resource management in achieving high governmental performance and identifies personnel management as one of the key elements in achieving organizational goals and objectives. The linkages between overall management of the Colorado State government and the operation of the personnel system are defined and analyzed. Each of the 13 personnel functions performed by the Colorado system are evaluated.
Based on this analysis, recommended changes and reforms are suggested, some of which require accompanying legislative or even constitutional changes. Approximately 118 recommendations for change are presented. Implementation of these recommendations would result in establishing a more advanced, effective, and managerially responsive personnel system that strongly adheres to the merit principle while enhancing the overall management effectiveness of Colorado State government.
Background on the Study and Its Importance
Study Purpose
In past years, many studies have been made of the Colorado State Personnel System, but problems continue to exist in the current system. (See Chapter VII—A Diagnosis of Key Colorado State Personnel Management Problems.) The Department of Personnel is staffed by able and dedicated employees, but they are too few in number and the system itself still has numerous fundamental deficiencies. It is still inefficient and ineffective in its operation. This situation presents an urgent problem
-2-


for Colorado government because of the new and demanding responsibilities being thrust on the State by the change and expansion being generated by the energy boom. Improved State governmental performance will depend heavily on the development of improved personnel administration to create an effective merit system staffed by competent career civil servants. Moreover, this comprehensive study presented an opportunity to develop and test an improved methodology for assessing public personnel systems.
Organization of the Report
This study is divided into four major sections. The first section summarizes the findings and recommendations of the study (Chapter I).
The second section presents the general background and development of human resource management from the beginnings of our country to present day, emphasizing the overall growth of government and the expansion of its role in our modern day society. It tracks the development of merit systems in the United States and traces the development of the Colorado State Personnel System (Chapters II and III). In Chapter IV, a proposed model for analyzing the effectiveness of public personnel system is presented that focuses on the relationship between governmental performance and the 13 major functions of a personnel system.
Section three reviews the Colorado State Personnel System in depth (Chapter V). Statistics on the coverage of the system and the characteristics of its employees are presented. Previous studies of the personnel system are described (Chapter VI). This section also Identifies the major system-wide issues, analyzes the principal management problems which cut across the entire system, and makes recommendations for their solution (Chapter VII).
-3-


The final section (Chapters VIII through XX) analyzes the 13 traditional personnel functions performed by the Colorado system (including key principles for each personnel function) and presents specific recommendations for change in light of these principles. Over 100 recommendations are made in this section alone for changes to modernize and improve the performance of the Colorado State Personnel System.
The Importance of Strong Personnel Administration for Effective Government
A well organized and properly functioning personnel system is a fundamental requirement for effective governmental operation. A strong personnel system and effective personnel administration are essential for several reasons.
First, the human resource management system is recognized as one of the two major institutional management systems available to chief executives of governments. It has long been established that a good budgeting and financial administration system is essential for the proper allocation and effective use and control of financial resources. An equally important role is played by the personnel administration system, which is the chief executive's main arm for managing the government's human resources. Both systems require highly competent career professionals to run them plus strong executive support to make them effective.
Second, effective modern public personnel systems are recognized as the tool through which the integrity of the public service is protected from the effects and abuses of the spoils system. As government increased in size and importance in the United States during
-4-


the 19th century, it was widely recognized that political patronage systems had to be replaced by merit systems. Merit systems are based on competence, competitive selection and promotion, and continuing career service by dedicated and productive employees. In the public sector, it is required that career civil servants be responsive to the policies established by their elected political leaders and in turn the political leaders are obligated to support the merit system.
Third, the personnel system is heavily responsible for the quality, assignment and utilization, and performance of the people who staff the government. A well organized and effective personnel system must have a planned human resource management program that is responsible for recruiting and selecting the best qualified applicants; classifying and assigning them properly; providing for their development and training; and compensating, motivating, and managing the employees to achieve the greatest possible governmental efficiency and effectiveness. A good personnel system recruits and retains competent people who are representative of our society. It must assure the continuity and responsiveness of their public service under proper management control and with due protection of employee rights.
Fourth, a comprehensive and positively oriented public personnel system serves as an integral tool for improving government management and providing for more effective government. Through a properly directed, organized, and managed human resource system, the chief executive—working with his departmental heads and staff units—can establish policies and practices which lead the government toward higher performance and greater effectiveness. Modern government requires highly competent and well-trained professional managers and technicians
-5-


to install and operate the managerial systems which are the key to improving governmental performance.
Neglect of the foregoing considerations inevitably will lead to disorganized and poorly managed government, deficient performance, and general ineffectiveness in achieving governmental goals and program objectives. Broadly speaking, while state and local personnel administration ^as improved in the last two decades, the Colorado State Personnel System still falls far short of meeting the needs of modern governmental management.
The Need for a_ More Effective Colorado State Personnel System
In the last few years powerful forces, some national and some uniquely affecting Colorado, have increasingly made it evident that Colorado needs a more effective state government and that major improvements in the State Personnel system would be a key ingredient in achieving these goals. Among these forces are the following factors:
1. Rapid Population and Economic Growth — The population of Colorado has increased from 1.3 million in 1950 to an estimated 2.8 million in 1980—an increase of 115%. Projections indicate that by the year 2000, the population may be 4.5 million. This would be a 1.7 million increase in 20 years, dwarfing the increase in the past 30 years.*
Colorado is rapidly becoming the "energy capital" of the United States. The Front Range area is one of the more rapidly growing areas in the United States. The Western Slope is bracing for an unprecedented period of growth and development. These developments will place a heavy
^The Governor's Blue Ribbon panel, Private Choices, Public Strategies, an Interim Report, Vol. 1 (February, 1981), p. 22.
-6-


burden on the State government and on local governments for providing basic public facilities and services as well as for meeting the inevitable problems that will attend rapid economic growth and resultant environmental and social changes.
The Governor has stated on several occasions that the State
2
government is unprepared to deal with these emerging problems.
Equipping the State government to meet these challenges will mean that more employees and especially more professionals and technicians with higher and more complex skills will have to be hired and trained. The critical personnel needs of the State include recruitment of qualified planners, policy and program analysts, economists and other specialists, and top managers who have the capacity to act expeditiously and effectively in a rapidly changing governmental environment.
2. Increasing Complexity and Proliferation of Difficult Government Tasks — During the last two decades, Colorado has experienced a rapid transformation from a largely agricultural, rural state into an increasingly urbanized and industrialized one which is being heavily developed for its energy resources. The rate of change continues to accelerate.
This rapidly changing situation in Colorado is producing unprecedented demands on State government, many of which in recent years have not been adequately met. Among the problems which confront the State are: energy development; environmental degradation; demands for expanded transportation and community facilities in both the Front Range
2
Richard D. Lamm and Lee White, "Enhancing Productivity: It's Possible," Notes, Office of Personnel Management (July/August, 1980), pp. 17-21.
-7-


area and on the Western Slope; unplanned urban sprawl; and increased demands for educational, health, and social services, as the population increases and as the rate of change accelerates. Therefore, State government must plan, develop, and implement timely and adequate action programs.
3. Increased Size and Complexity of Colorado Government — In 1950, State expenditures from all sources totaled only about $150 million. The 1980 expenditures as estimated by the Joint Budget Committee totaled approximately $2.77 billion. This is an increase of
O
18 times in 30 years. Although much of it was due to inflation, the increase in real terms was still about six times in 30 years.
With this growth has come a vast expansion in the number and size of programs and an accelerating complexity in the affairs of the State. Policy makers and administrators must gear up to deal with more difficult issues, larger budgets, increased numbers of personnel, more complex organizational and program coordination tasks, and with large interwoven problems that profoundly affect the ability of the State to meet the challenge of growth and maintaining the quality of life while accommodating that growth. Government must become more efficient in its management and more effective in its programs.
4. New Demands for Increased Efficiency and Effectiveness in the State — While the new wave of population and economic development is sweeping over Colorado and creating new needs for governmental action, strong public sentiment in Colorado and throughout the nation opposes the growth of the government. As a result, vocal demands have been made
Colorado Joint Budget Committee, Appropriations Report 1979-80.
-8-


for tight budget ceilings, tax reductions, and for increasing the efficiency and productivity of personnel currently in government agencies.
Therefore, the Executive Branch must take aggressive action to use its available resources of personnel and finances with maximum effectiveness—and demonstrate these results to the Legislature and to the people of the State. This, in turn, requires improved managerial systems and better managers. In addition, this requires planners, analysts, and program evaluators who can measure performance and demonstrate factually how well existing resources are being used.
The State currently lacks the specialists and analysts to perform these functions which include organization and management analysis and development of management information systems, program evaluation, and cost effectiveness analysis. Except for a minimally staffed Office of State Planning and Budgeting, the Chief Executive lacks the institutional staff machinery and organized processes to plan, organize, conduct, and monitor continuing efforts to improve the organization and management of the State and the effectiveness of its programs.
Problems in the Colorado State Personnel System
Throughout the history of the Colorado State Personnel System, there has been considerable debate over how to structure a personnel system free from vulnerability to political spoils and yet flexible enough for executive managerial leadership. Recent studies and evaluations of the system discussed and detailed in Chapter V indicate that this balance has not been achieved.
Extensive review, criticisms, and employee dissatisfaction by citizens, legislators, administrators, and employees suggest that
-9-


problems exist in the Colorado State Personnel System in the following 12 areas:^
1. Lack of support for and strict funding limitations in the State Personnel System by the General Assembly.
2. Absence of human resource planning in the system.
3. Widespread disregard of merit principles in recruiting, testing, selection, and promotion.
4. Ineffective affirmative action programs.
5. Inadequate salary and fringe benefits, especially for top executives.
6. Low employee motivation and absence of rewards and incentives for effective performance.
7. Disregard of the employee performance evaluation process.
8. Slow and ineffective grievance and appeal systems.
9. Lack of promotional and transfer opportunities across agency lines.
10. Inadequate training and developmental opportunities and programs due to funding limitations.
11. Lack of effective and timely personnel asistance to State agencies by the central personnel department.
12. Lack of integration between human resource management activities and the overall management functions of the Executive Branch.
Each of these problem areas is further elaborated on in Chapter II , and Chapters VIII through XX.
These criticisms have been made by respondents of the 1978 Common Cause survey, executive directors of CAPE and AFSCME, Colorado State Department and division heads in a 1976 survey by graduate student Paul Reardon and updated in other interviews conducted during 1978-80.
-10-


Summary of Study Recommendations
The study recommendations are divided into two parts—the overall systems recommendations and the recommendations concerning the 13 personnel functions. The recommendations in each area are summarized below and supply the heart of this project report.
Overall System Recommendations
I. Personnel management should be integrated with overall management of the State government and the overall managerial system should be strengthened, particularly by improving the managerial resources of the Chief Executive.
II. The merit basis for the State Personnel System should be strongly reaffirmed by the Governor—and effective merit standards established and enforced.
III. The Chief Executive should be given more direct control over personnel policy and personnel administration, subject to the clear obligation to abide by merit principles. The Department of Personnel should be elevated to be an Office of State Personnel Management, co-equal with the Office of State Planning and Budgeting. The State Personnel Board should be converted to a strong, well-staffed merit "watchdog” and enforcement agency.
IV. Top State managerial capacity should be strengthened by reducing the number of elected State officials; creating a Senior Management and Technical Corps; and authorizing political appointment of Deputy Executive Directors for the 20 cabinet departments.
-11-


V. The General Assembly should comply with the constitutional
mandate for "adequate appropriations" for the State personnel functions, because lack of resources has severely undercut State personnel administration.
VI. An improved personnel management and personnel data system should be installed—and performance analysis augmented.
VII. The decentralization process started in 1977 should be modified
in the interest of increasing efficiency and protecting the merit system from further weakening. The present vacancy-by-vacancy recruitment and testing process, heavily relied on by individual agencies, is costly and is subject to merit principle nonobservance.
VIII. Legislation should be enacted to establish well-defined ethical and professional conduct standards in the State government—and the Personnel Board should be given the responsibility and the staff resources to enforce the standards.
IX. The governmentwide organization for personnel management should be revamped and human resource management systems strengthened, because the present arrangements are unsystematic and costly.
The specific recommendations on the overall structure and role of the personnel system are largely contained in Chapter VII. Recommendations Regarding Specific Personnel Functions
I. Human resource planning is performed on a very limited basis and lacks coordination and integration with overall State management. Among the recommendations are that:
—The Governor should direct the development of a systematic human resource planning program to include both short and long
-12-


range projections and analyses.
—The Department of Personnel, responsible for this plan, should assess and identify the kinds of specialties needed to meet the new challenges of State government.
—Plans should be made to prepare and submit to the General
Assembly a State Personnel Management Report which will provide a comprehensive five-year analysis of the proposed personnel needs for review in the annual budgetary process.
II. The State's classification system needs restructuring to become better organized, to operate more professionally, to apply uniform classification principles, and to protect employees' rights more effectively. Recommendations include:
—Restructuring the system by reducing the number of job classes to about 1,000 and providing more and better defined career ladders.
—Centralizing of final decision-making and central review
authority over classification action within the Department of Personnel.
—Reviewing of the multiple range class concept and, if
continued, action to insure internal State-wide consistency.
—The establishment by the Department of Personnel of organized relationships with universities and colleges to develop rigorous standards for orderly entry into positions in the State service by new graduates, including creation of entry-level internship programs for young professionals trained in general administrative specialties.
-13-


—Centering responsibility on the Department of Personnel for adequately training classification specialists employed in decentralized agencies and used in post-audit decision-making.
—Revising and updating the Classification Manual.
—Training hearing officers in the basic concepts of
classification; and including provision for findings of fact in such cases, and sending cases back to the Personnel Department for specific remedy.
—Stating goals for the classification system to attain maximum accuracy, fairness, and consistency throughout the State service.
III. The recruitment program remains passive, unimaginative,
fragmented, inefficient, slow, and minimally responsive to
management's needs. Recommendations include:
—Restructuring the recruitment process to eliminate duplication and inefficiency.
—Recentralizing recruitment for system-wide classes and
utilizing "lead agencies” to recruit for certain classes used by several different agencies.
—Establishing criteria for decentralized recruitment with the Department of Personnel carefully monitoring and evaluating performance.
—Extending the filing time for middle and higher level classes and also broadly publicizing recruitment for such positions.
—Lengthening announcement periods for promotional openings and encouraging competition.
-14-


—Eliminating State residency requirements.
—Providing and encouraging lateral entry into middle and higher level classes.
—Establishing liaison with State universities and colleges to plan for meeting future projected State personnel requirements in various occupational areas.
IV. Employee selection is inefficient, slow, haphazard, unresponsive,
and often unsupervised. Excessive use of oral tests is
undercutting merit standards. Among the recommendations are that
the State should:
—Examine by class and restructure the selection process to eliminate the duplication and inefficiency inherent in position-by-position recruiting.
—Give system-wide exams in anticipation of vacancies, especially in general administrative specialties.
—Shorten the time from announcement to certification.
—Establish consistent standards and procedures for decentralized recruitment.
—Strengthen Department of Personnel control of the process by establishing selection standards and guidelines and monitoring and post-auditing the personnel selection instruments and procedures.
—Increase validation of tests.
—Centralize testing for classes common to more than one agency in the Department of Personnel, or designate "lead agencies" to serve as the testing centers for such classes under Department of Personnel supervision.
-15-


—Reaffirm the necessity for adherence to merit principles in the selection process.
—Strengthen oral board procedures by establishing criteria for membership, documenting job relatedness, ensuring that the board has full access to information submitted by the applicants, and protecting against conflict of interest among board members.
—Train departmental personnel analysts in decentralized agencies in selection procedures.
V. Performance evaluation in thousands of cases is not conducted
annually as required by the personnel rules and regulations.
Current evaluations are applied haphazardly and performance
evaluation results are often ignored. Recommendations include
that the State should:
—Install an effective management-by-objectives type appraisal system that provides for evaluation of organizational as well as individual performance.
—Involve top management including the Governor and department heads in periodically reviewing overall agency performance as a backdrop for personnel assessments.
—Require annual performance appraisals of all State employees and require that employee ratings be used in assessing supervisors and managers.
—Require standard employee performance appraisals as a condition of merit increases.
—Explore the full range of monetary and nonmonetary rewards that could be used in motivating State employees before adopting a
-16-


general bonus or incentive awards approach.
—Train supervisors and managers in using the personnel evaluation system.
VI. The employee counseling program is only available for a portion of State employees and supervisors are not properly trained in utilizing the program. Recommendations include that:
—The Governor and the General Assembly should plan to cover all State employees under a broad employee assistance program.
—The State should formulate,disseminate, and implement a clear and consistent policy statement on the employee assistance program.
—The Department of Personnel should implement a training program through workshops and seminars on the availability and the use of employee assistance.
VII. Employee training and development programs are very limited, poorly funded, inconsistent, inadequate, and are given a low priority by State management. Recommendations include that:
—The State should create an organized career system as a means of improving career development opportunities.
—The Department of Personnel should develop a comprehensive training and career development program for all State employees. The Governor should recommend in his budget adequate funds for career development and the General Assembly give high priority to providing adequate appropriations for this purpose.
—The Department of Personnel should establish uniform policy for training and for reimbursement of training expenses.
-17-


—The Department of Personnel should coordinate with State universities and colleges on training activities.
—The Department of Personnel should establish on-going management and executive training and development programs for mid-level and top-level State managers and
/
specialists.
VIII. Equal employment opportunity and affirmative action programs are
weak and are given minimal support and token funding by State
management. Recommendations include that:
—The Governor should reaffirm government-wide support for these programs.
—Managers and department heads should be held accountable for equal employment opportunity and affirmative action results through effective monitoring procedures.
—Equal employment opportunity and affirmative action programs should be built into in all steps of the personnel system and performance and results should be publicly reported.
—The Governor should recommend and the General Assembly should give high priority to additional fundings for these programs.
—The Department of Personnel should strengthen outreach recruiting and test validation.
—The number of eligibles certified for each job vacancy should be expanded to increase the odds that minorities and women can be selected.
—The conflict between the State Personnel Board and the General Assembly over the "3+3" certification procedure should be resolved.
-18-


IX. The State lacks a positive labor and employee relations policy.
Recommendations include that:
—A labor and employee relations policy should be established by statute.
—The General Assembly should enact a statute prohibiting strikes by public employees.
—The Department of Personnel should establish and improve
dispute settlement machinery for peaceful and timely resolution of impasses by providing for final decision by a neutral party.
—Regular reports that address potential employee relations problems and provide timely upward communication of these problems should flow to both the Governor and the General Assembly. Both branches should create machinery that can respond quickly and realistically to employee feelings and legitimate needs.
—The number of employee relation cases going for final decision to the courts should be reduced by solving these cases internally wherever possible.
—The kinds of cases to be returned to the State Department of Personnel should be identified along with the types of cases in which the Personnel Board's decision should be final.
—All employees should be notified about rule proposals and
hearings on such proposals should be no sooner than two months after notification.
X. The grievance and appeal processes require revamping and better
employee-management understanding to resolve complaints as
quickly as possible and to reduce the number of cases coming to
-19-


hearing. Recommendations include that:
—The Department of Personnel should develop and promulgate procedures instructing all supervisors to inform their staffs about the available grievance and appeal procedures and the governing policies.
—The State Personnel Board should be divested of its rulemaking power and be given a strengthened role in serving as the personnel advisory, appeal, adjudicatory, and merit standards enforcement agency, including an effective role in protecting whistleblowers.
—A greater proportion of personnel appeals should be resolved within the system without burdening the State courts and running the risks of inconsistent decisions inherent in piecemeal decisions.
—The State should process appeals and grievances on a more
timely basis. The number of properly trained hearing officers should be increased to accommodate the growing workload.
XI. Although the State's compensation plan is working reasonably
well, it has a number of areas that need improvement to reduce employee complaints. Among the recommendations are that:
—The comparability survey method of setting wages and salaries is sound and equitable; however, the State should expedite arrangements to gather and analyze comparability data so it will be more current—and/or project increases on a trend basis to bring them up to date at the time increases are awarded.
—The Director of Personnel should reevaluate the key classes chosen for the salary survey to ensure they meet the
-20-


established statutory criteria.
—The composition of the firms used in the annual salary survey should be reviewed to ensure that the distribution of occupations in the survey closely matches the occupational distribution in the State classified service.
—The Governor, in consultation with the General Assembly, should set up a joint task force to review the central "POTS” system of appropriating and allocating funds for pay adjustments. The rationales underlying the "80%” solution should be reexamined. —The Governor and the General Assembly should jointly develop formula pay methods and processes for annually adjusting top executive pay.
—The Governor should appoint a task force of qualified
economists, actuaries, and other specialists acquainted with retirement and fringe benefits to review benefits and costs and make recommendations for improved costing methodologies.
XII. Employee turnover and separation rates appear to be high, but adequate analysis is impossible because of the lack of recent data. The State does almost no diagnostic analysis of the causes of turnover. Recommendations include that:
—The Department of Personnel should take the lead in designing and implementing a data system which produces adequate information regarding separation and turnover rates and the reasons why employees leave.
—The Department of Personnel should standardize its definition of separation and turnover rate conditions so they are comparable from year to year.
-21-


—The Department of Personnel should plan and issue regularly scheduled reports on State separation and turnover by agency and by divisions and classes in each agency. Data on transfers, promotions, and demotions to measure mobility should also be gathered and published.
XIII. The Public Employees' Retirement Act (PERA) system has
experienced large increases in unfunded liabilities in the six years ending in 1979 and presents important issues relating to its administration. It requires a thorough review of its actuarial and management practices and its structure by an independent team of experts. Among the recommendations are that: —The Governor should appoint a blue ribbon panel to review the financial and actuarial condition of the PERA system. This panel should propose methods and practices which will be more adequate in an inflationary economy involving rapid changes in wages and prices and in the rates of earnings on investments.
—The Governor should recommend to the General Assembly the
creation of a small, continuing, professionally staffed unit in the Office of State Planning and Budgeting to assemble information about and monitor all authorized retirement and benefit plans, analyze the actuarial and investment condition of such plans, and review their provisions and management performance.
—The Governor should direct the blue ribbon panel to review the appropriate division of current contribution rates between employees and employers in PERA.
-22-


—The Governor and the General Assembly should develop an effective process for annually reviewing, controlling, and financing PERA unfunded obligations.
—The Governor should recommend to the General Assembly that PERA be specifically placed under the provisions of the State Open Records and Sunshine Law with respect to all meetings, records, and reports which do not involve confidential personal and investment matters.
—The Governor and the General Assembly should order an investigation as to why and how incomplete reports on the status of the retirement fund have been issued to PERA members. The composition and role of the PERA board should also be reexamined with a view to bringing the system under adequate State supervision.
—The Governor and the General Assembly should arrange for a review of retirement and disability benefit provisions and formulas in the PERA system.
—The Governor and the General Assembly should seek a broader public interest view on the possibility and desirability of universal coverage by Social Security for State employees.
Top Priorities
The above summary gives the highlights of the approximately 118 recommendations made in this study on the Colorado State Personnel system. See Chapters VIII through XX for the complete recommendations. Many of these recommendations can be carried out administratively. Some will require accompanying legislation and/or constitutional revisions. However, real progress in improving the State Personnel System will
-23-


—Eliminating State residency requirements.
—Providing and encouraging lateral entry into middle and higher level classes.
—Establishing liaison with State universities and colleges to plan for meeting future projected State personnel requirements in various occupational areas.
IV. Employee selection is inefficient, slow, haphazard, unresponsive,
and often unsupervised. Excessive use of oral tests is
undercutting merit standards. Among the recommendations are that
the State should:
—Examine by class and restructure the selection process to eliminate the duplication and inefficiency inherent in position-by-position recruiting.
—Give system-wide exams in anticipation of vacancies, especially in general administrative specialties.
—Shorten the time from announcement to certification.
—Establish consistent standards and procedures for decentralized recruitment.
—Strengthen Department of Personnel control of the process by establishing selection standards and guidelines and monitoring and post-auditing the personnel selection instruments and procedures.
—Increase validation of tests.
—Centralize testing for classes common to more than one agency in the Department of Personnel, or designate "lead agencies" to serve as the testing centers for such classes under Department of Personnel supervision.
-15-


require enactment of added appropriations and more staff.
Among the top priority recommendation are the following:
—Affirming the primacy of the merit principle and vigorous enforcement of competitive merit procedures.
—Enacting added appropriations.
—Integrating the personnel system into the overall management system of the executive branch.
Strengthening overall executive branch management from the top to provide a management framework and systematic processes in which personnel administration can function effectively.
The most important action at the beginning is for the Governor and his staff to prepare a five-year action plan for developing an effective State personnel system.
24-


CHAPTER II
PURPOSE, BACKGROUND, METHODOLOGY, AND SIGNIFICANCE OF COLORADO STATE PERSONNEL SYSTEM STUDY
Introduction
This chapter outlines the purpose of this study, summarizes merit systems, discusses the background and problems of the Colorado State Personnel System, and identifies areas of concern giving rise to the study. It also discusses the proposed model designed to analyze the effectiveness of public personnel systems which will be used in assessing the Colorado State Personnel System, and for developing recommendations. The methodology and methods of analysis are subsequently presented. Finally discussed is the potential significance of this systems analysis of the Colorado State Personnel System and the general applicability of this project to state and local governments. Project Purpose
The aim of this project is twofold: to render a public service and to develop and apply an improved methodology for analyzing public personnel systems. Its primary purpose is to review comprehensively and evaluate the Colorado State Personnel System by utilizing a systems analysis approach.
A model for analyzing the effectiveness of public personnel systems is developed for state and local governments and presented in Chapter IV. This proposed model focuses on the relationships between governmental performance and the functions of a personnel system. The analysis demonstrates the importance of human resource management in achieving high governmental performance and identifies personnel
-25-


management as one of the key elements in reaching governmental goals and objectives.
The linkages between overall State management and the operations of the Colorado State Personnel System are analyzed by applying the model in the latter part of the study. Based on this analysis, recommended changes and reforms are suggested. Implementation of these recommendations can result in developing a more advanced, effective, and managerially responsive personnel system for the State of Colorado adhering to merit principles of public human resource management.
Finally, it is anticipated that other state and local governments can benefit from revising their personnel systems in accordance with the principles of modern human resource management developed in this model. The model can be used as a tool for analyzing and evaluating the effectiveness of public personnel systems indicating where improvements can be made to assist management in achieving overall organizational goals and objectives.
The Development of Merit Systems in the United States
The concept of merit employment is the fundamental principle of all civil service personnel systems in our country at federal, state, and local levels. However, civil service employment and the central concept of "merit" has widely varied throughout U.S. history. For instance, during the first 40 years no federal legislation dealing with appointments, examinations, promotions, dismissals or other aspects of personnel administration existed. Personnel legislation was limited to establishing pay rates for clerks and officers.* Appointments to
^Leonard D. White, "Centennial Anniversary," Public Personnel Review,
14 (January, 1953), p. 6.
-26-


governmental positions were often based on political patronage and party loyalty instead of being based on job qualifications and skill. As political parties grew, the spoils system gained ascendancy over ability-based appointments. Despite the rising tide of the spoils system, there constantly remained a stratum of the civil service which helped to maintain continuity and competence in administrators. Comptrollers, auditors, and chief clerks of the department service in Washington frequently kept their positions through several administrations as did a portion of minor clerks, scientific and technical personnel, and the officer corps of the army and navy. In a sense, the federal service was manned and managed through two personnel
systems; though during the 1800s, the system governed by the principle
2
of spoils was by far the most dominant.
Negatively, the spoils system resulted in periodic chaos from the
changing of personnel during different administrations; the popular
association of public administration with politics and incompetence;
growing conflicts between the executive and legislative branch over
appointments; unbelievable demands upon presidents and elected officials
at all levels of government; and the development of political machines
3
in states, counties, and cities. On the positive side, this turnover served as a safeguard against an elitist government and the rise of a monarchy, provided for upward mobility for people from the lower classes, and provided a much needed channel for recruitment of personnel for the rapidly expanding national government. Political patronage also
^Paul P. VanRiper, History of the United States Civil Service (New York: Row, Peterson, and Company, 1958), p. 51.
^Frederick C. Mosher, Democracy and the Public Service (New York:
Oxford University Press, 1968), p. 63.
-27-


made the bureaucracy responsive to political leadership.
Reform of the spoils system was piecemeal at all levels of government. Pressure for personnel reform became intensified when in 1880 President Garfield was elected on a platform that called for drastic civil service reform. It was the 1881 assassination of President Garfield by a disappointed officer seeker that contributed to the climate for instituting a complete and radical civil service reform. Success came to the reform movement on January 16, 1883, when President Arthur signed into law, "A Bill to Regulate and Improve the Civil Service of the United States," better known as the Pendleton Act. This statute created a U.S. Civil Service Commission, established competitive examination requirements, insured security from dismissal for political reasons, and provided employee protection from being coerced into political activities. State and local governments followed the federal government's lead in civil service reform during the 1900s.
Since 1883, our country has made and continues to make a strong commitment towards operating merit-oriented civil service systems for
public sector employees. Today at the federal level more than 90% of
a
all federal jobs are covered under merit systems. Considerable variation in merit coverage exists at state and local levels. A recent survey of large cities and counties found that competitive examinations for entry-level positions were used in 79% of the cities whereas only 35% of the counties use such examinations.^ Thus many personnel systems
^Robert D. Lee, Jr., Public Personnel Systems, (Baltimore, Maryland: .University Park Press, 1979), p. 19.
:,Civil Service Commission, A_ Graphic Presentation of Public Personnel Systems in 172 Larger Cities and Counties (Washington: Government Printing Office, 1976), p. 2.
-28-


are still heavily influenced by the spoils system.
Modern personnel systems strive to insure the integrity of the public service by protecting it from the effects and abuses of the spoils system, but this sometimes occurs at the expense of meeting the needs of management. Some merit systems embody such complicated rules and detailed regulations that the result is counterproductive. One writer suggests that, "The result of the reforms of the last century was not the replacement of patronage with a system that generated faith, trust and competence but rather the emergence of a set of barriers that was negative and control oriented and frustrated elected officials, administrative managers and public employees alike.
In the last 15 years, new pressures and issues facing our entire society have had a significant impact on public personnel systems.
Among the issues in the forefront of public personnel management are: collective bargaining, minority group representation, public employment of the disadvantaged, expanded need for top-level managers, human resource development, demands for increased productivity, and for improvement in the effectiveness and efficiency of the public sector. Additionally, there are mounting pressures to limit government expenditures, particularly for public personnel.
Federal civil service reform was made a major issue in the 1976 Presidential election. On October 13, 1978, President Carter signed the Civil Service Reform Act which was designed to improve government efficiency and balance management authority with employee protections.
^Dennis L. Dresang, "Personnel Reformation in American States,” presented to Symposium on Administrative Reform at the University of Nebraska (April 1978), p. 13.
-29-


As President Carter said, "The most effective and fundamental improvement that we can make is to reform the civil service system, to make it truly a merit system that rewards achievement and responds to human needs.
Although many of the legal changes sought by President Carter may enable agencies to operate better, critics fear that there are defects in the Civil Service Reform Act which may threaten merit principles.
One major weakness relates to the President's Senior Executive Service (SES) which grants authority for presidential appointees to demote or reassign career executives and replace employees with political or other career appointees. There is concern that this discretionary power will lead to political and personal favoritism in the civil service system. One critic points out that instead of building a single talent pool of careerists for top managraent posts, the SES is on its way to creating
O
two, one Democratic and one Republican. Another major criticism of the
Act pertains to decentralization of the examining process. Each agency
would have the authority to examine and test applicants for jobs in that
agency. Delegating the examinating function to agencies, except in
selected situations, may violate the principle that all job applicants
9
be examined fairly and properly.
"Introducing the Civil Service Reform Act,” prepared by the U.S. Civil Service Commission (Washington, D.C.: CSC Document 124-43-5,
November 1978), p. 1.
°James L. Sundquist, "Civil Service Reform: Pitfalls and Opportunities," Good Government, Vol. 95, No. 2 (1979), p. 4.
^Bernard Rosen, "Merit and the President's Plan for Changing the Civil Service System,” Public Administration Review, No. 4 (July/August
1978), pp. 302-303.
-30-


Background of Colorado State Personnel System
The national civil service reform movement came after the Colorado State Constitution was enacted in 1876. There was growing interest and debate over personnel policies and procedures for Colorado State employees. The Denver Civil Service Reform Association was organized in 1899 as the principal citizen group involved in designing a State civil service law for non-elected State employees. Throughout the late 1800s and early 1900s, the Association lobbied for the passage of such a law. However, it was not until 1907 that such a law was passed, creating a State Civil Service Commission and a merit-based State personnel hiring system. With its rule-making authority, the State Civil Service Commission developed personnel principles such as the rule-of-one hiring method, open competitive tests, and political non-discrimination provisions.
During these early years, public debate centered on assuring that adequate appropriations should be provided by the Legislature for administering personnel provisions. Before 1912, legislatures were occasionally hostile to the merit system and refused appropriations to support the Commission.^
However, in 1918, a voter initiated amendment to the Colorado Constitution was adopted to assure adequate appropriations for the Civil Service Commission to carry out its duties. This amendment mandated that adequate funds be provided by the General Assembly for payment of salaries and expenses of State employees.
^The People v. Bradley et al., 66 Colo. 186, 179 Pac. 871, 1919.
-31-


1918-1949. The first Colorado Constitutional amendment regarding
State Civil Service policies was passed in 1918. This amendment became the backbone of the State personnel system. It outlined qualifications for civil service appointment by delineating which offices were covered under the classified service, and provided for the removal of officers and employees in that service.
From the 1920s to the mid-1950s, the Legislature was concerned with assuring State residents that civil service appointments were merit-based and free from political manipulation but with preferential treatment for veterans. During the 1920s and 1930s, the Legislature enacted numerous personnel statutory provisions and annual salary adjustments for state employees. To insure against political patronage, department heads were protected under Colorado Civil Service laws. As time progressed, these department heads became extremely powerful and immune from either executive or legislative control. In 1939, Colorado was the only state in which department heads were included in a civil service system.^
In 1944, Article 12, Section 15, of the Colorado State Constitution was amended by a voter initiated ballot proposal to provide veterans with preferential treatment. This amendment entitled veterans to bonus points on competitive examinations in the State personnel system. Five points are added to a passing score for a veteran who served on active duty during wartime, as defined in this amendment, under honorable conditions. Ten points are added to a veteran with compensable disability incurred in the line of duty during wartime. The
^Colorado Legislative Council, Reorganizing the Executive Branch,
R.P. 131 (1939), p. vii.
-32-


same bonus points are available to a veteran's widow.
1950-1965. Few changes occurred over a 15-year period (1950-1965) to alter the insulated personnel protections for department heads under the Colorado State Civil Service system. Ballot proposals aimed at exempting various department heads from civil service to appointment by the Governor with Senate confirmation were defeated in 1956, 1958, and 1960. Thus, while Colorado was one of the first states to establish a merit-based civil service law, it remained for many years the only state refusing to grant the Governor direct control in selecting department heads.
1965-1969. By 1966, the number of independent and semiindependent agencies in Colorado's executive branch had increased to 130. It was during this year that the Constitution was amended to require all executive and administrative officers, excluding the office of governor and lieutenant governor, be reorganized into not more than 20 departments by June 30, 1968. This amendment led to the enactment of the Administrative Reorganization Act of 1968 which regrouped State agencies into 17 departments. The State Civil Service Commission was transferred under the new Department of Administration. In this statutory reorganization, the Legislature endeavored to exclude four executive directors from civil service: those from the Departments of Administration, Revenue, Institutions, and Local Affairs. The Coordinator of State Planning and the Coordinator of Highway Safety were also exempted.
In late 1968, the Civil Service Employees' Association challenged the constitutionality of certain provisions of the Administrative Reorganization Act on the ground that it contravened the civil service
-33-


amendment in the Colorado Constitution, Article 12, Section 13. The
amendment provided that all classified civil service in the State shall
comprise all appointive public officers and employees except for the
Governor's private secretary and three confidential employees of his
office. This section was declared self-executing. In Civil Service
Employees1 Association v_. Love, the Colorado Supreme Court ruled that
the appointive offices exempted from the classified service must be
12
chosen from an approved civil service list.
The Governor appointed a Committee on Efficiency and Economy in 1968 to study possible reorganization and make an evaluation of the executive branch. The Committee reported that the State Civil Service Commission could not efficiently perform its personnel functions of recruitment, examination, and selection while being weighted down with "watch dog" personnel policy controls. This committee also recommended that some personnel functions be decentralized to improve the efficiency of personnel operations.
1970-1980. As a result, two personnel-related Constitutional amendments were adopted in 1970 to improve the State civil service system. One amendment exempted the heads of principal departments in the executive branch from the civil service requirements of the State Constitution. The other amendment established the Department of Personnel responsible for the administration of the civil service system.
These amendments abolished the State Civil Service Commission and established a five-member State Personnel Board to promulgate rules,
^Civil Service Employees' Association v. Love, 167 Colo. 436, 448 P 2nd. 624 (1968).
-34-


implement legal provisons and act as an appeals body. A State Department of Personnel was created, headed by a Director appointed by the Governor to administer the personnel system. The 1970 amendments also reinforced the merit principles of competitive examination in the selection process without regard for race, creed, color, or political affiliation. Responsibility for employee disciplinary action was still vested in each operating department with the Commission hearing appeals.
This amendment additionally extended veterans' preference provisions to include veterans of the Korean and Vietnamese wars, provided new retention rights for veterans in the event a reduction in the work force becomes necessary, and limited bonus points to be added only to passing grades on entrance examinations.
Overall, the personnel system can be characterized as one which still protected employees from gubernatorial political control. Thus, these amendments continued to insulate appointments and promotions from political control by authorizing division heads as appointing authorities for all positions in their respective divisions.
In 1972, the State Constitution was amended to bring approximately 6,000 employees at State universities and colleges under the State personnel system by January 1973. However, due to legal and administrative delays, this was not accomplished until 1977.
The most recent Constitutional amendment proposed and defeated in 1976 would have exempted 110 division heads from the State personnel system. Today, the Colorado State Personnel System could be characterized as a system comprised of merit and political-based controls with some administrative flexibility and consolidated legislative influence.
-35-


Problems in the Colorado State Personnel System
Throughout the history of the Colorado State Personnel System
there has been considerable debate over how to structure a personnel
system free from being vulnerable to political spoils and yet flexible
for executive managerial leadership. Recent studies and evaluations of
the Colorado State Personnel System discussed in Chapter V indicate that
this kind of balance has not yet been achieved.
Extensive review, criticisms, and employee dissatisfaction with
the present State personnel system by citizens, legislators,
administrators, and employees suggest that problems exist in the
13
following twelve areas:
1. Lack of support for and strict funding limitations on the State personnel system by the General Assembly.
2. Absence of human resource planning in the system.
3. Widespread disregard of merit principles in recruiting, testing, selection, and promotion.
4. Ineffective affirmative action programs.
5. Inadequate salary and fringe benefits, especially for top executives.
6. Low employee motivation and absence of rewards and incentives for effective performance.
7. Disregard of the employee performance evaluation process.
8. Slow and ineffective grievance and appeal systems.
9. Lack of promotional and transfer opportunities across agency lines.
13
These criticisms have been made by respondents of the 1978 Common Cause Questionnaire, Executive Directors of CAPE and AFSCME, Colorado State Department and Division Heads in a 1976 survey by graduate student Paul Reardon and other interviews conducted during 1978-1980. Also see Sidney B. Brooks, "State Personnel Reform Needed," Denver Post (July 2, 1979), and Todd Engdahl, "JBC Raps Hiring Policies,” Denver Post (July 7, 1979).
-36-


10. Inadequate training and developmental opportunities and programs due to funding limitations.
11. Lack of effective and timely personnel assistance to state agencies by central personnel department.
12. Lack of cohesive human resource management system which is an integral part of overall State executive management.
Each area of concern is discussed below. Other significant problems and
deficiencies within the system will be addressed in the following
chapters of this study.
1. Legislative Support and Funding. Staff employees, supervisors, and managers have expressed concern that the Legislature does not understand the problems facing the Colorado State Personnel System. Instead, the Legislature makes it impossible to establish and manage an effective personnel system by continually cutting its budget. Overall, employees feel that the Legislature is insensitive to managing the state's human resources. The 7% state budget increase restriction has placed an artificial barrier and burden on state employees who must live with the recent double-digit inflationary rate which has been as high as 20%. Employees are dissatisfied with the failure to fund the cash bonus system which rewards outstanding performance and provides incentives for self-development. Most employees feel that the training programs, suggestion system, and even some fringe benefits are underfunded. The tuition refund program is no longer funded. This situation is seriously complicated by the underfunding of resources necessary to staff the central personnel department.
Example: In 1973, approximately 21,000 employees were under the classified civil service system. The Department of Personnel was alloted 110 full-time equivalent (FTE) positions to perform all
-37-


personnel functions. Four years later, although 6,000 additional FTEs were added from colleges and universities, the number of FTEs in the Personnel Department was cut to 77. In comparison, the City and County of Denver Personnel Department is alloted approximately 80 FTEs for 7,000 classified positions.
2. Human Resource Planning. Many managers and supervisors have complained that the State performs little, if any, human resource planning. Agencies are not contacted to help forecast areas of turnover and labor needs. As a result it takes an excessive amount of time to fill vacancies from State eligibility lists which are seldom kept current.
Example: The Training Officer from the Highway Department stated
that in 1976 approximately 500 workers had to be hired on a temporary basis due to a lack of labor forecasting. An officer from the Department of Institutions stated that the Department of Personnel conducts little human resource planning for its agencies which is urgently needed in order to fill vacancies.
3. Recruitment, Testing and Selection. The State's recruitment, testing, and selection procedures as presently organized fall short of obtaining the best possible personnel for vacant positions. Neither the decentralized system nor the centralized system is working effectively and efficiently. Supervisors and managers state that it takes an average of three to four months to fill vacant positions. Eligible lists are seldom current if any applicants are available for certification. The Department of Personnel states that it needs more resources to recruit and conduct examinations. On the other hand, others have suggested that rigorous testing requirements be relaxed and
-38-


decentralized to state agencies to overcome this problem.
Example: An officer in the Governor's Office said that it takes their agency at least 90 days to fill its vacant positions, which is not cost effective considering the overtime pay usually involved.
4. Affirmative Action Programs. The State has established several affirmative action programs to insure equal employment opportunity. These programs, however, lack the necessary funding and staff to successfully recruit more women, minorities, handicapped, and disadvantaged applicants as well as to validate examinations.
Example: There were only two full-time employees in 1980 assigned
to affirmative action activities for 27,000 state employees. Therefore the department does not have enough time or staff to meet the equal employment opportunity goals of the State. Furthermore, there are only three personnel responsible for validating all examinations given, thus limiting the number of tests that can be developed and used.
5. Salary and Fringe Benefits. The State Personnel Director has suggested that the State should re-evaluate its criteria for setting salaries and, perhaps, offer pay ranges comparable to the upper 50% of the community in order to retain competent employees. State employees have complained that their salaries are no longer competitive with other levels of governments or organizations due to the seven percent ceiling increase. Additionally, employees have asked for improved health benefits comparable to the community level, funding for the tuition refund program (last funding level in fiscal year 1976 was $20,000 with a maximum reimbursement per employee of $100 at a state institution of higher education), and increased benefits for retirees that parallel the current rate of inflation.
-39-


Example: Department heads and division heads felt that the
$38,000 maximum salary level which was in effect until July 1980 discouraged many top-level executives from entering state service when their opportunities to earn more money are much greater outside the system. Furthermore, they claim that this ceiling has caused many trained and valuable employees to leave the state system.
6. Rewards and Incentives. A Colorado Senator has recently stated that in order to increase productivity, the State must provide a financial incentive system that contains appropriated monies to reward merit performance. The State Personnel Director in 1978 suggested that sufficient funding be appropriated to reward outstanding performance. Such a program, although authorized by enabling legislation, was funded for only one year with meager monies. He also suggested the creation of a career or senior executive service to offer recognition and financial incentives to highly productive managers.
Example: C.R.S., 1973, Section 24-50-104 establishes a cash bonus system for outstanding performance. However, it has not been funded since 1975. C.R.S., 1973, Section 24-50-119 established incentive and
recognition programs for employees, but has not been funded since 1977.
7. Employee Performance Evaluations. The State has been criticized for not providing an adequate measure of performance through its performance evaluation system, which can be the key to increased motivation and productivity. Many employees have complained that they seldom receive an evaluation, which is required by the State on an annual basis.
Example: The Executive Director of the Colorado Association of
Public Employees has stated that there are over 8,000 state employees
-40-


that are not being evaluated on an annual basis. The 1973 C.R.S. provides for annual performance evaluations, but management has failed to enforce it.*4 This problem frequently occurs in the State's educational institutions.
8. Grievance and Appeal System. Staff employees, supervisors, and managers have stated that the grievance and appeal system is cumbersome, complex, slow to execute, and backlogged. In view of these problems supervisors complain that the system is ineffective for taking disciplinary action. Additionally, they claim that it is heavily weighted in favor of the employee. Employees contend that management does not use the system properly, does not document information nor provides adequate training for supervisors in employee relations.
Example: Since 1976 only two hearing officers were responsible
for resolving employment disputes; one was in a full-time position.
There is usually a two to three-month waiting period for a formal hearing. The number of hearings that have been scheduled and not heard by the end of the fiscal year continue to increase. Approximately 23% of the hearings scheduled for disposition in the fiscal year 1978 were not heard. It is estimated that at the end of fiscal year 1979 the number of cases waiting to be heard would increase to 44%.*^
9. Advancement and Mobility Opportunities. State employees have complained that lateral interagency transfers are seldom encouraged and are indeed discouraged by some agencies. Promotions are most often made from employees within the agency prior to adequate notification and
14C.R.S., 1973, Section 24-50-116.
^Interview with Executive Secretary, State Personnel Board (August, 1980).
-41-


consideration of other qualified candidates. More importantly, employees have stated that there are too few career ladders in the State classification system to encourage career employees to continue working in State Government.
There is considerable debate over the desirability of lateral interagency transfers among agencies. Although employees may be frustrated by the lack of transfer opportunities, management frequently finds this type of movement undesirable in view of the time spent in training and employee development. On the other hand, there is little argument against the advantages of increasing the number of career ladders within the state system.
Example: A 1978 Mobility Study on State employees indicated that
organizational mobility (mobility between departments) occurred infrequently with 96.8% remaining within the same job classification and agency. Occupation mobility (mobility between job classifications) also occurred infrequently with 95.5% of those sampled remaining within the same job classification. These figures, admittedly on a sample basis, indicate little movement from classification to classification and from agency to agency.
10. Training and Development. State employees at all levels have criticized the quality and quantity of the State's training and development programs. One common complaint is that supervisors and managers lack sufficient training to be effective in their jobs. Furthermore, no current personnel data bank exists which could be instrumental in assessing skills, knowledge, and abilities required for promotional opportunities into the managerial ranks.
-42-


Example: The 1973 C.R.S.^ provides for the establishment of training programs related to job duties including management and supervisory training. However, the Department of Personnel's 1978 budget alloted $2.66 per employee for training, which is obviously an inadequate amount to accomplish the goals of the State's training program.
According to the multi-government training data summary for fiscal
year 1978, an average of $535 was spent per individual trained^ as
compared to the State's own expenditure for the State Department of
Personnel and agencies which averaged in 1978 $34 per employee. A
recent survey of more than 1,000 public and private employers found that
18
the median cost per employee trained to be $75 to $100.
11. Central Personnel Department Assistance. The State Department of Personnel has been criticized by agencies for not providing enough services and guidance. Interviews with personnel directors from most state agencies yield sharp criticism of the personnel department. Instead of performing the function of a service agency, the personnel department seemed to function more as a regulatory agency, always ready to condemn. Those interviewed consider that at the heart of the problem is the "watch dog" orientation of the department with very little support or constructive assistance being provided.
Example: Several personnel directors from state agencies contend
that central personnel does not understand the unique problems of
J^C.R.S., 1973, Section 24-50-122.
"Analysis of Baseline Data Survey on Personnel Practices for States, Counties and Cities," Office of Personnel Management and Council of State Governments (Summer 1979), p. 3.
"How Do You Compare to These Survey Results," Training Today (June 1980), p. 23.
-43-


various agencies. Instead, central personnel is viewed as being a self-serving agency.
Attitudes Revealed by Common Cause Survey
The results of the Common Cause questionnaire distributed during October 1978 through March 1979 to approximately 2,600 State employees summarizes the current feelings of state employees toward their jobs. This survey showed that nearly 80% of employees were satisfied with their current jobs, 20% were dissatisfied, and 7% had no opinion. More than 50% of the respondents were satisfied with the State Personnel System. Approximately 38% were dissatisfied. A 1973 national Gallup Poll concerning employee satisfaction showed that 77% were satisfied,
11% were dissatisfied, and 12% had no opinion. Thus, a higher number of Colorado State employees are dissatisfied than the national average.
Among those dissatisfied, the highest ranking reasons were:
(1) inadequate opportunity for growth, (2) incompatible associates, and (3) unsatisfactory wages and benefits. The top three suggestions for improvement were: (1) more opportunity for promotion, (2) better leadership from supervisors, and (3) higher pay for above-average work. Analytical Model for Public Personnel Systems
In addition to evaluating the Colorado State Personnel System, this project presents in Chapter IV an analytical model for assessing the effectiveness of public personnel systems. The model demonstrates the importance of human resource management in achieving high governmental performance and identifies personnel management as one of the key elements in reaching organizational goals and objectives.
By illuminating the cross-relationships among various personnel activities and a series of criteria for good governmental performance,
-44-


this analytical model casts a new light on the scope, role, appropriate level, and interrelationships of personnel functions, and overall governmental management. Lastly, the model illustrates how personnel management is an integral tool in achieving good government. It provides a systems approach to human resource management as related to overall governmental management and performance.
The model for analyzing the effectiveness of public personnel systems allows for variations so it can be adapted to any state or local governmental personnel system. These governments can thereby reshape this model to their own specific needs without destroying the spirit of the model.
Methodology and Methods of Analysis
This project is sponsored by the Colorado Chapter of the American Society for Public Administration (ASPA) with support from the University of Colorado Graduate School of Public Affairs (Boulder and Denver Campuses), Denver University College of Business and Public Management, and outside professional administrators. This public service study has been supported by Governor Richard E. Lamm and Rudy Livingston, former Executive Director of the Colorado Department of Personnel. The study was guided throughout by a Steering Committee chaired by Maxine Kurtz, ASPA National Council member and the Personnel Research Officer of the Denver Career Service Authority. The study was also supervised by a dissertation committee chaired by Michael S. March, past President of Colorado Chapter of ASPA and Professor of Public Affairs at the University of Colorado. Both committees consist of members representing the earlier mentioned universities, public sector, and private sector organizations.
-45-


A modest Intergovernmental Personnel Act of approximately $7,500 from the Denver Region of the U.S. Civil Service Commission (converted in 1978 to the Office of Personnel Management) made the project possible by covering duplicating and typing costs and some intern support. The grant was matched several times over by thousands of hours of donated professional research services by some 80 graduate students, headed by the doctoral student who wrote this detailed report, and by faculty and private citizens who worked on the project.
The following research resources were utilized to conduct and finalize this project.
1. Approximately 65 graduate student term papers by some 80 students were presented from 1976 to 1980 covering statutory, operational, and policy aspects of the State Personnel system. These students were supervised by Assistant Professor Lou Fair, Associate Professor Adjunct F. Arnold McDermott, Professor Michael March from the University of Colorado, and Professor Gordon VonStroh and Associate Professor Lon Mackelprang from Denver University. Professor March served as the Principal Investigator on the Project.
2. Colorado Common Cause, a public interest lobbying group, prepared a questionnaire and surveyed 2,600 state employees concerning their attitudes and feelings about state service. Approximately 1,200 questionnaires were returned. The results were tabulated and analyzed both by graduate students and by Common Cause.
3. Several graduate interns were hired for short periods to do additional research and check facts regarding the Colorado
-46-


State Personnel System.
4. Courtney Price, a doctoral candidate from the Graduate School of Public Affairs, is chief analyst on the project and wrote this report under the direction of the interlocking dissertation and steering committees. While useful factfinding and draft materials prepared by other students, interns, and senior professionals participating in the project were available to her, she did much additional research and analysis and rewrote the available information into a synthesized, cohesive overall report.
Methods of Analysis
First, a historical background and analysis is presented which traces the evolution of the Colorado State Personnel system. The constitutional requirements, statutes, and appropriations that affect the Colorado State Personnel system are included in this historical background. Next the goals and objectives of the personnel system are presented followed by a description of the current organizational structure and some statistical analysis of this system. The next section offers a diagnosis of key Colorado State Personnel management problems. This section centers on major cross-cutting and policy issues which have sweeping implications for revision of the system. The methods of analysis include:
1. Gathering of descriptive information on the organization functions, goals, and objectives of the Colorado State Personnel System, including legal and regulatory factors.
2. Appropriate statistical analysis of: (a) Colorado Common Cause questionnaire survey data; and (b) operating statistics
-47-


from the Department of Personnel and State agencies.
3. Organizational analysis of the personnel system along with its comparison to model public personnel systems and practices in other governments as obtained from published sources.
4. Process analysis of all major personnel activities in the personnel system.
As noted earlier, an analytical model public personnel system was developed. The Colorado State Personnel system was compared with this model. This evaluation included a comprehensive systems analysis of the Colorado State Personnel System, focusing on an in-depth study of specific issues affecting the personnel system. This systems analysis leads to a series of recommendations for reform which can result in an improved and updated public personnel system for the State of Colorado. Potential Significance
Colorado State Personnel System. This study can result in improvements in the present Colorado State Personnel system. Both management and staff can benefit from an assessment of the status and problems in the personnel system. Confidence can be established by highlighting those features of the existing system which are working well and by proposing improvements in those parts which need change.
The goal of this study is to suggest desirable concepts for improving personnel administration and management in State government. The study also proposes about 118 specific improvements to strengthen the merit system and to increase the efficiency and effectiveness of State personnel management. Sets of principles are presented for each specific personnel function.
-48-


This analysis and evaluation, including recommendations, may be valuable to top policymakers of the executive branch and committees of the General Assembly. In addition, it can be helpful to State employees, employee organizations, and members of the general public who are interested in the performance of the State government.
State and Local Governments. This project proposes an analytical model for assessing public personnel systems that many state and local governments can use to analyze and modify their present personnel systems. It is believed that this is the first time that a comprehensive systems analysis methodology for public personnel systems has been developed which addresses the needs of management and yet guarantees employees merit protection. Therefore, its utilization in other jurisidictions can aid them in improving public personnel systems to be more responsive and balanced to the needs of both management and employees. This can in turn improve governmental effectiveness and enhance the image of public sector employment both with employees and the general public.
-49-


CHAPTER III
THE EVOLVING ROLE OF PUBLIC PERSONNEL SYSTEMS IN GOVERNMENT MANAGEMENT
Introduction
This chapter discusses the development and role of public personnel systems which interact with and have an impact on governmental management. The tremendous growth of government and the rapid expansion of the services it provides are discussed. The search for improved governmental management through various budgeting and personnel management concepts is traced. Seven encompassing pressures that impact governmental organizations as well as government's continual search for improving management in the public sector are analyzed. Finally, the history and development of public personnel systems in the United States and current personnel trends found in the literature are presented. Governmental Growth
Government in the United States has played and will continue to play a pervasive role in our society. Tremendous growth has been experienced on federal, state, and local levels. For example, in 1929 total U.S. governmental expenditures in the U.S. amounted to $10.3 billion, of which federal government spending accounted for $2.6 billion. The total outlay at the federal level was 10% of the gross national product that year. In 1975, governmental expenditures rose to $530.8 billion, of which federal government spending accounted for $357.8 billion. Public expenditures that year had grown 31.7% of the
-50-


Table 3-1
GOVERNMENTAL EXPENDITURES AND GROSS NATIONAL PRODUCT FISCAL YEAR 1929 - 1975.
(Amounts in Billions)
CATEGORY 1929 1950 1960 1975
Federal Government $ 2.6 $ 40.8 $ 93.1 $ 357.8
State and Local Government 7.6 20.2 43.3 173.0
TOTAL Government Expenditures . 10.3 61.0 136.4 530.8
Gross National Product 103.1 286.2 506.0 1,516.3
Source: Tax Foundation, Inc., Facts and Figures on Government Finance, (New York: Tax Foundation, Inc., 1977).
Table 3-2
GOVERNMENT EXPENDITURES AS A PERCENTAGE FISCAL YEAR 1929 - OF GROSS 1975 NATIONAL PRODUCT.
Level of Government 1929 1950 1960 1975
Federal Government 2.5 14.3 18.4 20.8
State and Local Government 7.4 7.1 8.6 11.0
TOTAL 10.0 21.3 27.0 31.7
Source: Tax Foundation Inc., Facts and Figures on Government Finance (New York: Tax Foundation, Inc., 1977)
-51-


Table 3 - 3
GOVERNMENT AND PRIVATE EMPLOYMENT IN THE UNITED STATES FISCAL YEAR 1957 AND 1977 (MILLIONS)
1957 1977 Percent Increase
Federal Government 2.2 2.7 22.7
State and Local Government 5.4 12.5 131.5
Private Sector 45.3 66.9 47.7
Total Nonagricultural Employment 52.9 82.1 55.2
Source: Economic Report of the President (Washington, D.C.: U. S. Government Printing Office, January 1978).
Note: Data are for wage and salary workers in nonagricultural establishments and excludes military personnel.
-52-


Chart 3 - A
GOVERNMENT/EMPLOYMENT GROWTH
1950 1955 1960 1965 1970 1975 1980* 1985 *
Source: U. S. Department of Labor, Bureau of Labor Statistics,
Government Occupations, Bulletin 1955-42 (Washington, D.C.:
U. S. Government Printing Office, 1978), p. 2.
includes public education
*Projected employment growth
-53-


gross national product.^
State and local governments experienced similar growth. In 1929, when total government expenditures were $10.3 billion, state and local government spending accounted for $7.6 billion or 7.4% of the gross national product. In 1975, governmental expenditures were $530.8 billion, and state and local government spending grew to $173 billion, or 11.4% of the gross national product for that year. Tables 3-1 and 3-2 further illustrate this great growth pattern.
Growth of Governmental Work Force
The labor force continued to grow rapidly at all levels of government. In 1977, state and local government employed 12.5 million people, 4.5 times the 2.7 million federal civilian employees. (See Table 3-3 and Chart 3-A.) In comparing state and local employment growth to the federal level, federal civilian employment has increased 23% in the past 20 years, whereas state and local employment has soared 132% and as of 1978 accounted for one out of seven workers in nonagricultural establishments.
Growth of Governmental Services
Demands for governmental services and assistance programs have increased at a rapid rate. In order to meet these demands, the federal government has increased the composition and scope of its programs to include assuring national security, developing and conserving economic resources, regulating large-scale monopolistic industries, protecting the environment, expanding and developing energy sources, and providing health care benefits. Its cash benefits program, such as Social
^Tax Foundation, Inc., Facts and Figures on Government Finance,
(New York: Tax Foundation, Inc., 1977), p. 33.
-54-


Security, have become the bulwark of economic security for most
Americans. Government services provided by state and local governments
have also expanded in areas such as educational opportunities, law
enforcement, public works, welfare assistance, social services,
population planning and control services, health care, transportation,
community development, and environmental improvement projects. All of
these services have been directly transformed by population growth,
o
urbanization, technology, and automation.
This tremendous growth has contributed to all levels of government
becoming increasingly involved in economic and social welfare.
Government has assumed more responsibilities and functions, created
planning mechanisms, and become more specialized and professionalized.
Decision-making powers have become redistributed among all levels of
government. The federal government has assumed major responsibilities
for promoting economic growth and stabilizing economic cycles.
Expansion of Government1s Role
Government has become more comprehensive than any other
organization or force in our society. Consequently, the public sector
has become the largest set of institutions in our nation,
distinguishable from other organizations.
In broad terms, the governmental function and attitude have at least three complementary aspects that go to differentiate government from all other institutions and activities: breadth of scope, impact and consideration; public accountability; political character.... No other enterprise has such equal appeal or concern for everyone, is so equally dependent on everyone, or deals so
2
Stephen B. Sweeney and James C. Charlesworth, eds., Achieving
Excellence in Public Service, (Lancaster, Pennsylvania: The American
Academy of Political and Social Sciences, 1963), pp. 1-23.
-55-


vitally with those psychological intangibles which reflect popular economic needs and social aspirations.
Therefore, government differs from all other types of institutions by virtue of its public nature, degree of public scrutiny, and public criticisms. Although other organizations have some political influence, government is unique since professional management and politics must be blended to assure that public needs are met effectively and efficiently. As Woodrow Wilson stated:^
First, let's determine what government can properly and successfully do, then let's see how it can do these proper things with the utmost possible efficiency and at the least possible cost either of money or of energy.
Major Approaches to Better Management in Government
Two institutional processes that are considered crucial to improving government administration are: 1) Improved budgeting for better resource allocation and utilization; and 2) Improved personnel administration for more effective management and better utilization of human resources.
Since the turn of the century, major efforts to improve government have centered on these processes. All levels of government have recognized the need for comprehensive budgetary cost control but have been slow to recognize the need to manage and develop the organization's human resources effectively. The search for better management in government continues through the following approaches. 3
3
Paul Appleby, "Government is Different," in Jay M. Shafritz and Albert C. Hyde, eds., Classics of Public Administration (Oak Park, Illinois: Moore Publishing Company, Inc., 1978), p. 105. woodrow Wilson, "The Study of Administration," Ibid., p. 14.
-56-


Budgetary Approach
As our country continued to grow, expenditures for public programs expanded to almost one-third of the gross national product. Thus, governmental budgeting became a key function and was considered to be an instrument for the rational control and use of public resources.
Through budgeting, government's performance could be planned, coordinated, and controlled. Budgeting was considered the key to successful cost control and economically sound management, and program effectiveness.
Associated with the theory that budgetary control could lead to good management was the concept that proper management of human resources could lead to effective and efficient government. If the cost of government is to be restrained without sacrificing essential public services and if performance is to be enhanced, then it is necessary that government take the initiative to improve management of the public work force.^
Human Resource Management Approach
Effective use of human resources is a major factor of improved productivity in government. Not only is it important to control costs through the budgetary process, it is equally important to manage employees and develop human resources through effective personnel management. Productivity of the public work force is directly affected by personnel and financial management. "Budget and fiscal administration cannot be readily separated from the broader question of the relationship which exists between service output and resource
^Committee for Economic Development, Improving Management of the Public Work Force (New York: Georgian Press, Inc., 1978), pp. 11-12.
-57-


input.Productivity gains in government will depend on better utilization of public employees' talents; attracting highly qualified applicants into the public service, and offering more employee training and development programs.
Most of government's earlier efforts for improvement of its performance was placed on the budgetary process. Human resource management was considered an important staff function in providing competent workers to perform governmental work. However, these personnel responsibilities were viewed as a distinct staff function not integrated in overall management.
Human resource management and personnel specialists have been criticized for being a hindrance to management's achievement of organizational goals and objectives. Personnel rules and regulations established to protect the merit system were viewed by management as being restrictive and rigid. Rather than occupying a place of importance in managing public sector organizations, personnel administration was viewed as an isolated service function.
In the remainder of this chapter, various budgetary techniques and processes developed to manage government are summarized and the role of human resource management as a tool of effective overall management is outlined.
kjohn D. Millett, Management in the Public Service (New York: McGraw-Hill Book Company, Inc., 1954), p. 254.
-58-


A Brief History of Measures to Improve Government Management
The first efforts to improve governmental management focused on economy and efficiency and concentrated on the fiscal aspects of administration rather than on human resource aspects.
Economy and Efficiency in Government
The development of budgetary systems in American government began approximately 60 years ago. Prior to the early years of the 20th century, there were no standardized budgetary practices followed, no executive responsibilities outlined, and no comprehensive method for reviewing public expenditures and revenue expectations.^ The reports of President Taft's Commission on Economy and Efficiency in 1912 and 1913 focused nationwide attention on the unsystematic nature of governmental
Q
budgeting practices. These reports triggered the efficiency movement,
promoted by municipal research bureaus, which encouraged state and local
o
governments to improve their budgetary operations. The New York Bureau of Municipal Research was one of the leading bureaus to advocate budgetary reform. Numerous other municipal research bureaus patterned after the New York organization were soon organized in other large
Ibid., pp. 204-205. For pertinent history and excerpts from historical documents also see Albert C. Hyde and Jay M. Shafritz, eds., Government Budgeting: Theory-Process-Politics (Oak Park, Illinois: Moore Publishing Company, Inc., 1978), p. 556.
The Need for a National Budget, 62d Cong., 2nd sess., H Dec.
851, 1912.
9
Ibid. Also see partial reprint in Hyde and Shafritz, Government Budgeting, pp. 4-11.
uJesse Burkhead, Government Budgeting (New York: John Wiley and Sons, Inc., 1956), pp. 12-15.
-59-


In addition to budgetary reform, these bureaus were also concerned with personnel reform. The New York Bureau was instrumental in generating public interest over the patronage issue as it related to public personnel administration and municipal reform. This Bureau focused attention on hiring government employees based on merit principles instead of party loyalty. The Institute of Public Administration, the successor to the New York Bureau, became an influential national force in municipal civil service personnel programs.^ * *
Executive Budget Control
Although the concept of an executive budget had been introduced in
some state and municipal governments, it was not until 1921 when the
12
Budget and Accounting Act was passed, that the federal government adopted an executive budget, to be prepared by the Chief Executive. The Act created the Bureau of the Budget to achieve greater economy and efficiency in the conduct of the public service. It also emphasized
controlling expenditures to prevent overspending, waste, and misuse of 13
taxpayer's money. The adoption of an executive budget was a direct
result of common over-spending and loose financial administration in government. The Congress was frequently asked to grant deficiency appropriations to cover overspending. Shortly after this Act was passed, "similar statutory or constitutional provisions were enacted in
Winston W. Crouch, Local Government Personnel Administration (Washington, D.C.: International City Management Association, 1976), pp. 8-15.
^42. Stat. 18, 1922.
* Alan Schick, "The Road to PPB: The Stages of Budget Reform," Public Administration Review, 26, No. 4 (December, 1966), p. 245.
-60-


most state and local units of government"14 that had not yet implemented an executive budget. Without an executive budget, state and local government budgeting had simply been a collection of figures or a subsidiary activity of an accounting system.
The first approach towards a government-wide budget system was to strengthen the position of the Chief Executive in supervising administrative agencies and recommending fiscal policy to the legislature. In 1937 the President's Committee on Administrative Management (Brownlow Committee) asserted that it was necessary for central executive direction "to pursue . . .the task of cutting costs, of improving the service, and of raising the standards of performance."15 *
Executive Control of Personnel Policy
Early revisions in personnel administration concentrated on executive leadership. Most municipal research bureaus supported the preference of executive leadership in personnel programs. In 1937, the Brownlow Committee which almost exclusively dealt with national administrative policy, was particularly concerned about strengthening the administrative management capabilities of the Chief Executive. The Committee recommended that personnel functions be placed under the Chief Executive, who then would become fully involved in the developing personnel policies. "Thus, the Brownlow Report was the first major official study to break away sharply from the thought patterns affirmed by the classical civil service reform movement, and advocate an
14Millett, p. 205.
^President's Committee on Administrative Management, Report with
General Studies (Washington: Government Printing Office, 1937), p. 45.
-61-


executive-centered merit system."*8 The Brownlow Committee also recommended a "management approach" to federal budgeting.*^ Expenditure control was to be used to review the federal budget in terms of economy and efficiency.
Line-Item Budgeting
The first widespread approach to budgeting, emphasizing concerns
of accountability and control, was commonly known as line-item
budgeting. "In its most rigid form, line-item budgeting means listing
every single position and piece of equipment on a separate line in the
••18
expenditure estimates." Line-item budgeting, prepared on an object of expenditure basis, provides maximum control to check on excessive spending. During the 1920s, the federal government, adopting this approach, and most states and local governments also began to implement line-item budgeting.
Scientific Management Movement
The search for more efficiency in budgeting during the 1920s and 1930s paralleled the movement towards scientific management. This movement was pioneered by Frederick W. Taylor, who believed that scientific analysis would lead to the discovery of the one best way to efficiently perform any task. Many governments and private sector organizations adopted this management philosophy and organizational problems were approached within the framework of scientific management. Attempts were made to develop principles for the best and most efficient * 18
^Crouch, p. 11.
Burkhead, p. 12.
18Ibid.
-62-


Full Text

PAGE 1

THE PERSONNEL SYSTEM: SYSTEMS ANALYSIS AND RECOMMENDATIONS by Courtney Hart Price ------B.S. University of Colorado, 1968 M.P.S. University of Colorado, 1969 A thesis submitted to the Faculty of the Graduate School of Public Affairs of the University of Colorado in partial fulfillment of the requirements for the degree of Doctor of Public Administration 1981

PAGE 2

This Thesis for the Doctor Of Public Administration Degree b y Courtney Hart Price Has . been approved for the Graduate School of Public Affairs by / J'1"J /

PAGE 3

Price, Courtney Hart, (D.P.A. Public Administration) The Colorado Personnel System: Systems Analysis and Recommendations Thesis directed by Professor Michael S. March ii This is a comprehensive study of human resource management in the public sector using a systems analysis approach to evaluate the Colorado State Personnel System (CSPS) . An analytical model is used to establish relationships between personnel administration and effective overall state governmental management. The performance of the CSPS is analyzed first as a key overall executive branch management system and then with respect to each of its 13 functional activities. Variegated research methods were used in the project. From the literature of human resource management the history, philosophy, goals, performance, trends, and methods of public personnel administration in the United States were identified. Personnel systems which were modernized by other states within the last 5 years were reviewed. A broad analysis of the CSPS was then made, carefully examining its history , principles, laws, regulations, organization, operating procedures, financing, and strengths and weaknesses. Previous studies of the personnel system were analyzed. Attitudes and information regarding the performance of the CSPS were ascertained and gathered through hundreds of interviews by many researchers with Colorado legislators, personnel board members, union officials, department and division heads, supervisors, personnel staff, and employees. Greatly contributing to this effort was the 1 9 78 Common Cause survey with responses from approximately 1,100 employees. Lastly, an analytical model was created and used for identifying between 13 traditional personnel functions of human resource.

PAGE 4

iii The comprehensive overall review of the CSPS revealed a number of problems. The personnel system is poorly supported both financially and managerially; is weak and not well organized; and is not contributing adequately to the efficient and effective management of the state government. The constitutionally-mandated merit principle has been neglected, undercut, and given inadequate support by top state govern-ment administrators. The Department of Personnel is underbudgeted and understaffed. Personnel functions have been haphazardly decentralized with inadequate monitoring and are run by poorly trained or unqualified agency staff, resulting in inconsistent personnel actions. Eighteen recommendations are made to solve these overall problems . The functional activities were analyzed both in their impact on overall state management and by individual processes. They were planning, classification, recruitment, selection, equal employment opportunity and affirmative action, labor and employee relations, appeals and grievances, performance evaluation, training and human resource development, employee counseling, separation, and retirement. Key principles were outlined for each personnel function. Issues were identified and analyzed for each function and solutions were recommended. The major findings were that: Human resource planning was limited, lacking coordination and integration with State management. Classi-fication was poorly organized and inconsistently applied. Recruitment was passive, fragmented, unresponsive, and unimaginative. Selection was slow, inefficient, and often unsupervised. Many performance evaluations were not performed annually as required, were poorly related to performance, and results were often ignored. Employee counseling programs were limited to a portion of State employees.

PAGE 5

iv Employee training and development programs were poorly funded and inadequate. Equal employment opportunity and affirmative action programs were weak and poorly supported. Labor and employee relations policy was undefined; action was passive and slow. Grievance and appeal processes were unknown to many employees, ineffective, and tardy --resulting in backlogs. The compensation plan was based on old data, used unrepresentative key classes, and a questionnable system for allocating funds for pay adjustments from a central appropriation. Employee turnover and separation rates were high and virtually unanalyzed. The retirement system was experiencing large increases in unfunded liabilities. Over 100 recommendations were made for improvement of these activities. This project was performed as a public service to the State of Colorado and influenced policy making by the State government. The recommendations will provide an agenda for the State for many years. Finally, this study should be of value to other state and local governments because it develops and applies an improved methodology for analyzing public personnel systems in the context of their con-tribution to better overall management. This abstract is approved as to form and content. I recommend its publication. Signed

PAGE 6

PREFACE The purpose of this project report is to evaluate the performance of the Colorado State Personnel System and its various functional parts. An analytical model for evaluating public personnel systems was developed and served as a tool in this evaluation. Key principles for each of the 13 traditional personnel functions were developed and played a major role in the evaluation procedure. Approximately 118 recomm endations are made in this study. This report provides the basic research documentation for the summary report issued by the Colorado Chapter of the American Society of Public Administration (ASPA) circulated on October 1, 1980 and presented in final form to Governor Richard Lammon November 24 , 1980. The ASPA summary report presented the highlights of this technical study . The highlight report was released prior to the completion of this research document, and draft chapters of this report were circulated in August 1980, to assist the several official study groups in their evaluations. A multidisciplinary Steering Committee of public and private professional administrators guided this public service study throughout its course. The Steering Committee was chaired by Maxine Kurtz, Research Officer, Career Service Authority, City & County of Denver. Michael S . March, Professor of Public Affairs, University of Colorado, served as the Principal Investigator. Other members included Leo C. Reithmayer, Professor of Public Administration Emeritus at the University of Colorado; Norman Patrick, Vice President of Bell Plumbing and Heating Com pany; Louis Fair, Administrator at the Solar Energy Research Institute;

PAGE 7

and Amy Truby, representing the Colorado League of Women Voters. The Dissertation Committee consisted of Jay Shafritz, Maxine Kurtz, and Professor March, who served as chairman. From the summer of 1978, I served as the chief analyst for this study and wrote the detailed project report under the guidance of the interlocking committees. I was responsible for the development of its design, the execution of its analytical model, for analyzing the performance of various personnel functions, and for developing the principles in the functional chapters. I was fortunate to have as a base about 64 fact-finding reports provided by approximately 80 graduate students from the Master of Public Administration and Doctoral programs from the University of Colorado and Denver University. Exceptional student papers by Paul Reiderer, Ray Griffith, Chris Gray, Gloria Morgan and Jerry Deignan contributed valuable resource information. Various other student papers are also cited in the report. All student papers are listed in Appendix A. In addition, responses to the 1978 Common Cause survey of employees in the Colorado State Personnel System were integrated into the report findings. Gary Klein's analysis of the Common Cause questionnaire results was also of great help. Therefore, I had much information on the Colorado State Personnel System from these papers as a resource to begin my analysis report. However, it was necessary to organize, check, update, re-write and summarize the available information. For many chapters field work and further research was necessary before they could be written. All resource information was validated, updated, and re-written many times ove r this three year period.

PAGE 8

Typing and other incidental expenses for this three year public service project report were covered by a modest grant under the Intergovernmental Personnel Act from the Denver Region of the U. S. Office of Personnel Management. Both Governor Lamm and former State Director of Personnel, Rudy Livingston, assisted in obtaining this grant. I am especially thankful to each of the Steering Committee members for their long hours, devotion, and dedication to completing this project. They provided invaluable guidance and professional direction. I am also indebted to the excellent assistance of graduate student W. Allen Wilson, for providing much assistance in researching and summarizing information on the history of the Colorado State Personnel System, on developments of personnel administration, and on the statistics describing the personnel system. In addition, doctoral candidate Diana Kunz and intern Nancy A. Foreman filled many gaps and made many useful editorial suggestions. A special thanks of appreciation goes to Maxine Kurtz who gave so much of her time in directing and helping me assess, shape, and formulate broad principles relating to public sector human resource manag e ment. Jay Shafritz was also instrumental in providing direction and contributing to my understanding of the history and development of public personnel systems. Robert F . Wilcox provided a special incentive to me in completing this project and pursuing my goals as a public administrator. Michael S. March, my thesis advisor, significantly contributed to this study, the ASPA summary report, and to my professional and intellectual growth and development. He originated this project in 1977 when he was President of the Colorado ASPA Chapter and devoted many

PAGE 9

hundred's of hours in assisting me with the design, development, pre-paration and polishing of this study. His unselfish committment to the advancement and understanding of public administration and better quality government is praiseworthy and inspiring. I would also like to acknowledge Mary Bruinsma who typed several drafts and worked under severe deadlines; Corrine Glenn who typed all the charts and tables; and Lynne Beich who spent many hours proofreading this long manuscript. I am also grateful for the constant motivation and advocacy of my family in achieving my career goals. And last and most important is the total support, encouragement, understanding and love of my husband, Gordy, who has been my source or strength, energy, and enthusiasm over these last three years. Denver, Colorado May 1981 Courtney Hart Price

PAGE 10

ix TABLE OF CONTENTS SUMMARY CHAPTER PAGE L SUMMARY OF STUDY, FINDINGS, AND R E C 0 M M EN D A TIO N S • • • • • • • • • • • • • • • • • • • • • • • • • • 1 TI PURPOSE, BACKGROUND, METHODOLOGY, AND SIGNIFICANCE OF COLORADO STATE PERSONNEL S Y S T E M STU D Y • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 25 ill THE EVOLVING ROLE OF PUBLIC PERSONNEL S Y S T E M S IN G 0 V E R N M E N T A L M A N A G E M E N T • • • • • • • • 50 IV A PROPOSED ANALYTICAL MODEL FOR PUBLIC PERSONNEL SYSTEMS •••••••••••••••••••••••••• 1 1 5 V HISTORY AND PREVIOUS STUDIES OF COLORADO STATE PERSONNEL SYSTEM ••••••••••••••••••••• 156 VI D AT A 0 N C 0 L 0 R A D 0 STATE PER S 0 N N E L S Y S T E M S EMPLOYEE CHARACTERISTICS AND ATTITUDES ••••• 2 13 VII: A DIAGNOSIS OF KEY COLORADO STATE PERSONNEL MANAGEMENT PROBLEMS •••••••••••••••••••••• 242 Vill H U M A N R ES 0 U R C E P LA N NIN G • • • • • • • • • • • • • • • • • • • • • 311 IX C L ASSIFIC A TIO N • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 340 X R E C R UIT MEN T • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 3 9 6 XI SELECTION ••••••••••••••••.••..••••••••.••.••• 427 XII: E Q U A L E M P L 0 Y M E N T 0 P P 0 R T U NIT Y A N D A F FIR M A TIV E A C TIO N P R 0 G R A MS. • • • • • • • • • • • • • • • 4 77 X ill LAB 0 R AND EM P L 0 Y E E R E LA TIO N S • • • • • • • • • • • • • • • • 504 XIV GRIEVANCES AND APPEALS ••••••••••••••••••••••• 542 XV PERFORMANCE APPRAISAL ••••••••••••••••••••••• 561

PAGE 11

XVI xvrr xvm XIX XX EMPLOYEE COUNSELING •••••• T R AININ G A N D DE VEL 0 P MEN T C 0 M P E N SA TIO N ••••••••••• . . . . . . . . . . . . . . . . . SEPARATION AND TURNOVER . . . . . . . . . . . . . . . . . . . . . RETIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B IB LIO G R A PH Y ••••••••• 585 602 627 674 697 737 X

PAGE 12

TABLE OF CONTENTS CHAPTER L SUMMARY OF STUDY, FINDINGS, AND R E C 0 M MEND A TIO N S ••••••••••• Introduction •••••••• . . . . . . . . . . . . . . . . . . . . . . . . xi Background on the Study and Its Importance • • • • • • • • • • • • • • • • • • • • • • 2 Study P lll'pose • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 2 Organization of the Report The Importance of Strong Personnel Admin:istration for Effective Government ••••••••••••• The Need for a More Effective Colorado State Personnel System •••••••• Problems in the Colorado State Personnel System Sum mary of Study R eco m m endations • 0 verall System R eco m m endati.ons • R eco m m endations Regarding Specific Personnel Functions .......................... . Top Priorities. IT. PURPOSE, BACKGROUND, METHODOLOGY, AND SIGNIFICANCE OF COLORADO STATE PERSONNEL SYSTEM STUDY Introduction ••• Project Purpose The Development of Merit Systems in the United States .............. . Background of Colorado State Personnel System Problems in the Colorado State Personnel System ••••••••••••••••••••••• Attitudes Revealed by Com m on Cause Survey Analytical Model for Public Personnel Systems. Methodology and Methods of Analysis M ethods of Analysis • • • • • • • • • • ••• . . . . . . . . . . . . . . . . . . . . . . . . 3 4 6 9 11 11 12 23 25 25 26 31 36 44 44 45 47

PAGE 13

xii CHAPTER PAGE III. Potential Significance •••••••••••• THE EVOLVING ROLE OF PUBLIC PERSONNEL SYSTEMS IN GOVERNMENTAL MANAGEMENT •••••••••••••••••• Introduction •• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 50 50 Governmental Growth. . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Growth of Governmental Work Force. Growth of Governmental Services ••• Expansion of G ovem m ent's Role •••••• Major Approaches to Better Man age m ent in Govern. m ent ••••••••••••••••••••• Budgetary Approach ••••••••••••••• Hum an Resource Management Approach A Brief History of Measures to Improve G ovem m ent Management •••••••• Economy and Efficiency in Government Executive Budget C ontral •••• Executive Control of Personnel Policy Line-Item Budgeting •• Scientific Management Move m ent 54 54 55 56 57 57 59 59 60 61 62 62 Human Relations Movement............................... 63 POSDCORB........................................... 63 Performance Budgeting ••••••••••• 64 Executive Development Programs and D ecentraJization ••••••••••••• 65 Planning-Program ming-Budgeting System • 67 Personnel Administration in the 1960s and Early 1970s ................... . 68 Manage m ent by 0 bjectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Organizational Development • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 70

PAGE 14

xili CHAPTER PAGE Government Reorganization • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 71 Zero-Base Budgeting. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 72 Summai'y............................................. 72 Forcesimpacting Governmental Management During the 1970s and 1980s •••••••••••••••••••••• 73 Cost of Public Programs and Services 73 Scarcity of Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Demand for Increased Productivity • • • • • • • • • • • • • • • • • • • • • • • • • • 76 Equal Em ploy m ent 0 pportunity • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 78 Q uality of Govern m ent W ork ers • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 7 9 Lack of Confidence :in Governmental Performance • • • • • • • • • • • • • • • 80 New Public Demands Requ.ir.i.ng Effective Government Action ................................ . 80 Public Personnel Systems • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 8 3 Definition of Public Personnel. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 8 3 Scope of Public Personnel Systems. 84 Role of Public Personnel systems. • • • • • • • • • • • • • • • • • • • • • • • • • • • 85 Development of Public Personnel Systems ••• Bureaucratic Beginnings of Merit 1776-1819 Spoils System, 1829-1880 Establishment of a Civil Service System, 1881-1883 86 . . . . . . . . . . . . . . . . . . . . 86 87 89 Expansion of Civil Service Systems, 1883-1975 • • • • • • • • • • • • • • • • • • 91 Civ.il Service Reform, 1976-1980 •• 94 Trends :in Public Personnel Management Since 1960. 96 Hum an Resource Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Classifi.cation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 R ecriut m ent and Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

PAGE 15

CHAPTER IV. Compensation Productivity Management Performance Appraisal and Incentive Systems Model Personnel Laws ••••••••••••• Intergovernmental Personnel Relations Equal Employment Opportunity Labor'Management Relations Verterans' Preference •••••• Political Activities of Public Employees. Management Information Systems Personnel D ecentrali.zation Executive Services Sum mary ••••••• A PROPOSED ANALYTICAL MODEL FOR PUBLIC PERSONNEL SYSTEMS ••••••••••••••••••••••••••••••••••••••• Introduction • Performance Criteria for Good Government. Earlier Model's For Human Resource Management System National Civll. Service League Laws • Intergovernmental Personnel Act ••• Standards by Departments of Health, Education, and Welfare (HEW), Labor (DOL), and Defense (DOD) for Grant and C ontractural 0 perations ••••••••••••• 1978 Federal Civil Service Reform Act A Proposed Analytical Model for Public Personnel Systems •••••••••••••••••••.••••••••• Interrelationships of Performance Criteria for Good Government with Personnel Functions Effectivenss and Efficiency •••••••••••••• . . . . . . . . . . . . . . . . . . xiv PAGE 100 101 102 103 105 105 107 109 110 111 112 113 114 115 115 116 117 117 121 123 125 131 134 137

PAGE 16

XV CHAPTER PAGE Good Organization • 140 Adequate ResoUI"ces...................................... 141 v. Qualified Human Resources. High Productivity and Motivation M erit Service • • • • • • • • • • • Career Develop m ent System Equal Employment Opportunity Social R espons:i.bility. Accountability ••••• . . . . . . . . . . . . . . . . . . . . . . . . . . . HISTORY AND PREVIOUS STUDIES OF COLORADO STATE PERSONNEL SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction •••••••• H:istory of Colorado State Personnel System Introduction • Beginnings of Colorado State Personnel System: 1876-1907 ........................ . Development of Colorado State Personnel System Policies: 1908-1919 •••••••••••••••• • •• R eflne m ent of Colorado State Personnel System Policies: 1919-1965 •••••••••••••••••• Reorganization of Colorado State Personnel System Policies: 1966-1971 ••••••••••••••••• Developments in the Colorado State Personnel System: 1972-1980 •••••••••••••••••• State Personnel Board. Sum mary of Legal H:istory of Colorado State Personnel Syste m • • • • • • • • • • • ••• Major Trends in Colorado Civll Service Develop m ent ••••••••••••••••• Previous Studies of Colorado State Personnel System 143 144 146 148 150 152 154 156 156 156 156 1 57 160 161 168 173 175 177 179 180

PAGE 17

xvi CHAPTER PAGE Irltroduction . . • . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 Summaries of Previous Studies' Purposes, Major Findings and R eco m m endations • • • • • • • • • • • • • • • • • • • • • • • • • • • 182 Sum mary of the Implementation of Previous Study Recommendations • • • • • • • • • • • • • • • • • • • • • • • • • • • • • . • • • • • • 197 Sum mary of N on-Implemented R eco m m endations • • • • • • • • • • • • • • • • 204 D escripti.on of 1979 and 1980 Studies of Colorado State Personnel System • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 205 Leg:i.slati.ve State Auditor's Office Performance Audit. . . . . . . . . . • . . . . • . • . . • . . . . . . . . . . . . . . . . . . . . . . . • . 205 Office of State Planning and Budgeting Decentralization Statistical Study: 1 979 Colorado Common Cause Classified Employee 208 Survey: 1977-1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 0 ther Studies of Colorado State Personnel System in 1980 . . • . • . . • . . • . . . . • • . • • . . . . . . • . • . . • • . . . . . • • . . • . 209 VL DATA ON COLORADO STATE PERSONNEL SYSTEMS, EMPLOYEE CHARACTERISTICS AND ATTIT UDES • • • • • • • • • • • • • • • • • • • • • • • 213 Introduction . . • • • • . • . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . 21 3 Data on State Personnel System and Employee Characteristics • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Identification of Public Employee Groups in Colorado . • • . . . • . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Classified Employees in State Personnel System • • • • • • • • • • • • • • • • • 215 NonClassified Exempt State Employees • • • • • • • • • • • • • • • • • • • • • • 216 Classified Employees in State Judicial Personnel System • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 217 Statistical Sum mary of Public Em ploy ees in State Govern m ent • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 217 Statisitical Overview of Classified State Employees in State Personnel System • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 222 Major Findings from Statistical Tables 6-7 tl'lrough 6-11 • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 233

PAGE 18

xvti CHAPTER PAGE Social Service -County W elf'are Merit System • • • • • • • • • • • • • • • • 236 Other County and Municipal Public Personnel Progr-a. m s ••••••••••••••••••••••••••••• • • • • • • • • • • • • 238 Sum mar-y • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 241 VII. A DIAGNOSIS OF KEY COLORADO STATE PERSONNEL MANAGEMENT PROBLEMS Irltrod uction . • . . • • • . . . • • . • . . • . . . . . • • . • • . • . . • . • • • . . • . . 2 4 2 Manage m ent P hllosophy and Morale in State Pernonnel.System................................... 242 Purpose and Goals of State Personnel System................. 245 Role of Chief Executive as Chief Manager..................... 248 0 verall Organization of Colorado State G ovem m ent for State Personnel Management and Ad ministration • • • • • • • • • • • • • • 251 Decentralization Problems of Colorado State Personnel System • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 265 Coverage of State Personnel System • • • • • • • • • • • • • • • • • • • • • • • • • 283 Legal Provisions of State Personnel System • • • • • • • • • • • • • • • • • • • • 2 86 State Personnel Information and Analysis Systems • • • • • • • • • • • • • • • 2 90 Budgets and Financing in State Personnel System • • • • • • • • • • • • • • • • 292 Professional and Ethical Standards in Colorado State Ser'Vl.ce • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 296 VIIT. HUMAN R ESO U R C E PLANNING • • • • • • • • • • • • • • • • • • • • • • • • • • • • 311 Irltrod uction . . . . . . . . . • . . . . . . . . . . . . . . . . . . . • . . . • . • • . . • . 311 Background • . • • • . . . . . . • . . . . . • . . . . • . . . . . • . . . . . . . . . . . . . . 312 Importance of Hum an Resource Planning • • • • • • • • • • • • • • • • • • • • 312 Different Approaches to Hum an Resource Planning. • • • • • • • • • • • • 313 Governm.ent "Manpower" Programs for the Lab or F ore e • • . • . . . . . . . . . • • • . . . • . . . . . . . • • • . . . . . . . • • 31 4 Govern m ent Legislation Affecting E m ploy m ent • • • • • • • • • • • • • • • 315 Future of Human Resource Planning • • • • • • • • • • • • • • • • • • • • • • • 316

PAGE 19

CHAPTER IX. Public Sector Hum an Resource Planning. Problems with Public Sector Human Resource Planning Key Principles ••••••••• Analytical Model Linkages Colorado Hum an Resource Planning Colorado Legal Provisions ..............................• Current Status of Colorado Hum an Resource Planning ........................................ . Colorado Management Information System Analysis of Colorado's Personnel Planning System Elements of an Effective Hum an Resource Planning System Key Issues •• Inadequate Human Resource Planning Fcill.ure to Plan Ahead for Growth and Change Lack of Coordination Between Budgeting and Hum an Resource Planning •••••••••••• . . . . . . . . . . . . . . . . . Lack oflntegration of Human Resource Planning With 0 verall State Man age m ent •••••••••••••• Improve the Data Base for the Personnel System C L ASSIFIC A TIO N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction .•..................•..........•......... Background History Purpose •••••••••••••••• . . . . . . . . . . . . . . . . . . . . . . . . . . . . Concept of Job Classification Classification Development ••••••••••••••••••••••• xvill PAGE 317 318 319 322 324 324 325 326 328 329 331 331 334 335 331 338 340 340 341 341 346 347 348

PAGE 20

CHAPTER Class fica tion C ritic:is m s • • • • • • • • • • Classification Achievements •••••••••••••.••••••••••••••• Classification Challenges Decentralization ..................................... Classification Meth ods ••••••••••••••••••••••••••••••••• Future Trends Classification Principles •• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Analytical M odel Linkages Colorado Classification System ••••• Colorado C onsti.tutional Provisions Sta.tutory Provisions .................................. . Col o rado State Personnel S ystem Rules and R e gulations •••••• Urtique Characteristics of Colorado Classification System •••••••••••••••• Classification Case Law •••••••• . . . . . . . . . . . . . . . . . . . . . . . . Colorado 0 rganizational Classification St..r'ucture •••••••••••••••••••• K ey I.ssu es • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • R estructuri.ng the Classification System ••••••• Central and Uniform Decision-Making Authority. Adequacy of Trained Agency Personnel Analysts. Conti.nous Problems with Classification Decentralization Lack of C ons:istently Applied Classification Standar'd.s ••••••••••••••••••••••• Poorly Constructed and Written Classification Manual Lack of Qualified Hearing Officers for Classification Cases •••••••••••• . . . . . . . . . . . . . . . . xix PAGE 348 350 351 352 355 356 359 362 364 364 365 367 368 371 372 379 379 380 381 383 385 385 3 86

PAGE 21

CHAPTER X. Desirability of Five Year Review Cycles for 0 ccupational Studies ••••••••••••••• Accuracy of Job Descriptions •••••••• Division of Classification R esponsibillty. Misuse of Multiple Range Classes . . . . . . . . . . . . . . . . . . . . . . . . . Reducing Number of Job Classifications ••••••••• Revising R equ:ire m ents for Entry Level Professional Positions •.•....••.................... Establishment of a Senior Man age m ent and Technical Corps R E C R UIT M E N T • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • In. trod uc ti.on . • • . . • • . • • . . • • . . . . . . . . • . . . . . . . . • . . . . • • • • . Background • The Status of Recruitment for Public Employment History ••••••••••• R ecruit m ent Function •••••••••••••••••••••••••••••••••• Recruitment Methods Relationship of Recruitment to Other Personnel Functions .......................... . Recruitment Principles ••• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Analytical Model Linkages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Colorado Recruitment System ••••••• . . . . . . . . . . . . . . . . . . . . . . . Colorado Constitutional Provis:isons • . . . . . . . . . . . . . . . . . . . . . . . Colorado Statutory Provisions •••• Colorado State Personnel Rules and Regulations • Organization of Colorado Recruitment Program •• Characteristics of Colorado Recruitment Program Key I.ssues •••••••••••••••••••••••••••••••••••••••••••• XX PAGE 388 389 390 390 392 394 394 396 396 397 397 399 400 401 403 403 406 407 407 408 408 411 413 417

PAGE 22

CHAPTER IX. Lack of Highly Q uali.fi.ed Applicants •• Lack of SuNlcient Funding and StaNlng for Recruit m ent Programs ••••••••••••• Lack of Evaluation System for Recruitment Function ...................... . Lack of Tim ely Response in Recruiting Potential C an did a tes . • . . . . . . • . . . . . . . • . . . . . . Eliminate Duplication and Inemciency in the State Recruitment Process ••••••••••• . . . . . . . . . . . . . . . . . Lack of Consistent Policy C o nceming Decentralization Recruit m ent Program . . . . . . . . . . . . . . . . . . . Existence of State Residency Requirement. Lack of Coordination with State Secondary and Post--Secondary Educational Institutions •••• Restrictions Concerning Length of Announcement Period for State Vacancies ••••••••••••••• SELECTION •••• Introduction • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Background •••••••• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Evolution of Testing Methods National Legal Environ m ent Public Sector Selection • Key Principles ••••••••• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Analytical Model Linkages Colorado Selection System Colorado Legal Environment Organization of Colorado Selection Program . . . . . . . . . . . . . . . . . C haracter.istics of Colorado Selection Program Statistics •••••• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key Issues ••••••• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xx:i PAGE 417 418 419 419 420 421 424 424 425 427 427 428 428 431 434 435 439 440 440 442 442 444 453

PAGE 23

xxii CHAPTER PAGE Adherence to the Merit Principle. 453 Lack of Timeliness •••••••••• 454 Quality of Examiniation Process 456 Excessive Use of Oral Tests •• . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458 Validation of Test Instru m ents • 459 Examiniation Post Audit of Decentralized Agencies •••• 461 Testing by Class • 461 Probationary Period 462 Internships • • • • • • • 462 Contract Em ploy m ent. 463 Political and Favored Appoint m ents. 464 Management Infer m ation System •••••••••• 464 Effectiveness of Decentralization of Selection 4 6 5 Employee Perception of the Selection System 465 The Necessity for Increased Funding for the Selection Process •••••••••••••••••• 467 XII. E Q U A L EM P L 0 Y M EN T 0 P P 0 R T U NIT Y A N D A F FIR M A TIV E A C TIO N PROGRAMS ••••••••••••••••••••••••••••••••••••••••• 4 7 7 Introduction • 477 Background and H:istory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477 Equal Em ploy m ent 0 pportunity 477 Purpose of Equal Em ploy m ent 0 pportunity. 479 Affirmative Action Programs 480 History of Affirmative Action Programs 480 Characteristics of Affirmative Action •••• . . . . . . . . . . . . . . . . . . . . 481 Purpose of Affirmative Action Programs 4 8 1 Affirmative Action v. Merit System Standards • • • • • • • • • • • • • • • • 48 2

PAGE 24

xx:i:ii CHAPTER PAGE Affirmative Action Program Format 484 Affirmative Action Principles • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 486 Analytical Model Linkages • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 487 Statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488 Colorado Affirmative Action System • • • • • • • • • • • • • • • • • • • • • • • • • 491 Colorado Constitutional Provisions • • • • • • • • • • • • • • • • • • • • • • • • 491 Colorado Statutory Provisions............................ 491 Colorado State Personnel Rules and Regulations............... 493 Colorado Employee Handbook............................ 494 Other Affirmative Action Directives....................... 495 Key Issues • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 497 Need for Affirmative Action in Colorado.................... 497 Lack of Top Leadership and Agency Management Support for Affirmative Action • • • • • • • • • • • • • • • • • • • • • • • • • 497 Lack of Proper Organization for Afflrmative Action Progmms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • 49 8 Lack of Funding, Training and Personnel for Implementing Affirmative Action • • • • • • • • • • • • • • • • • • • • • • • 499 Increasing the Number of Eligibles C eritified • • • • • • • • • • • • • • • • • 5 00 Conflict Between the Colorado State Personnel Board and the General Assemble • • • • • • • • • • • • • • • • • • • • • • • • 501 XIII. LABOR AND EMPLOYEE RELATIONS • • • • • • • • • • • • • • • • • • • • • • • 504 Irltroduction . . . . . . . . . • • . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . 504 History of Private Sector Collective Bargaining • • • • • • • • • • • • • • • 506 Public Sector Labor and Employee Relations • • • • • • • • • • • • • • • • • • • 507 History of Public Sector Collective Bargaining • • • • • • • • • • • • • • • • 507 Issues R estri.cting Public Sector Collective Bargaining . . . . . . . . . . . . . . . • . . . • . . . . . . . . . . . . . . . . . . . . 508 Public Sector Employee Relations......................... 510

PAGE 25

CHAPTER XIV. Issues Involving Public Sector Collective Bargaining R ela. tionships . . • . . . . • . • • • • . . • . . . . . . . . . • • . . . • . . • . . .•.. Labor and Employee R ela.tions Principles Analytical Model Linkages •• . . . . . . . . . . . . . Colorado Labor and Employee R ela.tions System Colorado Constitutional Provisions Colorado Statutory Provisions •••• . . . . . . . . . . . . . . Colorado State Personnel Rules and Regulations • Other Labo!"-E mployee R ela.tions Directives. Colorado Legal History •••••••• Colorado E m ployee 0 rganizations Key Issues ••••••••••••••••••• Absence of Legal Framework and Statute Governing Collective Bargaining Rights •••••••••••••••• Lack of State Policy Concerning the Right to Strike ••••••••••••••••••••••• Provision of Alternative Solutions to Strike Lack of Leadership and Responsiveness to Employee Problems . • . . • . . . . . . . •..•.............. Inadequate Employee Participation in Rule-Making Activities in State Classified Service ••••••••• GRIEVANCES AND APPEALS. Background •••••••••••• Development of Grievance and Appeal Systems Grievance Systems •••••••••• Grievance Procedure Format. Grievance Principles. AppealSystems ••• Appeal Procedure Format . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiv PAGE 519 521 524 526 526 526 527 528 529 530 534 534 535 536 538 540 543 542 534 546 546 547 548 548

PAGE 26

CHAPTER XV. Appeal Principles ••••• Analytical Model Linkages . . . . . . . . . . . . . . . . . . . . . . . Colorado Grievance and Appeal System . . . . . . . . . . . . . . . . . . . . . . . Colorado C onstituti.onal and Statutory Provisions ................. . . . . . . . . . . . . . . . Colorado State Personnel Rules and Regulations. Grievance Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appeals Procedure •• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Greivances and Appeal Statistics • . . . . . . . . . . . . . . . . . . . . . . . . . Key Issues •••••••••••••••••••••••••••• Lack of Information for Employees A bout the Grievance and Appeal System •••••••••• Separation of Powers Between Setting Personnel Policy and Hearing Appeals ••••••••••• Delays in Resolving Grievances and Appeals. P E R F 0 R M A N C E A P P R AIS A L • • • • ••••••••• Backgr'ound ••••••••••••••••••••••• Public Sector Performance Appraisal Systems XXV PAGE 549 550 552 552 55 2 554 554 555 556 5 56 557 55 9 561 561 563 History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . 56 3 Purpose 563 Legal Concerns . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . 564 Performance Appraisal Formats 566 Performance Appraisal Principles 567 Analytical Model Linkages 56 9 Colorado Performance Appraisal System 571 Colorado Statutory Provisions •••••• 571 Colorado State Rules and Regulations 571 Other Performance Appraisal Directives • • • • • • • • • • • • • • • • • • • • 572

PAGE 27

CHAPTER XVL xxvi PAGE Sta. 'tistics . . . • . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575 Key Issues ••••••••••••••••• . . . . . . . . . . . . . . . . . . . . . . . . . . . 576 Linkages Between Performance Evaluation and 0 verall Manage m ent •••••••••••••••••• 576 Failure to Administer Required Annual Performance A ppra.isals •••••••••••• 578 Lack of Relationship Between Performance Appraisal and "Merit" Increases •••••••••••••••••••••• 580 Lack of Sufficient Supervisory Training and Implementation •.....••..........•.......••••.•.... 582 EMPLOYEE COUNSELING •••••••••••••••••••••••••••••••• 585 lrltrod ucti.on • . • • • • . • • . • • • • • • • • • . . . • . • • . . . . • . . . • • . •..• 585 Counseling Programs •••••••••••••••••••••••••••••••••••• 587 History •••• 587 Public Sector Employee Counseling 589 Purpose •••••••••••••••• 590 Employee Counseling Program Format •••••••••••••••••••••• 590 Employee Counseling Program Principles • • • • • • • • • • • • • • • • • • • • • • 591 Analytical Model Linkages •••••••••••••••••••••••••••••••• Colorado Employee Counseling System ••••••••• Colorado Constitution and Statutory Provisions Colorado State Rules and Regulations • Colorado Employee A ssLstance Program . . . . . . . . . . . . . . . . . . . . . Key Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lack of Comprehensive Coverage •••••• Lack of Comprehensive Policy Concerning Employee Personnel Problems ••••••• Lack of Supervisory Training ••••••••••••••••••••••••••••• 593 595 595 595 596 599 599 600 600

PAGE 28

CHAPTER xvrr. xxvii PAGE TRAINING AND DEVELOPMENT 602 Background •••••••••••••• 602 Public and Private Sector Training and Development Programs ..•...•••..•.•...•............ 603 History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603 Private and Public Sector Training Costs . . . . . . . . . . . . . . . . . . . . 604 Public Sector Training . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . 604 Purpose ••••••••••• 606 Training and Develop m ent Program Types • • • • • • • • • • • • • • • • • • • 608 Training and Development Principles Analytical Model Linkages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statistics ••••••••••• Colorado Training and Development Programs Colorado Statutory Provisions •••••••••• Colorado State Rules and Regulations and Employee Hand book •••••••••••••••• Executive and Legislative Support Key Issues Lack of Training Coordination Within State Government ••••••••••••••• Lack of Sufficient Funding of State Training and Development Programs •••••••••••• Lack of Com mit m ent by the Governor and L e g.isla. t ure • • . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lack of Sufficient Training Programs for State Employees •••••••••••••••••••••• Lack of Policy Concerning Attendance and Reimbursement at Training Programs Lack of Training Coordination with State Universities, Colleges, and Other Postsecondary Irlsti.t utions . . . . . • • • • . • . . . . • . • . . . . • . . . . . . . . . . . . . . . . 608 611 612 614 614 614 616 618 618 619 620 621 621 622

PAGE 29

xxvlii CHAPTER PAGE Lack of Career Development 0 pportunities . . . . . . . . . . . . . . . . . . 624 Lack of Management Development and Executive Training ••• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624 XVIII. COMPENSATION 627 Background •• 627 Compensation Elements •• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629 Development of Public Sector Compensation Practices .•.................... . . . . . . . . . . . . . . . . . . . 632 Public Sector Compensation Comparability 635 History of Public Sector Compensation Policies 638 Key Elements of Public Sector Compensation Programs ••••• 641 Prevailing Wage Principle • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 641 Pay Plan • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 642 Pay Range ••• 644 Salary Survey • 644 Key Classes • • • • •• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 645 Total Compensation Comparability . . . . . . . . . . . . . . . . . . . . . ... 646 Key Principles • • • • • • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 647 Analytical Model Linkages 651 Colorado Compensation System ••••• 652 Colorado Constitutional Provisions 652 Colorado Statutory Provisions •••••• 653 Colorado State Rules and R egualtions 655 Colorado State Employee Handbook • 655 Colorado Compensation Procedures 656 Key Issues •••••••••• 66 0 Comparability Survey Data Problems ••••••••••••••••••••••• 660

PAGE 30

CHAPTER XIX. Key Classes Fall to Meet Established Criteria Selection of Organizations for Salary Survey Fall to Match Closely the State's Work Force D istr'i.buti.on • • • • • • • • • • • • • • • • • • • • • Failure to Appropriate Sufficient Funds for Budgeted and Approved FTEs •••••••• Arbitrary Ceilings on Compensation of Top State Executives ...................... . Problems in Estimating Fringe Benef.i.t Costs . . . . . . . . . . . . . . . . . Lack of Tim ely Data Used for Salary Survey. SE P A R A TIO N AND T U R N 0 V E R Background • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Labor Turnover •••• Types of Turnover Reasons for Turnover Advantages and Disadvantages of Turnover Public Sector Turnover •••••••••••••••• Principles Relating to Separation and Turnover. Analytical Model Linkages ••••••••••• Colorado Separation and Turnover System Colorado Constitutional Provisions Colorado Statutory Provisions •••• Colorado State Rules and R egulations ............ ....... . Colorado State Employee Handbook •• Colorado Separation and Turnover Procedures Key Issues •••••••••• Neglect of Separation and Turnover Analysis in Personnel Planning and Management •••••• xxix PAGE 661 662 664 667 667 669 674 674 675 675 676 678 680 682 684 686 686 686 687 688 688 693 693

PAGE 31

CHAPTER XX. Lack of Separation and Turnover Data and Analyses •••••••••••••••••••••• Failure to Publish Statistical Reports on Separation and Turnover •••••••••• RETIREMENT B ackgr'ound ••••••••••••••••••••••••••••••••••••••••• Retire m ent Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . History ••••• • • • • • R etire m ent Benefits • • • • • • • • • • • • • • • • • • • • • • • •••••••••••• Problems in Funding Public Retirement Plans. Different Approaches to Funding R et.ire m ent Plans .....•.••...•.•............ Retirement Principles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Analytical Model Linkages Colorado Retirement Program •••••••••••••• Organization of Colorado Retirement Program PERA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Colorado Retirement System ••• Colorado Statutory Provisions •••••• Colorado State Rules and Regulations Colorado State Employee's Handbook Ad ministration of PER A •••••••••••••••••••••••••••••••• Key Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lack of C ons:istency in State R et.ire m ent Plans. Growing Lack of Actuarial Soundness in the PER A Plan Use of Unrealistic Assumptions in P E R A A cturial V alua ti.ons • • • • • ••••••••• Have PER A Contribution Rates Been Understated? ••••••••••••• XXX PAGE 694 694 697 697 698 698 699 701 702 704 707 709 709 710 711 711 711 712 712 713 713 715 718 723

PAGE 32

CHAPTER How Should PER A Unfunded Actuarial Liabilities be Funded? ••••••••••••••••••••••••• Refusal of PER A Staff to Release Full Actuarial Reports ••••• . . . . . . . . . . . . . . . . . . . . . Issuance of PER A of Erroneous Reports to Its Members •••••••••••••••••••••••• Problems With the Management of the PER A System ••••••••••••••••••••••••• The Social, Personnel, and Economic Impact of PER A B enef.i.t Provisi.ons ••••••••••• Coordination of PER A and Social Security Coverage ..•.•...•••••••.....•• B IBUO GRAPH Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxxi P A GE 724 727 7 2 7 729 731 7 3 4 7 3 7

PAGE 33

APPENDIX 5-A 7-A 11-A 15-A 18-A 18-B 18-C A B c LIST OF APPENDICES Colorado State Personnel Constitutional Requirements . Executive Order, Colorado Code of Ethics Legal Requirements Relating to Selection . Performance Value Definitions Key Classes, State of Colorado Salary Survey, 1979 . . . . . . . ... Colorado State Department of Personnel, National Salary Survey Questionnaire 1979 Annual Calendar of Events for State Salary Requirements . . . Research Papers Prepared For Colorado State Personnel Study by Graduate Students Public Employees Retirement Association of Colorado, Combining Balance Sheet, Year Ended xxxii PAGE 210-212 303-310 468 584 671 672 673 7 657 69 June 30, 1979 ........................................... 770 Public Employees Retirement Association of Colorado, Financial Statement, June 30, 1979 ............ 771

PAGE 34

CHART 3-A 4-A 4-B 5-A 7-A 7-B 7-C 12-A 18-A LIST OF CHARTS Government/Employment Growth . . . Relationships Between Governmental Performance Criteria and Personnel Activities The Analysis of a Personnel System A Chronological Chart of Major Steps in the Department of the Colorado State Personnel System 1876-1978 . . . . . . . . . . . . . Organizations and Legal Systems Impacting Colorado State Personnel System, by Functions, in 1978 . . . . . . . . . . . . Proposed State Organizational Chart Department of Personnel -Organization Structure 1980 . Affirmative Action Model Total Nonsalary Benefits as a Percent of Salary xxxviii PAGE 53 135 136 178 256 260 263 485 631

PAGE 35

TABLE 3-1 3-2 3-3 6-1 6-2 6-3 6-4 6-5 6-6 6-7 6-8 6-9 LIST OF TABLES Governmental Expenditures and Gross National Product -Fiscal Year 1929-1975 . . Government Expenditures as a Percentage of Gross National Product -Fiscal Year 1929-1975 Government and Private Employment in the United States -Fiscal Year 1957 and 1977 Average Number and Percent Increases in Full and Part-Time State Employees from Fiscal Years 1970 to 1978 . . . . . . . . . . . • . . Breakdown in the Average• Number of State Government Employees for the Legislative, Executive, and Judicial Branches In Fiscal Year 1978 . . . . . . . . . . . . . . of Actual Full-Time Equivalent Faculty Employed in State Universities and Colleges in Fiscal Year 1978 . . . . . Employees Covered Under the State Personnel System 1971-78 ..... Status of State Personnel System Appointments: June 30, 1978 . . . . . . . . . . . . . . . . . Reassignments in the State Personnel System: 1975-1978 . . . . . . . . . . . . . State Classified Employee (Full and Part Time Only) Characteristics of Sex, Age, Race, and Education Level Data for 25,491 Classified Employees as of June 30, 1978 . . • . . . . .... State Classified Employee (Full and Part Time Only) Characteristics of Pay Grade, Salary Level Data For 25,491 Classified Employees as of June 30, 1978 . . . . . . . . . . . . . . . Analysis of State Classified Employees (Full and Part Time Only) by Occupational Groups as of June 30, 1978 ............ . xxxviv PAGE 51 51 52 21 8 220 221 223 225 228 230 231 232

PAGE 36

TABLE 6-10 6-11 7-1 Age, Education, and Pay Grade Characteristics of State Classified Employees (Full and Part Time Only) Distributed by Employee Sex as of June 30, 1978 . . . . . ... Age, Education Level, and Pay Grade Charac teristics of State Classified Emplo yees (Full and Part T ime Only) Distributed by Employee Race as of June 30, 1978 . ..... . Colorado State Department of Personnel Decentralization Summary . . . . . . . 7-2 Optimal Locations for Administering Centralized and Decentralized Functions Based Upon the Associated Costs and Effectiveness 7-3 10-1 11-1 11-2 11-3 11-4 11-5 Expenditures and FTEs of the Colorado Department of Personnel and the State Personnel Board, Fiscal Years 1973-79 (Actual Expenditures, by Source, in Thousands of Dollars; Actual No. of FTES Used) . . . . . . . . . . . . . . . . Comparisons of Recruitment Activity Levels Per Hire . . . . . . . . . . . . . . Workload Indicators for Examination Administration Unit Colorado State Department of Personnel, Fiscal Year 1978 . . . . . . . . . . . Average Time for Colorado Department of Personnel to Establish Eligible Lists from Open Competitive Examinations After Closing Dates, 1976-1979 . . . . . . . . . . . . . . . . . . Comparison of Time to Establish Open Competitive Eligible Lists After Closing Dates of Examinations Colorado and State JurisdictionWide Merit Systems -Fiscal Year 1977-78 ... ... . Comparison Between the Personnel Department and Decentralized Agencies Regarding Oral vs. Written Exams Set Up and Constructed -Fiscal Year 1978-1979 • . . . . . . . . . . . Use of Multi-Part Examinations Colorado Department of Personnel and Decentralized Agencies -Fiscal Year 1978-79 .... . XXXV. PAGE 234 235 270' 271 275 293 422 446 446 447 449 451

PAGE 37

TABLE 11-6 11-7 ll-8 12-1 12-2 13-1 13-2 13-3 14-1 14-2 14-3 16-1 17-1 18-1 18-2 19-1 19-2 Perception of Accuracy of Job Announcements by Department, 1978 . . . . . . . . . . Perception of Accuracy of Job Announcements by Salary Level, 1978 . . . . . . Perception of Adequacy of Testing Equipment by Type of Instrument, 1978 . . . . . . . . Comparison by Ethnicity, State o f Colorado Classified Employees and State of Colorado Labor Force . . . . . . . • . . • . . . . . . . . Comparison by Sex, State of Colorado Classified Employees and State of Colorado Labor Force Union Representation in The Federal Govern ment, November, 1978 ..• . • ...... State and Local Organized Full-Time Employees, October, 1977 . . . . . CAPE Employee Relation Cases, July 1979 March 1 98 0 . . . . . . . . . • . . . . . Colorado State Personnel System Grievance Procedure • . . . . . . . . . . Time Lag Between Appeal Filing Date and Final Decision 1975-1979 ... .. . Backlog of Formal Hearings 1975-1980 Employee Assistance Program, Inc. Client Summary Data Training Program Types Percent Wage Gains, 1955-197 3 Sample by Industry-Total Colorado . . . . State Personnel System: Appointments, Promotions, Terminations, and Turnover Rates by Agency July 1, 1977 through June 30, 1978 (in permanent and full-and part-time positions only) . . . . . . . . . . . . . . . . . . . . . . . State o f Colorado Turnover Rates for Fiscal Years 1 9 74 through 1978 . . . . . . . • . . xxx:vi PAGE . 451 . 452 . 452 489 490 517 518 532 553 560 560 5 98 609 635 663 691, 692 695

PAGE 38

CHAPTER I SUMMARY OF STUDY, FINDINGS, AND RECOMMENDATIONS Introduction The purpose of this project is twofold: to render a public service and to develop and apply an improved methodology for analyzing public personnel systems. Its primary objective is to review comprehensively and evaluate the Colorado State Personnel System by utilizing a system analysis approach. The central evaluation objective in this study is to assess the effectiveness of the Colorado State Personnel System in the context of its contribution to overall State governmental management performance and program effectiveness. The overall structure and performance of the personnel system is assessed first. Then all of its 13 personnel activities are examined in depth. An analytical model was created and used in evaluating the effectiveness and performance of the Colorado State Personnel System. This model focuses on the relationships between the primary elements of governmental performance and the 13 traditional functions of a personnel system which include human resource planning, classification, recruitment, selection, equal employment opportunity and affirmative action, labor and employee relations, grievances and appeals, performance appraisal, training and development, employee counseling, separation, and retirement. Key principles are outlined for each of the personnel functions to follow in structuring a modern day personnel system that is responsive to the merit concept and protection of employee rights and also to the

PAGE 39

needs of management. This study emphasizes the importance of human resource management in achieving high governmental performance and identifies personnel management as one of the key elements in achieving organizational goals and objectives. The linkages between overall management of the Colorado State government and the operation of the personnel system are defined and analyzed. Each of the 13 personnel functions performed by the Colorado system are evaluated. Based on this analysis, recommended changes and reforms are suggested, some of which require accompanying legislative or even constitutional changes. Approximately 118 recommendations for change are presented. Implementation of these recommendations would result in establishing a more advanced, effective, and managerially responsive personnel system that strongly adheres to the merit principle while enhancing the overall management effectiveness of Colorado State government. Background on the Study and Its Importance Study Purpose In past years, many studies have been made of the Colorado State Personnel System, but problems continue to exist in the current system. (See Chapter VII--A Diagnosis of Key Colorado State Personnel Management Problems.) The Department of Personnel is staffed by able and dedicated employees, but they are too few in number and the system itself still has numerous fundamental deficiencies. It is still inefficient and ineffective in its operation. This situation presents an urgent problem -2-

PAGE 40

for Colorado government because of the new and demanding responsibilities being thrust on the State by the change and expansion being generated by the energy boom. Improved State governmental performance will depend heavily on the development of improved personnel administration to create an effective merit system staffed by competent career civil servants. Moreover, this comprehensive study presented an opportunity to develop and test an improved methodology for assessing public personnel systems. Organization of the Report This study is divided into four major sections. The first section summarizes the findings and recommendations of the study (Chapter I). The second section presents the general background and development of human resource management from the beginnings of our country to present day, emphasizing the overall growth of government and the expansion of its role in our modern day society. It tracks the development of merit systems in the United States and traces the development of the Colorado State Personnel System (Chapters II and III). In Chapter IV, a proposed model for analyzing the effectiveness of public personnel system is presented that focuses on the relationship between governmental performance and the 13 major functions of a personnel system. Section three reviews the Colorado State Personnel System in depth (Chapter V). Statistics on the coverage of the system and the characteristics of its employees are presented. Previous studies of the personnel system are described (Chapter VI). This section also identifies the major system-wide issues, analyzes the principal management problems which cut across the entire system, and makes recommendations for their solution (Chapter VII). -3-

PAGE 41

The final section (Chapters VIII through XX) analyzes the 13 traditional personnel functions performed by the Colorado system (including key principles for each personnel function) and presents specific recommendations for change in light of these principles. Over 100 recommendations are made in this section alone for changes to modernize and improve the performance of the Colorado State Personnel System. The Importance of Strong Personnel Administration for Effective Government A well organized and properly functioning personnel system is a fundamental requirement for effective governmental operation. A strong personnel system and effective personnel administration are essential for several reasons. First, the human resource management system is recognized as one of the two major institutional management systems available to chief executives of governments. It has long been established that a good budgeting and financial administration system is essential for the proper allocation and effective use and control of financial resources. An equally important role is played by the personnel administration system, which is the chief executive's main arm for managing the government's human resources. Both systems require highly competent career professionals to run them plus strong executive support to make them effective. Second, effective modern public personnel systems are recognized as the tool through which the integrity of the public service is protected from the effects and abuses of the spoils system. As government increased in size and importance in the United States during -4-

PAGE 42

the 19th century, it was widely recognized that political patronage systems had to be replaced by merit systems. Merit systems are based on competence, competitive selection and promotion, and continuing career service by dedicated and productive employees. In the public sector, it is required that career civil servants be responsive to the policies established by their elected political leaders and in turn the political leaders are obligated to support the merit system. Third, the personnel system is heavily responsible for the quality, assignment and utilization, and performance of the people who staff the government. A well organized and effective personnel system must have a planned human resource management program that is responsible for recruiting and selecting the best qualified applicants; classifying and assigning them properly; providing for their development and training; and compensating, motivating, and managing the employees to achieve the greatest possible governmental efficiency and effectiveness. A good personnel system recruits and retains competent people who are representative of our society. It must assure the continuity and responsiveness of their public service under proper management control and with due protection of employee rights. Fourth, a comprehensive and positively oriented public personnel system serves as an integral tool for improving government management and providing for more effective government. Through a properly directed, organized, and managed human resource system, the chief executive--working with his departmental heads and staff units--can establish policies and practices which lead the government toward higher performance and greater effectiveness. Modern government requires highly competent and well-trained professional managers and technicians -5-

PAGE 43

to install and operate the managerial systems which are the key to improving governmental performance. Neglect of the foregoing considerations inevitably will lead to disorganized and poorly managed government, deficient performance, and general ineffectiveness in achieving governmental goals and program objectives. Broadly speaking, while state and local personnel ad-min istration . has improved in the last two decades, the Colorado State Personnel System still falls far short of meeting the needs of modern governmental management. The Need for Effective Colorado State Personnel System In the last few years powerful forces, some national and some uniquely affecting Colorado, have increasingly made it evident that Colorado needs a more effective state government and that major improvements in the State Personnel system would be a key ingredient in achieving these goals. Among these forces are the following factors: 1. Rapid Population and Economic Growth --The population of Colorado has increased from 1.3 million in 1950 to an estimated 2.8 million in 1980--an increase of 115%. Projections indicate that by the year 2000, the population may be 4.5 million. This would be a 1.7 million increase in 20 years, dwarfing the increase in the past 30 years.1 Colorado is rapidly becoming the "energy capital" of the United States. The Front Range area is one of the more rapidly growing areas in the United States. The Western Slope is bracing for an unprecedented period of growth and development. These developments will place a heavy 1 The Governor's Blue Ribbon panel, Private Choices, Public Strategies, an Interim Report, Vol. 1 (February, 1981), p. 22. -6-

PAGE 44

burden on the State government and on local governments for providing basic public facilities and services as well as for meeting the inevitable problems that will attend rapid economic growth and resultant environmental and social changes. The Governor has stated on several occasions that the State government is unprepared to deal with these emerging problems.2 Equipping the State government to meet these challenges will mean that more employees and especially more professionals and technicians with higher and more complex skills will have to be hired and trained. The critical personnel needs of the State include recruitment of qualified planners, policy and program analysts, economists and other specialists, and top managers who have the capacity to act expeditiously and effectively in a rapidly changing governmental environment. 2. Increasing Complexity and Proliferation of Difficult Government Tasks --During the last two decades, Colorado has experienced a rapid transformation from a largely agricultural, rural state into an increasingly urbanized and industrialized one which is being heavily developed for its energy resources. The rate of change continues to accelerate. This rapidly changing situation in Colorado is producing unprecedented demands on State government, many of which in recent years have not been adequately met. Among the problems which confront the State are: energy development; environmental degradation; demands for expanded transportation and community facilities in both the Front Range 2Richard D. Lamm and Lee White, "Enhancing Productivity : It's Possible," Notes, Office of Personnel Management (July/August, 1980), pp. 17-21. -7-

PAGE 45

area and on the Western Slope; unplanned urban sprawl; and increased demands for educational, health, and social services, as the population increases and as the rate of change accelerates. Therefore, State government must plan, develop, and implement timely and adequate action programs. 3. Increased Size and Complexity of Colorado Government --In 1950, State expenditures from all sources totaled only about $150 million. The 1980 expenditures as estimated by the Joint Budget Committee totaled approximately $2.77 billion. This is an increase of 18 times in 30 years.3 Although much of it was due to inflation, the increase in real terms was still about six times in 30 years. With this growth has come a vast expansion in the number and size of programs and an accelerating complexity in the affairs of the State. Policy makers and administrators must gear up to deal with more difficult issues, larger budgets, increased numbers of personnel, more complex organizational and program coordination tasks, and with large interwoven problems that profoundly affect the ability of the State to meet the challenge of growth and maintaining the quality of life while accommodating that growth. Government must become more efficient in its management and more effective in its programs. 4. New Demands for Increased Efficiency and Effectiveness in the State While the new wave of population and economic development is sweeping over Colorado and creating new needs for governmental action, strong public sentiment in Colorado and throughout the nation opposes the growth of the government. As a result, vocal demands have been made 3colorado Joint Budget Committee, Appropriations Report 1979-80. -8-

PAGE 46

for tight budget ceilings, tax reductions, and for increasing the efficiency and productivity of personnel currently in government agencies. Therefore, the Executive Branch must take aggressive action to use its available resources of personnel and finances with maximum effectiveness--and demonstrate these results to the Legislature and to the people of the State. This, in turn, requires improved managerial systems and better managers. In addition, this requires planners, analysts, and program evaluators who can measure performance and demonstrate factually how well existing resources are being used. The State currently lacks the specialists and analysts to perform these functions which include organization and management analysis and development of management information systems, program evaluation, and cost effectiveness analysis. Except for a minimally staffed Office of State Planning and Budgeting, the Chief Executive lacks the institutional staff machinery and organized processes to plan, organize, conduct, and monitor continuing efforts to improve the organization and management of the State and the effectiveness of its programs. Problems in the Colorado State Personnel System Throughout the history of the Colorado State Personnel System, there has been considerable debate over how to structure a personnel system free from vulnerability to political spoils and yet flexible enough for executive managerial leadership. Recent studies and evaluations of the system discussed and detailed in Chapter V indicate that this balance has not been achieved. Extensive review, criticisms, and employee dissatisfaction by citizens, legislators, administrators, and employees suggest that -9-

PAGE 47

problem s exist in the Colorado State Personnel System in the following 12 areas:4 1. Lack of support for and strict funding limitations in the State Personnel System by the General Assembly. 2. Absence of human resource planning in the system. 3. Widespread disregard of merit principles in recruiting, testing, selection, and promotion. 4. Ineffective affirmative action programs. 5 . Inadequate salary and fringe benefits, especially for top executives. 6. Low employee motivation and absence of rewards and incentives for effective performance. 7 . Disregard of the employee performance evaluation process. 8. Slow and ineffective grievance and appeal systems. 9. Lack of promotional and transfer opportunities across agency lines. 10 . Inadequate training and developmental opportunities and programs due to funding limitations. 11. Lack of effective and timely personnel asistance to State agencies by the central personnel department. 12. Lack of integration between human resource management activities and the overall management functions of the Executive Branch. Each of these problem areas is further elaborated on in Chapter II, and Chapters VIII through XX. 4These criticisms have been made by respondents of the 1978 Common Cause survey, executive directors of CAPE and AFSCME, Colorado State Department and division heads in a 1976 survey by graduate student Paul Reardon and updated in other interviews conducted during 1978-80. -10-

PAGE 48

Summary of Study Recommendations The study recommendations are divided into two parts--the overall systems recommendations and the recommendations concerning the 13 personnel functions. The recommendations in each area are summarized below and supply the heart of this project report. Overall System Recommendations I. Personnel management should be integrated with overall management of the State government and the overall managerial system should be strengthened, particularly by improving the managerial resources of the Chief Executive. II. The merit basis for the State Personnel System should be strongly reaffirmed by the Governor--and effective merit standards established and enforced. III. The Chief Executive should be given more direct control over personnel policy and personnel administration, subject to the clear obligation to abide by merit principles. The Department of Personnel should be elevated to be an Office of State Personnel Management, co-equal with the Office of State Planning and Budgeting. The State Personnel Board should be converted to a strong, well-staffed merit "watchdog" and enforcement agency. IV. Top State managerial capacity should be strengthened by reducing the number of elected State officials; creating a Senior Management and Technical Corps; and authorizing political appointment of Deputy Executive Directors for the 20 cabinet departments. -11-

PAGE 49

V. The General Assembly should comply with the constitutional mandate for "adequate appropriati'ans" for the State personnel functions, because lack of resources has severely undercut State personnel administration. VI. An improved personnel management and personnel data system should be installed--and performance analysis augmented. VII. The decentralization process started in 1977 should be modified in the interest of increasing efficiency and protecting the merit system from further weakening. The present vacancy-by-vacancy recruitment and testing process, heavily relied on by individual agencies, is costly and is subject to merit principle nonobservance. VIII. Legislation should be enacted to establish well-defined ethical and professional conduct standards in the State government--and the Personnel Board should be given the responsibility and the staff resources to enforce the standards. IX. The governmentwide organization for personnel management should be revamped and human resource management systems strengthened, because the present arrangements are unsystematic and costly. The specific recommendations on the overall structure and role of the personnel system are largely contained in Chapter VII. Recommendations Regarding Specific Personnel Functions I. Human resource planning is performed on a very limited basis and lacks coordination and integration with overall State management. Among the recommendations are that: --The Governor should direct the development of a systematic human resource planning program to include both short and long -12-

PAGE 50

range projections and analyses. --The Department of Personnel, responsible for this plan, should assess and identify the kinds of specialties needed to meet the new challenges of State government. --Plans should be made to prepare and submit to the Gen eral Assembly a State Personnel Management Report which will provide a comprehensive five-year analysis of the proposed personnel needs for review in the annual bud getary process. II. The State's classification system needs restructuring to become better organized, to operate more professionally, to apply uniform classification principles, and to protect employees' rights more effectively. Recommendations include: --Restructuring the system by reducing the nu mber of job classes to about 1,000 and providing more and better defined career ladders. --centralizing of final decision-making and central review authority over classification action within the Department of Personnel. --Reviewing of the multiple range class concept and, if continued, action to insure internal State-wide consistency. --The establishment by the Department of Personnel of organized relationships with universities and colleges to develop rigorous standards for orderly entry into positions in the State service by new graduates, including creation of entrylevel internship programs for young professionals trained in general administrative specialties. -13-

PAGE 51

--centering responsibility on the Department of Personnel for adequately training classificaiion specialists employed in decentralized agencies and used in post-audit decision-making. --Revising and updating the Classification Manual. --Training hearing officers in the basic concepts of classification; and including provision for findings of fact in such cases, and sending cases back to the Personnel Department for specific remedy. --Stating goals for the classification system to attain maximum accuracy, fairness, and consistency throughout the State service. III. The recruitment program remains passive, unimaginative, fragmented, inefficient, slow, and minimally responsive to management's needs. Recommendations include: --Restructuring the recruitment process to eliminate duplication and inefficiency. --Recentralizing recruitment for system-wide classes and utilizing "lead agencies" to recruit for certain classes used by several different agencies. --Establishing criteria for decentralized recruitment with the Department of Personnel carefully monitoring and evaluating performance. --Extending the filing time for middle and higher level classes and also broadly publicizing recruitment for such positions. --Lengthening announcement periods for promotional openings and encouraging competition. -14-

PAGE 52

--Eliminating State residency requirements. --Providing and encouraging lateral entry into middle and higher level classes. --Establishing liaison with State universities and colleges to plan for meeting future projected State personnel requirements in various occupational areas. I V . Employee selection is inefficient, slow, haphazard, unresponsive, and often unsupervised. Excessive use of oral tests is undercutting merit standards. Among the recommendations are that the State should: --Examine by class and restructure the selection process to eliminate the duplication and inefficiency inherent in position-by-position recruiting. --Give system-wide exams in anticipation of vacancies, especially in general administrative specialties. --Shorten the time from announcement to certification. --Establish consistent standards and procedures for decentralized recruitment. --Strengthen Department of Personnel control of the process by establishing selection standards and guidelines and monitoring and post-auditing the personnel selection instruments and procedures. --Increase validation of tests. --centralize testing for classes common to more than one agency in the Department of Personnel, or designate "lead agencies" to serve as the testing centers for such classes under Department of Personnel supervision. -15-

PAGE 53

--Reaffirm the necessity for adherence to merit principles in the selection process. --Strengthen oral board procedures by establishing criteria for membership, documenting job relatedness, ensuring that the board has full access to information submitted by the applicants, and protecting against conflict of interest among board members. --Train departmental personnel analysts in decentralized agencies in selection procedures. V. Performance evaluation in thousands of cases is not conducted annually as required by the personnel rules and regulations. Current evaluations are applied haphazardly and performance evaluation results are often ignored. Recommendations include that the State should: --Install an effective management-by-objectives type appraisal system that provides for evaluation of organizational-as well as individual performance. --Involve top management including the Governor and department heads in periodically reviewing overall agency performance as a backdrop for personnel assessments. --Require annual performance appraisals of all State employees and require that employee ratings be used in assessing supervisors and managers. --Require standard employee performance appraisals as a condition of merit increases. --Explore the full range of monetary and nonmonetary rewards that could be used in motivating State employees before adopting a -16-

PAGE 54

general bonus or incentive awards approach. --Train supervisors and managers ln using the personnel evaluation system. VI. The employee counseling program is only available for a portion of State employees andsupervisorsare not properly trained in utilizing the program. Recommendations include that: --The Governor and the General Assembly should plan to cover all State employees under a broad employee assistance program. --The State should formulate, disseminate, and implement a clear and consistent policy statement on the employee assistance program. --The Department of Personnel should implement a training program through workshops and seminars on the availability and the use of employee assistance. VII. Employee training and development programs are very limited, poorly funded, inconsistent, inadequate, and are given a low priority by State management. Recommendations include that: --The State should create an organized career system as a means of improving career development opportunities. --The Department of Personnel should develop a comprehensive training and career development program for all State employees. The Governor should recommend in his budget adequate funds for career development and the General Assembly give high priority to providing adequate appropriations for this purpose. --The Department of Personnel should establish uniform policy for training and for reimbursement of training expenses. -17-

PAGE 55

--The Department of Personnel should coordinate with State universities and colleges on training activities. --The Department of Personnel should establish on-going management and executive training and development programs for mid-level and top-level State managers and specialists. VIII. Equal employment opportunity and affirmative action programs are weak and are given minimal support and token funding by State management. Recommendations include that: --The Governor should reaffirm government-wide support for these programs. and department heads should be held accountable for equal employment opportunity and affirmative action results through effective monitoring procedures. --Equal employment opportunity and affirmative action programs should be built into in all steps of the personnel system and performance and results should be publicly reported. --The Governor should recommend and the General Assembly should give high priority to additional fundings for these programs. --The Department of Personnel should strengthen outreach recruiting and test validation. --The number of eligibles certified for each job vacancy should be expanded to increase the odds that minorities and women can be selected. --The conflict between the State Personnel Board and the General Assembly over the "3+3" certification procedure should be resolved. -18-

PAGE 56

IX. The State lacks a positive labor and employee relations policy. Recommendations include that: --A labor and employee relations policy should be established by statute. --The General Assembly should enact a statute prohibiting strikes by public employees. --The Department of Personnel should establish and improve dispute settlement machinery for peaceful and timely resolution of impasses by providing for final decision by a neutral party. --Regular reports that address potential employee relations problems and provide timely upward communication of these problems should flow to both the Governor and the General Assembly. Both branches should create machinery that can respond quickly and realistically to employee feelings and legitimate needs. --The number of employee relation cases going for final decision to the courts should be reduced by solving these cases internally wherever possible. --The kinds of cases to be returned to the State Department of Personnel should be identified along with the types of cases in which the Personnel Board's decision should be final. --All employees should be notified about rule proposals and hearings on such proposals should be no sooner than two months after notification. X. The grievance and appeal processes require revamping and better employee-management understanding to resolve complaints as quickly as possible and to reduce the number of cases coming to -19-

PAGE 57

hearing. Recommendations include that: --The Department of Personnel should develop and promulgate procedures instructing all supervisors to inform their staffs about the available grievance and appeal procedures and the governing policies. --The State Personnel Board should be divested of its rulemaking power and be given a strengthened role in serving as the personnel advisory, appeal, adjudicatory, and merit standards enforcement agency, including an effective role in protecting whistleblowers. --A greater proportion of personnel appeals should be resolved within the system without burdening the State courts and running the risks of inconsistent decisions inherent in piecemeal decisions. --The State should process appeals and grievances on a more timely basis. The number of properly trained hearing officers should be increased to accommodate the growing workload. XI. Although the State's compensation plan is working reasonably well, it has a number of areas that need improvement to reduce employee complaints. Among the recommendations are that: --The comparability survey method of setting wages and salaries is sound and equitable; however, the State should expedite arrangements to gather and analyze comparability data so it will be more current--and/or project increases on a trend basis to bring them up to date at the time increases are awarded. --The Director of Personnel should reevaluate the key classes chosen for the salary survey to ensure they meet the -20-

PAGE 58

established statutory criteria. --The composition of the firms used in the annual salary survey should be reviewed to ensure that the distribution of occupations in the survey closely matches the occupational distribution in the State classified service. --The Governor, in consultation with the General Assembly, should set up a joint task force to review the central "POTS" system of appropriating and allocating funds for pay adjustments. The rationales underlying the "80%" solution should be ree xamined. --The Governor and the General Assembly should jointly develop formula pay methods and processes for annually adjusti ng top executive pay. --The Governor should appoint a task force of qualified economists, a ctuaries, and other specialists acquainted with retirement and fringe benefits to review benefits and costs and make recommendations for improved costing methodologies. XII. Employee turnover and separation rates appear to be high, but adequate analysis is impossible because of the lack of recent data. The State does almost no diagnostic analysis of the causes of turnover. Recommendations include that: --The Department of Personnel should take the lead in designing and implementing a data system which produces adequate information regarding separation and turnover rates and the reasons why employees leave. --The Department of Personnel should standardize its definition of separation and turnover rate conditions so they are comparable from year to year. -21-

PAGE 59

--The Department of Personnel should plan and issue regularly scheduled reports on State and turnover by agency and by divisions and classes in each agency. Data on transfers, promotions, and demotions to measure mobility should also be gathered and published. XIII. The Public Employees' Retirement Act (PERA) system has experienced large increases in unfunded liabilities in the six years ending in 1979 and presents important issues relating to its administration. It requires a thorough review of its actuarial and management practices and its structure by an independent team of experts. Among the recommendations are that: --The Governor should appoint a blue ribbon panel to review the financial and actuarial condition of the PERA system. This panel should propose methods and practices which will be more adequate in an inflationary economy involving rapid changes in wages and prices and in the rates of earnings on investments. --The Governor should recommend to the General Assembly the creation of a small, continuing, professionally staffed unit in the Office of State Planning and Budgeting to assemble information about and monitor all authorized retirement and benefit plans, analyze the actuarial and investment condition of such plans, and review their provisions and management performance. --The Governor should direct the blue ribbon panel to review the appropriate division of current contribution rates between employees and employers in PERA. -22-

PAGE 60

--The Governor and the General Assembly should develop an effective process for annually reviewing, controlling, and financing PERA unfunded obligations. --The Governor should recommend to the General Assembly that PERA be specifically placed under the provisions of the State Open Records and Sunshine Law with respect to all meetings, records, and reports which do not involve confidential personal and investment matters. --The Governor and the General Assembly should order an investigation as to why and how incomplete reports on the status of the retirement fund have been issued to PERA members. The composition and role of the PERA board should also be reexamined with a view to bringing the system under adequate State supervision. --The Governor and the General Assembly should arrange for a review of retirement and disability benefit provisions and formulas in the PERA system. --The Governor and the General Assembly should seek a broader public interest view on the possibility and desirability of universal coverage by Social Security for State employees. The above summary gives the highlights of the approximately 118 recommendations made in this study on the Colorado State Personnel system. See Chapters VIII through XX for the complete recommendations. Many of these recommendations can be carried out administratively. Some will require accompanying legislation and/or constitutional revisions. However, real progress in improving the State Personnel System will -23-

PAGE 61

--Eliminating State residency requirements. --Providing and encouraging later.al entry into middle and higher level classes. --Establishing liaison with State universities and colleges to plan for meeting future projected State personnel requirements in various occupational areas. IV. Employee selection is inefficient, slow, haphazard, unresponsive, and often unsupervised. Excessive use of oral tests is undercutting merit standards. Among the recommendations are that the State should: --Examine by class and restructure the selection process to eliminate the duplication and inefficiency inherent in position-by-position recruiting. --Give system-wide exams in anticipation of vacancies, especially in general administrative specialties. --Shorten the time from announcement to certification. --Establish consistent standards and procedures for decentralized recruitment. --Strengthen Department of Personnel control of the process by establishing selection standards and guidelines and monitoring and post-auditing the personnel selection instruments and procedures. --Increase validation of tests. --centralize testing for classes common to more than one agency in the Department of Personnel, or designate "lead agencies" to serve as the testing centers for such classes under Department of Personnel supervision. -15-

PAGE 62

require enactment of added appropriations and more staff. Among the top priority recommendation are the following: --Affirming the primacy of the merit principle and vigorous enforcement of competitive merit procedures. --Enacting added appropriations. --Integrating the personnel system into the overall management system of the executive branch. Strengthening overall executive branch management from the top to provide a management framework and systematic processes in which personnel administration can function effectively. The most important action at the beginning is for the Governor and his staff to prepare a five-year action plan for developing an effective State personnel system. -24-

PAGE 63

CHAPTER II PURPOSE, BACKGROUND, METHODOLOGY, AND SIGNIFICANCE OF COLORADO STATE PERSONNEL SYSTEM STUDY Introduction This chapter outlines the purpose of this study, summarizes merit systems, discusses the background and problems of the Colorado State Personnel System, and identifies areas of concern giving rise to the study . It also discusses the proposed model designed to analyze the effectiveness of public personnel systems which will be used in assessing the Colorado State Personnel System, and for developing recommendations. The methodology and methods of analysis are subsequently presented. Finally discussed is the potential significance of this systems analysis of the Colorado State Personnel System and the general applicability of this project to state and local governments. Project Purpose The aim of this project is twofold: to render a public service and to develop and apply an improved methodology for analyzing public personnel systems. Its primary purpose is to review comprehensively and evaluate the Colorado State Personnel System by utilizing a systems analysis approach. A model for analyzing the effectiveness of public personnel systems is developed for state and local governments and presented in Chapter IV. This proposed model focuses on the relationships between governmental performance and the functions of a personnel system. The analysis demonstrates the importance of human resource management in achieving high governmental performance and identifies personnel -25-

PAGE 64

management as one of the key elements in reaching governmental goals and objectives. The linkagesbetween overall State management and the operations of the Colorado State Personnel System are analyzed by applying the model in the latter part of the study. Based on this analysis, recommended changes and reforms are suggested. Implementation of these recommendations can result in developing a more advanced, effective, and mana gerially responsive personnel system for the State of Colorado adhering to merit principles of public human resource management. Finally, it is anticipated that other state and local governments can benefit from revising their personnel systems in accordance with the principles of modern human resource management developed in this model. The mode l can be used as a tool for analyzing and evaluating the effectiveness of public personnel systems indicating where improvements can be made to assist management in achieving overall organizational goals and objectives. The Development of Merit Systems in the United States The concept of merit employment is the fundamental principle of all civil service personnel systems in our country at federal, state, and local levels. However, civil service employment and the central concept of "merit" has widely varied throughout U.S. history. For instance, during the first 40 years no federal legislation dealing with appointments, examinations, promotions, dismissals or other aspects of personnel administration existed. Personnel legislation was limited to establishing pay rates for clerks and officers.1 Appointments to 1Leonard D. White, "Centennial Anniversary," Public Personnel Review, 14 (January, 1953), p. 6. -26-

PAGE 65

governmental positions were often based on political patronage and party loyalty instead of being based on job qualifications and skill. As political parties grew, the spoils system gained ascendancy over ability-based appointments. Despite the rising tide of the spoils system, there constantly remained a stratum of the civil service which helped to maintain continuity and competence in administrators. Comptrollers, auditors, and chief clerks of the department service in Washington frequently kept their positions through several administrations as did a portion of minor clerks, scientific and technical personnel, and the officer corps of the army and navy. In a sense, the federal service was manned and managed through two personnel systems; though during the 1800s, the system governed by the principle of spoils was by far the most dominant.2 Negatively, the spoils system resulted in periodic chaos from the changing of personnel during different administrations; the popular association of public administration with politics and incompetence; growing conflicts between the executive and legislative branch over appointments; unbelievable demands upon presidents and elected officials at all levels of government; and the development of political machines in states, counties, and cities.3 On the positive side, this turnover served as a safeguard against an elitist government and the rise of a monarchy, provided for upward mobility for people from the lower classes, and provided a much needed channel for recruitment of personnel for the rapidly expanding national government. Political patronage also -27-

PAGE 66

made the bureaucracy responsive to political leadership. Reform of the spoils system was piecemeal at all levels of government. Pressure for personnel reform became intensified when in 1880 President Garfield was elected on a platform that called for drastic civil service reform. It was the 1881 assassination of President Garfield by a disappointed officer seeker that contributed to the climate for instituting a complete and radical civil service reform. Success came to the reform movement on January 16, 1883, when President Arthur signed into law, "A Bill to Regulate and Improve the Civil Service of the United States," better known as the Pendleton Act. This statute created a U.S. Civil Service Commission, established competitive examination requirements, insured security from dismissal for political reasons, and provided employee protection from being coerced into political activities. State and local governments followed the federal government's lead in civil service reform during the 1900s. Since 1883, our country has made and continues to make a strong commitment towards operating merit-oriented civil service systems for public sector employees. Today at the federal level more than 90% of all federal jobs are covered under merit systems.4 Considerable variation in merit coverage exists at state and local levels. A recent survey of large cities and counties found that competitive examinations for entry-level positions were used in 79% of the cities whereas only 35% of the counties use such examinations.5 Thus many personnel systems 4Robert D. Lee, Jr., Public Personnel Systems, (Baltimore , Maryland: Park Press, 1979), p. 19. )Civil Service Commission, Presentation of Public Personnel Systems in 172 Larger Cities and Counties (Washington: Government Printing Office, 1976), p. 2. -28-

PAGE 67

are still heavily influenced by the spoils system. Modern personnel systems strive to. insure the integrity of the public service by it from the effects and abuses of the spoils system, but this sometimes occurs at the expense of meeting the needs of management. Some merit systems embody such complicated rules and detailed regulations that the result is counterproductive. One writer suggests that, "The result of the reforms of the last century was not the replacement of patronage with a system that generated faith, trust and competence but rather the emergence of a set of barriers that was negative and control oriented and frustrated elected officials, administrative managers and public employees alike."6 In the last 15 years, new pressures and issues facing our entire society have had a significant impact on public personnel systems. Among the issues in the forefront of public personnel management are: collective bargaining, minority group representation, public employment of the disadvantaged, expanded need for top-level managers, human resource development, demands for increased productivity, and for improvement in the effectiveness and efficiency of the public sector. Additionally, there are mounting pressures to limit government expenditures, particularly for public personnel. Federal civil service reform was made a major issue in the 1976 Presidential election. On October 13, 1978, President Carter signed the Civil Service Reform Act which was designed to improve government efficiency and balance management authority with employee protections. 6nennis L. Dresang, "Personnel Reformation in American States," presented to Symposium on Administrative Reform at the University of Nebraska (April 1978), p. 13. -29-

PAGE 68

As President Carter said, "The most effective and fundamental improvement that we can make is to reform the civil service system, to make it truly a merit system that rewards achievement and responds to h d n7 uman nee s. Although many of the legal changes sought by President Carter may enable agencies to operate better, critics fear that there are defects in the Civil Service Reform Act which may threaten merit principles. One major weakness relates to the President's Senior Executive Service (SES) which grants authority for presidential appointees to demote or reassig n career executives and replace employees with political or other career appointees. There is concern that this discretionary power will lead to political and personal favoritism in the civil service system. One critic points out that instead of building a single talent pool of careerists for top managment posts, the SES is on its way to creating two, one Democratic and one Republican.8 Another major criticism of the Act pertains to decentralization of the examining process. Each agency would have the authority to examine and test applicants for jobs in that agency. Delegating the examinating function to agencies, except in selected situations, may violate the principle that all job applicants be examined fairly and properly.9 7"Introducing the Civil Service Reform Act," prepared by the U.S. Civil Service Commission (Washington, D.C.: CSC Document 124-43-5, November 1978), p. 1. 8James L. Sundquist, "Civil Service Reform: Pitfalls and Opportunities," Good Government, Vol. 95, No. 2 (1979), p. 4. 9Bernard Rosen, " Merit and the President's Plan for Changing the Civil Service System," Public Administration Review, No. 4 (July/August 1978), pp. 302-303. -30-

PAGE 69

Background of Colorado State Personnel System The national civil service reform movement came after the Colorado State Constitution was enacted in 1876. There was growing interest and debate over personnel policies and procedures for Colorado State employees. The Denver Civil Service Reform Association was organized in 1899 as the principal citizen group involved in designing a State civil service law for non-elected State employees. Throughout the late 1800s and early 1900s, the Association lobbied for the passage of such a law. However , it was not until 1907 that such a law was passed, creating a State Civil Service Commission and a merit-based State personnel hiring s ystem. With its rule-making authority, the State Civil Service Commission developed personnel principles such as the rule-of-one hiring method, open competitive tests, and political non-discrimination provisions. During these early years, public debate centered on assuring that adequate appropriations should be provided by the Legislature for administering personnel provisions. Before 1912, legislatures were occasionally hostile to the merit system and refused appropriations to support the Commission.10 However, in 1918, a voter initiated amendment to the Colorado Constitution was adopted to assure adequate appropriations for the Civil Service Commission to carry out its duties. This amendment mandated that adequate funds be provided by the General Assembly for payment of salaries and expenses of State employees. 10 The People v. Bradley 66 Colo. 186, 179 Pac. 871, 1919. -31-

PAGE 70

1918-1949. The first Colorado Constitutional amendment regarding State Civil Service policies was passed in 1918. This amendment became the backbone of the State personnel system. It outlined qualifications for civil service appointment by delineating which offices were covered under the classified service, and provided for the removal of officers and employees in that service. From the 1920s to the mid-1950s, the Legislature was concerned with assuring State residents that civil service appointments were merit-based and free from political manipulation but with preferential treatment for veterans. During the 1920s and 1930s, the Legislature enacted numerous personnel statutory provisions and annual salary adjustments for state employees. To insure against political patronage, department heads were protected under Colorado Civil Service laws. As time progressed, these department heads became extremely powerful and immune from either executive or legislative control. In 1939,Colorado was the only state in which department heads were included in a civil service system.11 In 1944, Article 12, Section 15, of the Colorado State Constitution was amended by a voter initiated ballot proposal to provide veterans with preferential treatment. This amendment entitled veterans to bonus points on competitive examinations in the State personnel system. Five points are added to a passing score for a veteran who served on active duty during wartime, as defined in this amendment , under honorable conditions. Ten points are added to a veteran with compensable disability incurred in the line of duty during wartime. The 11colorado Legislative Council, Reorganizing the Executive Branch, R.P. 131 (1939), P• vii. -32-

PAGE 71

same bonus points are available to a veteran's widow . 1950-1965. Few changes occurred over a 15-year period (1950-1965) to alter the insulated personnel protections for department heads under the Colorado State Civil Service system. Ballot proposals aimed at exempting various department heads from civil service to appointment by the Governor with Senate confirmation were defeated in 1956, 1958, and 1960. Thus, while Colorado was one of the first states to establish a merit-based civil service law, it for many years the only state refusing to grant the Governor direct control in selecting department heads. 1965-1969. By 1966, the number of independent and semiindependent agencies in Colorado's executive branch had increased to 130. It was during this year that the Constitution was amended to require all executive and administrative officers, excluding the office of governor and lieutenant governor, be reorganized into not more than 20 departments by June 30, 1968. This amendment led to the enactment of the Administrative Reorganization Act of 1968 which regrouped State agencies into 17 departments. The State Civil Service Commission was transferred under the new Department of Administration. In this statutory reorganization, the Legislature endeavored to exclude four executive directors from civil service: those from the Departments of Administration, Revenue, Institutions, and Local Affairs. The Coordinator of State Planning and the Coordinator of Highway Safety were also exempted. In late 1968, the Civil Service Employees' Association challenged the constitutionality of certain provisions of the Administrative Reorganization Act on the ground that it contravened the civil service -33-

PAGE 72

amendment in the Colorado Constitution, Article 12, Se ction 13. The amendment provided that all classified civil service in the State shall comprise all appointive public officers and employees except for the Governor's private secretary and three confidential employees of his office. This section was declared self-executing. In Civil Service Employees' Association v. Love, the Colorado Supreme Court ruled that the appointive offices exempted from the classified service must be chosen from an approved civil service list.12 The Governor appointed a Committee on Efficiency and Economy in 1968 to study possible reorganization and make an evaluation of the executive branch. The Committee reported that the State Civil Service Commission could not efficiently perform its personnel functions of recruitment, examination, and selection while being weighted down with "watch dog" personnel policy c ontrols. This committee also recommended that some personnel functions be decentralized to improve the efficiency of personnel operations. 1970-1980. As a result, two personnel-related Constitutional amendments were adopted in 1970 to improve the State civil service system. One amendment exempted the heads of principal departments in the executive branch from the civil service requirements of the State Constitution. The other amendment established the Department of Personnel responsible for the administration of the civil service sys tern. These amendments abolished the State Civil Service Commission and established a five-member State Personnel Board to promulgate rules, 12civil Service Employees' Association v. Love , 167 Colo. 436 , 448 P 2nd. 624 (1968). -34-

PAGE 73

implement legal provisons and act as an appeals body. A State Department of Personnel was created, headed by a Director appointed by the Governor to administer the personnel system. The 1970 amendments also reinforced the merit principles of competitive examination in the selection process without regard for race, creed, color, or political affiliation. Responsibility for employee disciplinary action was still vested in each operating department with the Commission hearing appeals. This amendment additionally extended veterans' preference provisions to include veterans of the Korean and Vietnamese wars, provided new retention rights for veterans in the event a reduction in the work force becomes necessary, and limited bonus points to be added only to passing grades on entrance examinations. Overall, the personnel system can be characterized as one which still protected employees from gubernatorial political control. Thus, these amendments continued to insulate appointments and promotions from political control by authorizing division heads as appointing authorities for all positions in their respective divisions. In 1972, the State Constitution was amended to bring approximately 6,000 employees at State universities and colleges under the State personnel system by January 1973. However , due to legal and administrative delays, this was not accomplished until 1977. The most recent Constitutional amendment proposed and defeated in 1976 would have exempted 110 division heads from the State personnel system. Today, the Colorado State Personnel System could be characterized as a system comprised of merit and political-based controls with some administrative flexibility and consolidated legislative influence. -35-

PAGE 74

Problems in the Colorado State Personnel System Throughout the history of the Colorado State Personnel System there has been considerable debate over how to structure a personnel system free from being vulnerable to political spoils and yet flexible for executive managerial leadership. Recent studies and evaluations of the Colorado State Personnel System discussed in Chapter V indicate that this kind of balance has not yet been achieved. Extensive review, criticisms, and employee dissatisfaction with the present State personnel system by citizens, legislators, administrators, and employees suggest that problems exist in the following twelve areas: 13 1. Lack of support for and strict funding limitations on the State personnel system by the General Assembly. 2 . Absence o f human resource planning in the system. 3. Widespread disregard of merit principles in recruiting, testing, selection, and promotion. 4. Ineffective affirmative action programs. 5. Inadequate salary and fringe benefits, especially for top executives. 6. Low employee motivation and absence of rewards and incentives for effective performance. 7. Disregard of the employee performance evaluation process. 8. Slow and ineffective grievance and appeal systems. 9. Lack of promotional and transfer opportunities across agency lines. 13These criticisms have been made by respondents of the 1978 Common Cause Questionnaire, Executive Directors of CAPE and AFSCME, Colorado State Department and Division Reads in a 1976 survey by graduate student Paul Reardon and other interviews conducted during 1978-1980. Also see Sidney B. Brooks, "State Personnel Reform Needed," Denver Post (July 2, 1979), and Todd Engdahl, "JBC Raps Hiring Policies," Post (July 7, 1979). -36-

PAGE 75

10. Inadequate training and developmental opportunities and programs due to funding limitations. 11. Lack of effective and timely personnel assistance to state agencies by central personnel department. 12. Lack of cohesive human resource management system which is an integral part of overall State executive management. Each area of concern is discussed below. Other significant problems and deficiencies within the system will be addressed in the following chapters of this study. 1. Legislative Support and Funding. Staff employees, supervisors, and managers have expressed concern that the Legislature does not understand the problems facing the Colorado State Personnel System. Instead, the Legislature makes it impossible to establish and manage an effective personnel system by continually cutting its budget. Overall, employees feel that the Legislature is insensitive to managing the state's human resources. The 7% state budget increase restriction has placed an artificial barrier and burden on state employees who must live with the recent double-digit inflationary rate which has been as high as 20%. Employees are dissatisfied with the failure to fund the cash bonus system which rewards outstanding performance and provides incentives for self-development. Most employees feel that the training programs, suggestion system, and even some fringe benefits are underfunded. The tuition refund program is no longer funded. This situation is seriously complicated by the underfunding of resources necessary to staff the central personnel department. Example: In 1973, approximately 21,000 employees were under the classified civil service system. The Department of Personnel was alloted 110 full-time equivalent (FTE) positions to perform all -37-

PAGE 76

personnel functions. Four years later, although 6 , 000 additional FTEs were added from colleges and universities, the number of FTEs in the Personnel Department was cut to 77. In comparison, the City and County of Denver Personnel Department is alloted approximately 80 FTEs for 7,000 classified positions. 2. Human Resource Planning. Many managers and supervisors have complained that the State performs little, if any, human resource planning. Agencies are not contacted to help forecast areas of turnover and labor needs. As a result it takes an excessive amount of time to fill vacancies from State eligibility lists which are seldom kept current. Example: The Training Officer from the Highway Department stated that in 1976 approximately 500 workers had to be hired on a temporary basis due to a lack of labor forecasting. An officer from the Department of Institutions stated that the Department of Personnel conducts little human resource planning for its agencies which is urgently needed in order to fill vacancies. 3. Recruitment, Testing and Selection. The State's recruitment, testing, and selection procedures as presently organized fall short of obtaining the best possible personnel for vacant positions. Neither the decentralized system nor the centralized system is working effectively and efficiently. Supervisors and managers state that it takes an average of three to four months to fill vacant positions. Eligible lists are seldom current if any applicants are available for certification. The Department of Personnel states that it needs more resources to recruit and conduct examinations. On the other hand, others have suggested that rigorous testing requirements be relaxed and -38-

PAGE 77

decentralized to state agencies to overcome this problem. Example: An officer in the Governor's Office said that it takes their agency at least 90 days to fill its vacant positions, which is not cost effective considering the overtime pay usually involved. 4 . Affirmative Action Programs. The State has established several affirmative action programs to insure equal employment opportunity. These programs, however, lack the necessary funding and staff to successfully recruit more women, minorities, handicapped, and disadvantaged applicants as well as to validate examinations. Example: There were only two full-time employees in 1980 assigned to affirmative action activities for 27,000 state employees. Therefore the department does not have enough time or staff to meet the equal employment opportunity goals of the State. Furthermore, there are only three personnel responsible for validating all examinations given, thus limiting the number of tests that can be developed and used. 5. Salary and Fringe Benefits. The State Personnel Director has suggested that the State should re-evaluate its criteria for setting salaries and, perhaps, offer pay ranges comparable to the upper 50% of the community in order to retain competent employees. State employees have complained that their salaries are no longer competitive with other levels of governments or organizations due to the seven percent ceiling increase. Additionally, employees have asked for improved health benefits comparable to the community level, funding for the tuition refund program (last funding level in fiscal year 1976 was $20,000 with a maximum reimbursement per employee of $100 at a state institution of higher education), and increased benefits for retirees that parallel the current rate of inflation. -39-

PAGE 78

Example: Department heads and division heads felt that the $38,000 maximum salary level which was in effect until July 1980 discouraged many top-level executives from entering state service when their opportunities to earn more money are much greater outside the system. Furthermore, they claim that this ceiling has caused many trained and valuable employees to leave the state system. 6. Rewards and Incentives. A Colorado Senator has recently stated that in order to increase productivity, the State must provide a financial incentive system that contains appropriated monies to reward merit performance. The State Personnel Director in 1978 suggested that sufficient funding be appropriated to reward outstanding performance. Such a program, although authorized by enabling legislation, was funded for only one year with meager monies. He also suggested the creation of a career or senior executive service to offer recognition and financial incentives to highly productive managers. Example: C.R.S., 1973, Section 24-50-104 establishes a cash bonus system for outstanding performance. However, it has not been funded since 1975. C.R.S., 1973, Section 24-50-119 established incentive and recognition programs for employees, but has not been funded since 1977. 7. Employee Performance Evaluations. The State has been criticized for not providing an adequate measure of performance through its performance evaluation system, which can be the key to increased motivation and productivity. Many have complained that they seldom receive an evaluation, which is required by the State on an annual basis. Example: The Executive Director of the Colorado Association of Public Employees has stated that there are over 8,000 state employees -40-

PAGE 79

that are not being evaluated on an annual basis. The 1973 C.R.S. provides for annual performance evaluations, but management has failed to enforce it. 14 This problem frequently occurs in the State's educational institutions. 8. Grievance and Appeal System. Staff employees, supervisors, and managers have stated that the grievance and appeal system is cumbersome, complex, slow to execute, and backlogged. In view of these problems supervisors complain that the system is ineffective for taking disciplinary action. Additionally, they claim that it is heavily weighted in favor of the employee. Employees contend that management does not use the system properly, does not document information nor provides adequate training for supervisors in employee relations. Example: Since 1976 only two hearing officers were responsible for resolving employment disputes; one was in a full-time position. There is usually a two to three-month waiting period for a formal hearing. The number of hearings that have been scheduled and not heard by the end of the fiscal year continue to increase. Approximately 23% of the hearings scheduled for disposition in the fiscal year 1978 were not heard. It is estimated that at the end of fiscal year 1979 the number of cases waiting to be heard would increase to 44%. 15 9 . Advancement and Mobility Opportunities. State employees have complained that lateral interagency transfers are seldom encouraged and are indeed discouraged by some agencies. Promotions are most often made from employees within the agency prior to adequate notification and 14 C . R . S., 1973, Section 24-50-116. 15Interview with Executive Secretary, State Personnel Board (August, 1980). -41-

PAGE 80

consideration of other qualified candidates. More importantly, employees have stated that there are too few career ladders in the State classification system to encourage career employees to continue working in State Government. There is considerable debate over the desirability of lateral interagency transfers among agencies. Although employees may be frustrated by the lack of transfer opportunities, management frequently finds this type of movement undesirable in view of the time spent in training and employee development. On the other hand, there is little argument against the advantages of increasing the number of career ladders within the state system. Example: A 1978 Mobility Study on State employees indicated that organizational mobility (mobility between departments) occurred infrequently with 96.8% remaining within the same job classification and agency. Occupation mobility (mobility between job classifications) also occurred infrequently with 95.5% of those sampled remaining within the same job classification. These figures, admittedly on a sample basis, indicate little movement from classification to classification and from agency to agency. 10 . Training and Development. State employees at all levels have criticized the quality and quantity of the State's training and development programs. One common complaint is that supervisors and managers lack sufficient training to be effective in their _jobs. Furthermore, no current personnel data bank exists which could be instrumental in assessing skills, knowledge, and abilities required for promotional opportunities into the managerial ranks. -42-

PAGE 81

Example: The 1973 C.R.s.16 provides for the establishment of training programs related to job duties management and supervisory training. However, the Department of Personnel's 1978 budget alloted $2.66 per employee for training, which is obviously an inadequate amount to accomplish the goals of the State's training program. According to the multi-government training data summary for fiscal year 1978, an average of $535 was spent per individual trained17 as compared to the State's own expenditure for the State Department of Personnel and agencies which averaged in 1978 $34 per employee. A recent survey of more than 1,000 public and private employers found that the median cost per employee trained to be $75 to $100.18 11 . Central Personnel Department Assistance. The State Department of Personnel has been criticized by agencies for not providing enough services and guidance. Interviews with personnel directors from most state agencies yield sharp criticism of the personnel department. Instead of performing the function of a service agency, the personnel department seemed to function more as a regulatory agency, always ready to condemn. Those interviewed consider that at the heart of the problem is the "watch dog" orientation of the department with very little support or constructive assistance being provided. Example: Several personnel directors from state agencies contend that central personnel does not understand the unique problems of 16 C.R.S., 1973, Section 24-50-122. 17"Analysis of Baseline Data Survey on Personnel Practices for States, Counties and Cities," Office of Personnel Management and Council of 18state Governments (Summer 1979), p. 3. "How Do You Compare to These Survey Results," Training Today (June 1980), p. 23. -43-

PAGE 82

various agencies. Instead, central personnel is viewed as being a selfserving agency. Attitudes Revealed Cause Survey The results of the Common Cause questionnaire distributed during October 1978 through March 1979 to approximately 2,600 State employees summarizes the current feelings of state employees toward their jobs. This survey showed that nearly 80% of employees were satisfied with their current jobs, 20% were dissatisfied, and 7% had no opinion. More than 50% of the respondents were satisfied with the State Personnel System. Approximately 38% were dissatisfied. A 1973 national Gallup Poll concerning employee satisfaction showed that 77% were satisfied, 11% were dissatisfied, and 12% had no opinion. Thus, a higher number of Colorado State employees are dissatisfied than the national average. Among those dissatisfied, the highest ranking reasons were: (1) inadequate opportunity for growth, (2) incompatible associates, and (3) unsatisfactory wages and benefits. The top three suggestions for improvement were: (1) more opportunity for promotion, (2) better leadership from supervisors, and (3) higher pay for above-average work. Analytical Model for Public Personnel Systems In addition to evaluating the Colorado State Personnel System, this project presents in Chapter IV an analytical model for assessing the effectiveness of public personnel systems. The model demonstrates the importance of human resource management in achieving high governmental performance and identifies personnel management as one of the key elements in reaching organizational goals and objectives. By illuminating the cross-relationships among various personnel activities and a series of criteria for good governmental performance, -44-

PAGE 83

this analytical model casts a new light on the scope, role, appropriate level, and interrelationships of personnel functions, and overall governmental management. Lastly, the model illustrates how personnel management is an integral tool in achieving good government. It provides a systems approach to human resource management as related to overall governmental management and performance. The model for analyzing the effectiveness of public personnel systems allows for variations so it can be adapted to any state or local governmental personnel system. These governments can thereby reshape this model to their own specific needs without destroying the spirit of the model. Methodology and Methods This project is sponsored by the Colorado Chapter of the American Society for Public Administration (ASPA) with support from the University of Colorado Graduate School of Public Affairs (Boulder and Denver Campuses), Denver University College of Business and Public Management , and outside professional administrators. This public service study has been supported by Governor Richard E. Lamm and Rudy Livingston, former Executive Director of the Colorado Department of Personnel. The study was guided throughout by a Steering Committee chaired by Maxine Kurtz, ASPA National Council member and the Personnel Research Officer of the Denver Career Service Authority. The study was also supervised by a dissertation committee chaired by Michael S. March, past President of Colorado Chapter of ASPA and Professor of Public Affairs at the University of Colorado. Both committees consist of members representing the earlier mentioned universities, public sector, and private sector organizations. -45-

PAGE 84

A modest Intergovernmental Personnel Act of approximately $7,500 from the Denver Region of the U.S. Civil Service Commission ( converted in 1978 to the Office of Personnel Management) made the project possible by covering duplicating and typing costs and some intern support. The grant was matched several times over by thousands of hours of donated professional research services by some 80 graduate students, headed by the doctoral student who wrote this detailed report, and by faculty and private citizens who worked on the project. The following research resources were utilized to conduct and finalize this project. 1. Approximately 65 graduate student term papers by some 80 students were presented from 1976 to 1980 covering statutory, operational, and policy aspects of the State Personnel system. These students were supervised by Assistant Professor Lou Fair, Associate Professor Adjunct F. Arnold McDermott, Professor Michael March from the University of Colorado, and Professor Gordon VonStroh and Associate Professor Lon Mackelprang from Denver University. Professor March served as the Principal Investigator on the Project. 2. Colorado Common Cause, a public interest lobbying group, prepared a questionnaire and surveyed 2,600 state employees concerning their attitudes and feelings about state service. Approximately 1,200 questionnaires were returned. The results were tabulated and analyzed both by graduate students and by Common Cause. 3. Several graduate interns were hired for short periods to do additional research and check facts regarding the Colorado -46-

PAGE 85

State Personnel System. 4. Courtney Price, a doctoral candidate from the Graduate School of Public Affairs, is chief analyst on the project and wrote this report under the direction of the interlocking dissertation and steering committees. While useful factfinding and draft materials prepared by other students, interns, and senior professionals participating in the project were available to her, she did much additional research and analysis and rewrote the available information into a synthesized, cohesive overall report. Methods of Analysis First, a historical background and analysis is presented which traces the evolution of the Colorado State Personnel system. The constitutional requirements, statutes, and appropriations that affect the Colorado State Personnel system are included in this historical background. Next the goals and objectives of the personnel system are presented followed by a description of the current organizational structure and some statistical analysis of this system. The next section offers a diagnosis of key Colorado State Personnel managemen t problems. This section centers on major cross-cutting and policy issues which have sweeping implications for revision of the system. The methods of analysis include: 1. Gathering of descriptive information on the organization functions, goals, and objectives of the Colorado State Personnel System, including legal and regulatory factors. 2. Appropriate statistical analysis of: (a) Colorado Common Cause questionnaire survey data; and (b) operating statistics -47-

PAGE 86

fro m the Department of Personnel and State agencies. 3. Organizational analysis of the personnel system along with its comparison to model public personnel systems and practices in other governments as obtained from published sources. 4. Process analysis of all major personnel activities in the personnel system. As noted earlier, an analytical model public personnel system was developed. The Colorado State Personnel system was compared with this model. This evaluation included a comprehensive systems analysis of the Colorado State Personnel System, focusing on an in-depth study of specific issues affecting the personnel system. This systems analysis leads to a series of recommendations for reform which can result in an improved and updated public personnel system for the State of Colorado. Potential Significance Colorado State Personnel System. This study can result in improvements in the present Colorado State Personnel system. Both management and staff can benefit from an assessment of the status and problems in the personnel system. Confidence can be established by highlighting those features of the existing system which are working well and by proposing improvements in those parts which need change. The goal of this study is to suggest desirable concepts for improving personnel administration and management in State government. The study also proposes about 118 specific improvements to strengthen the merit system and to increase the efficiency and effectiveness of State personnel management. Sets of principles are presented for each specific personnel function. -48-

PAGE 87

This analysis and evaluation, including recommendations, may be valuable to top policymakers of the executive branch and committees of the General Assembly. In addition, it can be helpful to State employees, employee organizations, and members of the general public who are interested in the performance of the State government. State and Local Governments. This project proposes an analytical model for assessing public personnel systems that many state and local governments can use to analyze and modify their present personnel systems. It is believed that this is the first time that a comprehensive systems analysis methodology for public personnel systems has been developed which addresses the needs of management and yet guarantees employees merit protection. Therefore, its utilization in other jurisidictions can aid them in improving public personnel systems to be more responsive and balanced to the needs of both management and employees. This can in turn improve governmental effectiveness and enhance the image of public sector employment both with employees and the general public. -49-

PAGE 88

Introduction CHAPTER III THE EVOLVING ROLE OF PUBLIC PERSONNEL SYSTEMS IN GOVERNMENT MANAGEMENT This chapter discusses the development and role of public personnel systems which interact with and have an impact on governmental management. The tremendous growth of government and the rapid expansion of the services it provides are discussed. The search for improved governmental management through various budgeting and personnel management concepts is traced. Seven encompassing pressures that impact governmental organizations as well as government's continual search for improving management in the public sector are analyzed. Finally, the history and development of public personnel systems in the United States and current personnel trends found in the literature are presented. Governmental Growth Government in the United States has played and will continue to play a pervasive role in our society. Tremendous growth has been experienced on federal, state, and local levels. For example, in 1929 total U.S. governmental expenditures in the U.S. amounted to $10.3 billion, of which federal government spending accounted for $2.6 billion. The total outlay at the federal level was 10% of the gross national product that year. In 1975, governmental expenditures rose to $530.8 billion, of which federal government spending accounted for $357.8 billion. Public expenditures that year had grown 31.7% of the -50-

PAGE 89

Table 3-1 GOVERNMENTAL tXPENDITURES AND GROSS NATIONAL PRODUCT FISCAl YEAR 1929 1975 _ (Amounts in Billions) CATEGORY 1929 1950 1960 Federal Government ............ $ 2.6 $ 40.8 $ 93.1 State and Local Govern-ment ........................ 7.6 20.2 43.3 TOTAL Government Expenditures . 10.3 61.0 136.4 Gross National Product ••....•• 103.1 286.2 506.0 1975 $ 357.8 173.0 530.8 1,516.3 Source: Tax Foundation, Inc •• Facts and Fi ures on Government Finance, (New York: Tax Foundation. Inc .• 1977. -Table 3 -2 GOVERNMENT EXPENDITURES AS A PERCENTAGE OF GROSS NATIONAL PRODUCt fiSCAL YEAR 19-29 1-975 Level of Government 1929 1950 1960 1975 Federal Government ...... 2.5 14.3 18.4 20.8 State and Local Government ............ 7.4 7.1 8.6 11.0 TOTAl ................... 10.0 21.3 27.0 31.7 Source: Tax Foundation Inc .• Facts and Fi ures on Government Finance (New York: Tax Foundation, Inc •• 1977 -51-

PAGE 90

Table 3 -3 GOVERNMENT AND PRIVATE EMPLOYMENT IN THE UNITED STATES FISCAL YEAR 1957 AND 1977 (MILLIONS) 1957 Federal Government ............... 2.2 State and Local Government ..................... 5.4 Private Sector ................... 45.3 Total Nonagricultural Employment ..................... 52.9 1977 2.7 12.5 66.9 82. l Percent Increase 22.7 131.5 47.7 55.2 Source: Economic Report of the President (Washington, D.C.: U. S. Government Printing Office, January 1978). Note: Data are for 1-1age and salary workers in nonagricultural establishments and excludes military personnel. -52-

PAGE 91

Emplo ye e s 20 (mi 11 ions) 18 16 14 12 10 8 6 4 --2 0 Chart 3 -A GOVERNMENT/EMPLOYMENT G R O WTH / / / State and locala F e dera 1 / 1950 1955 1960 1965 1970 1975 1980* 1985 * Source: U. S. Depart ment of Labor , Bure a u o f Labor Statistics, Government Occupations, Bulletin 1955-42 (Washington, D.C.: U. S. G overnment P rinting Office , 1978), p . 2 . alncludes public education *Pr ojected employment growth -53 -

PAGE 92

gross national product.1 State and local governments experienced similar growth. In 1929, when total government expenditures were $10.3 billion, state and local government spending accounted for $7.6 billion or 7.4% of the gross national product. In 1975, governmental expenditures were $530.8 billion, and state and local government spending grew to $173 billion, or 11.4% of the gross national product for that year. Tables 3-1 and 3-2 further illustrate this great growth pattern. Growth of Governmental Work Force The labor force continued to grow rapidly at all levels of government. In 1977, state and local government employed 12.5 million people, 4.5 times the 2.7 million federal civilian employees. (See Table 3-3 and Chart 3-A.) In comparing state and local employment growth to the federal level, federal civilian employment has increased 23% in the past 20 years, whereas state and local employment has soared 132% and as of 1978 accounted for one out of seven workers in nonagricultural establishments. Growth of Governmental Services Demands for governmental services and assistance programs have increased at a rapid rate. In order to meet these demands, the federal government has increased the composition and scope of its programs to include assuring national security, developing and conserving economic resources, regulating large-scale monopolistic industries, protecting the environment, expanding and developing energy sources, and providing health care benefits. Its cash benefits program, such as Social 1Tax Foundation, Inc., Facts and Figures on Government Finance, (New York: Tax Foundation, Inc., 1977), p. 33. -54-

PAGE 93

Security, have become the bulwark of economic security for most Americans. Government services provided by state and local governments have also expanded in areas such as educational opportunities, law enforcement, public works, welfare assistance, social services, population planning and control services, health care, transportation, community development, and environmental improvement projects. All of these services have been directly transformed by population growth, urbanization, technology, and automation.2 This tremendous growth has contributed to all levels of government becoming increasingly involved in economic and social welfare. Government has assumed more responsibilities and functions, created planning mechanisms, and become more specialized and professionalized. Decision-making powers have become redistributed among all levels of government. The federal government has assumed major responsibilities for promoting economic growth and stabilizing economic cycles. Expansion of Government's Role Government has become more comprehensive than any other organization or force i n our society. Cons equently, the public sector has become the largest set of institutions in our nation, distinguishable from other organizations. In broad terms, the governmental function and attitude have at least three complementary aspects that go to differentiate government from all other institutions and activities: breadth of scope, impact and consideration; public accountability; political character •••• N o other enterprise has such equal appeal or concern .for everyone, is so equally dependent on everyone, or deals so 2stephen B. Sweeney and James C. Charlesworth, eds., Achieving Excellence in Public Service, (Lancaster, Pennsylvania: The . American Academy of Political and Social Sciences, 1963), pp. 1-23. -55-

PAGE 94

vitally with those psychological intan3ibles which reflect popular economic needs and social aspirations. Therefore, government differs from all other types of institutions by virtue of its public nature, degree of public scrutiny, and public criticisms. Although other organizations have some political influence, government is unique since professional management and politics must be blended to assure that public needs are met effectively and efficiently. As Woodrow Wilson stated:4 First, let's determine what government can properly and successfully do, then let's see how it can do these proper things with the utmost possible efficiency and at the least possible cost either of money or of energy. Major Approaches to Better Management in Government Two institutional processes that are considered crucial to improving government administration are: 1) Improved budgeting for better resource allocation and utilization; and 2) Improved personnel administration for more effective management and better utilization of human resources. Since the turn of the century, major efforts to improve government have centered on these processes. All levels of government have recognized the need for comprehensive budgetary cost control but have been slow to recognize the need to manage and develop the organization's human resources effectively. The search for better management in government continues through the following approaches. 3Paul Appleby, "Government is Different," in Jay M . Shafritz and Albert C. Hyde, eds., Classics of Public Administration (Oak Park, 4Illinois: Moore Publishing Company, Inc., 1978), p . 105. Woodrow Wilson, "The Study of Administration," Ibid., p . 14. -56-

PAGE 95

Budgetary Approach As our country continued to grow, expenditures for public programs expanded to almost one-third of the gross national product. Thus, governmental budgeting became a key function and was considered to be an instrument for the rational control and use of public resources. Through budgeting, government's performance could be planned, coordinated, and controlled. Budgeting was considered the key to successful cost control and economically sound management, and program effectiveness. Associated with the theory that budgetary control could lead to good management was the concept that proper management of human resources could lead to effective and efficient government. If the cost of government is to be restrained without sacrificing essential public services and if performance is to be enhanced, then it is necessary that government take the initiative to improve management of the public work force. 5 Human Resource Management Approach Effective use of human resources is a major factor of improved productivity in government. Not only is it important to control costs through the budgetary process, it is equally important to manage employees and develop human resources through effective personnel management. Productivity of the public work force is directly affected by personnel and financial management . "Budget and fiscal administration cannot be readily separated from the broader question of the relationship which exists between service output and resource 5committee for Economic Development, Improving Management of .the Public Work Force (New York: Georgian Press, Inc., 1978), pp. 11-12. -57-

PAGE 96

i .. 6 nput. Productivity gains in government will depend on better utilization of public employees' talents ; attracting highly qualified applicants into the public service, and offering more employee training and development programs. Most of government's earlier efforts for improvement of its performance was placed on the budgetary process. Human resource management was considered an important staff function in providing competent workers to perform governmental work. However , these personnel responsibilities were viewed as a distinct staff function not integrated in overall management. Human resource managemen t and personnel specialists have been criticized for being a hindrance to management's achievement of organizational goals and objectives. Personnel rules and regulations established to protect the merit system were viewed by management as being restrictive and rigid. Rather than occupying a place of importance in managing public sector organizations, personnel administration was viewed as an isolated service function. In the remainder of this chapter, various budgetary techniques and processes developed to manage government are summarized and the role of human resource management as a tool of effective overall managemen t is outlined. 6John D. Millett, Management in the Public Service (New York:. McGraw-Hill Book Company, Inc., 1954), p. 254. -58-

PAGE 97

A Brief History of Measures to Improve Government Management The first efforts to improve governmental management focused on economy and efficiency and concentrated on the fiscal aspects of administration rather than on human resource aspects. Economy and Efficiency in Government The development of budgetary systems in American government began approximately 60 years ago. Prior to the early years of the 20th century, there were no standardized budgetary practices followed, no executive responsibilities outlined, and no comprehensive method for reviewing public expenditures and revenue expectations. 7 The reports of President Taft's Commission on Economy and Efficiency in 1912 and 1913 focused nationwide attention on the unsystematic nature of governmental budgeting practices. 8 These reports triggered the efficiency movement, promoted by municipal research bureaus, which encouraged state and local governments to improve their budgetary operations. 9 The New York Bureau of Municipal Research was one of the leading bureaus to advocate budgetary reform. Numerous other municipal research bureaus patterned after the New York organization were soon organized in other large cities.10 7Ibid., pp. 204 -205. For pertinent history and excerpts from historical documents also see Albert C . Hyde and Jay M . Shafritz, eds., Government Budgeting: Theory-Process-Politics (Oak Park, Illinois: Moore Publishing Company, Inc. , 1978), p . 556 . 8The Need for Budget, 62d Cong., 2nd sess., H Dec . 851, 1912 . 9Ibid. Also see partial reprint in Hyde and Shafritz, Government pp. 4-11. 1Jesse Burkhead, Government Budgeting (New York: John Wiley. and Sons, Inc., 1956), pp. 12-15. -59-

PAGE 98

In addition to budgetary reform, these bureaus were also concerned with personnel reform. The New York Bur eau was instrumental in generating public interest over the patronage issue as it related to public personnel administration and municipal reform. This Bureau focused attention on hiring government employees based on merit principles instead of party loyalty. The Institute of Public Administration, the successor to the New York Bureau, became an influential national force in municipal civil service personnel programs. 11 Executive Budget Control Although the concept of an executive budget had been introduced in some state and municipal governments, it was not until 1921 when the Budget and Accounting Act12 was passed, that the federal government adopted an executive budget, to be prepared by the Chief Executive. The Act created the Bureau of the Budget to achieve greater economy and efficiency in the conduct of the public service. It also emphasized controlling expenditures to prevent overspending, waste, and misuse of taxpayer's money. 13 The adoption of an executive budget was a direct result of common over-spending and loose financial administration in government. The Congress was frequently asked to grant deficiency appropriations to cover overspending. Shortly after this Act was passed, "similar statutory or constitutional provisions were enacted in 11winston W. Crouch, Local Government Personnel Administration ( Washington, D.C.: International City Management Association, 1976), pp. 8-15. 12 42. Stat. 18, 1922. 13Alan Schick, "The Road to PPB: The Stages of Budget Reform_," Public Administration Review, 26, No. 4 (December, 1966), p. 245. -60-

PAGE 99

most state and local units of government"14 that had not yet implemented an executive budget. Without an executi-ve budget, state and local government budgeting had simply been a collection of figures or a subs:idiaryactivity of an accounting system. The first approach towards a government-wide budget system was to strengthen the position of the Chief Executive in supervising administrative agencies and recommending fiscal policy to the legislature. In 1937 the President's Committee on Administrative 1anagement (Brownlow Committee) asserted that it was necessary for central executive direction "to pursue ••• the task of cutting costs, of improving the service, and of raising the standards of 15 performance." Executive Control of Personnel Policy Early revisions in personnel administration concentrated on executive leadership. Most municipal research bureaus supported the preference of executive leadership in personnel programs. In 1937, the Brownlow Committee which almost exclusively dealt with national administrative policy, was particularly concerned about strengthening the administrative management capabilities of the Chief Executive. The Committee recommended that personnel functions be placed under the Chief Executive, who then would become fully involved in the developing personnel policies. "Thus, the Brownlow Report was the first major official study to break away sharply from the thought patterns affirmed by the classical civil service reform movement , and advocate an 14Millett, p. 205. 15President's Committee on Administrative Management, Report with General Studies (Washington: Government Printing Office, 1937), p. 45. -61-

PAGE 100

executive-centered merit system."16 The Brownlow Committee also rec ommended a "management approach" to federal budgeting . 17 Expe nd iture control was to be used to review the federal budget in t e rms of economy and efficiency. Line-Item Budgeting The first widespread approach to budgeting, emphasizing concerns of accountability and control, was commonly known as line-item budgeting. "In its most rigid form, line-item budgeting means listing every single position and p iece of equipment on a separate line in the expenditure estimates."18 Line-item budgeting, prepared on an object of expenditure basis, provides maximum control to check on excessive spending. During the 1920s, the federal government, adopting this approach, and most states and local governments also began to implement line-item budgeting. Scientific Management Movement The search for more efficiency in budgeting during the 1920s and 1930s paralleled the movement towards scientific m anagement. This m o vement was pioneered by Frederick W. Taylor, who believed that scientific analysis would lead to the discovery of the one best way to efficiently perform any task. Many governments and private sector organizations adopted this management philosophy and organizational problems were approached within the framework of scientific management. Attempts were made to develop principles for the best and most efficient 16 17crouch, p. 11. Burkhead, p. 12. 18Ibid. -62-

PAGE 101

way of structuring and managing administrative agencies.19 The scientific management approach encompassed many aspects of the management of organizations, including personnel administration. Human Relations Movement The scientific management movement , however, was challenged as a result of the Hawthorne experiments conducted during the 1930s. The Hawthorne experiments, under the leadership of Elton Mayo, marked the beginning of an ideological revolution in organizational theory. These experiments led to the first systematic conception of organizations as social systems.20 The organization was perceived as a social structure and an intricate web of human relations bound together by a system of sentiments. The human relations approach recommends that management should recognize the human element present in the organization and learn how to manage people more effectively. Like scientific management, the human relations movement was also criticized as being highly paternalistic and disregarding the roles of formal structure, technology, and conflict. POSDCORB Henri Fayol, a French mining engineer, developed a series of principles to improve management and the structuring of organizations. At this same time (late 1930s), Luther Gulick and Lyndall Urwick were also writing on public administrative reform, organizational structure, and efficiency. They held that all mangement undertakings require planning, organization, command, coordination, and control in order to 19 Ibid., p. 19. 20John M . Pfiffner and Frank P. Sherwood, Administrative Organization (Englewood Cliffs, N.J.: Prentice Hall, 1960), p. 101. -63-

PAGE 102

function properly.21 Fayol and Urwick's writings rendered support for Gulick's famous POSDCORB theory of administrative management. POSDCORB is an acronym for the seven administrative activities of:22 1. Planning 2. Organizing 3. Staffing 4. Directing 5. Coordinating 6. Reporting 7. Budgeting POSDCORB stressed that good administration required managers to accomplish certain common functions through a system of hierarchial authority and specialization. Systems of rule, personnel administration, budgeting, and financial management must be established. "Managers have to set forth objectives and improve employee maturation through human relations techniques."23 Like Taylorism and the human relations movement, POSDCORB theory was a response to the changing needs and problems of managing rapidly growing government organizations. Performance Budgeting New directions in management theory did not surface until after World War II. Attempts to improve financial management in government were intensified during the 1950s with the emergence of performance budgeting which again stressed managerial efficiency. Performance budgeting undertook to use measurement techniques developed during the scientific management movement for improving budgeting. 21Luther Gulick and Lyndall Urwick, eds., "Papers on the Science of Administration" (New York: Institute of Public Administration, 221937), p. 101. 2lbid., P• 13. Howard E. McCurdy, Public Administration: A Synthesis Park, California: Cummings Publishing Company, Inc., 1977), p. 5. -64-

PAGE 103

Performance budgeting in the federal goverment was officially proposed by the Hoover Commission of 194 9 which concluded that the federal budget was an inadequate document, poorly organized, and improperly designed. The Commission recommended that the federal government adopt performance budgeting based upon functions, activities, d . 24 an proJects. Much emphasis was placed on accurate accounting for costs. Efficiency was the major thrust of performance budgetng during the 1950s. Some state and local governments later adopted performance budgeting during the 1950s and 1960s; however, in most cases, these changes were superficial. Performance budgeting emphasized efficiency, but "there remained little integration of the budgeting process with rational policy-making and decision-making."25 Executive Development Programs and Decentralization In addition to recommending performance budgeting, the Personnel Policy Committee of the Hoover Commission proposed that the federal government spend more time and resources in developing a program for identification, promotion, and transfer of competent personnel. The Committee emphasized the lack of executive development programs. In 1952, the U.S. Civil Service Commission began to promote career development programs.26 24catheryn Seckler-Hudson, "Performance Budgeting in Government, Advanced Management (March, 1953), pp. 5-9 and 30-32. 25Yehezkel Dror, "Policy Analysis: A New Professional Role in Government Service," in Shafritz and Hyde, Classics of Public Administration, p. 288. 26Harold H. Leich, "The Hoover Commission's Personnel Recommendations: A Progress Report," American Political Science Review, Vol. 47 (March, 1953), p. 117. Also see Hoover Commission Report on Organization of the Executive Branch of the Government, United States Commission on Organization of the Executive Branch of Government, 1947-1949 (New York: McGraw Hill Book Company, 1949). -65-

PAGE 104

The Personnel Policy Committee also recommended that the recruiting, examining, and selection of personnel should be decentralized to federal operating agencies. The strengthening of personnel operations in departments and agencies was encouraged and supported by President Eisenhower. "Although the Commission retained general responsibility for preservation of the merit system, departments and agencies were given much greater work to do in the actual process of recruiting and examining employees."27 As a result of these developments, human resource mangement became more important at the operating level of the federal government. Similar decentralization development did not occur in state and local government at that time. Decentralization of personnel functions was a main thrust of improvements in federal personnel administration recommended in 1937 by the Brownlow Committee, but little happened, and the theme was repeated by the First and Second Hoover Commissions after World War II. It was during the 1950s that the federal government and a growing number of state and local jurisdictions began making progress in molding personnel systems to be more efficient, better related to management needs, and more concerned with the employee as an individua1.28 Manpower planning, career staffing on a long run basis, and employee development and training began making inroads in the federal service. Overall, government employees gained much during this period in job security.29 27 Millett, P• 309. 28Felix A. Nigro and Floyd G. Nigro, The New Public Personnel Administration, (Itasca, Illinois: F. E. Peacock Publishers, Inc., 1976), p. 10. 29Paul P. Van Riper, History of the United States Civil Service (New York: Row, Peterson, and Company, 1958), pp. 526-527. -66-

PAGE 105

Planning-Programming-Budge t i ng Syste m With the implem e ntation of the Planning-Programming-Budgeting System (PPBS) in the 1960s, the federal government sought to improve public decision-making through economic analysis. The goal of this approach, which was to increase the cost-effectiveness and cost-benefit yields of public programs, was to be achieved throug h planning goals, program budgeting, and systems analysis. A central feature of PPBS was to objectively analyze the probable costs and benefits of alternative programsto achieve stated goals. PPBS was first implemented on more than a trial basis in the Defense Department during the Kennedy Administration. In August 1965, President Johnson issued a directive calling for the e xtension of PPBS on a government-wide basis at the federal leve1.30 PPBS was represented to be a comprehensive system for setting priorities and budgeting based upon economic analysis. PPBS, therefore, sought to overcome the pitfalls of earlier approaches o f performance budgeting with narrow cost accounting analysis. Following the federal example, various state and local governments adopted this system. Many grant-in-aid programs required the implementation of a PPBS system as a condition for receiving government funds. Many organizations, however, found the PPBS system unworkable because it was a time-consuming and rigid approach to budgeting.31 -30David Novick, "The Origin and History of Program Budgeting," California Management Review, Vol. XI, No. 1 (1968), pp. 7-12. The early concepts of the approach as developed by RAND was detected in David Novick, ed., Program Budgeting: Program Analysis and the Federal Budget (Washington, D.C.: Govern ment Printing Office, 1965), p. 236. 31stephen Fletcher, "From PPBS to PAR in the Empire State," State Government (Summer, 1972), pp. 198-202. -67-

PAGE 106

I Personnel Administration in the 1960s and Early 1970s The 1960s were a time of more change in human resource management . Merit principles were redefined and expanded; and selection processes were revised. The Civil Rights Act of 1964 was a landmark in the efforts to eliminate discrimination. That law established the Equal Employment Opportunity Commission (EEOC), and Title VII as amended empowered the Commission to prosecute cases of discrimination in private employment. The law also reaffirmed the policy of nondiscrimination in the federal government. The Equal Employment Act of 1972 extended coverage of Title VII to state and local governments. With the thrust of eliminating discrimination in employment, affirmative action programs were born greatly affecting recruitment and selection techniques. Affirmative action programs affected recruitment efforts by focusing emphasis on attracting both minorities and women to the public sector. The concept of validity in the selection process became paramount as a result of the Griggs v. Duke Power Company case decided by the U.S. Supreme Court in 1971. "The court held that the use of tests or other measuring procedures is a business necessity only when they are shown to be a bl f . b f .. 32 reasona e measure o JO per ormance. Attention was placed on testing programs which might have an adverse effect by discriminating against some groups of individuals. Therefore selection techniques were reviewed and revised to comply with the law. 32office of Personnel Management, Equal Employment Opportunity Court Cases (\yashington, D.C.: Office of Intergovernmental, Personnel Programs, September, 1979), p. 1. -68-

PAGE 107

Public sector unionization a nd collectiv e b a rgaining began gaining considerable ground during the 1960s. As a result of President Kennedy's Executive Order 10988 issued in 1962, unionism in the federal government was greatly expanded. This Executive Order was also a stimulus or legitimizing force for collective bargaining at state and local levels. Major problems remain on how to integrate the collective bargaining process with other components of personnel management under a merit system.33 Management During the Nixon Administration, PPBS was gradually phased out and Mangement by Objectives (MBO) emerged in 1973 as the key management approach. The goal of MBO is to establish performance objectives between management and employees, to develop ways of meeting performance objectives, to schedule necessary resources needed to meet these objectives, to analyze how the activity is being completed, and to evaluate whether the activity is meeting its objectives.34 It was not promoted as a new budget system, rather as a management approach which would parallel the budget cycle. The MBO approach was also applied to the personnel management function of performance appraisal. It was believed by many that the MBO approach was superior to the traditional performance appraisal methods. The MBO approach gave the subordinate self-insight by shifting the e mphasis from an evaluation identifying weaknesses to an evaluation 33Felix A. Nigro, Management Employee Relations in the Public Service (Chicago, Illinois: Public Personnel Association, 1969), 34pp. 18-19. Stephen J. Carroll and Henry L. Tosi, Jr., "What is Management by Objectives?", in Shafritz and Hyde, Classics of Public Administration, p. 360. -69-

PAGE 108

analyzing and defining strengths and potentials.35 MBO as a management approach was later implemented by President Ford during his administration, thereby becoming an important procedure in the executive branch of the federal government and in federally funded activities of state and local governments.36 The Carter Administration shifted the emphasis to zero-base budgeting as discussed later in this chapter. Organization Development During the 1960s human resource management was influenced by another concept stemming from the behavioral science influence of the human relations movement based on the writings of Kurt Lewin and Carl Rogers during the 1950s.37 They theorized that individuals seek to achieve objectives which satisfy their needs and that individuals change most readily when they share in exploring the reasons and the means for change through team-building. Organizations became more responsive and flexible to the needs of both employees and management . Organizational development (OD) emerged as a new managerial technique to increase organizational effectiveness and flexibility by integrating an individual's desire for personal growth and development with organizational goals and objectives. OD was formulated as a strategy for managing organizational and personal change and focusing human energy on accomplishment of desired objectives 35 36crouch, p. 261. Ibid., p. 262. 37 wendell L. French and Cecil H. Bell, Jr., Organization Development (Englewood Cliffs, New Jersey: Prentice-Hall, .Inc., 1973), pp. 25-26. -70-

PAGE 109

through team-building.3 8 Its primary application was in using small groups for instituting change. Government Reorganization Reorganization of government agencies to provide improved structural arrangements used to facilitate coordination has been another major tool in attempting to improve efficiency and achieve economy. Many commissions such as the Commissions on Organization of the Executive Branch of the Government known as the Hoover Commissions39 have been created to study the federal government and to recommend improved organization. The President has for many years been empowered to recommend reoganization plans, subject to congressional veto. In addition, many state governments have also reorganized the structure of their organizations. Colorado state government underwent major change with the enactment of the Administrative Reorganization Act in 1968.40 OD became an established management approach in many private sector enterprises. However, the public sector was slow to implement this technique. The California State Personnel Board was one of the first organizations to use OD techniques in training programs. Later, Kansas City, Missouri, used third-party intervention to introduce OD techniques aimed at improving productivity and implementing change.41 This movement is still not well established in the public sector. -38Ibid., pp. 15-20. 39commission on Organization of the Executive Branch of the Government, General Management of the Executive Branch, a report to the Congress, February, 1949 (Washington, D.C.: Government Printing Office, 1949), pp. 40-41. Also see Hoover Commission Report on 40organization of the Executive Branch of Government, 1949. 4/olorado Session Laws, Article 24, Title 1, Section 101, et seq. Crouch, p. 277. -71-

PAGE 110

Zero-Base Budgeting Concern about increasing government productivity continued during the 1970s. With the advent of the Carter Administration, the federal government instituted zero-base budgeting (ZBB) in hopes of improving organizational effectiveness and efficiency. However, it was first adopted by then Governor Carter in the state of Georgia during 1973. ZBB required each organization to develop decision packages for all programs to serve as the major tool for budgetary review, analysis, and decision-making. "Zero-base budgeting is a management process that provides for systematic consideration of all programs and activities in conjunction with the formulation of budget program planning."42 By implementing ZBB, the federal government hoped to improve program effectiveness, shift resources, and retard tax increases. Overall, ZBB is a long-term management development tool developed to improve government effectiveness and efficiency.43 Summary In summary, all levels of government have tried various management approaches aimed at improving organizational effectiveness, efficiency, and economy. The approaches and trends outlined above have stressed the importance of budgetary procedures in the search for improved management of the public sector. These approaches have also stressed the growing recognition of the importance of better management of an organization's human resources in increasing efficiency, productivity, and 42Peter A. Phyrr, "Zero-Base Budgeting," in Classics of Public Administration, p. 438. The concepts of ZBB are detailed in Peter A. Phyrr, Zero-Base Budgeting (New York: John Wiley and Sons, Inc., 4 1973), p. 231. 3Federal Register, Office of Management and Budget," Zero-Base Budgeting," Part VII, Vol. 42, No. 84 (May 2, 1977), p. 12. -72-

PAGE 111

effectiveness. Although many techniques and approaches h ave gained attention as ways of achieving these governmental goals, recent trends and forces in the public sector show that the public views.government as performing poorly. Strong pressures are present for governmental retrenchment. These developments pose very important challenges for public managers and particularly for those engaged in personnel management in government. Forces Impacting Governmental Management During the 1970s and 1980s The growth of public employee unions, demands for equal employment opportunity, and the needs for managing and motivating a more sophisticated and professionalized work force confront government with new challenges in human resource management. The major forces impacting governmental organizations include: cost of public programs and services, scarcity of resources, demand for increased productivity, equal employment opportunity, deficiences in competent human resources, lack of public confidence in governmental performance, and new public demands requiring effective government action. Each of these forces will be addressed separately. Cost of Public Programs and Services The dominating trend in public management is generated by the perceived high cost o f and wastefulness in governmental services and programs. The most visible manifestation of this pressure was the passage of California's Proposition 13 in June 1978, which cut property taxes by nearly 57%. "By their action in June, the California voters clearly displayed their distrust of state and local officials and a -73-

PAGE 112

waning appreciation for the services provided by cities, counties, school districts, and special districts."44 Proposition 13, sometimes referred to as the California Taxquake, is the largest voter-imposed tax cut in U.S. history. Besides high taxes, this taxpayers' revolt focused attention on personnel concerns such as the number of public employees and the level of their wage s and benefits. Other states are currently considering similar tax cutting measures, although there is much controversy over the merits of such an approach. There has also been much citizen pressure to review the need for governmental services, agencies, and personnel through Sunset legislation. In 1976, Colorado was the first state to pass Sunset legislation. The law stipulated that the Legislature would be responsible for reviewing all regulatory boards and agencies in the Department of Regulatory Agencies one year before their scheduled expiration date to determine whether the board or agency and staff was essential and working in the public's interest. The main purpose of Sunset legislation is to improve effectiveness and efficiency of essential governmental agencies. 45 The additional benefit is to reduce governmental spending, labor costs, and unnecessary agency growth. To date, mor e than 25 states have enacted some form of Sunset legislation. Federal tax cuts were a major issue in the 1980 presidential selection, which provided a striking shift in the federal government in 44Jerome Evans, "Proposition 13: The Morning After," State Government 4 (Spring, 1978), p. 79. 5 Michael S. March, Statement reviewing the Colorado Sunset experiment in Sunset Act 1979, Hearings, U.S. Senate, Committee on Governmental Affairs, 96th Gong., 1st sess., June 14, 1979, pp. 302-318. -74-

PAGE 113

both the executive and legislative branches. Scarcity of Resources Scarcity and misuse of resources, a common concern during our nation's recent period of rapid growth, occurs on three levels: (a) natural resources, (b) human resources, and (c) financial resources. The industrial revolution, the growth of modern science and technology, and the population explosion are all factors leading to the concern regarding the increasing scarcity of natural resources. "The occurrences and economic consequences of natural resource scarcity, and their social and policy implications, run like strong threads through the variegated fabric of contemporary public concern over natural resources. 46 As a result, citizens have turned to government for better management of natural resources so they can maintain their present quality of life style. Human resources are also in urgent need of improved management since they are one of the major keys to improving governmental performance. More simply stated, "human resources are the ultimate basis of the wealth of nations ••• and the wealth of a nation can be expressed in terms of the level of development, and the effectiveness of the utilization of human energies, skills, and knowledges." 47 The public has continued to exert pressures on all levels of government to manage its work force more efficiently and effectively. The overall goal has been to curb costs without sacrificing important public services such as education, police and fire protection, water and 46narold J . Barnett and Chandler Morse, Scarcity and Growth 47(Baltimore, Maryland: The Johns Hopkins Press, 1963), pp. 1-2. Frederick H. Harbison, Human Resources as the Health of Nations (New York: Oxford University Press, 3 4 . -75-

PAGE 114

sewer services, social services, and health services. The public has been demanding that service levels continue at their present rate without an increase in public costs. Therefore, government must find better management approaches which will increase the emphasis on making managers more responsible and accountable for achieving results. Demand for Increased Productivity One of the most important components of successful management is the effective utilization of the organization's work force. This is especially true in the labor-intensive operations of government where improvements in productivity greatly depend upon the performance of people rather than on production by more efficient machines.48 In government, both managers and staff complain that there is a lack of managerial authority, inadequate performance appraisal systems, and lengthy grievance and appeal procedures which inhibit greater productivity of the work force. To address these issues, the federal government recently instituted a Senior Executive Service (SES). These 9,000 top federal executives will be subject to: "Incentive pay for good performance; removal of consistently marginal managers; freedom for agency heads to move managers where needed, with minimum restraints; and more systematic executive development, with particular attention to bringing women and minorities fully into the promotion pipeline."49 California instituted an executive service in the early 1960s. Connecticut, New Jersey, and 48Jerome B. McKinney and Lawrence C. Howard, Public Administration: Balancing Power and Accountability (Oak Park, Illinois: Moore Publishing Company, Inc., 1979), pp. 339-348. 49speech by Alan Campbell, Conference on Public Personnel Management Reform (January 23, 1978), p. 17. -76-

PAGE 115

Massachusetts have also established an executive serv i ce, a nd several other states plan to follow suit. The government conducted a study in 1979 which found lower productivity in the federal government than in the private sector. This study recommended that if overall federal productivity could be increased by 10%, personnel costs could be reduced by more than $8 billion a year without a reduction in services. Other major conclusions of this study were that: (1) potential savings from increasing productivity of governmental employees are greater among state and local governments; (2) there is no direct relationship between increasing wages and increasing productivity at the federal level; and (3) the public sector compares unfavorably with the private sector in reference to employee confidence in quality of supervisors, performance rewards, and employee evaluation of organizational effectiveness.50 Not only the federal government, but several state and local governments have addressed the issue of linking pay directly to performance. For example, Los Angeles has instituted production-oriented merit increases. Other jurisdictions are relying less on automatic step increases in favor of rewarding top performers with extra pay. Labor relations and collective bargaining have impacted the public sector and productivity issues affecting government. With the advent of collective bargaining relationships, public personnel management has become a matter of bilateral labor relations rather than of unilateral 50U.s. Congress Joint Economic Committee, Productivity in the Federal Government, Staff Study (Washington, D.C.: U.S . Government Printing Office, May 31, 1979), pp. 1-2. -77-

PAGE 116

human resources administration. This means that public sector managers must share the administration of personnel management with a labor or employee organization.51 One of the contributing factors toward increased unionization among govermental employees has been the lack of, or slowness of, a viable grievance and appeal system. Employees complain of the multitude of procedures that must be followed before a final decision can be rendered. Managers complain that they must comply with too many procedures in order to dismiss unproductive and poor performing employees. Reform efforts have aimed at reducing barriers in the grievance and appeal process while giving managers more authority to discipline employees. The purpose of discipline should be to establish and maintain a productive work force, not to hinder productivity. Equal Employment Opportunity The purpose of equal employment opportunity is to eliminate job discrimination on the basis of race, religion, age, sex, national origin, handicaps, or other factors unrelated to job performance. At all levels of government aggressive action has been taken to assure that any discrimination practices are eliminated in hiring, disciplinary actions, separations, promotions, and compensation policies. Affirmative action programs have been instituted by personnel administrators at the direction of their managers to assure the recruitment of members from disadvantaged groups under-represented in the work force. Personnel procedures have been implemented to insure the job-relatedness of examinations and the validity of written tests. Affirmative action programs contain measures to include qualified 51 Crouch, p. 39. -78-

PAGE 117

minorities, women, and other disadvantaged groups in selection procedures.52 However, equal employment opportunity goals have not yet been fully achieved in government. Although managers have been instructed to work towards these goals, they have encountered problems in achieving them. Consequently, pressures still exist to provide equal employment opportunity and to achieve social equity in public sector organizations. Quality of Government Workers Hanagers and government officials have complained about the quantity and quality of professional and skilled public employees. Some have stated that the former u.s. Civil Service Commission hindered rather than helped management in achieving goals and objectives. Many have felt that the old system was inadequate due to limited recruiting efforts, under-financed personnel agencies, and unimaginative personnel specialists. Managers in the public sector have stated that more pay is needed to attract skilled administrators, professionals, and technicians. Overall, government agencies have not been effective in forecasting techniques and human resource planning. Recruiting has been done on a haphazard basis without much forecasting of turnover. Promotional opportunities have been limited and often take a long time to complete. Furthermore, there has been "inadequate in-service training and career development of the work force."53 Public officials and administrators are now exerting pressures to hire and promote more 52 Ibid., pp. 169-176. 53o. Glenn Stahl, Public Personnel Administration (New York: Harper and Row, Publishers, 7th edition, 1976), pp. 111-118. -79-

PAGE 118

qualified individuals, to retain above-standard performers with sufficient pay incentives, and to provide more training opportunities. Lack of Confidence in Governmental Performance For some time, citizens have complained about the lack of efficiency in governmental operations. The public is concerned over rising taxes, perceived wasteful spending, and fraud in military and civilian programs. Citizens complain about excessive governmental spending for poverty programs, education, public works, water reclamation, space programs, urban renewal, and highway programs. Citizens are also dissatisfied with governmental spending for housing, health, and welfare The general public has a low esteem of public sector employees in both the legislative and executive branches of the federal government and at state and local levels, who they feel at best are mediocre performers. Merit systems have been perceived as rewarding longevity rather than outstanding performance. Government wage settlements with unions have contributed heavily to the inflationary spiral of wage and tax increases. The increasing incidence of strikes causing disruptions in public services have created ill will toward government.55 The image of governmental employees and their performance record needs to be improved in order to achieve efficient and effective government. New Public Demands Requiring Effective Government Action Citizens continue to make demands on government to provide new or expanded and often costly public programs. Among these demands which 54william Proxmire, Uncle Sam: The Last the Spenders -80-

PAGE 119

contribute nationally to the growth, size, and scope of government are energy development and conservation, environmental protection, health care, income maintenance (social security, pension, etc.), and defense. Great pressures have been placed upon government to develop new sources of energy as well as to conserve energy. For example, California and Texas have instituted consumer gas rationing programs based on an odd-even system of purchasing gas. The federal government encourages the private sector and the law requires the public sector to keep the temperature in the buildings no lower than 78 F in summer and no higher than 65 F in the winter. All levels of governments have been called upon to develop, allocate, and conserve natural resources for the common welfare of all citizens. Providing health care benefits for all citizens has been another demand made of government. The costs of health care services have risen astronomically. In 1929, Americans spent $2.9 billion on medical care expenses, or 3.8% of their total consumption expenditures. In 1973, they spent $62.7 billion or 7.8% of total consumption.56 It is estimated that total medical care expenses would soar to about $240 billion during 1980. Federal expenses for Medicaid and Medicare continue to rise. In 1967, "the federal government spent $4.6 billion as compared to $35.9 billion in fiscal year 1978."57 Other federal aid to state and local governments for health care has also greatly increased. Because of the rising cots of health care, many citizens can no longer afford such 5 6 Tax Foundation, Inc., P• 57The Budget of the United 1980, (Washington, D.C.: PP• 43, 439, and 440. 53. States Government, Appendix, Fiscal Year U.S. Government Printing Office, .1979), -81-

PAGE 120

care. Consequently, public pressure to establish a national health insurance program has increased. Demands for income maintenance programs continue to grow. These programs include social security, unemployment insurance, workmen's compensation, aid to families with dependent children, supplemental security income, aid to the blind and disabled, veterans pensions, and military and civilian retirement. The goal of these programs is to provide income to families with reduced or no income. Citizen demands have increased governmental spending on these programs during recent years. In 1960, the federal government spent $20.6 billion (22.3%) of expenditures on income maintenance programs. In 1975, federal funding rose to $98.2 billion (32.2% of expenditures).58 State governments spent $9.2 million and local governments spent $1.9 million on these programs in 1973.59 This tremendous growth in government spending has created several problems pertaining to issues of equity, negative incentives, and long-run deficits. However, demands for providing these programs and increasing benefits continues. Demands for strengthening defense of our nation have continued to grow. The largest federal expenditure is national defense, which in 1974 was $75 billion, over 25% of the total budget. Approximately 65% of the controllable federal expenditures in 1977 were for national defense.60 State and local government expenditures are minimal in comparison. H. Haveman, The Economics of the Public Sector (New York: 59John Wiley and , . 1976), Tax Foundation, p. 16. 60Lawrence J. Korb, "The Budget Process in the Department of Defense 1947-77: The Strengths and Weaknesses of Three Systems," Public Administration Review (July/August 1977), p. 334. -82-

PAGE 121

The cost of research and development for new weapons and equipment for national defense exceeds $12 billion annually. "This is expected to grow to $16 billion annually in the next few years and dwarfs in comparison the $1 billion spent by General Motors in 1975, the largest research and development expenditure to date of any private corporation in the United States ... 6 1 To summarize, the 1970s have focused on how government can offer more and better services with available resources, how government can hire a more qualified and competent work force, how government can maintain present service levels while stabilizing spending levels, and how government organizations can enhance social equity. Therefore, the primary emphasis of the 1970s has been on good and sound management, efficiency, economy of services, and social equity. The answer as to how to achieve these goals in a huge and growing public sector has not yet been found. Public Personnel Systems Definition of Public Personnel "Public personnel administration is the process of acquiring and developing skilled employees and of creating organizational conditions which encourage them to put forth their best efforts."62 It is concerned with both the technical aspects of maintaining a full complement of competent and high motivated employees and with the 61Albert G. Dancy, "Department of Defense Research and Development Management , Public Administration Review (July/August 1977), No. 4, p. 347. 62Nigro and Nigro, The New Public Personnel Administration, p. 28. -83-

PAGE 122

administrative aspects of being a key management tool. Public personnel administration is involved with the traditional functions of classification, personnel planning, recruitment, selection, placement, compensation, human resources development, performance evaluation, and employee relations. Personnel management is also concerned with a broader scope of problems in achieving organizational goals by utilizing government's human resources. Good personnel management must strive to maximize the performance and productivity of the organization's work force. Scope of Public Personnel Systems Personnel or human resource management of any organization constitutes the cornerstone of management. It is essential that personnel functions be integrated with the entire management system to achieve effective and efficient government. One of the most important principles in management is effective utilization of people. The degree of success in any organization depends on its ability to hire and retain a competent, committed, and ethical work force. Employees will determine how effectively and efficiently the organization operates by their productivity or lack of it. The organization's goals, objectives, policies, and procedures can be entirely successful or a dismal failure because of the organization's employees. In the public sector, however, the quality of services requires that employees are representative of and responsive to the clientele they serve. Employment in the public sector is unique because of the political, education, social, economical, cultural, judicial, technical, and historical nature of this environment. Public personnel management is conducted in an environment filled with political -84-

PAGE 123

pressures, social pressures, and public scrutiny. In both the public and private sector, personnel management focuses on the following three key elements which must be balanced to the end that:63 1. Established organization objectives are attained efficiently and effectively, 2. Employee needs are met and served to the highest possible degree, 3. Objectives of society are fully considered and served. Role of Public Personnel Systems Personnel management is integral to improving the efficiency and effectiveness of government. "In practice, however, personnel processes too often have remained separate from these important developments, functioning as an isolated staff function, often irrelevant to employee and program management concerns."64 The effectiveness of personnel management has been impacted by the increase and expansion of programs as well as the difficult issues which government must solve. Personnel managers are not necessarily at fault. Traditionally, government administrators have not involved personnel managers in the policy-making and goal-setting aspects of the organization. Personnel departments have been isolated from key managerial planning, organizing, and controlling strategies required for effective and efficient government. In order to have a constructive impact, personnel management and administration must be reoriented to function as an integral part of management on two levels. First, it must become involved with general 63Michael J. Jucius, Personnel Management (Homewood, Illinois: 64Richard D. Irwin, Inc., 1971), 7th edition, p. 2. Crouch, p. 263. -85-

PAGE 124

efforts towards government productivity and performance throughout the organization. Second, it must be instru-mental in helping employees achieve their objectives through the organizational structure. 65 Development of Public Personnel Systems Th e most distinguishing characteristic of public personnel administration is merit employment which has shaped the nature and quality of American bureaucracy. The concept of merit employment is the nucleus of civil service personnel systems in our country. Civil service employment based on the central concept of "merit" had widely varied throughout our history. The following chronology indicates the growth and developmental stages of personnel merit systems. These stages include:6 6 1. Bureaucratic Beginnings of Merit, 1776-1819. 2. Spoils System, 1820-1880. 3. Establishment of a Federal Civil Service System, 1881-1883. 4. Expansion of Civil Service Systems, 1884-1975. 5. Civil Service Reform, 1976-1980. Bureaucratic Beginnings of Merit, 1776-1819 Before the 19th century most public appointments were based in "partisanship, influence, wealth, family, personal loyalty, blackmail, 65 Ibid., p. 279. 66 A similar breakdown of stages in the development of public personnel systems can be found in Frederick C. MoShero , Democracy and the Public Service (New York: Oxford University Press,. 1968), PP• 96-97. -86-

PAGE 125

or charity rather than intelligence or competence."67 Early constitutions and statutes mandated the appointment of "officers" and "department heads" by direct election or by legislative confirmation. All other public employees, referred to as "civil officers", were to be appointed by their respective branches. Appointments to government positions were most often based on political patronage and party loyalty rather than job qualifications or skills. As political parties increased in size the spoils system gained status over ability-based appointments. Spoils System, 1829-1880 The spoils system was first introduced in the state of New York. "It was taken from New York into the national administration at about the time when, owing to the democratic movement beginning with 1820 and the slavery question, the political struggles of the nation began to assume somewhat the same bitterness which had characterized the politics of New York."68 It soon spread throughout the Union and was regarded as an essential part of the American political system. Although President Jackson (1829-1837) was blamed for inventing the spoils system, he only continued the personnel policies of his predecessors. Jackson's theories of job removals to provide jobs for supporters of his party symbolized and supported the equalitarian spirit of his time as well as the social mobility characteristics of the 67Paul P. VanRiper, History United States Civil Service (New York: Row, Peterson and Company, 1958), p. 18. 68Frank J. Goodnow, "Merit Sys terns and Politics," Classics of Public Personnel Policy, ed. Frank J. Thompson, (Oak Park, Illinois: Moore Publishing Company, Inc., 1979), p. 20. -87-

PAGE 126

society.69 Instead, spoils politics was related to the democratic ideals of an expanding nation and to the political and economic framework in which these ideals functioned.70 If it was a spoils system, it was not as evident to the public as what flourished in succeeding administrations when the turnover rate was likely to be an overwhelming majority of the civil service.71 With a new party in the White House in 1841, spoils appointments became the norm rather than the exception. Presidents Harrison, Tyler, Polk, Taylor, Fillmore, Pierce, Buchanan, and Lincoln all found themselves resorting to spoils system tactics in varying degrees to build political support for party programs.72 President Tyler ensured the permanence of the spoils system on the national level. President Polk removed more incumbants than any of the ten presidents preceeding him. President Fillmore had dissident turned out in favor of more loyal Whigs. When President Buchanan (Democrat) succeeded President Pierce (Democrat) it was announced that no incumbents appointed by Pierce would be retained. President Lincoln followed suit and became a strong supporter and skillful user of the spoils system. Paradoxically, whereas the spoils system of appointment seemed to reach its zenith under the Lincoln administration, it sharply declined during his administration.73 The Grant Administration was the first to make reforms in personnel management on a large-scale basis, although it was widely 69vanRiper, pp. 26-27. pp. 61-63. Jay M. Shafritz et al., Personnel Management in Government (New 72York: Marcel Dekker, Inc., 1978), p. 12. 73van Riper, p. 27. Shriftz et al., p. 16. -88-

PAGE 127

noted for spoils system excesses, graft, and scandals. President Grant recommended and obtained civil service from Congress in 1871. To the surprise of many, Grant appointed a seven-member commission to establish, direct, and implement personnel rules and regulations. "But once Congress realized that Grant was serious about reform and intent upon cutting their patronage powers, the program was trimmed."74 In 1875, the Commission was disbanded due to lack of Congressional appropriations and approval. President Hayes, succeeding Grant, continued the thrust of civil service reform as a major political issue. He issued several executive orders extending competitive examinations to field offices. A model merit system was finally established by the Department of the Interior in late 1877 and was extended to a few field offices by 1880. As of 1879, most citizens, but few political leaders, had shown that they would support national civil service reform.75 Establishment of Service System, 1881-1883 During the Hayes Administration, various civil service reform associations began to organize outside political circles. The first of these was the New York Civil Service Reform Association formed in 1877. Within three years it had members from 33 states. Newspapers in New York and Massachusetts were created to report monthly on national civil service reform progress. Several years later (1881) the National Civil Service Reform League was organized to promote federal reform.76 74 Ibid., P• 19. 75civil Service Commission, Biography of an Ideal, (Washington, D.C.: 7 Government Printing Office, pp. 34-35, 1958) 6Frank M. Stewart, The National Civil Service Reform League .(Austin, Texas: Press, 1929). -89-

PAGE 128

It was not until President James A. Garfield, elected in 1880, that a career merit system was given serious consideration. President Garfield was elected on a platform calling for a complete and radical civil service reform. One year later he was assassinated by Charles Guiteau, a disappointed office seeker, and in retrospect became a martyr to the spoils system. His death contributed in providing the necessary environment for a complete and radical civil service reform. Success came to the reform movement on January 16, 1883, when President Arthur signed the Pendleton Act creating the U.S. Civil Service Commission to act as the federal government's central personnel agency. The mid-term election of 1882 proved to be one of the worst Republican defeats since the Civil War. The event contributed to a positive bipartisan legislative climate for civil service reform which led to the passage of the Pendleton Act.77 This victory in civil service reform was not overwhelming in that the new competitive personnel system covered only 10% of positions in the executive branch. The rest of the positions were left to the discretion of succeeding presidents to add positions by executive orders. The U.S. Civil Service Commission, established by the Pendleton Act to protect government from partisan political control, led to public personnel reform in the federal first, followed by state and local governments. The main role of the Commission model was to improve personnel administration policy and techniques. However, it also developed a policeman role in protecting against political patronage and attempting to depoliticize the federal service. Thus it gained the 77 Ibid., PP• 34-37. -90-

PAGE 129

reputation o f being the personnel "wat c hd og " arm o f the federal government. Expansion of Civil Service Systems, 1883-1975 During the development of civil service systems and reform movements, a number of important personnel reform trends and themes surfaced on the federal, state, and local levels. These personnel reforms included: 1. Establishment of civil service commissions in 12 states by 1935 go neutralize the effects of the spoils system.7 2. Gradual expansion of the classified system to include more federal employees. 3. Expansion of civil service functions to include recruitment, classification, compensation, selection, and retirement. 4. Passage of the Civil Service Retirement Act, 1920. 5. Passage of the Classification A ct, 1923. 6. Emphasis on civil service provisions to improve merit protection of public employees. 7. Development of merit hiring and firing policies for civil service employees. 8. Development of veterans' preference policies. 9. Development and growth of public employee unions, particularly in the federal government. 10. Partial relaxing of civil service standards to accommodate temporary public employees administering emergency government activities during the Depression from 1929 through 1937 and during World War II. -During the 1930s, civil service systems expanded their scope and focused on ensuring that examinations were related to job requirements, rather than just to depoliticization as in the earlier period. The 78 Crouch, pp. 8-9. -91-

PAGE 130

Commission continued its watch dog role in applying restrictive regulations to federal agencies. An analysis of the Commission by the 1937 President's Committee on Administrative Management concluded that "many friends of the Commission ••• feel that more constructive types of personnel activity cannot be carried on effectively by an agency which necessarily must give so much attention to the enforcement of restrictive statutes."79 The Roosevelt Administration pursued efficiency at the federal level by recognizing management capabilities and interrelationships of personnel administration to the rest of government. Roosevelt issued an executive order requiring agencies to establish a division of personnel supervision and management, thereby creating decentralized personnel administration. Roosevelt's order signaled the arrival of "modern" personnel administration based on the efficiency approach. "Modern" encompassed expanded services, personnel offices staffed with specialists, improvements in recruitment and retention of efficient employees, and in general, the use of scientific methods in personnel selection and other personnel processes.80 This efficiency approach of personnel decentralization eventually spread to state and local governments. However, on the federal level, the Commission's emphasis on efficiency revealed two weaknesses: 1. It hampered rather than helped line officials by rigidly following a rule book. 2. It concentrated on procedures and paper work, neglecting human considerations and overlooking cooperation with et al., p. 36. 0Nigro and Nigro, The New Public Personnel Administration, p. 7. -92-

PAGE 131

management. Again, criticism of the Commission focused on rigid personnel rules allowing for little management flexibility. Personnel specialists were viewed as devoting all their efforts to the technical aspects of rule enforcement, showing little interest in developing the potential of the employee as a valuable human resource. As a result of the manpower experiences and tremendous expansion of government organizations especially at the federal level, during World War II, some progress was made towards making public personnel systems more efficient, better related to management needs, and more concerned with the employee. "New techniques in the assessment of individual capabilities to perform in stress situations, conceptions of leadership requirements, applications of classification techniques to military organizations, training for all types of jobs and classes, and group motivation and morale,"81 were new fields in public personnel administration. Decentralization of personnel management continued, because the expansion of federal services made centralized personnel administation a thing of the past. President Truman emphasized and endorsed decentralization. Decentralizing personnel functions is directly related to the scale of government such as the number of employees and geographic area covered. During the 1960s, civil service systems began to incorporate programs for career development designed to improve employee productivity, morale, and status in the work force. The philosophy of 81van Riper, pp. 452-532. -93-

PAGE 132

civil service personnel administration continued to place emphasis on refining the technical aspects of merit employment . Civil Service Reform, 1976-1980 Past civil service reform efforts have not yet achieved an active, positive, nor accountable system functioning as an integral arm of governmental management. Reform efforts built barriers that were ladden with controls, considered to be negatively oriented, and frustrated elected officials, as well as administrators, managers, and employees. "Procedures intended to protect against political hirings and firings now insulate employees and their managers from accountability for efficient performance, and make affirmative action difficult to achieve."82 The inability of public personnel systems to respond to issues of the times can be attributed to the tremendous growth of government services and subsequent changes that were required. In addition to significant increases in the number of public sector employees, there were dramatic changes in the direction, scope, and sophistication of governmental programs. Issues now confronting public personnel management include collective bargaining, affirmative action programs, employment of minorities, women, disadvantaged and handicapped, expanded need for top level managers, human resource planning and development. There has also been more public awareness of the need to improve the quality of manpower and the effectiveness of public organizations. As stated by 82speech by Alan Campbell, "The Not-so-Quiet Revolution in Civil Service," January 23, 1978, Conference Report on Public Personnel Management Reform, (Washington, D.C.: U.S. Civil Service Commission, 1978), p. 15. -94-

PAGE 133

Governor Snelling of Vermont, "We need to overhaul our individual civil service systems to be sure that they contribute directly to the efficient high quality delivery of services to our consumer, the taxpayers." 83 Th e "Watergate" fiasco greatly increased citizen alienation and distrust o f g overnment. These concerns were rhetorically expressed by the presidential candidates in the campaign of 1976 . Criticisms of the merit system and the U. S . Civil Service Commission were among the primary issues in Carter' s presidential campaign. He promised to reform the federal Civil Service, make it more easily understood by people, make it more responsive to executive leadership, and make it more efficient. The President kept his campaign promise by proposing and supporting the Civil Service Reform Act passed October 1978 . This reform act was designed to improve government efficiency and to balance managerial authority with employee protection. The issues involved in this reform included: 1 . Need for competence. 2 . Need for representativeness. 3 . Need f o r c ontinu i t y . 4 . Need for responsiveness. s . Need f o r management c ontrol. 6. Need for protecting employee rights. As President Carter stated, "The most effective and fundamental improvement that we can make i s to reform the Civil Service system, t o make it truly a merit system that rewards achievement and responds to 83 Remarks by Richard A . Snelling, Conference Report on Public Personnel Management Reform, p . 11. -95-

PAGE 134

human needs."84 Critics are most concerned that the latest reform efforts will serve to strengthen political loyalty, rather than promote competence in the public work force. It has yet to be determined whether the new Civil Service Reform Act will be an improvement over the old Civil Service Commission format. James Sundquist of the Brookings Institution wrote that politicization of the federal civil service since the Eisenhower administration had caused a decline in the quality of federal managers.85 Shortly after the 1980 presidential election, newspaper speculation became widespread that federal employees in the Senior Executive Service would subsequently lose their jobs. Trends in Public Personnel Management Since 1960 Many public personnel management reform issues have been addressed in the literature since the beginnings of public personnel. As pointed out earlier, civil service systems were developed to remedy the defects of the "spoils system" and citizen demands for reform of hiring practices. The patronage issue and other reform issues in public personnel management have been written about extensively. The following section summarizes the major personnel functions and activities developed over the past 20 years in public personnel 84President Carter, Introducing the Civil Service Reform Act, Presentation of Presidential Management Improvement Awards , May 23, 1978 (Washington, D.C.: U.S. Government Printing Office, 1978), 8 printed on inside cover of document. 5James L. Sundquist, "The Crisis of Competence in Government," in Joseph A. Pechman, ed., Setting National Priorities: Agenda for the 1980s (Washington, D.C.: The Brookings Institution, 1980), p. 556. -96-

PAGE 135

management literature: 1. Human Resource Planning 2 . Classification 3. Recruitment and Selection 4. Compensation 5. Productivity Management 6. Performance Appraisal and Incentive Systems 7. Model Public Personnel Laws 8. Intergovernmental Personnel Relations 9. Equal Employment Opportunity 10. Labor Management Relations 11. Veterans' Preference 12. Political Activity of Public Employees 13. Personnel Management Information Systems 14. Personnel Decentralization 15. Executive Service Human Resource Planning Human resource planning, formerly termed manpower forecasting or planning, has been emphasized as a means of improving recruiting and achieving organizational goals. Increasing competition for human resources and the continued growth of the public sector requires human resource forecasting and planning. Implementing this function requires the coordinated efforts of the entire organization through a systems approach. To accomplish this goal, more human resource research data must be made available, information concerning agency management goals and objectives must be provided to personnel, a data base which accurately describes current labor resources must be developed, and -97-

PAGE 136

applied research capabilities must be utilized. "The personnel department must be as deeply involved in the formulation of business plans and objectives as any other functional area. When it comes to improving the utilization of existing manpower resources, this involvement in planning is not only appropriate, but imperative."86 (Note: This statement applies to government as well as business.) Human resource planning encompasses the relationship of employment to fiscal policy, economic growth, and technological changes within the organization. Public personnel administration is responsible for the delivery of the required human resource skills to achieve organizational goals and objectives.87 Classification Classification systems have often been criticized for a lack of innovative techniques and rigid procedures. "In the name of position classification, more sins have been committed against persons and against the effectiveness of administrative operations than in any other function in personnel management."88 It has been stated that rigid classification systems often times impeded efficient work assignments. "Classification for jobs should be sufficiently broad to permit employees to use their range of skills and to permit managers flexibility in using staff according to changing work loads and agency objectives. • •• Modern classification should begin by 86Glenn A. Bassett, "Manpower Forecasting and Planning," Personnel, 87(September/October 1970), p.9. E.B. McGregor, Jr., "Problems of Public Personnel Administration and Manpower: Bridging the Gap," Public Administration Review, (November/December, 1972) PP 88Merrill J. Collett, "Rethinking Position Classification and Management," Public Personnel Review (July, 1971), p. 171. -98-

PAGE 137

defining agency goals and should then define the types of jobs or the qualifications of personnel required to perform the work that will lead to the accomplishment of agency objectives."89 Furthermore, job classifications need to be reorganized into series and reduced into manageable numbers, thereby eliminating numerous single job classifications. Management and staff contend that rigid classification systems are inhibiting "equitable" employee compensation, the organization of human resource planning, and supervisory flexibility.90 Although classification systems tend to be rigid and restrictive, they have provided equity to public sector employees. Recruitment and Selection Much attention has been focused on updating recruitment and selection procedures so they are administered more comprehensively, in less time, and with more emphasis on special outreach recruitment techniques, both for the disadvantaged and for high level managers.91 Most private organizations actively seek out top talent, unlike most governmental organizations. Many state and local governments are mired in red tape and the passive bureaucratic recruiting tradition which lends itself towhomever is attracted by unimaginative governmental announcements. Many federal agencies have begun to implement more innovative recruitment techniques. "In recent years, some states and cities have mounted effective recruitment campaigns, but even these have been cut back in the face of increasing fiscal pressure."92 Regardless of the recruitment techniques implemented, the quality of applicants for Economic Development, p. 56. Collett, p.l71. 91Robert K . Lee and William M. Lucianovic, "Personnel Management Information Systems for State and Local Governments," Public Personnel Management (March/April, 1975), p. 85. 9 2committee for Economic Development, p. 45. -99-

PAGE 138

corresponds to current descriptive job classifkationswhich specify the necessary knowledge, skills, and abilities required for the position. The most innovative and aggressive recruitment program cannot provide skilled human resources if the position classifications are outdated, inaccurate, or unrepresentative of job assignments. The classification system is the foundation of all personnel management functions. Compensation Compensation surveys and schedules need to be adjusted to better reflect pay similarities in occupational categories between the private and the public sector. Traditionally, governments have paid relatively more for unskilled, semi-skilled, and skilled craft workers and relatively less for high-level professional, managerial, and executive employees.93 Government wages have been criticized for lacking flexibility in compensating employees in view of the fact that employees are satisfied and motivated by different factors. A program of flexible salary administration is an opportunity for an employer to offer compensation alternatives consistent with the expressed preferences of employees.94 New methods for establishing compensation plans include: (1) Improving "prevailing wage" surveys by including more key occupational classes and information on private and public labor markets, as well as increasing the number of organizations surveyed; (2) Offering flexible compensation alternatives; (3) Allowing the use of deferred compensation plans for increasing supplementary retirement 93Daniel Lewin, "Aspects of l\lage Determination in Local Government Employment," Public Administration Review (March/April, 1974), p. 77. 94Jay R. Schuster, "Flexible Compensation," Personnel Administration Review (November/December, 1972), p.750. -100-

PAGE 139

benefits; and (4) Improving pension plans by addressing questions of possible integration with Social Security, benefit formulae, escalation clauses, and employee contribution rates. Pressure is, therefore, being exerted to modernize public personnel compensation plans. Productivity Management Historically, there has been a growing concern for increasing governmental productivity, offering incentives and rewarding outstanding performance based on merit. Government has traditionally lagged behind the private sector in measuring and reinforcing increased productivity. One of the reasons for this time lag is the difficulty in evaluating productivity, or the ratio of outputs to inputs.95 Measuring public services is very difficult due to the absence of directly quantifiable entities describing units of service. "The traditional definition (quantititative output per man-hour) is being modified to include such factors as quality, diseconomy, social value, and other measures considered by some more 'relevant' to today's environment."96 Consideration of these factors seems to indicate a growing concern for the need to develop better and more accurate indicators of the impact of government programs. The current interest in productivity management has been generated by the rising costs of services without any apparent increase in the output of services.97 Better productivity measurement techniques and incentives are needed to address the central questions of how can 95Jerome A. Marks, "Meanings and Measures of Productivity," Public Administration Review (November/December, 1972), pp. 747-753. 96Jerome M. Rosow, "Public Sector Pay and Benefits," Public _Administration Review (September/October, 1976), p. 538. 97 H:arry P. Hatry, "Issues in Productivity Management for Local Government," Public Administration Review (December 1972), Pp. 776-784. -Ml-

PAGE 140

employees provide service more efficiently and productively with available resources? Many states and some localities have created productivity incentives for career employees with varying degrees of success. This has been accomplished by linking productivity measures to cost-of-living salary increases, merit pay raises, or training needs. A few states have considered productivity and performance measurement systems as part of collective bargaining agreements.98 Performance Appraisal and Incentive Systems Employee evaluation or performance appraisal in the public sector has been perceived as being extremely lax and perfunctory. Evaluations are often conducted on a yearly basis utilizing a standardized rating form that has little meaning to the supervisor or employee. It is common practice for supervisors to give inflated ratings to all employees. "The problem lies not just in the employees' reluctance to be evaluated but also in the supervisor's aversion to giving negative performance assessments."99 Few supervisors want to give employees poor ratings considering the fact that the potential for discipline is often limited and burdened with red tape. But, "the greatest deficiency in performance appraisal is the lack of clear measures of agency performance and of individual performance as it is tied to agency objectives. nlOO C. Bledsoe et al., "Productivity Management in the California Social Services Program," Public Administration Review, (November/ December, 1972) pp. 799-803. i6gommittee for Economic Development, p. 58. Ibid., p. 58. -102-

PAGE 141

Employee ratings hinge upon established standards of performance and measures of effectiveness emphasizing the quantity and quality of work produced. Performance goals are now being developed in accordance with the principles of management by objectives. Recent developments have been made in utilizing behavioral anchored rating scales. "Florida's Department of Agriculture and Consumer Affairs has developed a rating form by which an employee's level of performance for each of 16 performance criteria is defined in terms of frequency with which various types of behavior typical of that level are manifested."101 Some state and local governments are testing methods of improving productivity through incentive systems. Much attention is now being focused towards instituting incentive systems which include monetary rewards, such as additional step increases based on performance rather than the traditional merit increases based on longevity. Other incentives include in-grade promotions based on performance and new training and development opportunities for employees with outstanding performance.102 Model Personnel Laws The creation of model personnel laws and their implementation at state and local levels was another major area of public personnel reform. Model laws have been supported by the National Civil Service League since 1883 to address broad emerging problems in personnel management . Emerging concerns centered around the feeling that civil service systems were inflexible, unimaginative, and non-management oriented. Many felt that civil service systems represented the triumph 101conference Report on Public Personnel Management Reform, p. 60. 102 Ibid. , pp. 60-65. -103-

PAGE 142

of technique over purpose with rigid merit rules and regulations that created artificial barriers to employment. They consisted of highly formalistic examinations and measured employee quality in narrowly defined quantified terms. Although there is no question that these mechanisms curb political patronage practices, they lock out disadvantaged candidates, a problem that could ultimately lead to the destructio n of a good public personnel system. 103 The National Civil Service League drafted the first U .S. civil service law (Pendleton Act of 1883) and since has proposed six other models. The most recent revision in 1970 was in response to the many transformations in the practice of personnel administration. "The linchpin for the Model Law was its philosophy that public personnel administration should be a positive management too l to achieve more efficient, effective government response to the needs of the citizens h d . . . d . b d .. 104 t at was nonan ase • The revised model recommends that personnel responsibilities be held by the chief executive, supported by a personnel department. The model also recommends that the responsibility for promulgating rules and policies be placed in the hands of the personnel director under the direction of the chief executive. In place of an independent civil service c ommission with administrative powers, the league proposed the substitution of a citizen advisory b oard. Th e 1 97 0 Model Public Personnel Administration Law has drawn much support and some criticism; however, m ost observers agree that all functional areas of public 103Jean J . Couturier, "The Model Public Personnel Law: Two Views," 4Public Personnel Review (October, 1971), pp. 202-209. 10 JeanS. Couturier, "The Quite Revolution in Public Personnel Laws," Public Personnel Management (May/June, 1976), p . 155 . -104-

PAGE 143

personnel managemen t were definitely in need of modernization.105 Further discussion and evaluation o f the 1970 Model Law follows in Chapter IV. Intergovernmental Personnel Relations The federal government has become increasingly involved in providing state and local governments with funds to help improve public personnel management primarily through the 1970 Intergovernmental Personnel Act (IPA). The IPA provides federal financial and technical assistance to strengthen personnel administration in state and local governments. This agency requires adherence by state and local government personnel systems to the six IPA merit principles. This is because, despite the great increase in services rendered by state and local governments, personnel practices were considered poor, "thereby resulting in the loading of agencies with incompetent, uninspiring, and o ften indifferent personnel. .. !06 In 1973, the IPA coordinated a task force composed of federal, state, and local personnel administrators to develop a set of guidelines for the evaluation of p ersonnel operations. 107 The IPA continues to be ' active today by assisting state and local governments in improving their personnel systems. Equal Employment Opportunity Much progress has been made in the areas of equal employment opportunity since the passage of the 14th Amendment of the U.S. Constitution, the Civil Rights Acts of 1866 and 1891, and the 105 Ibid., p. 158. and Nigro, The New Public Personnel Administration, p. 26 . Crouch, p. 171. -105-

PAGE 144

antidiscrimination provisions contained in Title VII of the 1964 Civil Rights Act as amended. However, there is still overt discrimination, as documented by the findings of the U.S. Commission on Civil Rights in a 1969 report on state and local government personnel systems. "Administrators of merit systems have frequently violated the merit principle and practiced conscious, even institutionalized discrimination. "108 The overall consensus of opinion in the report was that "static" civil service procedures such as the absence of aggressive recruiting programs, the use of unvalidated written tests, rigid educational requirements, and automatic disqualification for an arrest record were mostly responsible for excluding minority groups from public sector employment. Instead, emphasis should be shifted to removing barriers of entrance and promotion within public service by implementing aggressive recruitment programs to encourage members from disadvantaged groups to apply, providing internships as an entrance alternative, expanding in-service training opportunities, and providing promotional opportunities for minority applicants and employees. A solid program of affirmative action is the key to successful equal employment opportunity. The National Civil Service League's 1970 Model Law advocates special programs for minorities and women, in addition to special rating potential forms based on pass-fail criteria rather than the rule of three certification procedures. It also supports a quantifiable 10Bu.s. Commission on Civil Rights, "For All the People • • • By All the People: A Report on Equal Opportunity in State and Local Government Employment" (Washington, D.C.: Government Printing Office, 1969), p. 64. -106-

PAGE 145

timetable to achieve a representative work force.109 More recently, there has been a trend among states to provide the selecting official with more names to choose from in hiring new and disadvantaged applicants. "In 1963, 32 of 54 state merit systems gave (certified) to the selecting official the top three names on the list of eligibles (register) to consider for each vacancy. Six years later only 11 state merit systems used the rule of three while 26 were using a rule f i h f . fi .. 11 0 o e t er 1ve names or ve scores. States which have recently expanded their appointment rules to accommodate equal employment opportunity hiring practices include Connecticut, Florida, Georgia, Michigan, Massachusetts, Iowa, California, and Colorado. Labor-Management Relations There has been much debate concerning the advantages of public sector unionization. An authoritative writer observed, "It is morally indefensible for the government to deny its employees the same privileges that it compels private employers to grant •••• The government should be a model employer rather than lag behind industry in labor relations."111 "Burgeoning employee rules, mushrooming union and association membership, and skyrocketing strikes clearly demonstrate that in the public personnel area, state and local governments are where the action is."112 Much attention has been given to public sector labor-management 109Jean J. Couturier, "Civil Rights in Civil Service The Winds of 44. 1 2crouch, p. 115. 1 Carl W. Steinberg, "Labor Management Relations in State and Local Government: Progress and Prospects," Public Administration Review (March/April, 1972), p. 218. -107-

PAGE 146

relations at the federal, state, and local levels. Prior to 1959, Wisconsin was the only state that had passed legislation requiring public employers to bargain collectively with public sector employees. However, by the end of the 1960s, approximately 35 states had some positive labor relations legislation or procedures for dealing with public sector employee organizations while 15 states still did not. Today, collective bargaining agreements have been instituted by many jurisdictions at all levels of government. Public employee unionism was the result of a number of forces such as paternalism, the success of private unions in getting higher pay, rising expectations among employees of sharing the American dream, and the labor movement's shift from indifference to concern with public sector employees.113 As a result, by the late 1960s, public employees unionism was the growth sector of the union movement. Differences in management as a result of public sector unionization include: changes from unilateral to bilateral decisionmaking; less time for decision-making; the bilateral determination of fringe benefits and employee grievances; employee productivity bargaining; and seniority based promotions. Consequently, collective bargaining has significantly modified public personnel administration by redistributing authority since the taxpayer represents a third-party interest at the bargaining table. In summary, labor management relations has occupied a central position for the past several decades among the change agents which impact public administration. It is anticipated that labor management 113 Crouch, p. 34. -108-

PAGE 147

relations will probably continue to occupy that same position ove r the next decade.114 Veterans' Preference The history of veterns' preference in hiring was firmly established in World War I when government jobs were regarded as a special benefit for veterans. The Veterans' Preference Act of 1944 guaranteed statutory preference toveteranswho served during war time or a national emergency. In the federal government it was not until 1953 that veterans were required to earn a passing score on examinations before receiving premium points. Until that time, extra points could be added to a failing score to bring it up to passing. In 1966, the Veterans' Readjustment Benefits Act extended preference at all levels of government to peacetime veterans who had served six months in the military. There are two basic philosophies that underly granting of preference to veterans in public employment: (1) The idea of preference as a continuing reward for military service to the country, and (2) the concept of preference as a readjustment aid to civilian life. The policy of granting veterans' preference has become a very controversial issue, "when not only the discharges from lesser conflicts but anyone with more than token service in military uniform (including men who chose it voluntarily as a career and retire at an early age) may enter the civil service with a special advantage and often are able to retain their posts in preference to nonveterans with longer service in the civil departments of government. Nor can it be overlooked that by its very nature, veteran preference discriminates heavily against women 114conference Report on Public Personnel Management Reform, P• 70. -109-

PAGE 148

in public employment. " 115 There has been much debate over granting veterans' preference. Some states are making modifications in their veterans' preference policies. For instance, several states have made changes limiting the use of veterans' preference. These states include Oregon, Iowa, Kansas, Louisiana, and Maine. "The most usual recent revisions impose time limits on the military service which qualify veterans for preference (four states) and restrict use of the preference to one time (three states). Other revisions affect the type of preference, deny use for promotion, and limit the definition of disability for preference purposes. "116 Political Activities of Public Employees It has been a long-standing practice to severely restrict the political activities of public sector employees. Restrictions were established to prevent coercion, to assure political neutrality, and to protect the merit system. These restrictions have been mandated by federal law since 1939, under what is known as the Hatch Act.117 Prior to the Hatch Act, the U.S. Civil Service Commission promulgated the same rules as the President. Restrictions included: (1) political candidacy, (2) prohibition of campaign activity, and (3) prohibition of soliciting party contributions and holding office in party organizations. In 1940, federal limitations on political activity were extended to include state and local government employees whose principal 115 Stahl, P• 155. 116conference Report on Public Personnel Management Reform, p . • 67. 117 Stahl, p. 299. -110-

PAGE 149

employment was in connection with federally financed programs. The primary purpose of the 1940 amendments was to secure more efficient and impartial administration of federal funds. Most state and local governments have also restricted the political activities of employees, some regulations being more severe than those in the Hatch Act. There has been a long period of rising discontent since the Hatch Act was passed. Most public employees have been confused about what political activities they could engage in. They have argued that the Hatch Act is outmoded because political patronage has declined and the number of public employees has grown so rapidly as to remove from active political participation a substantial proportion of the total citizenry.118 As a result of the strong opposition to the Hatch Act, restrictions on state and local employees working in federally aided programs were substantially relaxed in 1974. Management Information Systems Public personnel management has been slow to utilize management information systems. "One probable reason for the slow progress being made in the personnel field is the tendency for personnel experts to overlook the total personnel management system and to concentrate upon sub-activities."119 One of the primary incentives to implement management information systems arises from the strict record-keeping requirements of the federal government, the courts, and local jurisdictions for all kinds of 118Nigro and Nigro, The New Public Personnel Administration, PP• 295-300. 119Robert K. Lee and William M. Lucianovic, "Personnel Management Information Systems for State and Local Governments," Public Personnel Management (March/April, 1975), p.84. -111-

PAGE 150

personnel functions. Information systems assist in providing this type of record-keeping information. Additionally, the increase in the size of public personnel systems necessitates the implementation of automated systems. An automated and integrated personnel information system has much greater capabilities than manual record-keeping systems. They serve as an aid to managers in both the delivery and control of personnel management functions.12 0 Personnel Decentralization Decentralization of personnel functions to government operating agencies has focused on better agency response time in filling vacant positions, more management flexibility in decision-making, and better management control of job classifications and position auditing. When certain personnel functions are decentralized, there is a strong need to maintain a tight post-audit control system. "One local government official indicated that his reorganization proposal called for centralizing the personnel function to remove abuses that occurred in 11121 the current decentralized system. States that have adopted decentralized personnel procedures include Colorado, Maine, New Jersey, and \Hsconsin. One of the first significant personnel reforms occurred in Colorado during 1970 when the appeals functions were separated from the Department of Personnel. In 1977, the Department of Personnel began a reorganization by delegating personnel responsibilities to line agencies primarily because of inadequate staff resources and the slow response time in filling positions. According to the Director of Personnel, in 1978, Rudy 120Ibid. 121conference Report on Public Personnel Management Reform, p. 38. -112-

PAGE 151

Livingston, "The early e vidence on delegation is positive -response time is improved, employee appeals have declined, a n d operating m a n a g e r s are actively involved in the personnel process."122 Many states are very skeptical about the "benefits" of delegation. Response time may be improved; however, consistency may be lost and costs may rise as a result. The federal government has e xperienced similar problems in control, consistency, and performance when personnel functions were decentralized and delegated. Executive Services In order to develop a highly trained, experienced, and motivated core of top public executives, several governments have established senior executive services for top managers. California instituted this kind of service in the 1960s called Career Executive Assignment (CEA). The CEA has a separate merit system which is not bound by the general civil service requirements. It allows for non-punitive removal, although CEA employees have a guaranteed right to return to t heir general civil service post if removed. CEA was established be cause of increasing complexities in government, new demands for managerial competence, and an increasing level of specialization.123 Oregon, Connecticut, New Jersey, and Minnesota have instituted similar e xecutive services. Pursuant to the Civil Service Reform Act of 1978, President Carter has implemented a Senior Executive Service (SES) for approximately 9,000 top managers in GS grades 16, 17, and 18. "Its purpose is to increase 122 Ibid., p. 38. 12311oyd D. Musolf, "Separate Career E xecutive Systems: Egalitarianism and Neutrality," Public Administration Review (July/August, 1971), p. 409. -113-

PAGE 152

incentive a mong mana gers in the fed eral government a nd provide top policymakers with greater latitude in usin g the skills of career managers in positions for which they are most capable or compatible."124 It is expected that similar executive services will be developed in other governments. Summary Recent trends in governmental programs and in public personnel management have brought new challenges to managers. Today, understanding and managing governments' human resources requires looking beyond traditional personnel functions. The current trends discussed in this chapter are shaping the future direction of personnel administration and its role in the organization. These trends coupled with the actions of legislative bodies, chief executives, courts, labor organizations, and the general citizenry are important driving forces for human resource management that make it essential for total integration of this function with overall governmental management. 124committee for Economic Development, P• 98. -114-

PAGE 153

CHAPTER IV A PROPOSED ANALYTICAL MODEL FOR PUBLIC PERSONNEL SYSTEM Introduction The preceding chapter outlined the history and development of public personnel systems during the rapid expansion of government at all levels. Chapter IV analyzes and evaluates current public personnel system models. These models were developed to remedy defects in existing civil service systems. To date, these models have been partially effective in integrating personnel functions with overall governmental management. For the most part, they lack a systems approach and are process-oriented, analyzing traditional personnel functions on a step-by-step basis. Presented in this chapter is a new updated and comprehensive proposed model for analyzing public personnel systems so it may be used as positive managerial tool of government. This analytical model relates personnel goals with those of government. It presents a set of performance criteria for good government and defines the relationship between these criteria and 13 traditional personnel functions. The utility of this analytical approach is to demonstrate how proper util-ization of human resource management relates to achievement of a series of criteria for high-quality government. The model demonstrates that personnel functions are an integral element in achieving governmental goals and vice versa. Without a management oriented and integrated personnel system protecting employee rights, the effectiveness and efficiency of government is severely hindered. -115-

PAGE 154

Conversely, it is very difficult to have effective personnel management in government with poor overall management. Performance Criteria for Good Government Although all levels of governments have developed goals and set some standards of performance, the personnel management arm of government has had limited involvement in this process. Overall, personnel management has been considered a service and support function primarily responsible for insuring compliance with merit standards. Personnel management is seldom perceived as contributing to overall management and the achievement of governmental goals. However, personnel management is one of the key managerial functions that significantly determines whether or not government achieves its goals and objectives. A list of major performance criteria for achieving good government that are woven throughout the organization include: a. Effectiveness and efficiency b. Good organization c. Adequate resources d. Qualified human resources e. High productivity and motivation f . True merit service g. Career development system h . Equal employment opportunity i . Social responsibility and equity j. Accountability These performance criteria for achieving good government are in the proposed Analytical Model for Public Personnel Systems. This model illustrates how traditional personnel functions are linked with and contribute to good government. The systems approach in the proposed model describes the management role of personnel functions and their effects on governmental performance. -116-

PAGE 155

Earlier Models For Human Resource Management System Historically, civil service systems have been in a constant state of reform. The concept of merit employment, however, has remained central in government personnel administration reform. Various public interest groups, governmental agencies and administrations have recommended improvements in public personnel systems. As a result, model public personnel systems have been proposed to generate more effectiveness, efficiency, and economy in government. Major models were developed by the National Civil Service League; Intergovernmental Personnel Act; Departments of Health, Education and Welfare, Labor and Defense; and for the 1978 Federal Civil Service Reform Act. Each of these personnel models will be summarized and evaluated as to the degree of success in helping public management achieve good government. National Civil Service League Laws The National Civil Service League was organized in August of 1881 and played a major role in the movement for civil service reform. Over the years the League has sought to aid government at all levels in the adoption, development, and maintenance of reliable public personnel systems through its model laws. The League "drafted the first U . S. Civil Service law (adopted as the Pendleton Act of 1883) and has since proposed six 'Models'."! The latest revision made in 1970, hereafter referred to as the M odel Law, was designed to serve as a guide for state and local governments in revising their personnel systems. The Model iJean J . Couturier, "The Quiet Revolution in Public Personnel Laws," Public Personnel Management (May-June, 1976), p . 150. -117-

PAGE 156

La w contain s thirteen sect ions a d d r essing t h e ge n e ral purpose , career personnel de partment, c i t izen personnel advisory board , hearing officer, agreements authorized, political activities, employee organizations, unlawful acts prohibited, penalties, and status of present employees separability. The purpose of the Model Law is to establish a s ystem of personnel management that meets the social, economic, and program needs of the government. The Model Law recommends a series of procedures for establishing a merit system to recruit, select, develop, and maintain a n effective and responsive work force. These recommendations include policies and procedures for hiring, advancement, training, career development, job classification, salary administration, retirement, fringe benefits, discipline, discharge and other related activities. Under this system, appointments are to be based on merit and fitness without regard to sex, race, religion, or political a ffiliation. For the purpose of this merit system to be realized, it is essential that the great majority of positions in the public service be classified. The Model Laws have long been used as a guide regarding the c entral philosophy of good personnel management systems which enhances the quality of government while offering full opportunity for citizen participation. A major feature of the 1970 Model Law is that the personnel responsibility is to be vested in the chief executive. The chief executive is supported by a personnel department under the supervision of a personnel director, appointed by and accountable to the chief executive. "The League's proposal would place in the h ands of the personnel director and the chief executive the responsbility for -118-

PAGE 157

promulgating rules (called policies in the league statement). These rules, to be adopted only after public hearing, would apply to all the usual personnel functions and would be effective in lieu of prescriptive legislation."2 As a result of the recommendation for chief executive control, the 1970 Model Law was viewed as a key reform effort to help state and local governments develop more effective personnel systems. Jean Couturier, professor of public management and former director of the National Civil Service League, stated that, "This model law was designed as a management document to give authority and responsibility to chief executives. Its philosophy was that public personnel administration should be a positive management tool to achieve more efficient, effective, and responsive government through merit-based employment.") A related feature of the 1970 Law was the abolishment of the commission format typical in earlier model laws and previously adopted by federal, state, and local governments. A 1962 report issued by the Municipal Manpower Commission recommended that independent civil service commissions be abolished because they do not cope adequately with the needs of municipalities f o r professional, technical, and administrative personnel. 4 Supporting this thinking, the League proposed the substitution of a citizen personnel advisory board. The citizen board would not act as an appeals board. The appeals function would be 2Winston W . Crouch, (Washingto n , D . C.: p. 25. 3Jean J. Couturier, p . 155. 4Municipal Manpower Tomorrow ' s Cities" ed., Local Government Personnel Administration International City Management Association, 1976), "The Quiet Revolution in Public Personnel Laws," Commission, report, "Governmental Manpower for (1962). -119-

PAGE 158

assigned to a hearing officer appointed by the citizen board, not by the chief executive. The citizen board, "although devoid of any legislative, judicial, or administrative functions connected with the jurisdiction's personnel administration, can still serve a valuable purpose as a communication link between the community and its elected representatives."5 Additionally, the citizen board would provide advice and counsel on all aspects of personnel administration. The 1970 Model Law received widespread support from mayors, governors, city managers, and civil rights advocates. However, it was highly criticized by testers, recruiters, selectors, and some personnel managers. One of the earlier attacks was made by Bernard Rosen, then director of the U.S. Civil Service Commission. His criticism focused primarily on the civil rights positions advanced in the Model Law.6 Others criticized the abolishment of the commission format, invented in 1883 and adopted with the creation of the U.S. Civil Service Commission. The National Civil Service League rejected the commission format in the 1970 Model Law because past civil service commissions had taken over the total management of systems. "Thus, trying to serve three masters--employees, executive management, and the public--they often ended up serving none and frequently (as in Watergate) were manipulated to serve private interests of public officials."? Although the 1970 Model Law proposed many excellent recommendations for modern personnel administration, it allows too many variations. Some of these variations result in susceptibility of abuse-5Crouch, p. 25. 6Couturier, "The Quiet Revolution in Public Personnel Laws," p. 156. 7Ibid., p. 157. -120-

PAGE 159

-the very susceptibility which gave rise to independent commission format.8 For example, under the New Model Law, some jurisdictions have limited the choice of the chief executive in appointing a personnel director. Another agency is required to conduct examinations and to provide the chief executive with a list of three names from which the appointment may be made. Some cities provide the personnel director with civil service protection. Others limit the authority of the chief executive to promulgate personnel rules by requiring that these rules be approved by city councils. Some critics of the Model Law claim that all of these variations limit the authority of the chief executive and therefore inhibit effective and efficient personnel management. "The success in achieving results can be frustrated by the chief executive's lack of authority over the very personnel decisions which produce good results."9 Intergovernmental Personnel Act Passage of the 1970 Intergovernmental Personnel Act (IPA) enabled the U.S. Civil Service Commission to provide grants to state and local governments for establishing merit personnel systems or for improving existing ones. In conjunction with promoting improved personnel management systems and increasing training and developmental opportunities for state and local government employees, the act enunciated six merit principles: 8Crouch, p. 25. 9Ibid., p. 26. -121-

PAGE 160

1. Recruiting, selecting, and advancing employees on the bais o f their relative ability, knowledge , and skills, including open consideration of qualified applicants for initial appointment. 2. Providing equitable and adequate compensation. 3. Training employees, as needed, to assure high quality performance. 4. Retaining employees on the basis of the adequacy of their performance, correcting inadequate performance, and separating employees whose inadequate performance cannot be corrected. 5. Assuring fair treatment of applicants and employees in all aspects of personnel administration without regard to political affiliation, race, color, national origin, sex, or religious creed, and with proper regard for their privacy and constitutional rights as citizens. 6. Assuring that employees are protected against coercion for partisan political purposes and are prohibited from using their official authority for the purpose of interfering with or affecting the result of an election or a nomination for office.10 These six IPA principles are used by state and local personnel systems in establishing and modernizing merit-based standards. They encourage intergovernmental mobility in achieving effective staff utilization and personnel development which is considered to be a central feature of good personnel management. Although these merit 10Chester A. Newland, "Public Personnel Administration: Legalistic Reforms vs. Effectiveness, Efficiency, and Economy," Public Administration Review (September/October, 1976), p. 556. -122-

PAGE 161

principles were not found as a cure for all "ills" of civil service systems, they did help in improving public personnel systems at state and local levels especially in training and development opportunities for public sector employees. This act authorized the creation of an Advisory Council on Inter-governmental Personnel Policy. This council recommended the extension of these six proposed merit principles to all states under all federal grant programs.11 Therefore, the IPA tried to require that these merit principles be followed in designing state and local model public personnel systems. The IPA principles provide the technical elements of a merit-based personnel system in which merit governs personnel selection and career progress. These principles reflect the managerial aspect of personnel control and responsibility. By following these guidelines, personnel management functions can better interact with the mainstream of management. Standards of Health, Education and Welfare (HEW), Labor (DOL), and Defense (DOD) for Grant and Contractual Operations Another model public personnel system involves a series of standards promulgated by the former Department of Health, Education and Welfare, Department of Labor, and Department of Defense. These departments required the establishment and maintenance of personnel standards by grantees on a merit basis in the administration of various grant-in-aid programs. The philosophy behind these standards was that proper and efficient administration required employment of the most competent 110. Glenn Stahl, Public Personnel Administration (New York: Harper and Row, Publishers, 1976), pp. 380-382. -123-

PAGE 162

available personnel, development of staff morale, and individual efficiency. In order to accomplish these personnel objectives, state and local agencies were required to design their personnel systems to include the 14 standards developed by these departments: (1) merit system organization, (2) equal employment opportunity, (3) employee-management relations, (4) political activity, (5) classification, (6) compensation, (7) recruitment, (8) selection, (9) appointment, (10) career advancement, (11) layoffs and separations, (12) cooperation between merit systems, (13) extension of merit system, and (14) personnel records and reports. "These standards were applicable to all personnel, both state and local, engaged in the administration of grant-in-aid programs under Federal laws and regulations."12 In 1978, the responsibility for establishing merit system standards was delegated to the Office of Personnel Management (OPM). The 14 merit system standards pertain more to the technical functions of personnel administration rather than personnel administration as a primary managerial tool in governmental organizations. Although these standards conform to the requirements of a good merit-based personnel system, they lack comprehensive application in achieving good government. This is also true of other model personnel systems described earlier. Although each model made significant contributions to improving public personnel systems, most were developed in a vacuum disregarding the interrelationships of the personnel functions with overall governmental management. 12Standards for System of Personnel Administration, (Washington, D.C.: Departments of Health, Education and Welfare, Labor and Defense, 1971), p. 1. -124-

PAGE 163

1978 Fed eral Civil Service Ref orm Act A significant revised personnel system of national i mporta nce was adopted on October 13, 1978, when President Carter signed into law the Civil Service Reform Act. This Act was designed to i mprove government efficiency and to balance management authority with employee protection. The chief executive was given more control over personnel policies and senior administrator appointments in the federal service. Add itionally, "Among the major features of the Act are independent and equitable appeals process; protections against abuse of the merit s ystem ; and incentives and rewards for good work and skilled management."13 One of the major features of this Act were two reorganizations. By Reorganization Plan Number 1 of 1978, the Equal Employment Opportunity Commission assumed from the U.S. Civil Service Commission the responsibility for leadership and enforcement of provisions of the Civil Rights Act. The transfer of functions included the hearing and resolution of certain discrimination complaints. By Reorganization Plan Number 2 of 1979, the 95 year old U.S. Civil Service Commission was abolished effective January 1979. Its functions were divided between two new agencies. The first agency, Office of Personnel Managment (OPM), provides leadership in managing the federal work force. OPM is responsible for central examining and employment operations, personnel investigations, personnel program evaluation, and executive development and training. It likewise administers the retirement and insurance programs along with exercising 13Civil Service Reform Act (pamphlet) prepared by the U.S. Civil Service Commission (Washington, D.C.: November, 1978), p. 1. -125-

PAGE 164

managerial leadership in labor relations and affirmative action programs. The second agency, the Merit Systems Protection Board ( MSPB), resolves employee complaints and appeals. The MSPB acts as an independent agency to safeguard both the merit system and individual employees against abuses and unfair personnel actions. It is also empowered to protect "whistle-blowers" from reprisals by their agency superiors. A third new agency was also established, the Federal Labor Relations Authority (FLRA), to administer the federal labor relations and investigate unfair labor practices. FLRA oversees the creation of collective bargaining units, supervises union recognition elections, and deals with labor management issues in federal agences. The 1978 Civil Service Reform Act followed the recommendations in the 1970 National Civil Service League Model Law concerning the abolition of the commission format, the U.S. Civil Service Commission being the oldest. The 1978 Act established nine basic merit principles governing traditional personnel functions. Another major feature of this act was a change in employee appeal rights concerning adverse action by an agency, allowing for direct appeal to the Merit System Protection Board. This change was made to reduce the number of stages in the appeal process and to shift the burden of proof from the agency in employee dismissal cases. Act created a Senior Executive Service (SES) for managers in the GS-16 to GS-18 range and above. Annual pay increases for executives in the Service are to be based on productivity instead of longevity. Those removed from the SES do not have appeal rights but retain the -126-

PAGE 165

r ight to return to thei r previous c l assi f i e d j ob s . The Act also placed managers in the GS-13 and GS-15 r a nge on a merit pa y system. Step a nd longevity increases are eliminated and pay increases are again based on performance. The last major feature codifies the labor rights of federal employees by expanding their rights under collective bargaining.14 The intent of this act was to build a stronger foundation protecting federal employee rights while adhering to the traditional merit concept. Furthermore, it was intended to develop new approaches in personnel operations and administration serving as aids in the effective management of the governmental work force. "The fundamental reforms proposed in the reorganization plan and Civil Service Reform Bill attempt to stake out the foundation points of a sound public merit system and the rights and manner of fair treatment of individuals in the system while also providing those tools that are essential for public managers who are responsible for the efficient and effective accomplishment of the missions of the federal government."15 Although there is no disagreement with the above developed goals for modern day public personnel systems, there is growing skepticism over the successful accomplishment of these objectives. For e xample, Bernard Rosen, Executive Director of the U.S. Civil Service Commission from 1971 to 1975, cites four major defects in this Act. 14Ibid., pp. 6-12. 15Testimony of Alan K. Campbell, Chairman, U.S. Civil Service Commission before the Committee on Post O ffice and Civil Service, U.S. House of Representatives ( March 14, 1978). -127-

PAGE 166

1. The S E S vests too much authority in presidential appointees t o reassign, demote, and r eplace . a lmost all top car eer executives. "It is important for the public interest that political appointees not have suffocating power over career executives; power that could be used intemperately or to satisfy a special interest, or to provide a s capegoat for a poor decision at a higher level."16 2. Individual agencies should not have the authority to examine applicants for jobs in that agency. This authority will not foster an impartial civil service but instead will encourage one selected on the basis of political and personal favoritism. 3. Splitting of the U.S. Civil Service Commission into two agencies allows for the possibility of manipulating the civil service for personal or political favoritism , because personnel policy would be made by an adm inistrator serving at the pleasure of the President, instead of a bi-partisan body. "The citizens would have far greater confidence in the wisdom and impartiality of such policies if they were made by a bi-partisan body; and that is, of course, the primary reason for having established the bi-partisan Civil Service Commission in the first place."17 16Bernard Rosen, "Merit and the President's Plan for Changing the Civil Service System, Public Administration Review (July/August, 1978), p. 301. 17Ibid., p. 304. -128-

PAGE 167

4. The OPM will not be subject to the cleansing power of the enacted Sunshine Act as the abolished Civil Service Commission would have been. Others agree with Rosen's criticisms of the 1978 Act. Frederick Thayer, Professor of Public Administration, feels that man y of SES employees will be immediately subordinate to patronage appointees, potentially lacking qualifications for assessing the competence of their career subordinates. Thayer does not agree with the President's assumption that the best way to motivate administrators is to combine the threat of punishment with the enticement of bonuses.18 James D. Hill, head of the National Federation of Professional Organizations, believes that this reform act is not the answer to the "ills" of civil service systems. "The Carter Plan is the product of a 'conspiracy by federal personnel officers to scuttle the merit system' and 'to get rid of every law that ever stood in their way' when they want to fire or shift an employee."19 The American Society for Public Administration's Capital District Chapter in Albany, New York, has expressed serious concerns over the 1978 Act, specifically the SES. Areas of concern include the: 1. Designation of positions in the Career Executive Service. 2. Entry into the service. 18Frederick C. Thayer, "The President's Hanagement 'Reforms': Theory X Triumphant," Public Administration Review (July/August, 1978), pp. 309-314. 19Gregory D. Foster, "The 1978 Civil Service Reform Act: Post-Mortem or Rebirth?" Public Administration Review (January /February, 1979), p. 80. -129-

PAGE 168

3. Tenure within the career service. 4. Attraction of competitive class civil servants to the Career Executive Service. 5. Compensation. 6. Management discretion in assignments. 7. Implementation and monitoring of the career executive service.20 Public administrators and public personnel professionals have voiced objections over the 1978 Civil Service Reform Act. It is feared that the Act will increase patronage appointments, cause a decrease in employee competency, and dilute the strength of the merit concept of employment. While it is too early to evalute the success and long-term implications of this reform, it is significant that James L. Sundquist, a long-time professional observer of national government from his position in Brookings Institution, has expressed concern. He feels that the increasing politicization of senior managerial appointments in the federal service by both Republican and Democratic administrations since 1952 has caused a decline in administrative competence in the national government.21 In summary, the 1978 Civil Service Reform Act comes closer than other legislation to integrating the personnel components of management with the overall management system for better performance in government. It does, however, seem to lack the proper balance between merit and 20Bob Donahue, "Chapter Adopts Positions," Public Administration Times (June, 1978), p. B. 21James L. Sundquist, "The Crisis and Competence in Government" in Joseph A. Pechman, ed., Setting National Priorities: Agenda for the 1980s (Washington, D.C.: The Brookings Institution, 1980), pp. 554-557. -130-

PAGE 169

patronage. It also fails to interrelate traditional personnel functions with criteria for good government. Earlier models have been moving in the direction of establishing greater executive responsibility. They have been structured largely around the more traditional personnel functions that emphasize the technical aspects of personnel management. The remainder of this chapter will be devoted to introducing a new analytical model for public personnel systems designed to overcome the deficiencies of past models by directly integrating public personnel system management with overall governmental management. A Proposed Analytical Model For Public Personnel Systems The objective of public personnel managment is twofold. First and more traditionally, it is concerned with employing a talented, competent, and representative work force. It is designed to provide fair competitive compensation, and improve working conditions for more effective, efficient, and economical conduct of government. The second objective of public personnel management pertains to the management of the organization's human resources in which the overall effectiveness of the organization largely depends. This management function includes human resource planning, classifying, recruiting, selecting, compensating, motivating, training, developing, and evaluating human resources in a manner which significantly contributes to accomplishing the organization's overall goals. To date, governmental managers have concerned themselves almost entirely with traditional personnel functions. For example, criticisms of public personnel management have focused almost entirely on personnel -131-

PAGE 170

services. "Responsible public executives, employee unions, and many employees alike share in complaints that the most pervasive and persistent problems of public personnel administration are the impersonal, slow, unresponsive, rigid, and expensive personnel processes which scarcely accomplish public employmen t objectives."22 This typical evaluation only scratches the surface by addressing the service and support responsibilities of public personnel. The other objective of managing human resources and utilizing personnel functions as a comprehensive management tool in achieving organizational goals and effective programs has for the most part been totally ignored. Most attention has focused on the important issues of collective bargaining, complicated mazes of legislation, judicial orders, civil service regulations, and individual agency rules. These factors have significantly changed the direction and scope of public personnel management . More importantly, they directly lend support for the need to integrate the personnel functions with overall management of the organization. New trends in collective bargaining, and increased litigation and legislation, have forced managers to involve personnel administrators in solving organizational management problems. As a result, an awareness has been created that professional personnel managers should be consulted in solving organizational problems and contributing to formalizing future organizational goals. However, few public administrators utilize this capability or recognize the potential of integrating human resource management with overall management. Traditional personnel systems have operated independent of, 22Newland, p. 557. -132-

PAGE 171

rather than interdependent with, public s e rvice deliv ery organization s . Viewed historically, public personnel management reform has concentrated on devising ideal principles for the achievement of merit personnel administration and on structuring organizational devices, such as bi-partisan, independent personnel boards, to administer the system. In this context, public personnel administration made important progress, but it also tended to be compartmentalized and to be treated as a subordinate service function. Its linkage to achievement o f effective program performance were at best indirect. Except for broad generalizations about the virtues of merit service and competence in government, there is little solid evidence around concerning how various types of personnel systems relate to overall governmental performance effectiveness. Indeed, the techniques of analyzing the linkages between personnel administration systems and their various parts and overall governmental administration effectiveness seem to have been neglected. The proposed Analytical Model for Personnel Systems focuses on the relationships between the performance of personnel administration and overall government or agency performance. It identifies a set of performance criteria for achieving good government and cross-relates them to the elements of the personnel system. The model illustrates how traditional personnel functions are interlinked with these criteria in unique and variable mixes. The proposed model emphasizes the interrelationships and interdependency of a personnel system with -overall management of the organization. Finally, the model demonstrates how personnel management is an integral tool in achieving good government. It provides a systems approach to human resource management and relates it to governmental performance. For, "it is time to refocus -133-

PAGE 172

attention on the principal purpose of public service--providing effective, efficient, economical, and fair government."23 Interrelationships of Performance Criteria for Good Government with Personnel Functions Governmental performance is directly affected by personnel administration. Personnel is woven through the entire organization and determines, in large part, the effectiveness of overall government. The close relationship of government and personnel management can be understood by examining the linkages between performance criteria for good government and traditional personnel functions. The following chart has been developed to illustrate the interrelationships between government performance criteria and personnel functions. Each "x" indicates that a relationship exists between the overall government performance criterion and the personnel function. Many different personnel functions contribute to achievement of the various performance criteria. Moreover, it is evident that government management cannot reach a high level of performance without utilizing personnel management as a total system with proper balance in its various functions. Public personnel systems must be integrated with governmental management systems. Personnel functions provide more than a support service to the organization. They are an important tool of overall management. In the following paragraphs each performance criterion is defined, described, and related to the traditional and modern-day personnel functions. 23Committee for Economic Development, Improving Management of the Public Work Force (New York: Committee for Economic Development, November;-1978), p. 16. -134-

PAGE 173

I t-' w V'l I ,0 J..P.,('a o..p 6'<12 /o-t/ C..p ')' ifl/..., Effectiveness and Efficiency Good Organization Adequate Resources Qualified Human Resources High Productivity and Motivation Merjt Service Career Development Sys tern Equal Employment Opportunity Social Res pons i bi 1 i ty and Equity Accountability Chart 4 -A RELATIONSHIPS BETWEEN GOVERNMENTAL PERFORMANCE CRITERIA AND PERSONNEL ACTIVITIES I , I c: I +' >,IOC: 41VI c: 41 0 V'l "' c: VI uc: "' > 01 ..... c: +' u 21 c: I , V'l 41 co 141 c: +' 0 c: 4101 ..... 0 E+> c:•.-+> c: 41 c: u ttl•.-01410 41•.-ttl . .... uc: '+-..... ..... Wc::::t'+-U 10410 VI c: ..... 41.-V'l ..... S...•.-..... ..... >,•.-.-10 . .... 41C: >,41 c: 10 f! c::::tc: VI u S...o+' 10 > O:::t C:C:U41 011'1 41 s... lOOt::: VI C: 41 10>,0 41 0.-"' 41 41 '+-.-..... "'s... E .-c: a. 10 ..... VItti roo u .-:::t 0 C."'O > .D a..-.,_ S...IO C.:::t 8 a. +' 41.-.-..... 41 41 cr.-c.. c .,.. 10 E 41 o..c:s... 41> Eo 41 41 U+J Vl ..... 0..0 10 ..... <10<.!:! o..w 1-::CV'lr-wu u Vl X X X X X X X X X X X X X X X X X X X X X X X X X X ' X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X . X X X X X X X X X X X . y X X X X X --

PAGE 174

Chart 4.. sTHE ANALYSIS OF A PERSONNEL SYSTEM EVAUIATIOO CRITERIA PERSCNNEL ACITVITIES 1 . Efficiency & Effectiveness A . Personnel Planning 2 . Good Organization B." Classification 3 . Adequat e Resources c. Recr uitment 4. Merit Service 0 . Selection 5 . Qualified Human Resources E. Perfonnance Eva 1 uation 6 . Career Developmen t System F. Empl oyee Counseling 7. High Motivation & Productivity G . Training & Career Development 8 . Equal Employment Opportunity H . Affirmative Action 9 . Socia l Responsibility I. Labor and Employee Relations 10. ity J . Grievances and Appeals K . Compensation L. Separati o n M . Retirement -136-

PAGE 175

Effectiveness and Efficiency Effective and efficient government has been a long established goal in the public sector. "Efficiency" relates to how well resources are used in carrying out specific measures of work. "Effectiveness" relates to the overall impact of a governmental program or a government in meeting public needs and of being "cost effective'' or yielding high benefits in relation to costs, such as thebenefidcost criterion. While efficiency is important, the effectiveness criterion is the ultimate measure, because it relates to the overall performanc e of an agency or a program in achieving public goals. The difference can be seen by realizing that personnel can be very "efficient" in an agency's actions, but the overall agency performance may be poor because the work is misdirected or simply produces "paperwork" rather than being devoted to productive rendering of ultimate services to the public or effectively carrying on functions which are truly essential. Originally, this performance criterion was aimed at achieving economy and efficiency in governmental organization. The federal government has established various commissions to study economy and efficiency; one of the first being the 1910 Taft Economy and Efficiency Commission. It was concerned with minimizing inputs. "This emphasis continued after the passage of the Federal Budget and Accounting Act of 1921, which included a section directing the Budget Bureau to secure greater economy and efficiency in the conduct of the public service."24 -In 1937, the President's Committee on Administrative Management stressed .the importance of cutting costs, improving services, and raising the 24John D. Millett, Management in the Public Service (New York: McGraw-Hill Book Company, Inc., 1954), pp. 205-254. -137-

PAGE 176

standards of performance. The goal of economy and efficiency was changed to that of effective and efficient government. Writers such as Gulick and Urwick viewed efficient government to be a prerequisite for administration reflecting basic American mores. Behavior that deliberately wastes resources or makes less efficient use of them than would be otherwise possible is generally thought of as being irrational, if not immoral.25 In 1948 the Commission on Organization of the Executive Branch of the Government, commonly known as the Hoover Commission, was established to study federal governmental organization and management. The 1949 Hoover Commission report stated that the first and essential step to improving administrative management in the federal government required a search for economical, efficient, and accountable government. The Commission found authority in the federal government diffused and confused. It also found that staff services were insufficient.26 Following the recommendations of the Hoover Commission, President Truman, by Executive Order 10072, directed federal departments and agency heads to provide for periodic and systematic appraisal of operations to improve effectiveness in governmental performance. President Truman also established the Advisory Committee on Management Improvement to promote these goals. State and local governments also tried to achieve more effective and efficient government. The Mayor's Committee on Management Survey for the City of New York during the early 1950s studied how agencies 25Jerome B. McKinney and Lawrence C. Howard, Public Administration: Balancin Power and Accountability (Oak Park, IL: Moore Publishing Co., 197 ), p. 26Millett, P• 254. -138-

PAGE 177

could achieve effective and efficient g overnment.27 All o f these commissions, committees, and studies at federal, state, and l ocal levels were concerned with improving management of the public sector by means of effective and efficient performance. Personnel management directly impacts on the government's performance criterion of effectiveness and efficiency, requiri ng competent and capable workers who are highly skilled, motivated, and productive e mployees. Government needs employees that are career oriented, aware of and have a feel for the principles of publi c service, and dedicated to the public's interest. They need to work in properly organized structures with effective institutional management systems. Personnel managers should strive to promote the development and productive use of the government workers. Chart 4-A illustrates how effectiveness and efficiency is related to the whole personnel system. It includes the personnel functions of human resource planning, classification, recruitment, selection, performance evaluation, training and human resource development, employee counseling, compensation, appeals and grievances, labor and employee relations, and separation. These relationships emphasize that personnel management is a central management function in the entire organization. It is not simply a housekeeping service for the enforcement of personnel rules and regulations. It is responsible for providing skilled, capable, and competent human resources. Public personnel systems and programs must promote high levels of employee performance to achieve governmental objectives. 27Ibid., pp. 254-276. -139-

PAGE 178

Good Organization Fundamentally, organization is assembling the structural governmental means to accomplish public goals. Organization provides a means to effectively achieve public objectives such as restructuring an agency, linking agencies in a better way, or establishing new inter-governmental coordinating structures. More specifically, organization is putting together the structural means to accomplish goals.28 As related to the government, organization involves structuring or restructuring public services to improve governmental performance. The performance criterion for good organization entails structuring the public service into numerous segments that will: (1) function effectively and efficiently, and (2) interact properly among related structures, and (3) be flexible enough to adjust to change. Good organization requires the arrangement of personnel to facilitate the accomplishment of a specified purpose through the allocation of functions and responsibilities. "It is the relating of efforts and capacities of individuals and groups engaged upon a common task in such a way as to secure the desired objective with the least friction and the most satisfaction to those for whom the task is done and those engaged in the enterprise."29 Throughout history, government has striven to achieve good organization by constantly reorganizing agencies and departments at federal, state, and local levels. President Carter's 1978 Civil Service 28HcKinney and Howard, p. 171. 29John M. Gaus et al., The Frontiers of Public Administration (Chicago, IL: University of Chicago Press, 1936), p. 67. -140-

PAGE 179

Reform Act is the most recent federal ref orm effort in the personnel area. Personnel functions directly interact with the performance criterion of good organization. Chart 4-A shows that this criterion i mpacts on human resource planning, classification, equal employment opportunity and affirmative action, appeals and grievances, and labor and employee relations. Personnel managers should have input in the organizational structure through job classification systems that: (1) takes into consideration various organizational structures and establishes classifications according to work assignment, (2) provides career ladders, (3) provides for flexibility to meet the changing needs of the organization by reassigning or restructuring job duties and responsibilities. The classification function sets the parameters for recruitment, career development, and salary setting which affects the organizational structure and performance of the agency. Agenc y administrators should involve personnel managers in organizational efforts to better accomplish governmental goals and objectives. These various personnel functions all affect and impact governmental performance. Likewise, the personnel system should be subject to direction by top management so personnel management properly serves overall management in the achievement of agency or governmental goals. Adequate Resources One of the primary purposes of government is to provide public goods and services to meet public needs as defined through legislation and regulations. Government must have adequate resources to (1) provide necessary programs and (2) provide for the necessary human resources and managerial system to carry out the objectives of the program. Decisions J . 41-

PAGE 180

pertaining to managing, budgeting, and allocating gove rnmental resources are often complicated by politics and public value judgments that prevail over the rising public expenditures such as unemployment, taxation, inflation, revenue sharing, and borrowing or deficit f inancing. The performance criterion of resource allocation encompasses taxation, budget provisions, and budgetary controls. Public services are provided through budgetary procedures which allocates resources for programs and personnel. Adequate resources must be secured to carry out government responsibilities and programs must be sufficiently staffed. Inadequate budget provisions can undermine the best conceived personnel system. Personnel allocation and management is a very important aspect of overall budgeting and resource management, especially in state and local governments. The performance criterion of adequate resource allocation impacts the following personnel functions: human resource planning, classification, recruitment, equal employ ment opportunity and affirmative action, training and human resource development, compensation, employee counseling, retirement, labor and employee relations, and separation. It is impossible for governmental managers to operate programs without competent, well compensated, and trained employees. Personnel management is responsible for recruiting and selecting a well-qualified work force, retaining competent employees, providing career development opportunities, providing work incentives, and compensating employees with competitive and just salaries. Management and personnel administration need to jointly set goals and plan adequate resources to staff, develop and retain employees in order -142-

PAGE 181

to insure high competence and productivity. A well-developed, integrated, and management-oriented personnel system is a key to effective utilization of human resources. Without sufficient funding, this performance criterion cannot be met and overall government performance will fall short. Qualified Human Resources The effectiveness and efficiency of any organization depends on the quality and performance of its work force. "Continual improvement in the quality and skill in the organization is a necessary investment for its success and survival."30 This is especially true in the public sector where: (1) it is difficult to separate overall performance of government from the abilities of its personnel, and (2) government is a labor intensive organization especially at the state and local levels. Superior talent is needed in the public sector to weigh important decisions and solve nationwide problems affecting every citizen. Today, governmental managers must combine public relations and political awareness with sound administrative principles. They must have the ability to coordinate large numbers of employees with diverse talents and cultural backgrounds.31 However, few realize or appreciate the knowledge, skills, abilities, and leadership required of governmental workers. The ultimate success or failure of governmental programs depends on the 30R. Wagner, "The Employment Interview: A Critical Summary," Personnel Psychology 2 (1949), p. 28. 31Stephen B. Sweeny and James C. Charlesworth, eds. Achieving Excellence in Public Service. A symposium sponsored by the American Academy of Political and Social Science and the American Society for Public Administration (Philadelphia, PA: The American Academy of Political and Social Science, August, 1963), pp. 19-20. -143-

PAGE 182

highly qualified, motivated, skilled, and dedicated employees. Consequently, the prime of good government requires a constant supply of capable and trained manpower which is the direct responsibility of personnel administration. The performance criterion of highly qualified human resources is related to the following personnel functions: human resource planning, classification, recruitment, selection, equal employment opportunity and affirmative action, performance evaluation, training and human resource development, and compensation. Unless the personnel system provides high quality personnel, government cannot achieve its goal of effective and efficient government. The quality of the governmental work force is the most vital resource of an organization. It is the human resource counterpart of the dollars allocated to fund the organization and its programs. The continual improvement in the quality of personnel talents of an organization is a necessary requirement for improving the productivity. High Productivity and Motivation Massive expansion of governmental functions during the 1960s and 1970s, rapidly escalating costs during an era of long-term inflation, and severe budget constraints have resulted in the high priority now being placed on the government performance criterion of high productivity and motivation. Productivity is measured by the ratio of outputs (goods and services produced) to inputs (money, labor, and materials). Improved productivity requires increased outputs with equal or less units of inputs. Productivity is a measure of how well resources are used. -144-

PAGE 183

During the last two decades, government has emphasized and focused on increasing productivity in all public sector agencies. In 1970 the President created the National Commission on Productivity to promote productivity improvement projects. The Commission concentrated on studying productivity in state and local governments. In April, 1971, a federal joint Project on Productivity Measurement under the d irection of the General Accounting Office, the Office of Management and Budget, and the U.S. Civil Service Commission was established to coordinate federal productivity improvement efforts. By August, 1971, the project resulted in establishing a permanent program for productivity measurement and reporting in federal government.32 More recently, in 1979, the Joint Economic Committee of Congress commissioned its staff to review productivity in the federal government. This study concluded that the goal of federal government, as perceived by American citizens, was to make the federal government work effectively by limiting growth, controlling costs, and improving services. The study concluded that the way to achieve these goals was to increase the level of productivity in government activities.33 To achieve the performance criterion of high productivity and motivation, the following personnel functions are linked with government operations: human resource planning, classification, equal employment opportunity and affirmative action, performance evaluation, training and human resource development, employee counseling, compensation, appeals and grievances, labor and employee relations, and separations. To 32Crouch, pp. 257-279. 33Productivity in the Federal Government, Staff Study, Joint Economic Committee, Congress of the United States (Washington, D.C.: U.S. Government Printing Office, 1979), p. 1. -145-

PAGE 184

increase productivity and motivation, personnel systems through overall management must provide an employee a work climate that fosters employee satisfaction. Job structuring should allow for creativity, advancement, growth, and development, as well as, stability. Employees should feel that management is fair and supportive of their personal goals and objectives. Management needs to institute incentives such as performance bonuses, performance related merit increases, job enlargement, job enrichment, career development, and training opportunities, and suggestion award programs. All of these activities must be planned, developed, and organized with concurrence of agency management working closely with personnel managers. Personnel and agency management should be equally involved in developing and utilizing productivity and performance measurements. To accomplish this, the personnel evaluation process needs to be related to organizational and program performance. By linking personnel management to agency performance, government can be managed more objectively and come closer to obtaining a more productive and motivated work force. Merit Service As discussed earlier, the size and complexity of government requires qualified, competent, and continuing professional capability. Only through able and dedicated career employees can effective and efficient government be achieved. Historically, through trial and error, our nation discovered that the spoils system of rewarding political service, did not produce the quality manpower necessary for good government. As government increases in size and complexity, it becomes even more important to select and retain a highly skilled and capable career work force, especially at the -146-

PAGE 185

managerial level. "Excellence is nowhere more necessary today than those charged with the management of public affairs, and excellence cannot be sustained indefinitely without public recognition."34 Managers must instill in all citizens a greater appreciation of the increasingly critical role that all levels of goverment play and a greater awareness that efficiency in government depends on the quality of the work force. The merit system was established as a means of providing a better quality career work force. In its broadest sense, the performance criterion of merit service means, "a personnel system in which comparative merit or achievement governs each individual's selection and progress in the service and in which conditions and rewards of performance contribute to the competency and continuity of the service."35 Most American governmental jurisdictions have adopted the merit service concept for their personnel management functions to raise the quality of their governments. The governmental goal of establishing a merit service epitomizes and guides enlightened public personnel policy. The concept of merit service literally focuses attention on the responsibility of managers and supervisors to select, retain, and reward industrious and competent employees on a career basis. However, the intent of a merit service has significantly expanded since originally established in response to combat the "ills" of the spoils system. Establishing a merit service required reform in public sector employment to promote government efficiency and uphold ethics in the service. The 34Sweeny and Charlesworth, p. 27. 35Stahl, p. 42. -147-

PAGE 186

merit goal of government today stresses the positive aspects of personnel administration, placing less attention on the traditional protection function. Personnel management of the 1980s must concentrate on the positive approaches of selection, advancement, and retention of employees on the basis of demonstrated individual merit. There is a delicate balance between providing a merit service for public sector employees and complying with civil service rules and regulations. The merit principle as a concept has been firmly rooted in government. Its implementation, however, is integrally woven throughout the personnel management functions of human resource planning, classification, selection, equal employment opportunity and affirmative action, performance evaluation, training, and human resouce development, employee counseling, compensation, appeals and grievances, labor and employee relations, and separations. Personnel management continues to promote and maintain a merit service in order to provide professional and capable career employees needed for effective and efficient government. Career Development System The counterpart to the performance criterion of merit service is establishing and maintaining a career development system for public sector employees. Much of the attention in establishing and maintaining a merit service has focused on the importance of attracting highly qualified individuals. A true career development system is broader. It -encompasses recruiting, hiring, motivating, developing, and retaining well-qualified employees on a long-term basis. Continuity and valued public sector experience are essential for achieving effective and efficient government and providing public services and programs. -148-

PAGE 187

Only through a well-established career development system will highly skilled employees remain with the organization, thus enhancing its competence and character. The career system of government must provide a work environment which stimulates initiative, imagination, productivity, personal development, and cost consciousness. Additionally, it must enhance opportunities for career development and advancement through training, education, and career development, thus utilizing abilities of personnel to their fullest extent. A career development system fosters skill, development, and promotion in accordance with employee interest and abilities as well as meeting organizational objectives. It encourages productive employees to continue working for the organization by rewarding outstanding performance. A career development system sets the parameters for personnel management by interfacing with the following personnel functions: human resource planning, classification, recruitment, selection, equal employment opportunity and affirmative action, performance evaluation, training and human resource development, employee counseling, compensation, retirement, appeals and grievances, and separations. Public personnel systems must provide individual growth and development by utilizing promotional opportunities for advancement. It also must provide commensurate salary and fringe benefits to enhance employee satisfaction. A poorly structured, isolated, and unresponsive personnel system will have high turnover, and lead to inefficient use of human resources. -149-

PAGE 188

In a highly advanced and technologically oriented world, it is necessary to constantly retrain human resources. Even good employees can become ineffective without proper retraining in new methodologies, new systems, and new approaches in government. It is the responsibility of overall management working closely with personnel specialists to provide job security, adequate careerdevelopment opportunities, and a reward system to retain competent and capable employees. In order to make government more effective and efficient, personnel management must attract quality manpower and retain them through a career system. Equal Employment Opportunity The performance criteria of equal employment opportunity is a widespread and important issue, firmly established in national policy. "Federal and state institutional policy and the traditional merit principle guarantee equal employment for all U.S. citizens."36 National policy has been adopted by Congress with the specific purpose of eliminating all bias in employment practices through Title VII of the 1964 Civil Rights Act as amended by the 1972 Equal Employment Opportunity Act. As a result of this 1972 Act, Title VII now bars all discrimination in employment and conditions therein based on race, color, creed, national origin, sex, or other non-merit factors. This Act vests enforcement authority in the Equal Employment Opportunity Commission (EEOC) which can now bring employee discrimination cases to -litigation. In summary, equal employment opportunity applies to all employers. Its objective is to ensure non-discrimination on the basis 36Crouch, p. 39. -150-

PAGE 189

of race, color, creed, sex, national origin or handicap. To accomplish these goals it processes complaints through conciliation and/or litigation. Affirmative action programs were established by Executive Order 11246 as amended. These programs applied to federal contractors with oversight by the Office of Federal Contract Compliance in 1969 . Affirmative action programs require that special measures be taken to assure disadvantaged groups better entrance into organizations and better promotional opportunities. The objective of affirmative action programs is to overcome results of past discrimination by balancing the number of disadvantaged employed with their representation in the labor force. These programs are also aimed at ensuring the equal distribution of disadvantaged group members among occupational classes and pay grades in an organization. To accomplish this, affirmative action programs use outreach recruitment, training, removal of unnecessary barriers to employment and promotion, internal appeals and grievance procedures, and counseling. Affirmative action programs are usually developed and coordinated by the personnel department. The performance criteria of establishing equal employment opportunity is also a goal of personnel management. The following personnel functions are directly associated with providing equal employment opportunity: human resource planning, classification recruitment, selection, equal employment opportunity and affirmative action, training and human resource development, compensation, appeals and grievances, and labor and employee relations. Personnel systems must insure that all recruitments, appointments, and promotions are based on merit and fitness without regard to race, color, sex, age, -151-

PAGE 190

religion, political affiliation, handicaps, or other non-merit factors. Achieving equal employment opportunity c annot be compartmentalized in the personnel department or individual departments. Instead, personnel management must play an integral role in overall management by planning and advising, and implementing equal employment opportunities for a more efficient, effective, and representative government. Social Responsibility The traditional performance criteria of government have been the effective, efficient, representative, and economical conduct of business. Consequently, the main focus has been on budgeting, personnel management, organization, system analysis, planning, and purchasing. In recent years, governments at all levels have added a new goal of social responsibility and equity. Historians claim that government has systematically discriminated in favor of established stable bureaucracies which were opposed to hiring minorities from disadvantaged backgrounds and lacking political and economical resources. However, governments have gradually attempted to reverse this systematic discriminationby recognizing their social responsibility to enhance the political power and economic well-being of disadvantaged groups.37 Governmental organizations are committed to both good management and social equity as values, rationales, and goals to be achieved. Opportunities for achieving social equity can be enhanced by decentralizaion, devolution, projects, contracts, sensitivity training, responsibility expansion, confrontation, client involvement, executive 37H. George Frederickson, "Towards a New Public Administration," in Shrafitz and Hyde, eds., Classics of Public Administration, PP• 392-403. -152-

PAGE 191

inventories and social indicators.38 Review of the distributional impact of all public programs is necessary and at times specific programs must be created for this purpose. The government has initiated many programs for the purpose of achieving social equity. They aim to insure equal employment opportunity for the disadvantaged, establish training programs for the unskilled and unemployed, and provide day-care centers for working parents. These programs began with President Johnson's "War on Poverty" and encompassed the Neighborhood Youth Corps, Model Cities, Job Corps, Head Start, and other programs in the mid1960s. More support was gained with the passage of the Emergency Employment Act (EEA) and its successor, the Comprehensive Employment and Training Act (CETA) in the mid-1970s. Governments have also used social indicators as a means of measuring social equity and charting social progress. In 1974, the Office of Management and Budget published a report entitled "Social Indicators". This and similar reports demonstrated the need for quantitative analysis of general social conditions and trends to facilitate governmental policy choices to help implement the goal of social responsibility. These programs have had a tremendous impact on human resource management by facilitating implementation of social equity in the public sector. The following personnel functions play a part in helping government achieve social equity: human resource planning, classification, recruitment, selection, equal employment opportunity and affirmative action, training and human resource development, retirement, and employee counseling. 38Ibid., p. 393. -153-

PAGE 192

Public sector organizations are encouraged to accept untrained and minimally skilled workers in federally {unded programs and the n training them in work skills and work discipline. Personnel mana gement fulfills its social responsibility goal by developing personnel policies and procedures that employ the disadvantaged or unskilled workers and provide promotional opportunities for them. Accountability Accountability is an essential element of representative, democratic government. Accountability surrounds, permeates, and underlies the entire process of representative government and thus becomes an important governmental goal. Government agencies, officials, and employees are all expected to be accountable to higher authorities in the executive and legislative branches and to the general public. Every governmental entity is therefore held accountable for faithfulness to lawful duty; for high attainment of standards and principled behavior; and for constructive results.39 Accountability in government involves three main concepts: (1) greater responsibility to elected policymakers in the executive and legislative branches; (2) greater responsiveness to community groups and the public, and (3) greater commitment to "Values and Higher Standards of Ethics." Governmental accountability relates to its efficient performance, responsiveness, and achieved results. This includes efficiency, productivity, and economy of operations, as well as honesty and integrity. The performance criterion of accountability links with the following personnel functions: classification, recruitment, 39Burton D. Friedman, The Quest for Accountability (Chicago, IL: Public Administration Series, 1973), pp. 1-32. -154-

PAGE 193

selection, equal employment opportunity and affirmative action, training and human resource development, compensation, retirement, appeals and grievances and separations. Accountability is now being applied to personnel systems on two levels: 1. Devising personnel policies that give greater authority to managers while adhering to merit principles. 2. Providing responsive support services to agencies so they can be efficient and productive. The first level requires developing a classification system that gives the organization enough latitude to assign sufficient authority to its managers. Managers must have the authority and the resources to accomplish objectives for which they are held responsible and accountable. They must be given adequate authority to insure that the skills and energies of employees are used to achieve greater efficiency and productivity. The second level requires that personnel systems be responsive to management while ensuring the integrity of the merit system. -155-

PAGE 194

Introduction CHAPTER V HISTORY AND PREVIOUS STUDIES OF COLORADO STATE PERSONNEL SYSTEM The purpose of this chapter is to provide an understanding of the historical evolution and development of the principal State personnel system, as well as document major reforms which characterize the current system. The chapter begins with an in-depth presentation of the State personnel system's historical origins. Initial development of the system is then discussed at length. The chapter continues with a presentation of the more recent refinements which characterize the current State personnel system. An historical summary of major trends to reform the system is then presented. The chapter continues with a review of major State personnel studies conducted since 1970, including analysis of the status of past study recommendations. The chapter concludes with a summary of current major studies of the State personnel system. History of Colorado State Personnel System Introduction -'!'his section describes the legal history and organizational evolution of the State personnel system. Historical origins and legal developments leading up to the current system are traced. A summary of the legal history of the State personnel system is presented, including a chronological chart of major State personnel developments. -156-

PAGE 195

Beginnings of Colorado State Personnel System: 1876-1907 The first Colorado State Constitution in 1876 (Title I, Articles I-IV) provided a general set of guidelines for employing the State's public personnel--known then as officers. The Governor had responsibility for State officers' nomination and appointment, with the State Senate's consent (Article IV, Section 6). The Governor also had responsibility for State officers' retention and firing (Article IV, Section 8). The State Legislature had responsibility for establishing State officers' salaries, which could not be changed during an incumbent's term in office (Article V, Section 30). In short, State employment powers were vested with the Governor, with provision for Legislative consent and review. After 1883, public sentiment toward the civil service in Colorado began to parallel national reform sentiments. National attitudes centered on the rejection of partisan identification as the principal criterion for public sector appointment. It was often postulated that "once the governmental institutions were void of graft and corruption found through the spoils system, the economic and social injustices of government personnel policies could be legislated away."1 Since the 1876 State Constitution provided only general State personnel guidelines, there was a growing consensus in Colorado to follow the Federal government's lead in establishing merit principles and a commission form of public personnel management. Therefore, in 1899, a group calling itself the Civil Service Reform Association of Denver began promoting State civil service reform, 1carl Ubbelohde et al., A Colorado History (Boulder, CO: Pruett Publishing Co., 1972), p. 266. -157-

PAGE 196

utilizing a model State civil service merit law developed by the National League of Cities. This group repeatedly attempted to gain legislative passage of a State Civil Service Act in 1903 and again in 1905 without success. This Act, if passed, would have created a State Civil Service Commission responsible for the system of hiring, retaining, and firing non-elected executive branch State employees. In 1907, the State Legislature finally passed an "Act in Relation to Civil Service in State Institutions and Municipalities" (1907 Colorado Session Laws, Chapter 117). The Act established a State Civil Service Commission responsible for most non-elected State officer and employee appointments, with provision for municipalities to contract with the Commission for personnel services. The Commission was composed of three unpaid members appointed under Civil Service Act provisions by the Governor, with Senate consent, for overlapping six-year terms. No more than two of the commissioners could be from the same political party. Under the civil service provisions of the Act, the commissioners were authorized to appoint a secretary, who would serve as chief examiner, and additional assistant examiners to assist the Commission in its functions. The Commission's functions included the promulgation of civil service system rules and regulations, as well as administration of the Act. All rules and regulations had to be approved by the Governor. However, a provision was made to allow these rules to become effective within ten days of submission regardless of the Governor's position. The 1907 Act also stipulated that rules would cover the following areas of State personnel policy: 1. Position classification of all civil service jobs. 2. Open, competitive examinations to test competency. -158-

PAGE 197

3. Noncompetitive examinations for technical positions, when necessary. 4. s. 6. 7. 8. 9. 10. Listing of those eligible for job certification and appointment. Probationary periods of employment, with discharge procedures. Provisional appointments, including transfers and reappointments. Promotion and pay raises based on merit, seniority, and examination rating. Suspensions, reductions, and discharges. Employment decisions based on examination ratings. Use of noncompetitive examinations when competizive examinations did not yield a list of eligibles. The 1907 Act delineated which public employees fell under its meritbased purview.3 Persons in Colorado's State civil service included the following types of public employees: 1. All employees of the State Civil Service Commission, including Commission members . 2. Most appointed executive branch employees in State agencies. 3. All county and municipal pubic employees whose localities chose, by referendum, to adopt the State's civil service merit law. Persons exempt from the state's civil service system included: 1. Most State board and commission members appointed by the Governor as well as one employee for each State board and commission. 2. All State legislative and judicial branch members and employees. 3. All officers and employees in educational institutions not reformatory or charitable in nature. ;session Laws of Colorado, Article 26, Chapter 117, Section 9 (1907). Ibid., Sections 10 and 11. -159-

PAGE 198

4. In counties and municipalities, one employee for each elect i v e officeholder. Therefore, the 1907 Act created two groups of public personnel--State civil service classified employees and exempt non-classified State employees. The 1907 Act also stipulated that all classified personnel could not be subjected to political or religious favoritism nor be required to perform political duties during State employment. Eligibility for appointments were to be certified by the Commission on the basis of the highest examination score for each classified position. This appointment procedure became known as the "rule-of-one" hiring method. Other stipulations in the Act were that: "(1) all appeals would be submitted in writing to the Commission, (2) the Commission could exercise subpoena powers, and (3) the Commission could subject State Personnel Act violators to misdemeanor penalties of f ine and/or . . i S d Di . d. d d " 4 1mpr1sonment, us ng tate an str1ct court procee 1ngs as nee e • Development of Colorado State Personnel System Policies: 1908-1919 The 1907 Act was strengthened in 1912 by the addition of a statutory requirement for "adequate" annual appropriations to administer the Act and cover all commissioner staff salaries (1912 Colorado Session Laws, Chapter 96). In 1915, the Act was revised to adjust the start of new commissioners' terms to correspond to the end of the Governor's term in office, thereby leaving lame duck governors with commission appointment responsibilities (1915 Colorado Session Laws, Chapter 94). It also repealed all former State personnel laws. The State Legislature had thereby "destroyed much of the civil service system's beneficial 4 Ibid., Sections 12-25. -160-

PAGE 199

effects"5 by not requiring adequate appropriations as stipulated in 1912. In response, a State Constitutional amendment requiring "adequate appropriations" for personnel activities was initiated and adopted in 1918 (Section 13 of Article XII) primarily for the purpose of avoiding the destruction or financial emasculation of the Act in the future by some possibly hostile General Assembly. Thus, from 1907 to 1918, the State Legislature's primary influence on the State personnel system was "in the area of appropriations, which were used as the principal means of limiting the broad discretionary powers previously legislated to the State Civil Service Commission."6 The 1918 amendment also added Section 13 to Article XII of t-he Colorado State Constitution which became the backbone of the State personnel system. Section 13 outlined the principles of the State personnel system, which were the ten policy rules found in the 1907 Act (see pp.l58-9, Chapter V). Additional provisions covered: (1) personnel system coverage and exemptions, including Chief Executive appointment of the Chief Purchasing Agent, the Commissioner of Mines, and Adjutant General, (2) residency requirements for most classified positions, and (3) compensation policies for classified employees and the Commission's staff. Refinement of Colorado State Personnel System Policies: 1919-1965. Since 1918 there has been a perennial debate in the State Legislature on how to fashion a State personnel system that is not too vulnerable to executive manipulation nor too independent for executive leadership. 5People ex rel. v. Bradley, 66 Colo. 186; 179 Pac. 871 (1919). 6colorado Public Expenditure Council, Annual Report (1939), pp. iii-iv. -161-

PAGE 200

In 1919, the State Legislature passed legislation to group together or codify the State laws pertaining to the State's personnel system. This codification was placed in Chapter 20 of the Colorado Annotated Statutes in 1919, and included stipulation of State Civil Service Commission's salaries for its three members. 7 During the 1920s and 1930s, the Colorado State Legislature enacted numerous statutory personnel provisions. These included veteran hiring and promotional preferences as well as provisions for the Legislature to set State employee salaries on an annual basis by adoption of statutory pay raises. Besides an annual report to the Governor required by law, no provision was made to refer civil service rules for the Governor's approval. During the 1940s and early 1950s the State Legislature enacted further provisions to increase Veterans' entrance and promotion preferences and benefits in the civil service system. Provisions relating to salaries, appointments, hours of work, and annual reporting requirements were also incorporated into a new codified State personnel act, 8 Chapter 26 of the 1953 C.R.S. From the 1920s through the mid-1950s, the State Legislature was concerned with assuring State residents that civil service appointments were merit-based and free of political manipulation, but with preferential treatment for veterans. However, as early as 1939 a consultant's report by Griffenhagen and Associates stated that civil service employees could "act independently from gubernatorial 7colorado Annotated Statutes, Article 10, Chapter 20, Sections 1-3 8(1918). C.R.S. 1953, Article 10, Chapter 26, Sections 4-11 (1953). -162-

PAGE 201

leadership, and that administrative complexity is so bad that it is impossible to determine ••• where responsibility rests and ••• where to exercise effective supervision."9 These problems were compounded by the election of several State officials, such as the State Treasurer, which made them largely free of executive control. "Department heads, secure in office under the civil service law, could surreptitiously build up their own machines through the dispensation of patronage. Even under the most rigid audit controls and the most effective post-auditing, department heads became so powerful politically that they were immune from either executive or legislative control. Colorado is the only state in 1939 in which department heads are in the competitive civil service."10 Little was done over the next fifteen years (1955-1969) to alter the insulated personnel structure of the State civil service. In 1956, a Constitutional ballot proposal which would have shifted some appointment authority from the civil service system to the Governor was defeated. Known as Amendment 3, the proposal would have made the following changes: 1. Authorized the Governor six confidential employees exempt from the civil service. 2. Exempt the Controller and Directors of Institutions, Purchasing, and Revenue departments from civil service appointment provisions. 3. Revised Civil Service commissioners' term in office to occur at the beginning of a new Governor's term, rather than at the end of the old. 9colorado Legislative Council, Reorganizing the Executive Branch, 1 P • 131 (1 9 3 9 ) , p • vii. Ibid., pp. xi, xii. -163-

PAGE 202

4. Subjected commissioner's appointments to Senate confirmation. 5. Continued the rule-of-one appointment method, but with a sixmonth probationary period. The language of Amendment 3 was designed both "to promote closer liaison between • • • the Chief Executive and the central personnel agency • • • and to shift the emphasis of authority for setting the general policies with regard to overall personnel matters from the Civil Service Commission to the General Assembly."ll In 1958, another ballot proposal was defeated on the grounds that it would foster the "spoils" system. Known as Amendment 1, the proposal would have: 1. 2. 3. 4. 5. 6. 7. 8. 9. Eliminated the rule-of-one appointment method. Established a one-year probationary period. Removed the "qualified elector" requirement for employment, thereby eliminating age (21) and State residency requirements. Established a Personnel Director chosen by competitive examination but exempt from the civil service. Exempted part-time consultants and an additional confidential employee of the Governor and his/her appointed assistants. Exempted the "chief administrative officer" of the following departments: Agriculture, Employment, Health, Highways, Institutions, Natural Resources, Purchasing, Revenue, and Public Welfare. Eliminated veterans' preference on promotional examinations. Provided for promotion by "demonstrated efficiency and performance." Allowed the Legislature ty pass laws for public retirement due to old age oT disability. 2 11colorado Legislative Council, An Analysis of 1956 Ballot Proposals, R.P. 18 (1957), pp. 6-7. 12colorado Legislative Council, Analysis of 1958 Ballot Proposals, R.P. 23 (1959), pp. 2-5. -164-

PAGE 203

Although the 1956 and 1958 ballot proposals did not succeed, continual interest in revising the personnel system culminated in 1959 with the enactment of the "State Civil Service Act." The 1959 Act reorganized central personnel administration under one administrator, but left general advisory and detailed policy duties in the hands of a more diffuse body--the Civil Service Commission. The Act made the following civil service reforms: 1. Created a State Personnel Director to administer the Act and serve as executive head of the Commission's administrative office. 2. Assigned three primary duties to the Civil Service Commission: (a) holding competitive examinations; (b) determining personnel policy; and (c) advising the Governor. 3. Directed that compensation of State employees be geared to compensation in "comparable employments in other places of public and private employment in appropriate competitive labor markets." 4. Stated the appointments should not be influenced by race, politics, or religion. 5. Provided for standards of conduct and periodic evaluations, as well as incentive plans for exceptional performance. 6. Provided for an orderly system to resolve grievances to be set up by the Commission, but left final decisions to the appointing authority (classified department heads). 7. Allowed a ten-day period for1jmployees to appeal grievance decisions to the Commission. In 1960, another Constitutional ballot proposal which would have given the State Civil Service Commission (but not the Governor) greater flexibility in administering personnel policy was defeated. The proposal, which was a moderate version of the 1956 and 1958 proposals, would have given the Legislature greater control over appointments to 13session Laws of Colorado, Chapter 81, Sections 3-4, 1959. -165-

PAGE 204

the Commission, and thus also increased legislative influence. Known as Amendment 1, the proposal would have made the following personnel reforms: 1. Subjected Commissioner appointments by the Governor to Senate consent. 2. Allowed flexibility in the use of the rule-of-one appointment method by the Commission. 3. Required a one-year probationary period for all appointments. 4. Eliminated the "qualified elector" employment requirement. 5. Exempted all of the Governor's administrative assistants from the civil service. Current practice was to place these assistants under civil service, but without competitive examination. 6. Exempted from the merit service one stenographer for each elective State officer. 7. Protected employees from discrimination for political reasons or of race, color, creed, sex, or place of national origin. The unsuccessful 1956, 1958, and 1960 ballot proposals all attempted to grant greater administrative flexibility to the State Civil Service Commission. The proposals would .have shifted authority over day-to-day personnel administration from the Commission to a single administrative head. They also would have given the Governor appointing authority for selecting directors of three additional departments, contingent upon Senate consent. In response to these unsuccessful proposals, the Legislature, in 1959, enacted a new State Personnel Act providing a single Civil Service administrative head. Thus, while Colorado had been one of the first states to establish a merit-based civil service law, Colorado remained the only 14colorado Legislative Council, Analysis of 1960 Ballot Proposals, R.P. 37 (1961), pp. 4-9. -166-

PAGE 205

state refusing to grant the Governor a direct role in selecting most department heads. This situation effectively kept the Governor from exerting effective policy control or achieving policy responsiveness over agency and program administration. This lack of direct executive-level involvement in departmental personnel management persisted for some 60 years until 1970. An example of Colorado's legislative dominance is the passage of a 1964 Constitutional amendment regarding State auditing accountability and control. Known as Amendment 1, the 1964 proposal made some major changes in the legislative role of the State. The adopted amendment: 1. Replaced the elected independent State Auditor with a State Auditor appointed by the Legislature. 2. Required the new State Auditor to be a certified public accountant, without regard to political affiliation. 3. Limited the State Auditor's term in office to five years, and a maximum of two consecutive terms. 4. Prohibited the State Auditor from obtaining any other State employment while in office, and for two years following the end of term in office. 5. Authorized the removal of the State Auditor by two-thirds' vote of both House and Senate members . 6. Required that not more than three members of the staff of the State Auditor be exempt from the State's civil service. 7. Removed the Constitutional prohibition the State Treasurer succeeding him/herself in office. In short, the State Legislature felt and the electorate concurred that the State's post-auditing program should be conducted by the Legislative branch, as the guardian of public funds. This arrangement ensured that there would be an independent check on all executive branch 15colorado Legislative Council, Analysis of 1964 Ballot Propo.sals, R.P. 89 (1965), pp. 2-4. -167-

PAGE 206

expenditures. The passage of this amendment also meant that the State Legislature could exert policy influence and control over principal State auditing activities by exempting any three staff members of the State Auditor's Office. In 1964, some 29 states had their principal auditor functioning under the executive branch, while 21 states had their State auditor's staff controlled by the legislative branch.16 Reorganization of Colorado State Personnel System: 1966-1971 In 1966, the State Constitution was amended by the electorate to provide that all executive and administrative offices, except the offices of the Governor and Lieutenant Governor, would be organized into no more than 20 departments by June 30, 1968. This amendment, known as Amendment 1 or the 1966 Reorganization amendment, led to enactment of the "Administrative Organization Act of 1968" by the Legislature. The 1968 Act established 17 departments at that time, including the transfer of the Civil Service Commission to one of six divisions in the new Department of Administration. The Commission retained its administrative autonomy, while general budgeting responsibilities were centralized under the department director.17 In the 1968 Civil Service Employees Association Love case, the Colorado Supreme Court held "that Governor's appointments of directors of Institutions, Local Affairs, and Revenue were not in accord with the 1918 Constitutional civil service amendment nor the 1966 i i d . n18 reorgan zat on amen ment. While the Court noted that such 16 17Ibid., P• 3. Colorado Session Laws, Article 24 of Title 1, Section 1 et seq., 1968. 18colorado State Civil Service Association Love, 167 Colo& 436, 448 P. 2nd 624 (1968). -168-

PAGE 207

appointments had been previously made, it ruled that legislative action cannot alter clear constitutional intent to protect the civil service. As a result of this ruling, the Governor was entitled to appoint only directors of the Departments of Administration (Chief Purchasing Agent for the State), Natural Resources (Commissioner of Mines), and Military Affairs (Adjutant General). All other departmental directors were subject to civil service provisions. This left the Governor with diluted policy and managerial authority and little direct control over the operations of Colorado State government agencies.19 To consider a reorganization and evaluation of the executive branch, a committee of private sector businessmen was appointed by the Governor in 1968 to serve as the Committee on Efficiency and Economy . This issued a report on the State Civil Service Commission in March 1969. The report suggested that the Commission could not efficiently perform its personnel functions such as recruitment, examination, and selection. It also stated that the Commission's activities were heavily weighted toward "watch dog" personnel policy control functions. The Committee recommended that the administrative powers of the Commission be divested from its rule-making powers. The Committee also recommended that departmental employees be trained in various aspects of personnel administration so they could perform 19There was diluted policy control and managerial authority because the had in 1876 been given responsibility for all employee appointments. However, this authority was limited by subsequent State civil service policies. The Governor could in the final analysis appoint only the three department directors, noted earlier, and the three Civil Service Commissioners, of which only two could be from the same political party. The Governor's only direct influence over policy administration was appointment of three department heads and three Civil Service Commision members who then appointed State employees based solely on merit. -169-

PAGE 208

personnel functions on a decentralized basis. The results of the Economy and Efficiency study were evaluated by the Governor and the Legislature (Senate State Affairs Committee) in mid-1969. On the basis of this study, two personnel-related Constitutional amendments were developed and initiated to improve the State's civil service system.2 0 These amendments passed in November of 1970 and extensively reorganized the State civil service system. Known as Amendments 1 and 2, these proposals repealed the former civil service provisions in the State Constitution and added three new sections to Article XII-Sections 13, 14, and 15 (see Appendix 5-A). These 1970 Amendments contained many civil service reform measures previously defeated by the State's voters in 1956, 1958, and 1960. More specifically, Amendment 1 made numerous reforms in State personnel policies that included: 1. Elimination of the rule-of-one appointment method and establishment of a rule-of-three appointment method, whereby the top three scorers on examinations are referred to appointing authority via eligibility lists for selection. 2. Establishment of a probationary employment period for all new civil service appointees not to exceed 12 months. 3. Replacement of the "qualified elector" requirement for civil service employment with addition of new State residency requirements. 4. Establishment of temporary employment periods not to exceed 6 months, while eligibility lists could be provided for filling temporary positions permanently. 5. Amendment of Article IV, Section 22 of the State Constitution to exempt the heads of principal departments from the State's civil service and provide for Executive appointment of department heads by the Governor with Senate consent. 20colorado Committee on Government Efficiency and Economy, Department of Administration (1969), pp. 146-152. -170-

PAGE 209

Amendment 1 also added new civil service provisions that included: 1. Provision for the principal department heads to be the appointing authorities for employees in their respective offices and for heads of divisions directly under department heads. Civil service appointed division heads, in turn, are the appointing authorities for all positions under them within their respective divisions. 2. Provision for classified employees to hold their positions during efficient service or until reaching the statutory retirement age. 3. Allowance for any political subdivision in the State to contract with the State Personnel Board for personnel services. 4. Provision for classified employee dismissal, suspension, or other discipline by the appointing authority upon written findings of failure to comply with standards of efficient service or competence, etc. Amendment 2 also made numerous personnel policy reforms listed below. 1. Abolishment of the State Civil Service Commission and establishment of a five-member State Personnel Board to adopt administrative rules to implement legal provisions of the new "State personnel system" (in Constitution and statutes). 2. Provision for three members of the State Personnel Board to be appointed by the Governor with Senate consent, and two members to be elected by classified employees in the State Personnel system--each five-year office term was staggered with unlimited succession. 3. Provision for removal of Board members by the Governor for willful misconduct, failure to perform duties, or permanent disability--subject to judicial review. 4. Provision for Board rules to include (but not limited to) the following State personnel considerations: (a) standardization of positions; (b) determination of grades of positions; (c) standards of efficient and competent service; (d) conduct of competitive examinations of competence; (e) grievance and appeal procedures; and (f) conduct of Board hearings and hearing officers. Amendment 2 also added new State personnel provisions which had significant organizational and policy impact. These new provisions included: -171-

PAGE 210

1. Creation of the State Department of Personnel headed by the State Personnel Director. The Director, to be appointed by the Governor upon Senate consent, is held responsible for administration of the State personnel system--as stated in the Constitution, statutes, and State Personnel Board rules. 2. Establishment of a veterans' preference point system whereby honorably discharged veterans receive five points toward examinations for initial appointments (but not promotional appointments), and disabled veterans receive 10 points for only initial appointments. Unremarried widows of honorably discharged veterans also receive five extra examination points for initial appointments. 3. Provision that those not eligible for veterans' preference points with equal length of service with veterans are laid off first when reductions in the State's work force is necessary. However, when seniority is considered in making reductions, veterans with 20 or more years of military service do not count such service in determining length of State service; while for those veterans with less than 20 years of military service, only up to 10 years is counted toward State service. Otherwise, separation is based on seniority including military service credit as described above. Thus, 1970 Amendments 1 and 2 made significant changes to modernize the State personnel system. Greater flexibility in certification of classified employees was granted to the new State Personnel Board (rule-of-three appointment method). Greater political control and direction over department heads was granted to the Governor (Department head civil service exemption and appointment by Governor, with Senate consent). Rule making and quasi-judicial functions were retained by the new State Personnel Board but separated from the responsibility for central personnel administration (given to the new State Personnel Director and Department). The 1970 Amendments also strengthened the merit-based principles of competitive examinations for selection without regard to race, creed, or color, or political affiliation. Responsibility for employee removal and disciplinary actions were now vested with the appointing authorities rather than with the Commission. The new State Personnel Board acted as an appeals body. -172-

PAGE 211

However, the amendments continued to insulate, though to a lesser degree, civil service appointments and promotions from direct political control by authorizing division heads to be the appointing authorities for all positions in their respective divisions. Developments in the Colorado State Personnel System: 1972-1980 Constitutional Developments. In 1972, the State Constitution was amended to provide that all non-academic staff employees of State universities and colleges, except certain administrators exempt by law, would be covered by the State personnel system as of January, 1973. Approximately 6,000 staff employees at State universities and colleges were affected by the 1972 Amendment. However, legal and administrative delays in implementing the Amendment resulted in a gradual inclusion of these higher education employees from 1974 through 1978.21 The most recent Constitutional personnel amendment proposal was initiated and defeated in 1976. Amendment 4 would have exempted approximately 110 division heads from the merit-based service. Division heads would have been appointed directly by the Governor, rather than appointed by department heads under the civil service. If the 1976 Amendment 4 had passed, the Governor would have been able to place all classified position appointments, promotions, and disciplinary actions under politically controlled appointees.22 Statutory Developments. From 1972 through 1978, the State Legislature made numerous State personnel policy changes. These changes 21colorado Legislative Council, Analysis of 1972 Ballot Proposals, R.P. 164, p. 3, 1972; and State Attorney General's Opinion No. 73-0042 (December 1973). See Article VIII, Section 5, Colorado 22constitution. Colorado Legislative Council, Analysis of 1976 Ballot Proposals, R.P. 217 (1976), p. 4. -173-

PAGE 212

are summarized below, along with appropriate statutory citations and enactment dates. 1. A system for the periodic evaluation of classified employees' performance and conduct. 1973 C.R.S. 24-50-118 (1972). 2. Employee training opportunities (Public Service Institute), including an employee tuition assistance program. 1973 C.R.S. 24-50-122 (1973). 3. A salary compensation system tied to annual performance evaluation, plus cash bonuses for "unusually outstanding" employee performance. 1973 C.R.S. 24-50-104(8) (1973). 4. Annual submission to the Legislature by the State Personnel Director of estimates of classified employee salary adjustments and 'Of the results of fringe benefits surveys. 1973 C.R.S. 24-50-104, as amended (1975). 5. An administrator or secretary for the State Personnel Board, funded by the General Assembly. 1973 C.R.S. 24-50-103, as amended (1976). 6. Amendments to affirmative action procedures established by the State Personnel Board, providing selective certification through the use of additional eligibles (per vacancy) of up to three minority group-protected class eligibles--in addition to the "rule of three" certification regularly in use. However, legislation authorizes only a voluntary request for selective certification authority. Chapter 578 of the Session Laws (1977). 7. Termination of use of affirmative action eligibility lists (no. 6 above) as of January 1, 1980. Chapter 578 o f the Session Laws (1977). 8. State Personnel Board hearing officers to be appointed, contingent upon State Department of Administration appropriations. 1973 C.R.S. 24-50-110, as amended (1978). Equal Employment Opportunity. Equal employment opportunity and affirmative action programs have received attention by Governors John Vanderhoof and Richard Lamm. Both governors issued executive memorandums, in 1972 and 1976, respectively, concerning the general commitment to equal employment opportunity as a laudable State government goal. The State Personnel Board issued specific affirmative action rules and procedures in 1976, 1977, and 1978--labeled as -174-

PAGE 213

correc tive remedies for inadequa t e equal employme n t opport unit y (Ch apter 1, Article 7 of Board Rules). In 1977, the State Legislature recinded the Board's 1976 affirmative action rules, claiming that the Board had attempted to legislate a State affirmative action program when no such program or policy had been established by the State Legislature. Under substantial bipartisan lobbyin g pressure, the State Legislature subsequently passed and the Governor approved in 1977 new 23 State personnel employee hiring and promotional requirements. These requirements stipulated that an additional eligibility list of three qualified candidates from protected employment classes (minority, female, and handicapped applicants) could be certified to appointing authorities for filling vacancies. The affirmative action certification is used in conjunction with the regular rule-of-three. The legislation stipulated that appointing authorities can voluntarily request the additional three eligible names. Thus, appointing authorities are given discretionary power to fill vacancies from affirmative action eligibles versus regular certification. In addition, the State Legislature also stipulated that the voluntary use of affirmative action certification would terminate January 1, 1980.2 4 State Personnel Board As specified earlier, the State Personnel Board was created by a 1970 Constitutional mandate. The Board is responsible for promulgating rules and regulations necessary for administering the State personnel system as well as adjudicating appeals. Board rules issued in 1971 cover all aspects of personnel administration including classification, Session Laws, Chapter 578, Broad Rule Revisions, Ibid., 1977. -175-

PAGE 214

compensation, examination, appointment, and appeals functions. From 1971 to 1977, Board rules were expanded to address employee performance appraisals as directed by the Legislature. During the same time, the Board revised previous rules on leave and holiday time as well as on political activities of classified employees. In October 1977, the Board reissued all rules and regulations, including administrative procedures covering the following areas of State personnel policy: 1. General provisions on administrative powers, duties, and affirmative action corrective remedies. 2. Classification of positions. 3. Compensation of personnel system employees. 4. Examinations and eligibility lists. 5. Appointments, referrals, and employee status. 6. Leave and holidays. 7. Corrective and disciplinary actions. 8. Appeals, hearings, and grievances. 9. Separation from State service. 10. Employee appraisal. 11. Restrictions of on-the-job political activities.25 From late 1977 through early 1979, new Board rules updating personnel policies include: 1. Affirmative action hiring, referrals, and corrective remedies (6-1-78). 2. Procedures related to hiring of the handicapped and relating to non-discriminatfun(2-1-78). 3. Teachers' work classification and salary schedules modification (7-1-78). 25colorado State Personnel Board, Rules and Regulations (October 1977), pp. i-iii. -176-

PAGE 215

4. Annual personal and sick leave requirements and modifications (11-1-78). 5. Modifications of retirement postponement and lay-off requirements (1-1-79). 6. Grievance processing by Board, and employee and redress procedures on grievances filed (2-1-79). Summary of Legal History State Personnel System The nature and current operations of the State personnel system are reflected in its legal history and development. The creation of a merit-based State personnel act in 1907, and subsequent Constitutional amendments in 1918, established the legal framework under which the system operated for the next 50 years. In early years, public debate centered on gaining assurances that adequate appropriations would be provided by the Legislature for administering personnel provisions. Numerous unsuccessful attempts were made during the 1950s to reform the State personnel system. By the late 1960s, the system was characterized as one which protected civil servants from gubernatorial political control but failed to protect them from political favoritism among classified managers, supervisors, and staff employees. At this time, the Governor had little legal basis for ensuring that classified employees would be responsive to Executive authority and programs. During the 1970s, the system was reformed by two Constitutional amendments which created the current legal framework for the State Personnel Board and Personnel Department headed by a Director. While the Governor was now able to appoint most executive department heads (Executive Directors), division-level heads still had the key authority 26Ibid., as amended 1978-79. -177-

PAGE 216

I ....... ...... (X) I Chilrt 5-A A CHRONOLOGICAL CHART OF MAJOR STEPS IN THE DEVELOPMENT OF THE COLORADO STATE PERSONNEL SYSTEM 1876-1978 Denver Civil Service Reform First Co lorado New State Cl vil Service Colorado State U.S. Pendleton Association begins promoting Civil Service Act Act Enacted-Fonner Constitution Enacted Act Enacted Civil Service Reform In State Enacted by State Personnel Laws Repealed (1876) (1883) . (1899) (1907) (1915) General State-wide public personnel guidelines established for elective and appointive State employees Federal Civil Service Reform: U.S. Civil Service Commission form of personnel management. Colorado civil service refona sentiment follows national reform movement. Civil Service Reform Association works to gain passage . of 1 state wide Civil Service Act In State legislature. State Civil Service Commission established Aerit based State Personnel rules developed. State Civil Service system established In State Constitution . ( lg18\ Numerous State Civil Service Act Modifications passed by the State legislature State Civil Service Act Established a State Personne 1 Director State Auditor's Office transferred to Legis lative Branch ( 1920-55) Veteran's hi r1 ng practices, State employee salary levels, office hours, and Civil Service Commission Annual Reports established under State Per sonnel Act. Rule-of-one appointment procedures used. (1959) Two State Constitution Personnel Amendment pro posals fall during 1956 and 1958 general elections, designed to Increase political control over executive level positions. (1964) Constitutional Personnel Amendment fails in 1960. Most State Auditor employees under State Per sonnel system, and post auditing accountability under legislature due to 1964 Con stltuttonal Amendment. State Voters arid legislature pass State Reorganization plans ( 1966-60 I State Personnel created -with State Personnel Dl rector and Board 1970-7B) Executive Branch. reorganized Into no more than 20 denartments in 1968. State Personnel system modernized by two Constitutional Amendments in 1970 ••• Creation of State Personnel Board Director and Department. Most Department Directors appointed by Governor as of 1970. Rule-of-three appointment method used. Expanded Executive appointment proposel defeated In 1976. Affirmative Action 1977-80.

PAGE 217

o ver most classified appointments , promot ions, a nd d isciplinary acti o ns. The State Personnel Board was given rulem a king and appellate responsibilities, while the State Personnel Director was made responsible for administering the system's provisions. However, responsibility over merit protection and enforcement in the State service was not clearly defined. In addition, as of 1970, selection of employees was based on certification lists which included the top three candidates rather than the top one. And, in 1977, this selection method was e xpanded with temporary provision for use of additional certification from protected class eligibles. This new legal framework characterizes the system as one of mixed merit and politically based controls, with historically increased administrative flexibility and legislative influence. A graphic representation of the legal history of the State personnel system is presented in Chart 5-A. The major legal reforms of the system are chronologically described. Major Trends in Colorado Civil Service Development From the foregoing review of the constitutional, statutory, and organizational development of the Colorado State personnel system, the following broad trends or tendencies have become evident: 1. Strong voter sentiment that all State employees in the Executive branch, except a limited number of agency directors and assistants to the Governor, should be recruited, appointed, and serve under a competitive merit system which will protect the State service from political misuse. 2. A gradual movement toward giving the Chief Executive greater control over State administration and policy direction through -179-

PAGE 218

appointment of departmental directors, with Senate consent, and the establishment of the Department of Personnel under a director appointed by the Governor to administer personnel functions. 3. Elimination of the role of the independent Civil Service Commission and/or State Personnel Board in State personnel administration--but continuing retention of the State Personnel Board as the dominant rulemaking authority subject to constitutional and statutory provisions. 4. Constitutional restriction of State appropriations for personnel administration, an increasing tendency of the General Assembly to enact detailed personnel statutes; and, with the reorganization of the State Auditor under the Legislature, to monitor personnel administration in the State government continuously and in great detail. Previous Studies of Colorado State Personnel System Introduction This section presents summaries of major findings and recommendations of previous Colorado State personnel system studies. Previous studies covered include only those conducted since 1970 when the current organization of the State personnel system wa s established by Constitutional amendment. Previous studies are first identified with brief discussions of their origin, purpose, and scope. For each study, major findings and recommendations are summarized and listed. The status of major recommendations implemented by the State Department of Personnel are reported. Previous study recommendations not implemented by the State are then summarized. The section concludes wit4 a brief -180-

PAGE 219

d iscussion of concurrent studies of the State Personne l system. Since 1970, five comprehensive studies of the Colorado State personnel system have been conducted. The main studies are cited below. 1. Committee on Personnel (Colorado General Assembly), Legislative Council Report on the Colorado State central personnel system (excludes State Judicial personnel system and the Social Services-County Welfare Merit system) 1971 and 1972 Committee reports published. Two detailed consulting reports were prepared by Executive Management Services, Inc. 2. on an Evaluation of Personnel Administration, Public Administration Service, Chicago, Illinois, December 1974 report prepared for Governor John D. Vanderhoof. 3. Statewide Salary Survey and Salary Practice Analyses, Hay and Associates ( Management Consultants), Chicago, Illinois, January 1975 reports published (Volumes I and II). 4. Review of the Colorado Department United States Civil Service Commission (Denver Region), Division of Intergovernmental Personnel Programs, June 1975 report published. 5. Operational Concept and Reporting System for the Colorado Department of Personnel, Colorado Department of Administration, Division of Management Services, December 1978 report published. In addition, various studies and/or audits of selective personnel functions have been conducted by the State Auditor and the post-audit unit of the Department of Personnel. These functional studies are discussed, as needed, under personnel function headings. -181-

PAGE 220

Summaries of Previous Studies' Purposes, Major Findings and Recommendations Colorado Committee on Personnel: 1971-1972. The directive to the Committee on Personnel from the General Assembly was "to conduct a study of the State's entire personnel system, including employee motivation, performance appraisal, compensation and finge benefits, and the conduct of the wage survey."27 However, the Committee decided that compensation, training, performance evaluation, and classification were major areas of priority. The Committee was composed of four members from the House of Representatives, four members from the Senate, three members from the executive State Departments (Administration, Local Affairs, and Personnel), and three representatives from the Colorado Association of Public Employees. The Committee also utilized the services of an independent consultant (Executive Management Service, Inc., of Arlington, Virginia) to study the interwoven topics of compensation, performance evaluation and training. The consultant's study was included in the body of the Committee's 1971 and 1972 reports. The Committee's methodological approach centered on the identification of State personnel system problems and inequities. Recommendations were then made to improve State personnel management. The consultant's supplemental study also identified current (1972-72) problem areas and made recommendations for improvement. A summary of the 1971 and 1972 Committee report recommendations is presented below.28 27committee on Personnel, Colorado Legislative Council (December 1-3 and (1972), pp. 104. -182-

PAGE 221

1. Restructuring State Classification System. The Committee recommended the implementation of the consultant's study on position classification plans and pay relationships. The consultants made numerous recommendations to improve and update the current classification system, including a restructuring of the classification system to add all positions previously not covered and to eliminate the unnecessary layering of positions within occupational series. They proposed the reduction of classes from some 1,568 to about 1,000. A point evaluation system for determining position classification and a set number of 24 classes and levels of organization were discussed, but not accepted by departmental management primarily because of insurmountable management problems in implementation and strong employee and management opposition. Overall, the consultants recommended a position classification philosophy which also uses classification as a management tool in addition to its use in determining employee pay rates. Other recommendations centered on the reorganization of personnel specialist units in the Department of Personnel and adoption of the proposed classification plan by the State as the official classification plan for employees. Since some position classes had been created solely to address pay relationship problems, the study suggested that restructuring the classification plan and eliminating this practice will have considerable impact on management and employees alike. However, there was some question raised in the State government as to whether within the constraints of 24 classes and levels of organization, the capacity to develop the preferred alternatives was present. In short, the consultants reported that neither the management philosophy, -183-

PAGE 222

technical capability, nor motivation existed to implement the other main alternative. 2. Revising State Compensation Plan and The Committee recommended the adoption of a proposed new pay plan, with specific pay grades and ranges, for all State elected officials, executive directors of principal departments, and members of full-time boards and commissions. This new pay plan would have established salaries which were competitive in the market place and were designed to relieve the compression at the top of the pay range. The Committee also recommended the creation of a mechanism whereby salaries were to be reviewed on a regular basis with sound survey documentation to ensure their competitiveness, as well as linking legislative salary increases with those of top executive positions. Finally, the Committee recommended removal of the pay ranges from the statutes and the extension of greater latitude to the Personnel Director for the administration of personnel compensation. 3. Developing State Training Programs and Human Resource Data. The Committee recommended a "buy-back" training approach whereby departments would purchase training programs provided by the State Department of Personnel. Specific recommendations included: a. Charging the State Department of Personnel with responsibility for developing service-wide orientation and training programs, as well as ensuring that all departments provide orientation programs for their own employees. b. Developing a manpower data bank in the State Department of Personnel for inventory of all classified positions, -184-

PAGE 223

including vacancies, and use of the data bank in planning for filling positions. in-house versus through new appointments. This was particularly targeted at managerial jobs. 4. Improving Employee Performance Evaluation. The Committee recommended the development of a single employee performance evaluation form for use in all State agencies. The Committee also recommended development of specific standards to measure employee performance beyond general performance standards called for in the 1972 statutes. The State Department of Personnel was to be responsible for developing and monitoring the new performance evaluation program. 5. Recognizing Collective Bargaining. The Committee recommended that a gubernatorial commission be formed to study collective bargaining and labor-management relations, and employ a "meet and confer" bargaining concept whereby topics are agreed to before labor-management conferences take place. 6. Expanding Coverage of State Personnel System. The Committee recommended bringing staff employees at State universities and colleges under provisions of the State personnel system. 7. Other Committee Recommendations. The Committee also recommended (1) establishment of a veterans' re-employment rights policy, (2) initiation of a tuition assistance program for State classified employees, and (3) recodification of the personnel statutes to correct their disorder and to incorporate the Committee's recommendations. -185-

PAGE 224

Public Administration Service Personnel Administration Study: 1974. In mid-1974, Colorado Governor John D. Vanderhoof contracted with the Public Administration Service, a consulting firm from Chicago, Illinois, to conduct an evaluation of personnel administration in the departments and agencies of Colorado State government. The study's major emphasis was both comprehensive and in-depth, involving analyses of the legal framework and related rules, inventory of personnel services and functions, and formulation of findings and recommendations to address problem areas. The major responsibility for conducting this study and preparing the report was assumed by William J. Hilty--who later served as the Colorado State Personnel Director until 1975 under the executive appointment of Governor Vanderhoof. The Public Administrative Service study first presented a general view of current (1974) State personnel administration and then identified functional and organizational problem areas of State personnel practices. The study concluded with specific recommendations for each major State personnel participant (Director, Board, operating divisions, etc.), and a discussion of the comparative cost levels of personnel operations in some other states. The study also discussed some of the rapidly emerging employment forces impacting the State personnel system. These forces included the following: 1. A sharply increased number and complexity of specialized and professional occupations. 2. A restructuring of jobs to employ the disadvantaged, and pressure to provide training and employment opportunities for the underemployed. -186-

PAGE 225

3. Uncertainties of a changing job market, where p ervasive employer and job applicant competition e xists in some occupations but is practically non-existent in others. 4. The growing strength of employee organizations and the need for creation of apparatus to perform the basic employee relations functions. 5. The role of personnel management and personnel innovations in making personnel more productive and administration less expensive throughout the State departments and agencies. The identified problem areas of State personnel practices for each organizational unit are reported in summary below.29 1. State Personnel Board. Non-utilization of the Board as a policy "Board of Directors" by the Department, and inadequate general staff support work, office space, and appropriations for the Board. 2. Office of the Director. Inadequate internal and external lines of communications, failure to develop evaluation criteria for internal staff operations, and lack of management analysis and information system capabilities. 3. Affirmative Action Program. Imprecise definition of disadvantaged group problems and a lack of analysis of critical problem areas in State government as well as a lack of aggressive affirmative action recruiting methods being formulated or utilized. 29 A Report on an Evaluation, of Personnel Administration (Chic;ago, IL: Public Administration Service, December 1974), pp. 2-7. -187-

PAGE 226

4. Intergovernmenta l Personnel Act Program . Lack of technica l assistance staff to directly aid local go vernments, lack of a total personnel systems approach to improving local personnel management, and inadequate State financial commitment to assist localities, etc. 5. Field Operations. Unequal delivery of personnel services to departmental managers, and a lack of service coordination and timeliness of service delivery to all State agencies. 6. The Classification Section. Inordinately large classification workload without adequate staff resulting in inadequate classification work response time, administrative delays, narrow classifications, and a lack of uniform classification procedures, manuals, and career ladders. 7. The Compensation Section. Lack of synchronization of the salary setting processes with the pay practices in the private sector and local governments, as well as inadequate communication of compensation setting techniques to employees, employee representatives and State legislators. 8. Recruitment and Examinations Section. Lack of concise manual of examination procedures for all applicants; slow turn-around response times to State agencies in examination research, development, administration, and validity testing processes; and communication and control problems in decentralization agreements and field activities of personnel services. 9. Training and Information Section. Use of the "catch all" work approach of this Section, whereby employees are diverted from direct training and career development responsibilities to -188-

PAGE 227

areas of incentive awards, performance evaluations, and rules interpretations, thus lowering this Section's effectiveness of its primary training mission. 10. Staff Operations Section. Inadequate computerization of accounting, budgeting and management reports, as well as a lack of an overall office management approach that attempts to equalize workload assignments and provide adequate clerical support. Specific recommendations to correct these problem areas were presented in the study for each organizational unit. These specific recommendations centered on developing better personnel techniques and providing sufficient staff and financial resources for the Department's organizational units. System-wide recommendations made in the study are listed in summary form below.30 30 1. Creation of a program planning and evaluation office in the State Department of Personnel to provide services to the Board and Department regarding alternative cost-effective methods for accomplishing Departmental and program objectives as well as performing quarterly management evaluations. 2. Development and implementation of a management-by-objectives system throughout the Department including prioritization of all objectives and creation of management information reporting and evaluation linkages between units. 3. Reorganization of the Department to develop increased service responsiveness and orientation to address State agency Ibid., PP• 25-29. -189-

PAGE 228

personnel needs. 4. Increased funding and staffing of the Personnel Department and agency personnel offices to improve service and management control operations of the State personnel system. Statewide Salary Survey and Salary Practice Analyses: 1975. In mid-1974, the Legislative Joint Budget Committee requested that Hay and Associates (a Chicago-based management consulting firm) conduct a Statewide salary survey to evaluate State government's salary setting practices. Detailed technical summaries are contained in two report volumes, released in early 1975. Although this project only addressed State compensation policies and practices, it is reported here because it is considered the most comprehensive salary study in recent years. Subsequent to its release, Hay and Associates had been conducting detailed salary surveys for the State from fiscal years 1976 through 1979. The 1975 study's principal findings and recommendations are quoted below. Principal Findings: 1. The weighted average actual salary practice lines (total Colorado and Denver Metropolitan) of the State and Hay surveys for 29 "key classes" is comparable. 2. The Denver Metropolitan area salary practice average is approximately 3.3% above the salary practice of the total Colorado employment market for General job classes, with a minimal difference for Labor and Trades job classes. 3. Labor and Trades classes are compensated at a substantial premium (approximately 40%) over the salaries for comparable job content for General job classes. -190-

PAGE 229

4. The State's current actual salary practice for General job classes is slightly above the Total Colorado survey average, even with the Denver Metropolitan survey average. 5. The State's current actual salary practice for Labor and Trades classes is slightly below the Total Colorado survey average. 6. The State's current actual salary practice is generally at or above the average of the state governments contiguous to Colorado. 7. The State's current actual salary practice is generally at or slightly below the average of 42 state governments in a national survey. 8. A substantial number of internal inequities exist in the State's current salary practices. 9. A substantial number of the State's job classes are compensated incorrectly in relation to the prevailing rates due to the method of setting salaries for all of the State's over 1200 job classes directly from the 39 "key classes." 10. The State's "merit" compensation provisions are functioning primarily as in-grade longevity increases. Principal Recommendations: 1. Eliminate the six to eight month "lag" between salary survey data collection and establishment of annual salary grade allocations through prospective prevailing rate determination. 2. Minimize the length of decreasing State market rate relationship by setting salaries to be at the prevailing rate on December 31 of each year, effectively "straddling" the -191-

PAGE 230

prevailing rate. 3. Increase the salary rates of General job classes an average of 6.5% effective July 1, 1975, and increase the salary rates of Labor and Trades classes an average of 9.0% effective July 1, 1975. 4. Triple the State's survey "benchmark" job classes which are used to survey the Colorado employment market to approximately 90 "benchmark" job classes selected to represent the total range of jobs for which the State competes with other Colorado employers. 5. Eliminate the job rate to job rate method of salary survey and utilize an accepted evaluated job content method for data collection and analysis. 6. Utilize a quantitative method of job evaluation to determine more precise job class interrelationships and to compare salary survey data to the State's actual practice and to "link" annual salary policy to all of the State classes by the line of central tendency approach. 7. Eliminate the distortion (approximately 5%) in comparing the State's salary practice to the survey data that is caused by assuming the State's actual salary practice to be at Step 4 of the salary grade for each class, and compare the State's actual salary practice (approximately 5% above Step 4) to the actual salary practice of the Colorado employment market. 8. Accommodate both the Total Colorado and Denver Metropolitan employment markets by placing the State's annual salary policy line in between the averages of both markets. -192-

PAGE 231

9. Replace the quasi-automatic in-grade longevity aspects of "merit" increases with a true pay-for-performance compensation plan. 10. Eliminate the procedure of linking "key classes" directly to all of the State classes by pre-established fixed salary grade intervals.31 (Refer to the Compensation Chapter for additional information.) Review of Colorado Department of Personnel: 1975. In mid-1975 the U.S. Civil Service Commission's Division of Intergovernmental Personnel Programs (Denver region) conducted an on-site evaluation and review of many State personnel policies and operations. These study areas included a monitoring of the State's position on equal opportunity employment, and an evaluation of selected areas of the State personnel system. Suggestions were then offered on improving State personnel management. The federal study team was composed of personnel specialists from the U.S. Departments of Labor and Health, Education and Welfare, along with U.S. Civil Service Commission staff. The study team accepted the analysis and recommendations of the 1974 Public Administration Service Study, and intended the Division's study to supplement and extend the Public Administration Service report. A number of current (1975) problems in the functional areas of State personnel responsibility were identified and discussed in the Division's study. Specific recommendations to improve personnel system management were then listed. A summary of these recommendations is 31statewide Salary Survey and Salary Practice Analyses, Volume report, (Hay and Associates, Management Consultants: January 1975), PP• i-ii. -193-

PAGE 232

quoted below. 1. Through Executive Order, establish a State Equal Employment Opportunity commitment, including a State E.E.O. officer and Council. Require all departments to submit annual affirmative action plans. Staff and fund the E.E.O. office adequately to review all employee and applicant discrimination complaints and carry out affirmative action remedial activities. Appoint at least one part-time E.E.O. officer in each department, and require State E.E.O. officer to publish an annual accomplishments report. Rate all supervisors and managers performance regarding E.E.O. commitment and efforts. 2. Develop a manpower planning capability to anticipate position vacancies and new position needs, including an automated skills bank of available personnel. 3. Develop training programs for new classification technicians and supervisors, including seminars on recent classification developments and problems. Simplify and expedite the handling of classification appeals. 4. Develop career ladders for all entry-level position classifications to promote upward mobility opportunities. 5. Identify State agency recruitment problems, develop a separate budget for recruitment programs and plans as well as a monitoring system to measure recruitment effectiveness from application through appointment stages. 6. Coordinate the test research and development section with the classification section in a new technical services division to promote inter-section problem solving. A standard .job -194-

PAGE 233

analysis methodology should be d eveloped, tested, and implemented to produce documented job-related knowledge, skills and abilities (KSA's) and defensible content valid examinations. 7. Examine the feasibility of instituting a formal test development arrangement with other surrounding states. 8. Determine and validate the adverse impacts of examination tests upon minority group applicants, and internalize this analysis on an on-going basis within the Department's affirmative action plan. 9. Explore the practicability of increasing administration of testing in decentralized locations throughout the State to attract a wider spectrum of the population. 10. Update and reissue an employee's handbook summarizing personnel system laws, rules, policies, and procedures. 11. Expand the staff for administering training programs to reach annually at least 10% of all classified employees 12. Develop an automated data processing unit to coordinate and automate all information and accounting programs. 13. Devise a periodic breakdown of the number and types of separations from the personnel system, and report this information annually in budget requests and evaluation reports, to forecast manpower needs, recruitment efforts, training needs, and correct problem conditions. In addition, employ an exit interview system to help correct conditions -195-

PAGE 234

which may cause turnover within the system.32 Division of Management Services State Personnel Study (Colorado Department of Administration): 1978. Responding to a fiscal year 1978 footnote in the General Assembly's "Long" Appropriations Act, the Division of Management Services conducted a study of two features of the State personnel system: (1) an analysis of an operational concept and cost-effectiveness review of decentralization in the Colorado State personnel system, and (2) the development of a personnel management information system designed to upgrade policy management analyses and accountability controls of all State personnel operations. A presentation of the significant findings and conclusions of the Division's study, along with a discussion of its methodology, is reported in Chapter VII (under "Decentralization Characteristics of the Colorado State Personnel System"). In short, the study concluded that decentralized personnel functions cost more to administer than centralized functions but greater service-effectiveness can be realized. Thus, decentralization is recommended to continue in the future. However, the study identified many specific areas of inefficiency under decentralization. For instance, the report concluded that monitoring and control over all personnel functions costs less on a centralized basis. Thus, centralization of personnel activity monitoring and information controls within the State Department of Personnel was recommended. 32 Review of the Colorado Department of Personnel (Denver Region: u.s. Civil Service Commission, Division of Intergovernmental Personnel Programs, June 1975), pp. 8-52. -196-

PAGE 235

Summary of the Implementation of Previous Study Recommendations Each of the previous studies on the Colorado State personnel system have aided in reforming and updating the State personnel system. Most recommendations have resulted in improving State personnel management, although some recommendations have not been accepted or implemented. A brief summary of implemented recommendations from previous studies is presented below. In addition, those recommendations which repeatedly have not been implemented are identified separately. It was partially reported in the State Personnel Annual Budget Requests for 1970-1978 that the following State personnel reforms have resulted, at least in part, from the previous studies discussed as well as those conducted before 1970. Additional confirmation was received through a 1979 interview with the Associate Director of the State Personnel Department. 1. Restructuring of the State Classification System: The State position classification system was restructured in 1975, including analysis of all classified positions and vacancies. The classification system is undergoing another review by the State Department of Personnel during 1979, chiefly in response to employee classification complaints. 2. Revisions of the State The State pay plan was removed from the personnel statutes in 1973, while statutes were revised to give the State Personnel Director increased responsibility over annual compensation survey and planning administration. However, the personnel system's maximum salary level is -197-

PAGE 236

set by the State Legislature. 3. Improving State Training Opportunities: A. A position for a State training director was budgeted from 1973-76 to direct the development of State training programs, with minimum staff support. These positions were not funded since 1977, so training and development responsibilities have been internalized within the training unit of the Department of Personnel in a piecemeal fashion over time. Training opportunities are also made available to State employees through the Federally subsidized Intergovernmental Personnel Act unit of the State Department of Personnel. B. A Public Service Institute was created in 1977 to aid in developing training programs for classified employees. Approximately 20 training programs annually, covering 5 to 7% of all classified employees, are offered. These programs are paid through "charge back" procedures, although before fiscal year 1979-80 their associated personal costs were covered by general fund appropriations. A State training information clearinghouse was developed in late 1977 to coordinate information on public and private sector training program opportunities throughout the State. C. A Career Executive training program for agency managers in State government has been studied by the -198-

PAGE 237

State Department of Personnel and is currently under initial implementation for fiscal year 1979-80. In addition, a tuition-assistance program was funded from 1975 through 1978. 4. Developing an Employee Appraisal Evaluation System: A. A single performance appraisal system was developed and implemented since 1974, providing for an annual review of most classified employees on a decentralized basis. B. A performance-based bonus system was implemented in 1976 to grant financial bonuses to "outstanding" rated employees, but was terminated by the Legislature a year later. A merit pay system to reward "average" and "outstanding" rated employees annually (5%) has been implemented since 1977, based both on in-grade longevity and measurement. This was based principally on seniority and in-grade longevity. 5. Developing Labor-Management Relations Policies and Procedures: Legal requirements make reference to a State employee organization (Colorado Association of Public Employees) in providing for State Personnel Board membership elections. However, no attention is given in providing for formal employee-management relations policies although a structured employee appeals and grievances system has existed for many years. State Personnel -199-

PAGE 238

Board rules are periodically published and updated. 6. Expanding State Personnel System Coverage: State personnel system coverage has been expanded to include approximately 6,000 staff employees at public universities since 1977. This increased coverage has substantially increased Department of Personnel workloads, without commensurate financial and staff resource increases (see Budget Expenditures section). 7. Veterans Employment Developments: A veterans' reemployment rights policy was adopted by the Legislature in 1973, and State Personnel Board rules were developed on these policies in 1974. 8. Establishing Management Reporting Systems: A personnel management information/reporting system was partially implemented beginning July 1, 1979, in order to track personnel activities of decentralized functions as well as key success indicators of management techniques throughout the State personnel system. Central control and activity monitoring remains an on-going system concern. 9. Reorganizing State Personnel Administration: As reported earlier, the Department of Personnel was reorganized in July, 1978, to increase program-unit service responsiveness and to reflect increased decentralization. In addition, in 1973, personnel laws were codified into two separate statutes (administration and retirement). -200-

PAGE 239

10. Developing Equal Employment O pportunity P olicies a nd Affirmative Action Programs: A. As reported earlier, Governor Richard Lamm issue d a revised Equal Employment Opportunity (E.E.O.) executive order in early 1976 to update the State's general commitment to E.E.O. as a laudable State goal. In addition, an E.E.O. officer position was established in the Department of Personnel to coordinate agency affirmative action corrective plans since 1976. Agency personnel in principal departments have been designated to fill agency affirmative action responsibilities. On the average, only .3 annual FTE of each affirmative action officer is used for E.E.O. and affirmative action responsibilities in respective departments. Special "3+3" certification designed to improve minority group representativeness in the State workforce was initiated in 1977, after extensive Board input and legislative revision. This type of certification was to be terminated effective January 1, 1980 (in personnel statutes), but it is still being continued. B. The Department of Personnel has been instrumental in developing E.E.O. and affirmative action plans, providing State agencies with position utilization analyses used to develop agency affirmative action goals and timetables. Annual agency affirmative -201-

PAGE 240

action plans are then s ubmitted to the Depa rtment o f Personnel for review and Also, the Department has been active in developing a few special recruitment efforts targeted for minorities (political classes), including special advertisements and seminars for public and private organizations to coordinate minority group recruitment. 11. Developing Personnel System Human Resource Planning Capabilities: Human resource planning capabilities have not been developed in either central budget or personnel State agencies, chiefly due to inadequate policy commitment and a lack of appropriated resources for this purpose. An automated skills bank is currently scheduled to be on-line in 1983 to develop skills inventories for personnel system planning purposes. 12. Developing Specific Training Programs for Classification Specialists: A Classification skills training program has been implemented since 1977 to aid in training classification officers throughout State agencies. 13. Developing Career Service for Employees: Career ladders or classification series have reportedly been developed by the Department of Personnel to aid in planning for upward employee mobility and career service. However, this information is not documented and actively disseminated to classified employees, but rather is passively provided to employees who inquire -202-

PAGE 241

about career service opportunities. 14. Coordinating Research and Classification Department Units: The test research/development section was joined with the classification section from 1976 to 1978. However, since this time these two sections have been disaggregated to enhance and broaden personnel research capability. These sections are currently coordinated on a project-by-project basis. In addition, the Department of Personnel has not developed a uniform job analysis methodology to ensure standardized application, chiefly due to the Department's preference to develop job analysis methodologies that allow for flexibility in State agency use. 15. Analyzing Minority Group Test Development Impacts Periodically: Some review of minority group adverse impacts from State examinations is scheduled for fiscal year 1979-80. 16. Expanding Test Administration at Branch Offices: Test administration has been increased at the Department of Personnel's branch offices (Pueblo and Grand Junction) since 1975, and consideration is being given to utilizing State Employment and Training offices (Department of Labor and Employment) for additional testing administration throughout the State. 17. Developing and Disseminating Employee Handbooks on Policies and Procedures: I.P.A. funds from the federal

PAGE 242

government are being used, in part, to develop a looseleaf employee handbook on State personnel laws, rules, policies, and procedures. Approximately 21,000 copies are being prepared for dissemination during fiscal year 1979-80. No State appropriations have been provided for this purpose. 18. Collecting Accurate Data on Employee Separations: Data on separations from the classified service has been collected annually on a broad scale by the Department of Personnel. However, this data is not documented nor reported in Annual Budget requests. Furthermore, separation or turnover rates have been calculated by at least two different formulas which are not compatible. Only a handful of State agencies, including the Department of Personnel, conduct exit interviews with employees leaving State employment.33 While these reforms have been instituted, the absence of an evaluation reporting system makes verification impossible. Summary of Non-Implemented Recommendations The following recommendations previously made have not been implemented by the Legislature, State Department of Personnel and/or the State Personnel Board: 1. Lack of a Merit Protection and Investigation Function. 2. Lack of Resolving Top Salary Pay Range Compression. 33Interview with Associate Director, Colorado Department of Personnel (June 8, 1979). -204-

PAGE 243

3. Lack of Sufficient Training Resources. 4. Lack of Uniform Employee Appraisal Reviews and PerformanceBased Compensation. 5. Lack of Formal Labor-Management Relations Policies. 6. Lack of a Management-by-objectives Personnel Management Approach. 7. Lack of Human Resource Planning Capability. 8. Lack of Procedures for Collecting and Utilizing Separation Data. Description of 1979 and 1980 Studies of Colorado State Personnel System In addition to the American Society for Public Administration (ASPA) State Personnel study, other studies on the State personnel system were being conducted concurrently. The purpose, scope, and origin of each study is summarized below. Any current study findings are also summarized and reported. Legislative State Auditor's Office Performance Audit In June of 1979, the State Legislature passed and the Governor signed into law 1973 C.R.S. as amended, Article 25, Chapter 50, Section 103.5, a requirement for periodic legislative review of the State Department of Personnel (including the State Personnel Board). The Act requires the State Auditor's Office to conduct a performance audit of the Department and Board every four years. The first performance audit was to be completed by December, 1980, for Legislative Audit Committee review. Such reports thereafter will be published for formal public review in committees of reference in each house of the General Assembly. These committees receive testimony from sources such as the public, the State Personnel Director, and the chairman of the State Personnel Board. -205-

PAGE 244

Draft s of thi s ASPA study were made available to the Aud itor. T h e Auditor's report has been published.34 The Act is patterned after the 1976 Colorado "Sunset" Law. The Act requires the Department of Personnel or the Personnel Board to demonstrate the extent to which a change in the administration, rules, and regulations, or operations of the agency may increase its efficiency of administration or operation. The Legislative committees o f reference are required to take into consideration at least ten factors during their public hearings. The ten factors, five taken from the earlier "Sunset" Law, are stipulated in the Act and described below. 1. The extent to which the Department and the Board have operated in the public interest and economy, and the extent to which their operations have been impeded or enhanced by existing statutes, procedures, and any other circumstances, including budgetary, resource, and personnel matters (Sunset factor). 2. The extent to which the Department and the Board have recommended statutory changes to the General Assembly which would benefit the public as opposed to the persons they regulate (Sunset factor). 3. The extent to which the Board has adopted rules and regulations, procedures, or practices which enhance or impede the efficiency or economy of state government (Sunset factor). 34colorado State Auditor, State of Colorado, Department of Personnel Performance Audit, dated June 30, 1980, but was not publicly available until January 1981. -206-

PAGE 245

4. The efficiency with which formal complaints filed with the Department or the Board concerning regulation policies, procedures, or practices have been processed to completion by the Department or the Board and the decisions thereof (Sunset factor). 5. The effectiveness of the Department and the Board in implementing incentive systems to reward and encourage excellence in public service, particularly in middle and top management levels. 6. The effectiveness of the Department or the Board in filling job vacancies. 7. The effectiveness of staffing levels of the Department, particularly in view of the decentralization of personnel functions to other agencies in State government. 8. The effectiveness of the Department and the Board as perceived by executive directors of other agencies of State government and members of the General Assembly. 9. The extent to which changes are necessary in the enabling laws of the Department or the Board to adequately comply with the factors listed (Sunset factor). 10. The extent to which the authority of the Department or the Board should be or has been restricted by the annual Long Appropriation Bill. Before passage of Senate Bill No. 468, the State Auditor's Office was already preparing a study on the State Personnel system. This study -207-

PAGE 246

was conducted by Case and Company (a New York-based man agemen t consulting firm) for the State Office. It addressed the following aspects of the State personnel system: (1) training, (2) decentralization, (3) comparison with other states, (4) compensation, and (5) classification. This study's results were to be incorporated into the 1980 performance audit for public review in early 1981. Office of State Planning and Budgeting Decentralization Statistical Study: 1979 In response to footnote No. 134 in the 1979-80 Long Appropriations Bill, the Office of State Planning and Budgeting was requested to compile a listing of the F.T.E.s utilized for personnel staff and workload performed for personnel functions by each State agency. This information was submitted to the Joint Budget Committee early in January 1981. Colorado Common Cause Classified Employee Survey: 1977-1980 Civil service reform has been a continuing priority with both the national Common Cause organization and the Colorado State chapter of Common Cause. In line with this priority, the Colorado Common Cause office conducted an attitude study of employees in the Colorado State personnel system. This sample survey asked questions concerning efficiency, effectiveness, and perfomance of the State Personnel System. The survey study provided detailed documentation of employee attitudes, and was presented in two summary reports. The first survey summary report was released in late June, 1979, and the second in October, 1979. A summary of findings is presented and analyzed in Chapter VI. I -208-

PAGE 247

Other Studies of Colora do State Personnel S ystem in 1 98 0 A major study of the Colorado State Personnel System was ordered by Governor Richard Lamm in fiscal year 1980. This study was condu cted during the summer and fall of 1980 and was chaired by Alan Dines, former Speaker of the Colorado House of Representatives. Mr. Dines headed a committee largely composed of businessmen. The Committee's r eport in many respects parallels the findings of the ASPA study.35 Another extensive internal study was made by the State Department of Personnel. It was directed by David Foote during 1980. He was appointed by Governor Lamm to be interim head of the Department of Personnel as well as the Executive Director of the Office of State Planning and Budgeting. Lastly, an Interim Committee on State Affairs was conducting a study during the summer and fall of 1980 of the State personnel system and the Department of Personnel. The purpose was to draft legislation for consideration by the General Assembly during its 1981 session. 35Executive Committee on Personnel Management in State Government, Revitalizing the State Personnel System, Colorado Office of State Planning and Budgeting,(January 1, -209-

PAGE 248

I N ...... 0 I -Af'pendix 5 A Colorado State Constitutional Requirements Section 13. Ptrsunncl system of state merit system. (I) Appointments and promotions to oHices and employments in the personnel system of the state shall be made to merit and fitness, to be by competitive tests of competence without regard to race, creed, or color; or political aCfilia tion. (2) The personnel of the state shall comprise all appointive public orric:ers and employees of the state, except the following: Members of the public utilities commission, the industrial commission of Colorado, the state board of land commissioners, the Colorado tax commission, the state parole and the state personnel board: members of any board or commission serving without compensation except for per diem allowances provided by law and reimbursement of expenses; the employees in the offices of the gov crnor and the lieutenant governor whose functions are confined to such offi ccs and whose duties arc concerned only with the administration thereof; appointees to fill vacancies in elective offices: one deputy of each elective of!icer other than the governor and lieutenant governor specified in section I of article IV of this constitution: officers otherwise specified in this consti tution; faculty members of educational institutions and departments not reformatory or charitable in character, and such administrators thereof as be exempt by law; and iMtates in state educational or other institutions employed therein; attorneys at law serving as assistant attorneys &cneral: and members, oHicers, and employees o( the legislative and judicial departments o( the state, unless otherwise specifically provided in this consti tution, (3) Officers and employees within the judicial department, other than judges and justices, may be included within the personnel system of the state upon determination by the supreme court, sitting en bane. that such would be in the best interests of the state. (4) Where by law, any political subdivision of this state may contract with the sUite personnel board for personnel services. (5) The person to be appointed to any position under the personnel system shall be one of the three persons ranking highest on the eligible list for such position, or such lesser number as qualify, as determined from competitive tests of competence, subject to limitations set forth in rules of the state per\Onnel board applicable to multiple appointments from any such list. (6) All appointees in the state, but application5 need not be l imited to residents or "the state as to those positions round by the state per\Onnel board to require special education or training or special professional or technical qualifications and which cannot be readily filled (rom among resi dents of this state. (7) The head of each principal department shall be the appointing author. ity (or the employees o( his office and for heads of divisions, withi n the personnel system, ranking next below the head of such department. Heads of such divisions •hall be the appointing authorities for all positions in the personnel system within their respective divisions. Nothing in this subsectioa shall be construed to affect the supreme executive powers of the governor preicribed in section 2 of article IV of this constitution. lJ Constitution of Colorado (8) Persons in the system of the staie sh;tll hold their respccti, t positions during efficient service or until reaching retirement age, ns provided by The>: shall .be graded and compensated according to standards of efftctent servtce whtch shall be the same for having like duties A_ pe;rson certified to any class or position in the personnel system may or by the appointing authorit) upon wntten ftndmgs of f:ulure to comply wtth standards of efficient service or competence, or for willful misconduct, willful failure or innbility to per his duties, or eonvicti.on of a felony or any other offense which mvolves !"oral or charges thereof may be filed by In)' person ':"tth the authorny, which shall be promptly determined. Any action of the appotntmg authority taken under this subsection shall be subject to appeal to the state personnel board, with the right to be heard thereby in person or by counsel, or both. (9) The state personnel may authorize the temporary employment of persons, not to exceed stx months, during which time an eligible list shall be provided f . or permanent positions . No other temporary or emergent)' employment shall be permitted under the personnel system. • (10) The state personnel board shall establish probationary periods for all persons initially appointed, but not to exceed twelve months for any clan or position. After satisfactory comrletion of any such period, the person be certified to such class or position within the personnel system, but unsat lsfactory performance shall be grounds for dismissal by the appointin' authority during such period without right of appeal. (II) Persons certified to classes and positions under the classified civil of the state immediately prior to July I, 1971, persons having served for SIX months or more as provisional or acting provisional employees in such positions immediately prior to such date, and all persons having served sil months or more in positions not within the classified civil service immediate!) prior to such date but included in the personnel system by this section, shall be certified to comparable positions, and grades and classifications, under the personnel system, and shall not be subject to probationary periods of employment. All other penoM in positions under the personnel system shan be subject to the provisions or this concerning initial appointment on or after such date. . Repealed and reenacted, with amendmenu, November 3, 1970-Effective July I, 1971. (See Laws 1969, p. 1252.)

PAGE 249

I N I Section 14. Sl21e personnel board • state personnel director. (I) There is hereby created a state personnel board to consist of five of whom shall be appointed by the governor with the conseo.t r! tne senate. und two of whom shall he elected by certified to classes and in the state personnel system in the manner by law. Each shall be appointed or elected for a term of five years, and ma)' succeed him self. but of the mcmbeu first selected, the members appointed by the gover nor shall serve for terms of one, two, and three yeurs, respectively, and the members elected shall serve for terms of four and five years, respectively. Each member or the board shall be a qualified elector of the state, but shall not he cthrrwise an officer or employee or the state or of any employee and shall receive such compcnsatit'n as shall be fixed by law. (2) Any member of the board may be removed by the governor for willful misconduct in office, willful failure or inability to perform his duties. final conviction of a felony or of any other offense involving moral turpitude, or by of permanent interfering with the performance of his duties. which removal shall be subject to judicial review . Any vacancy in office shall be filled in the same manner as the selection of the person vacat ing the office , and for the unexpired term. (3) The state personnel lx>anl shall adopt, aod may from time to time 11mend or repeal, rules to implement the provisions of this section and sec tions 13 and IS of this article, as amended, and laws enacted pursuant thereto, including but not limited to rules concerning standardization of posit ions. determination of grades of positions, standards of efficient and competenl sen ice, the conduct of competitive cxaminiltions of competence, grievance procedures, appeals from actions by appointing authorities, and conduct of hearings by hearing officrrs where authorized by law, (4) There is hereby created the department of personnel, which shall be one or the principal departments of the executive department, the head or which shall be the state personnel director, who shall be appointed under quali fic:llions established by law. The &tate personnel director shall be responsible for the administration of the personnel system of the sl21e under thi5 constitution and laws enacted pursuant thereto and the rules adopted thereunder by the 5tate personnel board. 15. , prdertnce. (I) (a) The passing on each com pctiiiYe examma . llon shall be the same Cor each candidate for Appoi ntment 1n personnel sy•tem of the st:lle or in nny CIYit 5erv1ce or ment system of any agency or political subdivision of the mtr, incluuinJ.! any municipality chartered or to be chartered under article XX o( this constitution. Five points shall be added to the passing !;fade of each candidate on eac! 1 such examination, except any promotional exam i nation, who is sepa unde.r honorable conditions and who, other thnn for training purposes, h) 1n any branch of the armed forces of the United States durin&: 01ny pcn.od of any declared war or any undeclared war or other armed hostilities aGa nst .an armed foreign enemy, or (ii) served on active duty in :ony m any campaign or expedition for which a campaign badge is author llCC : . (t:l Ten points shall be added to the passing grnde of any cand i date of uca such examination, except any promotional who has so other thnn for training purposes , and who, because of disability incur• red. m the line of duty, is receiving monetary or d i \ability benefits by reason of public laws administered by the department of or the veterans administration, or any successor thereto . (!!) F ive points shall be 3uded to the passing grm.le of any candidate of cac l .such except any promotional examination, who is the unre w1dow of any person who was or would have been entitled to addi paragraph (b) or (c) of this suhsection , or of any person 0 d1ed durmg such service or as a result of service-connected cause while on a t ' d c 1ve uty 1n any such branch, other than for training purposes . f No more than II total or ten points shall be added to the paning 0 <-ny such candidate pursuant to thi s subsection ( 1 ). . Ut. The certifiute of the department of defense or of the veterans adm i n 1\trfttOn, or any successor thereto, shall be conclusive proof of service under

PAGE 250

I N ..... N I IS of Colorado 380 honorable conditions or of disability or death incurr-.:d in the line of during such service. m (:!) When n reduction In the work fnrce nf the slnte or 11ny such polit. ical subdivision thereof becomes because of lack of work or cur tailment of funds, employees not eligible for added points under subsection (I) of this section shall be separated before those so entitled who have the same or more service in the employment of the stale or such r<'litical subdivi sion, counting both military service for which such points are added and such emplnyment with the state or such political subdivision, liS the case may be, from which the employee is to be separated. (b) In the case of such a person eligible for added points who has com pleted twenty or more years of active military service, no military service shall be counted in determining length of service in respect to such retention rights. In the case of such a person who has completed less than twenty years of such military service, no more than ten years of service under sub section (I) (b) (i) and (ii) shall be counted in determining such length of ser vice for such retention rights. (4) The state personnel board and each comparable supervisory or admin istrative board of any such civil service or merit system of any agency of the state or any such political subdivision thereof. shall implement the provi sions of this section to assure that all persons entitled to added points and preference in examinations and retention shall enjoy their full privileges and rights granted by this section. (5) Any examination which is a promotional examination, but which is also oren to persons other than employees for whom such appointment would be a promotion, shall be considered a promotional examination for the pur poses o( this (6) Any other provision of this section to the contrary notwithstanding, no person shall be entitled to the addition of points under this section for more than one appointment or employment with the same jurisdiction, per sonnel system, civil service, or merit system. (7) This section shall be in Cull force and effect on and after July I, 1971, and grant veterans' preference to all persons who have served in the armed forces of the United States from the Spanish-American war as of April 21. 1898, and any other declared or undeclared war, conflict, engagement. expedition, or campaign for which a campaign badge has been authorized, and who meet the requirements of service or disability, or both, as provided in this section. This section shall apply to all public employment examina lions. except promotional examin11tions, conducted on or after such date, aad it shall be in all respects sell-executing. Adopted November 3, 1970 Effective July 1, '1971. (See Laws 1969, p. 12S4.) Source: . . . Colorado State .Constitution, Art1cle XV, Sections 13 • . 14. and 1973 C.R.S. T1t1e 1. •

PAGE 251

Introduction CHAPTER VI DATA ON COLORADO STATE PERSONNEL SYSTEMS, EMPLOYEE CHARACTERISTICS AND ATTITUDES This chapter provides a statistical analysis of Colorado State government officers and employees. First it identifies State personnel systems and employee groups. Next, it describes the structure and coverage of all State level personnel systems. An in-depth statistical analysis of characteristics of employees covered under the principal State personnel system is presented. The chapter concludes with a description of county and municipal personnel systems, including a description of intergovernmental personnel relations and activities. Data on State Personnel System and Employee Characteristics Identification of Public Employee Groups in Colorado State and local public officials and employees in Colorado are employed under specific legal provisions established by Constitutional mandates and/or State and local legislative bodies. In the State government, employees are either exempt from personnel legal provisions or employed under distinct State personnel merit-based systems. At local public employees are either exempt from local personnel provisions or covered under individual personnel systems provided by charter or ordinance for home-rule cities or by State law for statutory cities, counties, school and special districts. Public employee groups employed in the Executive and/or Legislative branches under State or -213-

PAGE 252

local provisions are described below: 1. Non-Classified Exempt State Employees --Exempt public employees include all elected State officials, most legislative employees, approximately one-half of all executive branch employees (including temporary and contractual employees), higher education faculty members, and judges and their appointees in the judicial branch (Colorado Constitution, Article XII, Section 13). 2. State Personnel Classified Employees --These State employees include most full-time employees, totaling roughly half of all executive branch employees and staff employees of the State Auditor's office. 3. State Judicial Classified Employees --These employees include all staff employees of the State judiciary, excluding State court judges appointed by the Chief Executive. 4. Social Services Classified Employees --These employees are hired under a State-supervised social services merit system and include all social service staff employees in Colorado's 63 counties, separated from the principal State personnel system by State statute. 5. Individually Adopted Local Personnel Systems --Municipal and county public employees are employed under either home rule (structural home rule in counties) or State statutory provisions. Personnel provisions enacted by legislative bodies or provided in statutes usually exclude elected officials and their top-level appointees from the merit service. -214-

PAGE 253

10. Members, officers, and employees of the legislative and judicial branches of the State, unless otherwise provided in the State Constitution. These exempt State employees are either popularly elected or appointed by elective office holders or politically appointed administrators. Approximately 26,800 State employees were not under the State classified service as of June 30, 1978.1 Some of these, such as many faculty members, are covered under their own special merit systems. Classified Employees in State Personnel System These employees include all State government appointments made by State department and division heads in the executive branch, as stated in the Colorado Constitution (Article XII, section 13-7). These appointments include all full and part-time employees classified in State personnel positions with tenured or probationary employment certification. Temporary and contractual State employees are excluded from the classified State personnel system, and are part of the exempt State employee group. Specifically, the Colorado Constitution states that classified employees consist of all appointive public officers and State employees, except those exemptions (No. 1-10) listed above (Article XII, section 13-2). In addition, the State personnel system also includes staff employees of the legislative State Auditor's Office. Approximately 25,500 State employees were classified under this system as of June 30, 1978. 1colorado State Department of Personnel, Statistical Unit, 1979-80 Annual Budget Requests (State Department of Personnel and Statistical Reports, May 1979.) -215-

PAGE 254

Nature and Scope of Personnel Provisions for State Employee Groups Non-Classified Exempt State Employees Approximately half of all State employees are exempt from the State's principal personnel system. Exempt State employee groups are listed below: 1. Members of specific State boards and commissions, including the Public Utilities Commission, State Industrial Commission, State Board of Land Commissioners, State Tax Commission, State Parole Board, and the State Personnel Board. 2. Members of any board or commission serving without compensation except for per diem allowances and reimbursement of expenses provided by law. 3. Employees in the offices of the Governor and the Lieutenant Governor. 4. Appointees to fill vacancies in elective offices. 5. One deputy of each elective office holder other than the Governor and Lieutenant Governor. 6. Local and County officers otherwise specified in the State Constitution. 7. Faculty members of educational institutions and departments not reformatory or charitable in character, and such administrators thereof as may be exempt by law. 8. Students and inmates in State educational or other institutions employed therein. 9. Attorneys at law serving as assistant attorneys general. -216-

PAGE 255

Classified Employees In State Judicial Personnel System The judicial State employee personnel system is based on merit provisions of personnel programs administered by the State Supreme Court Administrator. The State Court Administrator is accountable to the justices of the Colorado State Supreme Court for personnel management (1973 C.R.S., Section 37-11-6). The State judicial employee personnel system currently utilizes distinct personnel policies and procedures from those of the State's principal personnel system. This system included 1,470 full-time equivalent (FTE) State judicial employees and 93 part-time employees, 2 totaling 1, 563 as of February 28, 1979. Statistical Summary of Public Employees in State Government Overall Growth in State Employees: 1970-1978. Table 6-1 presents the increase in the average number of State employees from 1970-78. This table is broken down by full-time employees and "other" employees, such as part-time, contractual, and temporary employees (including higher education work-study students). Table 6-1 also shows the percent increases for each employee group from 1970 to 1978. Comparative data on the total number of State personnel system employees over the same time period is also presented. Findings: 1. By far, the greatest proportional increase in State government employment from 1970 to 1978 has occurred in the part-time, contractual, temporary and student work-study State employee 2rnterview with Deputy State Court Administrator and Payroll Officer, State Court Administrator's Office, State Judicial Building, (Harch 15, 1979). -217-

PAGE 256

I N ...... CXl I Table 6 -AVERAGE NUMBER AND PERCENT INCREASES IN FULL AND PART-TIME STATE EMPLOYEES FROM FISCAL YEARS 1970 TO 1978 Number and Percent Increase in Total FISCAL YEAR State Government Employment 1970 1971 1972 1973 1974 1975 1976 1977 1978 No. of Full-time % Increase over Prior Year No. of "Other"a % Increase over Prior Year Total Employees Total No. of Emplovees in State Personnel Systemb % Increase over Prior Year 26,446 30,476 31,819 32,668 33,735 34,846 36,338 35,879 36,323 13.1 4.4 2.7 3.3 3.3 4.3 -1.3 .7 7,991 11,029 14,318 14,601 14,335 16,099 16,930 18,961 20,534 38.0 39.8 1.9 -1.8 12.3 5.1 11.9 8.3 34,937 41,505 46,137 47,269 48,070 50,945 53,268 54,840 56,857 17,607 18,399 18,090 18,870 19,767 19,474 19,682 22,306 25,491 Base yr. 4.49 4.31 4.75 -1.48 1.06 13.33 14.27 Percent 37.3 156.9 62. 7 44.8 Notes: a) employees include all part time and contract State employees as well as State higher education faculty, administrators, and work-study students. b) The total number of state merit system employeers drastically increased during the 1977 and 1978 fiscal years due to the inclusion of approximately 6,000 public university and college staff employees within the state merit system. Source: Colorado State Controller, State Department of Administration, Division of Accounts and Controls, personal services' warrants issued monthly, fiscal year 1978. Demographic statistics of the U. S. Department of Commerce (Bureau of Census).

PAGE 257

groups --representing a 157% increase, totaling over 12,500 employees. 2. FTE State employees have increased by 9,877 or 34% over 1970-78. 3. Classified employees in the State personnel system have increased by 7,884 or 44.8% from 1970-78, mostly due to the influx of 6,000 staff of colleges and universities. 4. Due to the 1970-78 increase in part-time and temporary State employees, exempt State employees have increased almost four times as fast as classified employees --157% versus 44.8%. Breakdown of Number of State Employees in Branches of State Government. Table 6-2 presents a breakdown in the average number of State employees in the legislative, judicial, and executive branches of State government during fiscal year 1978. State employees are divided into full-time and "other" State employees, as described above in Table 6-2. It also presents comparative data on the total number of classified State personnel system employees from 1970 to 1978, as well as statistics on executive branch higher education employees. Findings: 1. State employees classified under the principal State personnel system accounted for 46.5% of total executive branch employees and 74% of full-time executive branch employees in 1978. 2. Classified State personnel system employees accounted for 44.8% of all State government employees and officers in the three branches of State government as of June 30, 1978. Table 6-3 presents the actual number of FTEs for faculty employed at each public higher education institution in Colorado during the -219-

PAGE 258

I N N 0 I Table 6 -2 BREAKDOWN IN THE AVERAGE NUMBER OF STATE GOVERNMENT EMPLOYEES FOR THE LEGISLATIVE, EXECUTIVE, AND JUDICIAL BRANCHES IN FISCAL YEAR 1978 Total Number of Full-time Branch of State Government and "other" State employees in Fiscal Year 1978 Full-time Employees "Other" Employeesa Total Legislative Branch Judicial Branch Executive Branch (Sub total) Public Higher Education Onlyb Executive Branch without Public Higher Education Employees Total for all branches Total Number of Employees in State Personnel System 238 1,661 34,424 17,976 16,448 36,323 43 157 20,334 16,215 2,119 20,534 Notes: a) "Other employees include all part-time and contractual/temporary State employees. 281 1,818 54,758 34,191 181567 56,857 25,491 b) Excludes university faculty and administrators, but includes all students on work-study programs. This accounts for the difference in the Total State Employees of 56,857 in Table 3 and the 54,653 reported here in Table 4. Source: Colorado State Controller, State Department of Administration, Division of Accounts and Controls, personal services warrants issued monthly, fiscal year, 1978.

PAGE 259

Table 6-3 NUMBER OF ACTUAL FULL-TIME EQUIVALENT FACULTY EMPLOYED IN STATE UNIVERSITIES AND COLLEGES IN FISCAL YEAR 1978 Name of Each State Supported University and College C. U. Boulder C. U. Denver C. U. Colorado Springs c.s.u. Prof. Vet. Medicine Ft. Lewis College School of Mines U.N.C. Adams State Metro State Mesa College u.s.c. Western State Arapahoe Community College Community College of Denver El Paso Community College Morgan Community College Lamar Community College Otero Community College Trinidad Junior College Total Number of Faculty F.T.E.'s Number of Actual Full-Time Equivalent Faculty Members (F.T.E. -9 to 10 Mos./Yr.) 1,200.5 288.2 144.7 972.2 67.3 136.8 179.4 619.7 138.0 456.3 144.4 285.4 156.4 158.3 552.4 198.3 17.3 25.7 35.9 66.3 5,869.2 Source: Governor's Budget Request, Fiscal Year 1978-79, Office of State Planning and Budgeting, January, 1979. -221-

PAGE 260

fiscal year e nding June 30, 1978. A s s h own in Table 6-3, 1.0 FTE e q uals one faculty member working 9 to 10 months per year. Faculty members working for twelve months per year are considered as 1.2 FTE annual employment. Findings: 1. FTE faculty in public higher education (post-secondary) institutions represent 11.2% of all executive branch full-time equivalent employees. 2. Faculty FTE represent approximately 10.7% of State employees in all three branches of State government, as of June 30, 1978. Statistical Overview of Classified State Employees in State Personnel System Statistical reports on classified employees in the principal State personnel system are produced annually by the State Department of Personnel and used internally for personnel management purposes. Some of these reports present information on classified employee characteristics (age, sex, pay grades, salary levels, occupations, and personnel separations) as well as affirmative action statistics. However, the Department's information system does not readily provide classifications of these characteristics. Before examining these characteristics, an overview of executive branch classified State employees is presented. Table 6-4 presents the increase in classified State employees under the State personnel system from 1971-78. The annual percent increase of classified State employees is also presented. Of these, 25,491 full and part-time permanent employees appointed in the State -222-

PAGE 261

Table 6-4 EMPLOYEES COVERED UNDER THE STATE PERSONNEL SYSTEM 1971-78 Fiscal Year Total Permanent Employees Annua 1 Percent Change 1971-72 18,090 1972-73 18,870 4.3 1973-74 19,767 4.7 1974-75 19,474 -1.5 1975-76 19,682 1.1 1976-77 22,306* 13.3 1977-78 25,491* 14.3 Net Difference 1971-78 7,401** 40.9 Source: Annual Statistical Reports, State Department of Personnel, Research Section, August 21, 1978. *Note: 1976-77 figures include all University system staff employees except those of the C.U. Medical Center; the 1977-78 figures include the C.U. Medical Center. **Note: Of this number 6535 employees have been blanketed into the system since 1970, including 6000 staff of Universities and cull eges. -223-

PAGE 262

personnel system, 23,814 are full-time employees and 1,677 are part-time employees. Findings: 1. The total increase in classified State employees in the State personnel system from 1971 to 1978 was 40.9% or 7,401 employees. 2. However, if the approximate 6,000 State university system staff employees brought into the State personnel system from 1976-78 are excluded from calculating the total percent increase, then the increase in the remaining classified State employees over 1971 to 1978 is 7.7%. Thus, the transfer of higher education staff employees account for most of the apparent increases in classified State employee growth from 1971 to 1978. 3. Bureau of Census indicates that Colorado's population growth from 1971-78 was 17.3% or 394,000 additional State residents. Table 6-5 presents figures on the career status of classified employees in the State personnel system as of June 30, 1978. Employee status is based on nine specific appointment categories. State Personnel Board rules define these nine types of appointments as follows (Chapter 5, Article 1): * Certified means the permanent appointment of an employee to a position following successful completion of a probationary period or trial service period, by transfer, or by demotion of a permanent employee from another class to which he has been previously certified. -224-

PAGE 263

* Probationary means the initial appointment of an individual from without the personnel system from an open-competitive eligible list to a permanent position. During this probationay period, not to exceed twelve months, the employee shall be evaluated to determine if he shall merit certified status. * Trial service means the promotion of a certified employee to a permanent position after examination. During the trial service period, not to exceed six months, the employee shall be evaluated to determine if he should remain in the position. * Trainee means the appointment of an individual to a formally designated trainee position. * Substitute "S" means an appointment to a substitute position established to provide for leaves of absence or for training purposes for classified employees for a period normally not to exceed six months. Such appointments shall be made in the order of filling positions provided in Article 2 of Chapter 5. When the "S" position is abolished, the lay-off provisions in Chapter 9 shall not apply, and the incumbent, if a certified employee, shall revert to his prior class. * Temporary means the limited term appointment without examination for a period not to exceed six months in a twelvemonth period. Conditional means the temporary of a certified employee to a permanent position pending the establishment of an eligible list after an examination for a period not to exceed six months. -225-

PAGE 264

* Provisional means the temporary appointment of an individual from without the personnel system to a permanent position, pending the establishment of an eligible list after an examination, for a period not to exceed six months. * Emergency means a limited term appointment without examination for a period of not more than fifteen working days. Findings: 1. Those certified with tenured employment (beyond the maximum one year probationary period) represented 84.2% of all classified State employees as of fiscal year 1978. 2. The remaining 15.8% included probationary, trial service, provisional, temporary, and conditional employees. 3. In addition to the 25,491 classified State employes, approximately 5,300 classified position slots were vacant at the end of fiscal year 1978. This represented 17.2% of all classified positions. 4. The use of temporary and contractual employees in filling State executive branch positions represented 6% (440) of the total classified workforce (25,491) as of June 30, 1978. Table 6-6 presents data of the annual number of reassignments of classified employees for fiscal years 1975 to 1978. Reassignments include those made through upward or downward reassignment between and/or within multiple range classes of the State personnel system. Reassignments are determined by appointing authorities or their designees.3 3Rules and Regulations of Colorado State Personnel System (April 1980), Rule 2-1-10.

PAGE 265

Table 6 5 STATUS OF STATE PERSONNEL SYSTEM APPOINTMENTS: June 30, 1978 Number of Covered Certified (with tenured status) 21,465 Probationary 2,780 Trial Service 957 Provisional 47 Condition a 1 51 Trainee 111 Substitute 11S11 0 Subtotal Classified State Employees = 25,491 Temporary and/or Contractual State Employees = 440 Grand Total (as of July 1, 1978) = 25,931 Source: Annual Statistical State Department of Personnel Research section, August 1978. -227-

PAGE 266

T able 6-6 REASSIGNMENTS IN THE STATE PERSONNEL SYSTEM: 1975-1978 Fi sea 1 Year Category 1975 1976 1977 Upward reassignment in agency 2,318 2,745 1,882 Upward reassignment between agencies 10 9 7 Downward reassignment in agency 0 150 19 Downward reassignment between agencies 1 1 6 Total reassignments 2,329 2,905 1 ,914 Percent of full and Part-time Classified Work Force 11.9 14.7 8.6 Note: Figures do not include State University and college system reassignments. 1978 2' 182 17 14 5 2,218 8.7 Source: Annual Statistical Reports, State Department of Personnel, Research section, August, 1978. 2 28-

PAGE 267

Findings: 1. Although the State university system employees are not included, the trends in multiple range class reassignments appear to be stabilizing over the past four years (1975 to 1978) --representing an 11% annual reassignment rate. 2. The largest number of classified State employees is employed under the State Department of Higher Education, which includes staff employees of 21 State universities and four-year, or two-year colleges--totaling 37.1% of all classified employees. Other major employers are the Departments of Institutions (15.3%) and Highways (14.7%). Between the Departments of Higher Education, Institutions, and Highways, a total of 17,135 are employed--representing 67.1% for fiscal year 1978. 3. The number of classified employee promotions represented 37.1% of the total fiscal year 1978 appointments (including promotions) in the State personnel system. 4. Resignations from classified positions represented 68.6% of total terminations (resignations, retirements, layoffs, deaths, and dismissals) in fiscal year 1978, while dismissals represented 3.0% of total terminations. On the following pages, statistics on the characteristics of the 25,491 State classified employees are presented for the fiscal year ending June 30, 1978. Table 6-7 presents data on employee sex, age, race, and education level. Table 6-8 presents data on employee pay grades, salaries, and separations from the personnel system. Table 6-9 shows the distributions of employees among major occupational classes. -229-

PAGE 268

I N w 0 I Table 6-7 STATE CLASSIFIED EMPLOYEE (FULL AND PART TIME ONLY) CHARACTERISTICS OF SEX, AGE, RACE, AND EDUCATION LEVEL DATA FOR 25,491 CLASSIFIED EMPLOYEES AS OF JUNE 30, 1978 CHARACTERISTIC RANGE, PERCENT AND NUMBER OF EACH EMPLOYEE CHARACTERISTICS Sex: Male Female No. Total 12,771 12 '720 % of Total 50.1 49.9 Age: (Years) Less than 20 20 to 29 30 to 39 40 to 49 50 to 59 60 and Over No. Total 229 7,724 . 6,500 4,359 4,384 2,294 % of Total .9 30.3 25.5 17.1 17.2 9.0 Race: White (a) Black Hispanic Asian-American (b) American Indian (c) No. Total 32,320 1,352 2,600 153 76 % of Total 83.6 5.3 10.2 .6 .3 Education Level No High School High School Some College Degree Ph.D. Diploma Diploma (d) College (BA/BS) Degree and Hore No. Total 2,396 9,662 6,347 5,022 1,631 433 % of Total 9.4 37.9 24.9 19.7 6.4 1.7 Notes: a) Includes Indo-European, Pakistani, and East Indian c) Includes Eskimo b) Includes Thailander, Pacific Islander d) Includes High School Equivalent diplomas e) The percent totals and number counts for the education levels of classified employees are derived from the 1978 D.U. School of Public Management statistical study of State personnel system employees (noted in Footnota No. 44) --the State Department of Personnel does not currently track employee education levels ahthough this capability will be available through an updated computerized information system beginning January, 1980. Source: Annual Statistical Reports, Colorado Department of Personnel, Research section, 1978.

PAGE 269

I table 6-8 STATE CLASSIFIED EMPLOYEE (FULL AND PART TIME ONLY) CHARACTERISTICS OF PAY GRADE, SALARY LEVEL DATA FOR 25,491 CLASSIFIED EMPLOYEES AS OF JUNE 30, 1978 CHARACTERISTIC Pay Grade: No. Total % of Total Salary Level ($) With Pay Grade 1 RANGE, PERCENT AND NUMBER OF EACH EMPLOYEE CHARACTERISTIC to 10 11 to 20 21 to 30 31 to 40 41 to 50 51 to 60 61 to 70 71 to 82 765 3,314 5,863 6,118 5,353 2,548 1,020 510 3.0 13.0 23.1 23.9 21.0 9.0 4.1 2.0 4,000-9,400 7,100-12,000 8,900-16,000 12,000-28,000 28,000-38,700 5,863 6,373 7,392 5,608 255 21.9 No. Total % of Total Separations from Personnel System: Fiscal Year 1978 (ending 6/30/79) No. Total % of Total 23.0 Resignations from System 3,318 13.0 25.1 Retirement, Lay-offs and Deaths Combined 1,383 5.5 28.9 Dismissals from System 135 0.5 Total Actual Separation Rate 4,836 19.0 Source: Annual Statistical Reports, Colorado Department of Personnel, Research section, 1978. 1.1 (1977-78)

PAGE 270

Table 6 -9 ANALYSIS OF STATE CLASSIFIED EMPLOYEES (FULL AND PART TIME ONLY) BY OCCUPATIONAL GROUPS AS OF JUNE 30, 1978 OCCUPATION GROUPS NO. OF EMPLOYEES PERCENT TOTAL Clerical and data processing 8,208 32.2 Medical and health related 3,645 14.3 Domestic, custodial and personal services 2,600 10.2 Mechanical, construction and trades Social Welfare, rehabilitation and institutional services Administrative, financial and staff services Information, education, public and community services Engineering and Scientific Regulatory, enforcement and legal services Natural Resources TOTALS for all Occupational Groups 2,524 2,167 1,555 1,401 1,274 1,141 976 25,491 9.9 8.5 6.1 5.5 5.0 4.4 3.9 100.0 Source: Annual Statistical Reports, Colorado Department of Personnel, Research section, 1978. -232-

PAGE 271

Tables 6-10 and 6-11 present statistics on the relationships of employee age, education level, and pay grade with employee sex and race, respectively. Major Findings From Statistical Tables 6-7 Through 6-11 1. In general, State classified employees are most frequently white, less than 40 years old, with at least one year of college education. The majority are employed in clerical, data processing, custodial, domestic, medical, and health-related occupations. Overall, sexes balance between all classified employees, although males are more frequently better educated and compensated (pay grade). In addition, age stratification between the sexes reveals that males dominate the youthful ages (less than 41 years) and females dominate older ages (more than 40 years). 2. Only .5% of all classified State employees were dismissed from State employment in fiscal year 1977-78 --representing 135 employees from all State agencies. However, 13.1% of all classified State employees (3,318 employees) resigned from State employment, and 5.5% either retired, were laid off, or died. Thus, the total actual separation rate for State employees under the State personnel system was approximately 19.0% or 4,836 employees out of 25,491 employees. 3. Total appointments in fiscal year 1978 represented 14.7% of the total classified workforce on June 30, 1978, while total promotions represented 8.6% of this total workforce.4 Statistical Reports, (State Department of Personnel, August 1978). -233-

PAGE 272

I N w I Table 6-10 AGE, EDUCATION LEVEL, AND PAY GRADE CHARACTERISTICS OF STATE CLASSIFIED EMPLOYEES (FULL AND PART-TIME ONLY) DISTRIBUTED BY EMPLOYEE SEX AS OF JUNE 30, 1978 SELECTED CHARACTERISTICS OF STATE CLASSiFIED EMPLOYEES DISTRIBUTED BY EMPLOYEE SEX . AGE (Yrs. ): 18 to 27 28 to 40 41 to 48 49 to 59 60 and Over No. Males 3,483 3,950 2,683 1,686 986 I of Males 27.3 30.9 21.1 13.0 7.7 No. Females 3,222 2,839 2,351 2,983 1 ,308 I of Females 25.4 22.3 18.5 23.5 10.3 No, and Females) 6,705 6,789 5,034 4,669 2,294 Of Grand Total 26.3 26.6 19.7 18.3 9.1 EDUCATION LEVEL: No High School Col}ege Post-Graduate Diploma H. s. Diploma Some ColleQe BA/BS Study• No. Males 985 4,720 2,994 2,602 1,321 I of Males 7.7 36.9 23.4 20.4 10.3 No. Females 1,411 4,942 3,353 2,420 743 S of Females 11.1 38.8 26.4 19.0 5.8 No. (Males and Females) 2,396 9,662 6,347 5,022 2,064 of Grand Total 9.4 37.9 24.9 19.7 8.1 PAY GRADE: 2 to 24 25 to 34 35 to 46 47 to 82 No. Males 1,451 2,379 3,839 5,099 I of Males 12.0 19.0 30.0 39.0 No. Females 4,070 3,719 3,562 1,27Z S of Females 32.0 30.0 28.0 10.0 Total No. (Males and Females 5,521 6,198 7,401 6,371 Of Grand Total 21.7 24.3 29.0 25.0 Sources: Annual Statistical Reports, Colo. Dept. of Personnel, Research Section, 1978. Statistical Analysis of Colorado State Personnel System, D.U. School of Public Management by M. Barker and B. Novak, January, 1978. . Notes: a) Data presented is based on a D.U. School of Public Management Statistical Survey footnoted in No. 69. The categories of characteris-tics are different than tables 10 and 11 due to use at the D.U, Survey data reports.

PAGE 273

Table 6-11 AGEi EDUCATION LEVEL, AND PAY GRADE CHARACTERISTICS OF STATE CLASSifiED EMPLOYEES FULL AND PARTTIME ONLY) DJSTRJBUTED BY H IPLOYH RACE AS OF JUN( 30, 1978 Selected Characteristics of State Classified Employees Distributed by Employee Race AGE {YRS. 18 to 27 28 to 40 41 to 48 49 and Over No. Caucasian •••••••••••• 6,030 5,570 3,989 5,641 I ............ 28.6 26.2 18.7 26.5 No. Black •••••••••••••••• 272 357 311 411 I ............ 20.1 26.5 . 23.0 30.4 No. Hispanic ••••••••••••• 377 717 671 835 s ............ 14.5 27.6 25.8 32.1 No. Asian-American •••••••• 32 24 49 49 I ............ 20.0 16.0 32.0 32.0 No. American Indian ••••••• 14 2r 14 27 I ............ 18.Z 27.3 18.2 36.3 Total for All Races .... 6,725 6,789 5,034 6,963 %of Grand Total •••••••••• 26.3 26.6 19.7 27.4 No High School H.S. Some College Degree Pos t-Grac EDUCATION LEVEL: Diploma Diplo m a Colleqe _(BA/BS) Study No. Caucasian ............ 713 9,000 5,127 4,550 2,011 s ............ 3.3 42.2 23. 21.4 9.4 No. Black ................ 81 662 338 176 95 I ............ 6.0 49.0 25. 13.0 7.0 No. Hispanic ••••••••••••• 208 1,612 546 208 26 I 8.0 62.0 21. 8.0 1.0 No. Asian-American •••••••• 8 24 57 24 40 I 5.0 16.0 37. 16.0 26.0 No. American Indian ••••••• 1 33 8 17 17 s •..........• 1.0 44.0 11 ??.0 _Zl_.D Total No. for A 11 Races .... 1,011 11,331 5,986 4.975 2.189 I of Grand Total ......... 4.0 44.5 23. 19.5 8.5 PAY GRADE: 2 to 24 24 to 34 35 to 46 47 to 82 No. Caucasian ........... 4,106 4.835 6.490 5,871 I ..........• 19.2 22.7 30.5 27.6 No. Black . .............. 446 433 270 202 I ........... 33.0 32.0 20.0 15.0 No. Hispanic ............ 936 858 598 208 I ........... 36.0 33.0 23.0 8.0 No. Asian-American ...... 18 49 18 67 1 ........... 12.0 32.0 12.0 44.0 No. American Indian ..... 15 23 15 23 I ......•...• 20. 0 30.0 2
PAGE 274

Description of County and Municipal Public Personnel Programs Social Service County Welfare Merit System In addition to the State personnel systems and programs previously mentioned, public employees working for county departments of social service in Colorado are employed under provisions of a State supervised "County Welfare Merit Sys tern ... s This county social service personnel system under law is supervised by the State Department of Social Services and covers all employees of social service departments in each of Colorado's 63 counties. As of June 30, 1978, a total of 2,826 county employees were covered by the social services Merit System Council provisions. This includes 1,717 full-time employees and 1,109 part-time and/or contractual employees in county social services departments.6 Thirty of Colorado's 63 counties have less than six welfare employees. Supervisors of the County social services Merit System have written agreements with the State Department of Personnel to utilize various Departmental technical personnel services. These technical personnel services include access to State examinations, State position classifications, annual State compensation survey, and some recruitment processes. The Merit System Council's personnel functions of employee selection, advancement, performance evaluation, training, and appeals and grievances are administered by the Merit System Council's staff or delegated to county social service directors. County social service directors often utilize personnel committees to aid in discharging these 5county Welfare Merit System, 106 Colo. 475, 106 p., 2d., 464 (1940). 6Grant-Aided Agency Report: Review of Personnel Operations, (County Personnel Merit System Administration, State Department of Social Services, June 30, 1978). -236-

PAGE 275

Merit System delegated responsibilities.7 Though some State Merit System Council personnel functions are delegated to county social service departments, the State contributes funds to cover 80% of the county welfare employees' salaries.8 However, each county welfare department establishes its own organizational structure, and under State Merit System Council's rules, approved by the State Board of Social Services, its own hiring and firing procedures. In Nadeau v. Merit System Council (1975), the State Court of Appeals held, with dissenting opinions, that county social service departments have no right to seek judicial review of State Merit System Council decisions regarding the disciplining and/or removing of county social service employees covered under the Merit System Council. The issue arose out of an attempt by a county department of social services to dismiss a Merit System covered employee. The State Merit System Council's hearing officer concurred with the department's decision. However, the Council itself issued a 30-day suspension to the employee instead. This action was upheld, with dissent, in the 1975 case, and reaffirmed that both the State Merit System Council and county departments of Social Services are functional divisions of the State Department of Social Services and its State Board.9 Thus, State Merit System Council actions are binding on each county social service department, within provisions of Council rules. This approach provides some administrative flexibility for individual 7Interview with County Personnel Merit System Administrator, State Department of Social Services (March 16, 1979). 8 1973 C.R.S., Sections 26-50-108 and 26-50-109. 9 Nadeau v. Merit System Council, 36 Colo. App. 362, 545 P.2d. 1061 (1975). -237-

PAGE 276

counties while retaining Merit system policy-making, merit protection, and accountability in the central State office. But in Evert and City and County of Denver Ouren (1976), the Colorado Court of Appeals held that the City and County of Denver (Career Service Authority) does not have the right to set salaries of their county social service employees covered under the Herit System Council's statutory provisions and county employee salary provisions of the State Board of Social Services. Thus, the State Board and the Merit System Council are not obligated to adopt the Career Service Authority's salary wage schedules (see Colorado Constitution, Article XX, Sections 2 and 6). In short, this action kept the City and County of Denver from making county social service employee salaries more competitive between public and private sectors than was legally possible within the State Department of Social Services because of a shortage of funds.10 Other County and Municipal Public Personnel Programs The Colorado Constitution provides that where authorized by statute or ordinance, any political subdivision of the State may contract with the State Personnel Board for personnel-related services (Article XII, Section 13-4). Thus, municipal, district, county, and regional public employees are not automatically included in the State classified personnel system or the judicial personnel system. Under home rule provisions, legislative bodies in counties and municipalities may establish their own personnel systems. They have authority to "determine the term or tenure of service of their employees, including all necessary public personnel provisions they may wish to establish by 10Evert v. Ouren, 37 Colo. App. 402, 549 P.2d. 791 (1976). -238-

PAGE 277

1 n11 aw. However, in towns, statutory cities, special districts, and most counties, personnel operations must be conducted pursuant to statutory authorization by the Colorado General Assembly. In practice, all local jurisdictions that wish to utilize the personnel services of the State are referred to the Intergovernmental Personnel Office located at Fort Logan in south Denver. This office has been established under the statutory basis of federal Public Law 91-648 the Intergovernmental Personnel Act of 1970 (I.P.A.). Its purpose is to assist state and local governments to strengthen their merit based personnel systems by improving their personnel administration, training, and career development. Intergovernmental personnel services or projects are developed and coordinated by the State Personnel Director and the I.P.A. office staff. All projects are funded on a matching basis between local jurisdictions and the federal government. The State's only fiscal contribution is in maintaining personnel within the State Department of Personnel's I.P.A. office.12 The following personnel services are provided by the State's I.P.A. Unit. 1. Policy Formulation --Ordinances, resolutions, or executive orders defining the legal and/or policy base for the personnel system. 2. Position Classification Plans --Including the structure of all needed position classes. 11coopersmith v. City and County 156 Colo 469, 399 P.2d 331 (1965). 12Interview with Director of the State I.P.A. Unit, Colorado Department of Personnel, Fort Logan State Complex, Denver, Colorado (March 20, 1979). -239-

PAGE 278

3. Compensation Planning and Administration --Concerning salaries and wages, retirement systems, insurance, and other benefits services. 4. Human Resource Planning --Including determination of future staff requirements, and plans for meeting projected requirements. 5. Employment --Including recruitment, examination, selection, and placement services. 6. Employee-Management Relations --Concerning hours of duty, leave policies, holidays, employee conduct, discipline, grievances and a ppeals, and negotiations with employee organizations. 7. Employee Training and Development--Performance evaluation, job instruction, and career advancement services. 8. Research -Updating existing personnel methods and procedures to effectively deal with current and anticipated personnel problems. 9. Information Systems --Statistics and narrative data dealing with the operation of the personnel system, as well as workload, compliance, and performance measures. 10. Management Capacity Building -Policy formulation, resource management, and program management services. Findings: 1. Most jurisdictions have utilized position classification services (37 jurisdictions) and compensation planning and administration services (30 jurisdictions). Other frequently used services include policy formulation (19 jurisdictions), -240-

PAGE 279

employee-management relations and employment (11 jurisdictions each), and research (10 jurisdictions). 2. A total of 5,435 jurisdiction employees have been affected by I.P.A. unit service projects, plus those affected by service projects for the Colorado Municipal League and Metropolitan State College since May, 1974. Summary Further data on the characteristics and attitudes of State employees is not available in an accessible form from any central location or State agency. Plans for implementing an improved computerized management information system and enlarging the data base during 1978 through 1981 should help alleviate this problem. , -241-

PAGE 280

Introduction CHAPTER VII A DIAGNOSIS OF KEY COLORADO STATE PERSONNEL MANAGEMENT PROBLEMS The purpose of this chapter is to provide a systematic analysis of the major problems besetting overall State personnel managment. The central problems which cut across the whole system are diagnosed and recommendations are offered for their solution. Unless they are corrected, these trouble areas will continue to impede the development of a merit service in Colorado which provides highly qualified and motivated civil servants who make possible an effective and efficient State government. The overriding concern shared by all those individuals and groups expressing an interest in personnel management issues is the need to effect reasonable managerial control of the system while at the same time providing relevant, timely service to the employee and the responsible governmental entity. Management Philosophy and Morale in State Personnel System Overview. Nationally, failures both to improve effectiveness and efficiency of public services and to achieve economical use of public money cannot be explained away by the presumed deficiencies of public employees. Instead, the major sources of the problem are the lack of common purpose, the excessive political competition of numerous interest groups, the failure of top officials to provide effective personnel -242-

PAGE 281

management, and low morale throughout the public work force.1 In Colorado, problems in improving the effectiveness and efficiency of . State services and achieving economical use of State funds are rooted in many of these same sources. There are few aspects of State government organization and management that do not in some way involve or affect classified employees, and those relationships need to be more consciously taken into account in formulating personnel policy. Analysis State Personnel Management Philosophy and Morale. Personnel management must be linked to and be an instrument of an overall management philosophy and system to achieve high employee productivity and morale and to provide effective and efficient public services. Colorado State government lacks an effective overall management system and this, in turn, impacts on the personnel system and contributes to a stifling of morale in the State classified workforce. This assessment is reflected in the following findings regarding State personnel management philosophy and employee morale. The Colorado Common Cause survey shows that employees in the State personnel system have a poor impression of virtually all of the key personnel system activities, including: 1. Unreliability and lack of merit-based recruitment and appointment activities, 2. Lack of promotional opportunities, 3. Lack of career development and training opportunities, and 1committee for Economic Development, Improving Management of the Public Workforce (New York' : Committee for Economic Development, November, 1978), p. 13. -243-

PAGE 282

4. Lack of a productive and meaningful employee appraisal/evaluation system. The State has not developed a strong "overall personnel management system" for effective management of its human resources in the context of an overall policy and program management system. The principal reasons for this appear to include: 1. Failure to adopt a total management approach by the State and to build the personnel function into it. 2. Lack of sufficient appropriations to create and manage an effective personnel system. 3. Excessive continuing political criticism of the system by the Legislature and from other sources. 4. Poor organizational structure which isolates the personnel function from organized professional management in State agencies and unduly fragments the personnel system. The State lacks a true merit selection system and a top management career development program which facilitate the development of personnel who can provide broad professional public administration for State agencies. In addition, personnel management is viewed as a support function to the respective agencies, not as a prime resource and management tool which can assist in making State government work effectively and efficiently. Recommendation 7-1: A. There is a need to develop an "overall personnel management system" which is designed to manage all human resources in the State service within the context of an overall performance management system for State government. -244-

PAGE 283

B. The philosoph y of the reorganized system shou l d build in t h e model which has been developed in C hapter IV. This would enable the State to better achieve the goals of government through a comprehensive and effective personnel management system. C. The component functions and activities of the State personnel system need to be reformed, strengthened, reorganized, and coordinated to assist and contribute more effectively to update management of human resources in State agencies. Specific suggestions are made in the last half of this report. Purposes and Goals of State Personnel System Purposes of State Personnel System. The Constitutional purpose of the State personnel system is to make "appointments a nd promotions to offices and employments according to merit and fitness, to be ascertained by competitive tests of competence without regard to race, creed, color, or political affiliation."2 State courts have further defined the purpose of the State personnel system as being "to promote efficiency by appointing and employing those only who, upon examination, have shown their qualification for the office or position."3 The courts also state that "the purpose of City and County of Denver personnel system legislation is to protect employees from arbitrary and capricious political action and to insure e mployment during good behavior ••• tenure, however, is not meant to guarantee duration of employment for any number of set years or any particular period of time."4 These are worthy and properly stated merit service goals for a public personnel Constitution, Article X I I , Secti o n 13-(1). Roberts et al. People rel. Duncan, 81 Colo. 338, 225 Pac. 463 (1927). 4coopersmith v. Denver, 156 Colo. 469, 399 P.2d. 943 (1965). -245-

PAGE 284

system. In addition, State legislation has helped define the purpose of the State personnel system such that, "The State Personnel Act and the personnel rules adopted pursuant to this Act are to provide a sound, comprehensive, and uniform system of personnel administration for the employees within the State personnel system .. 5 State courts have defined this to mean that "the purpose of a local personnel system is to obtain the person most fit for a position through a competitive and impartial method."6 The fiscal year 1979-80 State Department of Personnel Budget Request states that "the office of the Director of the State Department of Personnel is responsible for the planning, organizing, coordination, and direction of the staff and operations of the department in the recruitment and examination, selection, training, retention, termination and retirement of employees in a system having jurisdiction over 31,134 classified positions as of August 31, 1978."7 However, these lofty and well-stated purposes of the State personnel system have not been realized in practice. Within State government, merit service, high productivity, and policy leadership responsiveness purposes of State personnel management have not been sufficiently built into the overall management of State government nor well achieved within the personnel functions. Current emphasis is on maintaining personnel functions within the narrow context of personnel 5 C.R.S., 1973, Section 24-50-101. 6spickard v. Civil Service Commission of City of Denver, 31 Colo. Department of Office of the Director, p. 8A. -246-

PAGE 285

a d ministration to the neglect o f a broa d managem ent f o cus. Stat e personnel m anagement goals are not tied into the overall State government management system (See model i n Chapter IV). Recom mendation 7-2: A. T h e central goal of State personnel management should be revised and broadly stated in constitutional and statutory provisions to achieve effective and efficient State government services, fair treatment of all applicants and employees, and economical and effective use of State funds and human resources. B. State personnel management should be recognized as a major State government management tool of the Executive branch, not just as an incidental support function (See model in Chapter IV). C. The merit service purpose stated in the Constitution should be fully observed, and management direction of personnel should be subject to the merit principles stated in the constitution, statutes, and regulations. D. The Governor and State Personnel Director, in coordination with the heads of all State agencies, should establish clear goals and objectives for personnel management. These policies should be developed as part of a total State management system and a plan structured to support the components (such as recruitment, selection and classification) that will achieve effectiveness in implementing the policies of government and identifying performance indicators by which their effectiveness can be regularly evaluated. -247-

PAGE 286

Role of Chief Executive as Chief Manager Introduction. If the Chief Executive and cabinet-level appointees are to be held accountable for policy and program results, they must be provided with a State personnel system that is comprehensive and conducive to a high level of performance. While the Chief Executive should have the authority to fill some top policy positions with people who will serve at his or her pleasure, the continuing effective operation of the State government depends on the career civil servants. The voters of the State have clearly indicated their strong support for the merit principle in State personnel selection and administration. If the Chief Executive, who is elected by the public, is to be charged with the responsibility of making government perform in accordance with the public's expectations, he or she must have at his or her direction a personnel system which will staff the agencies of government with highly qualified, responsible, and accountable personnel who have the ability to organize and execute the increasingly complex programs of State government. The diffusion of responsibility for personnel matters among the Legislature, the Chief Executive, department heads, employee organizations, the personnel board, and agency and division heads in departments creates unnecessary problems of coordination and cause confusion in the formulation and administration of personnel policy.8 Analysis of Personnel Role of State's Chief Executive. In Colorado, the Chief Executive has inadequate direct power to manage the classified workforce and to direct and coordinate personnel functions in State government, subject to the merit principle, to fit into an overall 8committee on Economic Development, pp. 53-54. -248-

PAGE 287

management system. Today the personnel-related roles of the Governor are inadequate. The Governor: a. Is charged with faithfully executing all laws. b. Nominates and appoints, with Senate consent, all exempt nonclassified officers and employees in the Executive and Judicial branches --as well as three State Personnel Board members and all appointive Executive Directors (Department heads) of executive departments. c. May advise the State Personnel Board on promulgation of administrative rules and seek advice when needed. d. May remove the five State Personnel Board members for malfeasance or neglect of duties. e. Approves or vetos all personnel-related legislation. f. May veto line-items in personnel appropriation bills. g. Must account for all personnel-related expenditures (through interagency budget review). h. May require written information reports on duties of all State officers and managers. Of all Executive appointments, the Governor's most direct impact on State personnel management and functional administration is the selection and appointment, with Senate consent, of the State Personnel Director and three of five members of the State Personnel Board. Since administrative responsibilities are under the Personnel Director but rules and regulations are determined by the Personnel Board, the Chief Executive is left with few personnel management responsibilities. The personnel power is vested in subordinate officials, not in the Chief Executive. -249-

PAGE 288

The use of the State personn e l system a s a major managemen t instrument for achieving effective and efficient government has been seriously handicapped by: 1. Independence of the State personnel system from Executive policies under the constitution and statutes. 2. A poorly functioning State personnel system that i s understaffed and underfunded, and hence is not able to discharge necessary functions effectively. 3. Distrust of the Executive Branch's commitment to the merit service principles of the classified personnel system, based, in part, on executive level management's efforts to sidestep the merit system by use of contractual and temporary appointments to meet State agency personnel needs. Side stepping of merit standards in personnel decisions also contributes to distrust of the personnel system. There is also a lack of a well-organized overall State management system, such as a management-by-objectives approach to State government, and of an up-to-date management orientation to integrate personnel management with other management tools such as performance review of agencies and budgetary and financial management. As a result, there is a widesprea d negative attitude towards the State personnel system by classified employees and others. In short, this reflects the absence of proper role by the Chief Executive in being the chief manager of the State's governmental establishment. A key ingredient in this is the absence of an effective human resources management system in the State government. -250-

PAGE 289

Recommendation 7-3: A. The Chief Executive should be able to use personnel policy and management as a key management tool--subject to full adherence to the merit service principle. B. Personnel administrative policy and rule formulation and personnel management should be under the policy direction of the Chief Executive, with provision for these authorities to be delegated to the State Personnel Director as the Chief Executive's principal personnel policy officer. C. The Chief Executive should establish clear and explicit delegations of authority and mechanisms for coordination in the making and execution of personnel policy among the offices responsible for planning, budgeting and finance, management analysis and control, legal affairs, and personnel support functions to the end that personnel management becomes an integral part of the overall management system of the State. Overall Organization of Colorado State Government for State Personnel Management and Administration Introduction. As noted earlier, the diffusion of responsibility for public personnel policy management and administration among the principal officers of public personnel systems can create problems in coordination and cause confusion in the formulation and administration of public personnel policy. This diffusion of responsibility coupled with the increasing specialization and bureaucratization of personnel administration can create related problems for personnel agencies, the political leadership, and for employees alike.9 9 Ibid., P• 44 and PP• 53-54. -251-

PAGE 290

Current Status o f Personnel Roles and O rganizatio nal R elation ships pf Principal Officers in State Personnel System. The current roles o f principal organizations and officers in the State personnel s ystem do ot measure up well to the increased specialization and complexity of tate policymaking and administration in the last 30 years. There is extreme fragmentation of authority and a serious lack of coherent executive direction of personnel policy and operations. The current personnel roles of each principal officer or body are briefly outlined below, along with information on the current selection process and composition of the principal organizations affecting personnel. 1. State Personnel Board Personnel Roles: a. Authorized to adopt, amend or repeal administrative rules to implement State personnel system (see c below). b. May review administrative decisions of appointing authorities regarding selection and appointment, retention, discipline, transfer, and dismissal of State personnel system employees. c. Authorized to promulgate personnel rules for position classification plans, recruitment, selection and appointment procedures, employee service standards, and conduct competitive examinations, training, appraisal, grievance procedures, appeals, and hearing officers. d. Authorized to adjudicate appeals and grievances of classified employees which are not resolved within departments or at preliminary hearing officer reviews (hearing officers resolve over half of all grievances and appeals brought to the Board). Selection Process: a. Three members appointed by Governor, with Senate consent, and two members elected by employees under the State personnel system. b. Five year staggered terms in office. -252-

PAGE 291

c. Must be qualified State electors, not holding any other State office or any office in State employee organizations. Composition: a. No more than two of three Board members appointed by Governor to be of the same political party. b. Five Board members, one administrative officer, and two clerical employees. c. Hearing officers (2.5 FTE currently) as needed. 2. General Assembly Personnel Roles: a. Enact laws establishing policies on State personnel system (including retirement) and rescind State Personnel Board rules which may not conform to State policies. b. Conduct Senate reviews of and grant consent for Governor's executive policy level nominations for appointments. c. Revise and repeal current laws on the State personnel system. d. Review the performance and operations of the State personnel system and Department, as necessary, and conduct annual budget reviews on all personnel agency staffing and funding requests. e. Enact pay plan for compensation of State classified personnel, the Chief Executive, and legislative and judicial personnel. 3. State Personnel Director Personnel Authority: a. Is responsible as department head for administration of State personnel system all legal/administrative rules adopted by Legislature and State Personnel Board. b. Serves as liaison between Personnel Department and all other executive departments and public personnel jurisdictions in State. -253-

PAGE 292

c. Has implicit responsibility for assuring that State personnel administration is sound, uniform, and comprehensive. Implements executive policy set by the Governor. Selection Process: a. Appointed by the Governor, with Senate consent, and serves at pleasure of the Governor. b. Must be qualified by education and personnel experience for Executive appointment as Director of State personnel system and Department. Composition of Director's Office and Personnel Department: a. Appoints employees of immediate office as well division heads and advisory boards as needed. b. In 1980, a Deputy Director and six departmental sections. 4. State Departmental Executive Directors Personnel Authority: as a. Have appointing authority for division-level heads within their respective departments, as well as staff employees in immediate offices. b. Act on transfers, discipline, complaints and dismissals of division heads and immediate office staff employees--in addition to initial selections and appointments. c. Establish and revise the organization of classified positions within their respective departments. d. Lend direction and implementation to Governor's executive policies and priorities. e. Assign duties and responsibilities to personnel. f. Establish working conditions such as locations, shifts, etc. Selection Process: Appointed, with Senate consent, by the Governor to serve at the pleasure of the Governor. -254-

PAGE 293

5. Division H e ads in Executive Departments and Agencies Personnel Authority: a. Have appointing authority for all State personnel employees within their respective Divisions, including any staff employees in immediate division offices. b. Act on transfers, discipline, complaints and dismissals of all State personnel system employees within their Divisions--in addition to initial selections and appointments. c. May assist directors with the establishment of personnel staffs within respective Divisions of State agencies. Selection Process: a. Appointed by departmental Executive Directors (department heads) under the provisions and procedures of the State personnel system. b. Must meet all merit-based requirements (knowledge, skills, and abilities) of their classified positions, and qualify by appropriate rank before their selection and appointment by department heads. 6. Chief Executive Personnel Roles: Refer to section on "Role of the Chief Executive as Chief Manager" in this chapter for specification of personnel-related roles. Another means of illustrating the complexity of State personnel system organization is to examine the organizational relationships or interactions among the principal officers and organizations listed above and the additional participants such as the courts, the State employee employees themselves, the Colorado Civil Rights Commission, the State public employees retirement association, and numerous federal agencies that impact the State personnel system. Chart 7-A depicts the complex and overlapping organizational relationships that affect the State personnel system. With this archaic system of -255-

PAGE 294

Cha r t 7 A ORGANIZATIO N S ANO LEGAL SYSTEMS IMPACTIN G COLORADO STATE PERSONNEL SYSTEM, B Y FUNCTIONS, IN 1978 CLASSIFICATION 1 ,2,3,4,5, 8,9,11 I MANPOWER PLANNING 1 1,2,4,5,6,7,13,15 { ___ __, SYSTEM \ MAINTENANCE \1,2,4,5,6,7,9,10,11 12,13,14 1 ,2,4,5,6,8,11, 12,13 COMPENSATION STATE 1 ,3,4,5,11,15 PERSONNEL SYSTEM EVALUATION 1,2,4,5,11 ACTION ,2,3,4,5,6,. . \z,9,12,13 GRIEVANCES, APPEALS, AND SEPARATIONS DISCIPLINARY ACTIONS 1) 2) 3) 4) 5) 6) 7) 1,2,3,4,5,8,9,10,11, 1,2,4,5,11 12 State Personnel Director 8) State Constitution andDepartment (central) 9) Courts Agency Personnel Office 10) Employee Organizations State Personnel Board 11) E m ployees Depart m ent Heads 12) Civil Rights Commission Division Heads 13) Affir m ative Action Units Governor's Office 14) Occupational Safety and Health Admin. State Legislature 15) Public Employees' Retirement Associati 256 -

PAGE 295

checks and balances, effective personnel management can n ever b e possible in any realistic sense. Analysis of Current State Personnel Roles and Organizational Relationships. Although the State Department of Personnel is responsible for selected aspects of overall State personnel management, public managers and personnel specialists often equate the limited support function of personnel administration with the broader responsibility for personnel management. Organized under a separate department, the personnel support functions tend to take on a life of their own that may become divorced from the goal of improving government performance and productivity. This specialization and bureaucratization of State personnel administration and its isolation f rom the central management stream has created problems in de veloping a strong overall personnel management capability which can contribute to achieving government-wide goals of effectiveness, efficiency, economy, and fair employee treatment. In Colorado, there is considerable confusion among principal personnel officers over the scope of their personnel roles. Foremost is the finding that none of the principal officers have the explicit and effective role of personnel system merit protection, monitoring, investigation, and enforcement. The State Personnel Board, in particular, has not actively sought review of alleged merit service injustices or infractions and this, in turn, requires employees and citizens to initiate merit service grievances in order to uphold merit protection within the State personnel system. The Board's emphasis on promulgating system rules and regulations without actively enforcing t hose rules through merit protection monitoring and investigation -257-

PAGE 296

activities has compromised the merit protection integrity of the personnel system. Recommendation 7-4: A. Responsibility for merit protection investigation and enforcement, including the power to adjudicate, should be vested with the State Personnel Board. Sufficient staff and funds should be appropriated by the Legislature to ensure an adequate standard of merit protection activities. The Board should make independent investigations of allegations made by whistle blowers and provide effective protection to them. This should include sanctions against officials and employees who are found to have engaged in offenses. The Board should publish annual reports on merit protection activities and how they relate to upholding merit standards throughout the system. B. The suggested standards for enforcing merit protection should involve the following merit service factors, advocated by the U.S. Office of Personnel Management, the National Civil Service League, and recently adopted in Utah State government: 1. Recruiting, selecting, and advancing employees on the basis of their relative ability, knowledge, and skills, including open consideration of qualified applicants for initial appointment. 2. Providing equitable and adequate compensation. 3. Training employees, as needed, to assure high-quality performance. 4. Retaining employees on the basis of the adequacy of their performance and separating employees whose inadequate performance cannot be corrected. 5. Assuring fair treatment of applicants and employees in all aspects of personnel administration without regard to political affiliation, race, color, national origin, sex, or religious creed and with proper regard for their privacy and constitutional rights as citizens. -258-

PAGE 297

6. Assuring that employees are protected against coercion for partisan political purposes and are prohibited from using their official authority for the purpose of interfering with or affecting the result of an election or nomination for office. Another closely related problem with the organization of State personnel roles is that administrative rule-making responsibilities are diffused between the State Personnel Board and the General Assembly which tends to enact detailed statutory provisions. This arrangement causes unnecessary coordination problems in administering State personnel policies and has resulted in actual administrative activities (such as decentralizing central personnel agency activities) being uncoordinated with necessary rules and regulations which ensure merit-based conformity of all activities. As noted earlier, the role of the Governor as chief manager of the State is integral to proper personnel management and administration. The Governor should have two key management tools at his disposal: (1) budgeting and finance, and (2) personnel and human resources management. These key staff managerial capabilities of the Chief Executive can be reflected in the following diagram. Recommendation 7-5: Administrative personnel rule-making responsibilities should be vested in the Chief Executive, with provision for delegation of this responsibility to the State Personnel Director. The Chief Executive and Personnel Director phould be required to submit annual reports to the General Assembly on the accomplishments of State personnel management and administration as well as on the maintenance of system-wide merit protection standards in accord with constitutional and statutory provisions. The Personnel Board should protect "whistle blowers," -259-

PAGE 298

Chart 7-B PROPOSED STATE ORGANIZATIONAL CHART GOVERNOR .. .... ...... .... .................. OFFICE OF STATE OFFICE OF STATE PLANNING AND 1------+----! PERSONNEL MANAGEMENT BUDGETING I I I I I I I I STATE LINE AGENCIES -260STATE PERSONNEL BOARD I I I I I I I I ------____ I

PAGE 299

investigate their allegations, and take appropriate action against any offenses. Adequate staff and financial appropriations should be made to ensure full and complete development of administrative personnel rules covering all aspects of State personnel management and administration. Both the Committee for Economic Development and the National Civil Service League make similar recommendations on the role of personnel management as well as adherence to the merit protection standards. The present vesting of the bulk of State appointing authority responsibility for classified employees in the division heads of State agencies presents additional problems in achieving effective and efficient State services and ensuring that those who are charged with government performance accountability actually possess the commensurate authority to effectively manage State programs. As mentioned earlier, top policy officials--namely the Governor and his cabinet heads--in the Executive branch must have the authority over personnel in order to make government perform in accordance with the public's expectations and legislature's laws. Colorado State government should improve the effectiveness with which it uses top executive policy officials in managing State government. The Governor, in particular, cannot "faithfully execute" the laws if he cannot exercise policy direction over State personnel. An important step in this direction is to give the Chief Executive authority over both personnel policy and budget and financial policy, because these are the two principal management instruments of a top manager. (See discussion preceeding Recommendation Number 7-5). -261-

PAGE 300

Two principal alternative recommendations can be made to address this problem. Clearly defined scopes of appointing authority might be developed and distinguished among top policy appointees, division heads, program managers, and supervisors within executive departments. However, this alternative would apportion appointing authority without accounting for various organizational structures among executive departments, and would be insensitive to the needed organizational flexibility required to effectively coordinate and manage departmental programs and officeunits. Therefore, actually granting the necessary appointing authority to those top departmental officials responsible to the Chief Executive for overall departmental program management is the most effective alternative to the current arrangement which neglects top policy appointee responsibilities in managing departmental programs. Recommendation 7-6: State personnel appointing authority over all classified positions should be vested with departmental Executive Directors, with provision for delegation of this authority to division heads, program managers, and supervisors at the discretion of the department heads. Appointing authority delegations should be in writing and should be reported annually in the personnel management system for legislative review. Analysis of State Department of Personnel Organization. The present organization structure of the State Department of Personnel reflects the State Personnel Director's philosophy regarding overall personnel administration. The current departmental organization was established in mid-1980 and is presented as Chart 7-c. The objective of the Department of Personnel organizational plan has been, "to provide better and faster personnel services to State agencies, and allow for -262-

PAGE 301

I N 0"1 w I Chart 7-C .DE.PARI'MENT OF PERSONNEL ORGANIZATION STRUCTURE( l)_ 19.80 EXECUTIVE DIRECTOR -----------STATE 1'\SO:H:EL flAvld L BOARD STArF SUPPORT OFFICE Wagner CEHERAL INtORHATION RESEARCH OFFICER Monica Spellman ... DEPUTY DIRECTOR .11 ,.,.. II C:"""• I I I I I I ON SELECTION ORCAtliZAT I COMPENSATION AND SERVICES CENTER EFFECTIVENESS CLASS I F' I CAT I ON Rod Hernley John Olson Jerry Davies I Ken Alllklan (2) ,---------j_ ________ i (2) . I (2) ,-------------------r 1 SPEC I ALt. : l TECHN I CALU : : LOCAL COV'T. : 1 PROJECTS I : I : AND PSI : (I) Individual Job component of unit to be determined from Job restructuring (2)units cnc:.lo!>c:d by dotted Hnes will be reportlng . to . the Deputy Director on a matrix assignment until the Effectiveness Unit Is fully staffed, 6 Unit lncludej EEO, Appeals and one professional locned to Department of Corrections, 4 n Techr.ical Services Un.it includes Capitol Hill Ad"-lnlstrator and tho Branch Offices. SOURCE: Dapartment of Personnel. 1opo,

PAGE 302

greater specialization to improve the quality of personnel services performed in a decentralized operational mode."10 However, the current organizational structure of the State Department of Personnel is deficient in providing for certain key aspects of personnel administration, particularly absence of key personnel planning functions. The Department's organizational structure lacks a personnel program planning and evaluation capability necessary to improve management of departmental and program objectives. These problems combine to inhibit comprehensive State personnel management and proper systematic review of State personnel operations. Recommendation 7-7: A. Specific program office units which administer the Department's recruitment and employment planning functions should be identified in the Department's organizational chart and should be discussed individually in the context of the Department's Annual Budget Requests. B. Sufficient appropriationsshould be made to develop and maintain a program planning and evaluation office in the State Department of Personnel, with specific departmental responsibilities over personnel system program planning and evaluation. This office should be organized with the other departmental maintenance functions such as accounting, budgeting, and personnel. This recommendation has been repeatedly suggested in previous State personnel studies--including the 1974 Public Administration Service study and the 1975 U.S. Civil Service 10Executive Memorandum, Policy Management Plan on Major Policy Issues, from State Personnel Director to Office of State Planning and Budgeting, (August 8, 1978). -264-

PAGE 303

Commission Study--and deserves immediate consideration for implementation (see Chapter V). C. The Department of Personnel and its Director should expand the presentation and discussion of its organizational structure, budget, and personnel in Annual Budget Requests, and develop an Annual Personnel Management Report to include additional comprehensive organizational charts and program data on the entire State personnel system. This report should include discussion of departmental relationships among all State agency personnel offices and decentralized personnel activity locations and presentation of the governmentwide personnel program in a fiveyear perspective. D. All data on anticipated fiscal year-end expenditures and personnel staff FTE allocations for agency personnel offices and decentralized personnel activities should be collected by the Department and reported and analyzed in the Annual Budget Requests and the Annual Personnel Management Report in the context of the various functional activities ofthe overall State personnel system. Decentralization Problems of Colorado State Personnel System Introduction. It may be desirable in larger governments to decentralize some personnel support functions selectively so that individual agencies and managers will have flexibility in designing personnel practices in keeping with their particular needs. However, decentralization should be a thoughtful process accompanied by clearly defined goals and objectives and provision for resources and for monitoring to assure consistency and the observance of common merit -265-

PAGE 304

standards and practices throughout the gove rnment.1 1 I n Colorado State government, decentralization has been without such forethought and monitoring capability. Origins of Decentralization in State Personnel System. Decentralization of personnel activities in Colorado State government began in 1976 when the Governor issued an a d ministrative memorandum requesting State officials and managers to decentralize State government services wherever feasible.12 This decentralization was carried out without careful planning and without necessary training of agency staff nor developing the essential central monitoring and auditing capability. Moreover, the Department of Personnel did not have delegated away or as a matter of policy has not used authority to reverse faulty a gency personnel decisions. State personnel statutes and Board rules do not currently provide the legal flexibility needed for decentralizing personnel operations. The decentralization concept was initially implemented because of frustrating delays in recruitment, classification, examination, certification, and other important personnel functions. It was reported that these personnel delays "were impeding managerial initiative and depriving State managers of opportunity for achievement."13 Thus, the case for decentralization centered on the lack of timeliness of the State Department of Personnel responses to the personnel management and for Economic Development, p. 54. Order, Goals and Objectives for Colorado's Long-Range Growth and Development, Governor Richard D. Lamm, (September 10, 1976.) 13An Operational Concept and Reporting of Personnel, Division of Management Administration, (December, 1978), p. Sys tem for the State D epartment Services, State Department of 8. -266-

PAGE 305

administrative needs of State agencies. I t is not c lear, h o wever, w h y decentralization was the proper solution for the problems which ailed the personnel system or whether decentralization is consistent with full and proper application of merit principles in the agencies. Survey of State Personnel Problems as Seen Heads. Part of the main thrust for the personnel decentralization e ffort came from pressures from State department heads. For example, a 1976 survey of State administrators revealed many complaints regarding the performance of the Department of Personnel. Another survey of department heads (Executive Directors) attitudes toward State personnel operations in December 1977 revealed many personnel-related problems that needed immediate attention.14 These problems are described below in order of their importance as rated by survey respondents (Departmental Executive Directors). 1. Timeliness of Examination and Selection --The period of time it takes to fill a position vacancy. 2. Timeliness in Classification --The period of time it takes to reallocate a filled position. 3. Needed improvement in the quality of classification work. 4. Timeliness of classification work needed to create a new position. 5. Needed improvement in the quality and efficiency of recruitment. 14Department Heads and the State Personnel System, Michael Reardon, CU Graduate School of Public Affairs (December, 1977), pp. 1-6. This research paper data is based on a survey of six department heads and 67 division heads who returned questionnaires by October 8, 1976. Thus, while less than one-third of all department heads responded, almost half of all division heads (including higher education institutions) responded to the questionnaire. -267-

PAGE 306

6. Needed i mprovement in a ffirmative action, especially in recruitment and examination e fforts. 7. Needed improvement in the service/helping orientation of the State Personnel Department other State departments, minimizing interference with agency program management. 8. Better communication by the State Personnel Department with other operating departments and agencies. 9. Needed better tools to evaluate employee work performance. 10. Needed better screening techniques by personnel recruitment specialists before applicants are determined to meet the minimum qualifications. 11. Needed more responsiveness by Department of Personnel to small agency personnel problems. 12. Needed decentralized problem-solving capability provided by Department of Personnel. 13. Needed faster appeals to classification issues.15 Data are lacking on whether decentralization has helped to solve these various problems. Indeed, there is some evidence that it did not speed up the personnel process --and may have led to weakening of merit standards. Extent of Decentralization in State Personnel System. The decentralized State personnel activities have most often included selective classification, examination, and record-keeping functions. To date, decentralization of personnel activities has most noticeably occurred in State universities and colleges which had previously been outside the classified system as well as in a few larger executive departments. The current focus of decentralization is centered on extending personnel operations to the remaining agencies wherever 15 Ibid., pp. 54-56. -268-

PAGE 307

feasible. Thus, over the past four years Colorado has shifted to a decentralized mode of State personnel operation, with the State Personnel Director nominally retaining centralized control. The State personnel system operations generally centralized are listed below. 1. State-wide position recruitment announcements. 2. Position examination research and test development. 3. Position examination test approval, review, and some administration. 4. Review of all selection devices. 5. Salary and fringe benefit survey research. 6. Annual compensation plan development and salary administration. 7. Affirmative action and equal employment opportunity program development and review. 8. Administration of the Public Service Career Institute, where employee training and career development activities are provided. 9. All post-auditing functions which are conducted to ensure adequate centralized control over agency personnel-related operations. 10. All hearings and reviews of grievances and appeals which could not be solved at the agency level. Table 7-1 from the Department of Personnel reports on the extent of decentralization of State personnel operations to State agencies as of October, 1978.16 Decentralized State personnel operations listed in Table 7-1 involve the following personnel functions: 1. Position classification. 16state Department of Personnel, Office of the Director (February, 1979). No subsequent State report was availci:>le as of October, 1980. -269-

PAGE 308

I N -....) 0 I Table 7 -1 x • 11 Decencral1&ed COLORADO STATE DEPARTMENT OF PERSONNEL DECENTRALIZATION SUMMARY nccnrd• & Reporta ' . .. c u u .. ... , .. < ,., .. .. .. .... u ,._ u (I (; u 11. a.:: .. :1 .... e .. ... o! Fore ;..:li' ((1/,28//777)) X X X X X X I X X X X X X X I X ! XX ' X I . x-t-ii clu•!• _ _ _ _ C:; e o•J I H 'i l 8 X X X X X X X X X X I I I ' X tx 1 I! 1 d Corn .. x X X x X X X X X X X I I X '::..:.-t:.:'-!..;< 4:.:..1 >:.._;-A-x • . J . ll.1r.tnH! • • . •••. • . • I I I I I I I ,-r . . , . I I I I . \ ' o ;.t!• S orvitts x x IY 1 x ! Yt Y I i v • : ' v 1 • i'l d '..!., .. y+--T-4-yf--:y XIEB -1 -• -.G=.t:::. .... I , . ! I I I . I l I i .:..1'.;..• !;_I' !..\ )-ii-4X-; --;....a..X_ f-+' X"'--t--i--'-'1..,-..:>....1'11: .L.j-1 . ..J .....J __ ! _ ' l. 1_ c:lu IU ..1 j>c c.i f.i cC: . . . . • . r. ., /7•. \ y I y 1 -y1 y I I_ r i " I : : i ; . : 1 i'i J 1pec • . I X X X X X X X I X I I I I._J __ -• ' , •• ,,,. .. t 1 u, • 1 • '-t"T I• 1 /77) '''''"" I ( ., y lx r 1 1 i _j ! I I I ; C:lauHicuiona IX IX X Y. X Y X _X _X X . .X ..X I I Y I ... I I 1 I : , . o n l,ltd!icd X X X X X X X X X X ; X I ; X ! . ..•. I I I . I I I I 1 1 l ! ! X X

PAGE 309

I N -....J t-' I I Deaf t. Blind . (9/19/711) (11/J/76) CSII I u::c Administration S c hool of Hines Ct1 Colo -I I ... ... -< • I I COLORADO STATE DEPARTMENT OF PERSONNEL -DECENTRALIZATION SUMMARY (addition) ... " ... ... .!! ..J .... .... -< .. c: 0 I , u "' " .. .. li ::; X X X X X X X Ewn:olnatlons X X X r X I X X X X X ll ll X X r!-.L X -)C X X X X X ll X -& lie ort• X X I s uea X X X X' X X X I E"n"' E••r.t I 1\o flo :!o ::o tlo 10/2/78 llnh• ,.... _2 o! Fera Alii'•Oh chuu iptc lC l :d .. Co:>lTacl Co:: I uct Co:uuel

PAGE 310

2. Examination research, development, and administration. 3. Personnel management and information reports. 4. Computerized personnel information usage. Table 7-1 does not reflect all decentralized State operations; however, the extent of decentralization for a limited number of State agencies is noted for various phases of operational functions. Dates reflecting when decentralization began are reported for each agency. Specific comments regarding decentralized activity administration and inter-agency contractual agreements are reported in the "Remarks" column. It is important to note that some State agencies are performing decentralized personnel functions without written contractual agreements that authorize such decentralization. A State Department of Personnel division head explained that this is because a new standardized contractual format is currently being developed for all State agencies, but is not yet formalized for immediate use.17 In addition to the decentralized functions reported in Table 7-1, the following State personnel functions are also decentralized: 1. Performance evaluations of classified employees are decentrally administered and reviewed at State agencies. The yearly evaluation reports are filed and maintained at each State agency. No central review occurs. 2. Selective recruitment and position announcement operations are decentralized to a few State agencies. 17Interview with Associate Director, Colorado Department of Personnel (February 5, 1979). -272-

PAGE 311

3. Some oral examinations are decentrally conducted by selected State agencies. Previous Studies on Decentralization of State Personnel System Since 1976, several studies of decentralization of personnel operations have been conducted, but only one was published. This study was made in response to a legislative requirement by the Division of Management Services of the State Department of Administration. One aspect of the study dealt with the cost-effectiveness of centralized versus decentralized personnel operations.18 Completed in late 1978, it discussed key factors that determined the feasibility of centralized versus decentralized personnel operations, the nature of various personnel functions performed, and their related cost-effectiveness. A summary of the study's findings and recommendations follows. The factors identified as significant "in limiting the effectiveness and cost of personnel functions"19 are briefly described below. These factors include: 1. Authority required to take action on personnel functions. 2. Information available on personnel agency needs and activities at each level of the organization. 3. Size of the organization necessary to permit decentralization. 4. Dispersion and location of the population being served by the organization, as well as the dispersion and location of the organization itself • . 5. Legal constraints regarding principal officers' personnel roles, responsibilities, powers, and duties. 18Division of Management Services, An Operational Concept and Reporting System for the State Department of Personnel, State 19Department of Administration (December, 1978). Ibid., p. 8. -273-

PAGE 312

6. Competence, knowledge, and support of qualified personnel specialists in both central and decentralized personnel agencies, as well as sufficient staff appropriations to all personnel agencies. 7. Nature of the personnel functions which affect costeffectiveness under decentralization, as well as standards necessary for observing merit factors on a uniform basis. 8. Costs of decentralization for different personnel functions. 9. Adequate definition asnd clarification of gov20nment wide and agency program goals and objectives. Data are sparsely provided on how the State agencies conform to these factors. The study then suggests optimal locations for administering centralized (C) and decentralized (D) functions, based upon "the associated costs and effectiveness with which the services can be performed."21 The summary from the report is presented in Table 7-2.22 Principal Decentralization Study Conclusions. Based on this study, it can be concluded that broadly: (1) management and administrative "policy" and "controls" over all activities should be centrally set; (2) some selective decentralization may be possible for most "operating" functions; and (3) decentralization is the preferred mode for employee performance evaluation and for employee relations. However, in the detailed findings of the study some observations raise questions about the cost-effectiveness of decentralizing a number of personnel functions which are currently being decentralized. Among these observations are the following: 20Ibid., PP• 8-28. 21Ibid., p. 27. 22Ibid., p. 28. -274-

PAGE 313

Table 7-2 . OPTIMAL LOCATIONS FOR ADMINISTERING CENTRALIZED AND DECENTRALIZED FUNCTIONS BASED UPON THE ASSOCIATED COSTS AND EFFECTIVENESS Cost Effectiveness Summary Function c 0 D c Class i fi cation policy X X operation X Examination policy X X operation X Allocation policy X X operation X Informati 0.1 policy X X on X Evaluation policy X X operation X Compensation policy X X operation X X Employee policy X X Relations operation X Trair.ing policy X X operation X Pers onne 1 /Exam po 1 icy X X Research operation X X Key: C centralize 0 selectively centralize or decentralize D decentralize 0 D c 0 D X X X X X X X X X X X X X X X X X X X X X X X X X Source: An Operational Concept and Reporting System for the State Department of Division of Management Services, State of (December, 1978). -275-

PAGE 314

1. Decentralization of the classification plan and function would increase costs, and standard policies and practices would be practically impossible to achieve on this basis (p. 19). 2. Decentralization of the position allocation/reallocation function carries with it a decrease in uniformity and integrity of the State personnel system (pp. 21-22). 3. Examinations are not uniform for the same positions in different agencies, and decentralization of the preparation of examinations allows line agencies to slant the examination toward personnel with the "preferred" background. Also, it is more costly to decentralize examination administration at two or three locations than it is to accomplish a single one (p. 22). 4. "It is difficult to see how a personnel records system could be maintained on a decentralized basis and still meet the criteria of effectiveness" (p. 23). 5. Decentralization of the audit process for controlling the employee evaluation function leads to a reduction in integrity, uniformity, and the comprehensiveness necessary for effective evaluation of all State employees. From September 1976 to 1977, approximately 35% of the State's managers did not evaluate their employees. And, according to State statute, nonevaluated employees receive automatic salary raises, which too often affects overall employee morale (p. 25). -276-

PAGE 315

6. Comparative analysis and decentralized compensation surveys would require greater costs to ensure salary comparability. Thus, equitable compensation policies and practices necessitate centralization (p. 26). 7. Resolution of employee grievances at the lowest possible (decentralized) organizational level tends to screen out "unimportant" cases, and therefore appears to be less costly (p. 26). 8. Personnel and examination research functions are clearly cost-effective on a centralized basis and should continue to be performed centrally (p. 27). The Decentralization Study recommended a number of revisions which include: 1. An improved central personnel automated information system to enhance both decentralized operations and central authority and control. 2. Centralization of personnel operations of State agencies within the Capitol complex and having less than 250 employees, to improve service at the least cost. 3. Development of criteria for performance in State personnel operations, accelerated training of personnel specialists, and additional personnel. 4. Auditing of decentralized units' performance and conformance to established procedures and criteria. 5. Adequate staffing of all personnel operations with properly trained specialists. -277-

PAGE 316

6. Staffing based on a ratio o f one personnel person per 150 FTE employees for agencies. of less than 1,000 FTE personnel in size. 7. Centralized general training and decentralized special training. 8 . Retention of the present system of employee relations.23 The Division of Management Services also addressed the need to "develop a comprehensive management reporting system in order to evaluate the appropriateness of this study's proposed recommendations."2 4 The study then made recommendations for developing a comprehensive personnel managemen t reporting system which included: 1 . Implementing a management reporting system based on this study and the personal desires of the Executive Director and managers of the Departmen t of Personnel. 2 . Establishing and firmly pursuing a schedule for data collection, analysis, and report preparation. 3. Reviewing the management information provide d by the system on a regular and timely basis. 4. Continuing development of performance measures and system improvements.25 Problems with Decentralization in State Personnel System. The implementation of decentralized personnel activities in the Colorado State personnel system reveals a number o f problems concerning the appropriateness of its use. These problems from the use of 23Ibid., pp. 6-7. 24Ibid., PP• 36-40. 25Ibid., p. 7. -278-

PAGE 317

decentralization are analyzed below, along with discussions of alternative problem-solving approaches and the preferred recommendation for implementation. The foremost problem surrounding the use of decentralization in the State personnel system is that no adequate plans, strategy, and criteria or administrative rules were developed and utilized to guide personnel decentralization. No specific Executive policies on which to base decentralization efforts exist, since the principal Executive Order issued to initiate decentralization is a broad generalized statement which does not address broad personnel management concerns. In short, decentralization of State personnel activities has proceeded for over three years on an ad hoc basis. This movement has tended to ignore the role of personnel as a major overall State government management tool and to treat it as a subordinate service function for each agency or division. Recommendation 7-8: Regardless of the future use of decentralization, the Executive policies and plans, Personnel Director's criteria and strategy, and Personnel Board's administrative rules surrounding the use of personnel decentralization should be developed, reported in public documents, and adhered to by all principal personnel officers. Both the national Committee for Economic Development and the U.S. Office of Personnel Management have issued policy statements to this effect. Another pervasive problem with personnel decentralization in Colorado government is that there is a lack of monitoring capability over the application, execution, and merit standardization of decentralized activities. This deficiency has been evident since the -279-

PAGE 318

inception of personnel decentralization i n State government in 1976. This deficiency sacrifices the integrity of State personnel activities and the merit system itself. It impedes verification that merit protection standards and personnel management goals are achieved uniformly, comprehensively, and on a sound public policy basis in accordance with law. The seriousness of this monitoring deficiency leads to incremental and disjointed attention. It demands comprehensive reassessment and review of the use and need for personnel decentralization. The lack of a comprehensive management information and reporting system, needed to build a sound monitoring capability into the State personnel system, seriously undermines the central merit service and protection purposes of the State personnel system. Conceptually, there are a number of problem-solving alternatives which can be suggested to address the pervasive short-comings described above. The usual State government approach of providing short-term and/or cosmetic reform is, of course, one alternative. This approach would involve a continuation of personnel decentralization while a management information and reporting system is installed in the State Department of Personnel and state agencies in a piecemeal and incremental way over a number of years. A preferable variant of this alternative would be a temporary freeze on further decentralization efforts, while the policy criteria and the management information and reporting system are developed and tested on a pilot basis in a few State agencies. However, these short-term remedies do not address the central purposes of State personnel system performance and integrity. Merit standardization, effective and efficient public services, and fair -280-

PAGE 319

treatment of employees among all personnel activities and effectiveness of key personnel system factors such as examination and classification would not be assured by piecemeal decentralization in its present mode. Nor would the use of personnel management as a key instrument of top State managers be facilitated by decentralization. In short, a meaningful long-range solution requires a careful restructuring of the personnel system to sort out which functions must be centrally directed, performed, or controlled and which might be performed in a decentralized operational mode. Such an alternative would begin with a comprehensive and meaningful public review of all State personnel activities, including those which are at present decentralized. Many of the criticisms of the State Personnel Department by agency administrators on such grounds as slowness, unresponsiveness, etc., could well stem from structural and procedural deficiencies in State personnel system practices which decentralization will not solve, but merely bury "under the rug" in the agencies. Among these defects are the following: (1) the fragmented classification system with 1,568 classes including 213 classes which most often consist of agency specific and "one-of-a-kind" positions; (2) tailoring of position descriptions to particular persons who are preselected through temporary or contractual appointments; (3) the extensive and increasing use of oral or 50% oral examinations which can be subjective and which permit preselected individuals to receive preference; and (4) the widespread practice of narrowly advertising individual positions and conducting special examinations for each of them instead of widely advertising a general written examination periodically, including submission of credentials, to establish a roster of eligibles from which agencies may -281-

PAGE 320

be given referrals in short order when vacancies arise. Decentralization, without resolution of these basic deficiencies, can be harmful to the merit principle which is the keystone of the Colorado State civil service system as established in the Constitution and cannot discharge well the positive personnel functions which a well-structured system can perform. Recommendation 7-9: Further decentralizaton of State personnel system activities, excluding employee appraisal and employee relations operations, should be frozen pending a thorough review of the structure of the Colorado State personnel system. All personnel functions and activities should then be reviewed and structurally analyzed to ensure that the merit protection and personnel service purposes of the State personnel system are observed in conducting all functions, including the elimination of inefficient, ineffective and/or unfair personnel practices and procedures. This comprehensive review would also entail an examination and restructuring of the State position classification system in order to, among other things, minimize the proliferation of "single position" job classifications and develop better career ladders for employee development. (See Chapter X relating to classification.) The 1978 Division of Management Services study of personnel decentralization revealed that many personnel functions are ineffective and uneconomic to decentralize even on a selected agency basis. (See Principal Decentralization Study Conclusions in this section.) The Division's study identifies which personnel functions should be decentrally administered on the basis of the costs and effectiveness -282-

PAGE 321

with which services can be performed. Furthermore, as noted above, personnel decentralization need only occur for some operational activities and then only on a selected State agency basis. Proper review of all personnel functions would improve their performance and enhance their contribution to achievement of overall government-wide and agency goals. It should be noted that the Colorado State classified service with some 26,000 employees in 1978 was a good deal smaller than some federal bureaus, such as the Social Security Administration. Recommendation 7-10: A. Within the context of a comprehensive public review of the State personnel system and its principal department, consideration should be given to adopting the findings, conclusions and recommendations of the Division of Management Services study on a personnel management information system and reporting needs. B. An annual personnel management/policy review process led by the Governor using his central personnel management office and including each department and agency should be developed and instituted to parallel the annual budget review process in the Executive branch. This process should focus on a review of overall management progress and the relation of personnel needs and plans to implement and facilitate policy development and agency operations. This review should be done on a five-year program base and should result in an Annual Personnel Management Report which the Governor submits to the General Assembly. Coverage of State Personnel System Introduction. Coverage of employees in the State personnel system has expanded in recent years by the blanketing in of approximately 6,000 283-

PAGE 322

State higher education staff employees brought under the system, beginning in 1975. The State Constitution states that all employees in Colorado State government are included under the principal State personnel system, except those excluded in legal provisions of both the Constitution and legislative statutes (Article XII, Section 13-2). Currently, the principal State personnel system covers slightly less than half of all State government employees and officers. It covered a total of 30,000 classified positions and 25,491 classified employees as of June 30, 1978. Total State employment was around 56,000 as of June 30, 1978, as reported in annual State Department of Personnel statistics. Analysis of Coverage of the State Personnel System. In addition to the fact that about half of all State employees and officers are covered under the principal State personnel system, employee groups which could be considered for system coverage are evident. State judicial branch staff employees are covered under a separately administered State judicial personnel system --totaling approximately 1,500 staff employees as of February, 1979. While the legislative State Auditor's staff employees (approximately 85 employees in 1980) are covered under the principal State personnel system, staff employees of the Legislature's other chief analytic staff, the Legislative Council, are exempt from personnel system coverage by law. Faculty members of the State's higher education institutions are also excluded from personnel system provisions, and are generally covered under individual institution employment policies. In short, the coverage of the State personnel system is neither uniform nor comprehensive among all State employee groups. -284-

PAGE 323

Some of the fragmentation of personnel systems throughout the State is necessitated by the separation of powers concept. Each branch of government (legislative, executive, and judicial) was designed to be a distinct and separate system. The separate nature of each governmental branch was developed to act as a balancing influence in relation to the other two systems. One additional step fostering the autonomous nature of each governmental branch has been the protection of non-policymaking personnel from replacement due to political patronage. Several Supreme Court cases, including Elrod v. Burns,26 have upheld the concept of protection of all personnel not directly involved in policymaking positions. The opinions set forth by the Court have further supported the premise of a strong, continuous, non-political personnel base for governmental balance and control. A similar situation exists regarding the coverage of the State's principal retirement system. This is particularly true for higher education faculty members across the State, where some faculty are covered under the State's principal Public Employees' Retirement Association (PERA) system and others are covered under the Teachers Insurance and Annuity Association (TIAA) system or other retirement plans. Recommendation 7-11: A review should be made of all State personnel and employment systems to determine which of them should be included in the coverage in the State's principal personnel and retirement system to the end that this system will provide 26Elrod v. Burns, 423 u.s. 821, 1976. -285-

PAGE 324

coherent and integrated coverage of all State employees. Legal Provisions of State Personnel System Introduction. The current Constitutional personnel requirements are found in Article XII, Sections 13, 14, and 15 of the State Constitution. As mentioned earlier, Appendix 5 A presents these Constitutional requirements. (Also see Chapter V.) State personnel statutes address both personnel administration (C.R.S. 1973, Section 24-50-101 to 402) and retirement (C.R.S. 1973, Section 24-51-101 to 1109) policies. An identification of the statutory provisions affecting State personnel administration and retirement is presented in Chapters XIII through XX under Colorado Statutory Provisions. State personnel rules are promulgated by a five-member State Personnel Board, as provided in the State Constitution and statutes. The rules are promulgated to assist the State Personnel Director in administering the State personnel system. In actions and cases not covered by rule, the State Personnel Director may make a ruling for the action or case subject to appeal to the Board (Chapter 1, Article 3 of Board Rules). In addition, recent amendments to Board rules since 1977 are described in Chapter V under the Legal History of the Colorado State Personnel System. Analysis of Legal Provisions. Analysis of the Constitutional provisions covering the classified State personnel system reveals that these provisions are excessively detailed when compared with other state constitutions like the State of Wisconsin. This detail is contrary to suggestions in relevant literature on personnel legal frameworks. Inclusion of functional personnel program and merit procedural details in the State Constitution creates a rigid and inflexible legal framework -286-

PAGE 325

which interferes with the updating and improving of State personnel management and achieving government-wide service goals in general. Recommendation 7-12: A. The personnel provisions in the State Constitution should be revised and rewritten to provide broad, clear policy statements on State personnel system purposes and merit principles, coverage, the role and responsibilities of the Chief Executive and other principal officers, and funding adequacy in accord with the recommendations in this chapter. B. Functional program details, such as the following, should be removed and placed appropriately in State personnel statutes:27 1. Employment eligibility list length, 2. Employment appointing authority scope, 3. Temporary and probational employment lengths, 4. Personnel system exclusions, 5. Veterans' employment, retention, and separation preferences. State personnel statutes also reveal that the statutes are not codified in a systematic and orderly manner that reflects all functions of the State personnel system. This is true regarding both the administrative process and functional program provisions in State statutes. Thus, it is very difficult to comprehend the nature and interrelationships of State personnel system policies and guidelines. Recommendation 7-13: A. The personnel statutes should be recodified and revised such that system-wide merit and 27u.s. Civil Service Commission, Guide to a More Effective Public Service: The Legal Framework (Washingto;, D.C.: U.S. Government Printing Office May, 1975), pp. 5-6. 287-

PAGE 326

administrative process provisions are ordered, systematically followed by the functional program provisions arranged to reflect the normal sequential steps in the personnel process.28 B. The revisions of the personnel statutes should reflect the recommendations in this study, including revision of State personnel system purposes and goals, system organization, principal officers' roles and responsibilities reporting requirements, funding adequacy, and functional program details. Central changes are to (1) vest overall direction of the personnel system in the Chief Executive, (2) vest "appointing authority" personnel powers of agencies in the heads of each agency, and (3) convert the State Personnel Board to a merit "watchdog" and appeals agency. Recommendations 1 and 3 would require changing the Constitution. Also, these changes would be subject to the overriding principle of merit service and other provisions of the Constitution and statutes. Delegation powers should be provided as appropriate. For a more detailed discussion of Constitutional constraints, refer to Chapter V. C. Statutory provision should be made to require a review on a five-year program basis which would result in an Annual Personnel Management Report which the Governor would submit to the General Assembly. Analysis of the State Personnel Board's administrative rules reveals the same types of structural problems as found in State personnel statutes. In addition to a lack of systematic order, 28 Ibid., p. 7. -288-

PAGE 327

administrative rules do not cover all of the current functions and/or activities found in State personnel management and administration. This situation is illustrated by the following findings. 1. Board rules do not stipulate administrative procedures for the development of (1) training and career development programs, (2) the use and need for personnel decentralization, (3) reporting requirements to the Board regarding financial, budget, equal employment opportunity and merit standards-enforcement activities. 2. Performance appraisal rules are presented after separation rules. Thus, the lack of systematic ordering of rule provisions and the failure to provide rules on key functions/activities of personnel management has caused considerable confusion and, at times, conflicting interpretations over State personnel administration efforts. Recommendation 7-14: A. The personnel rules and regulations should be revised and reorganized into a systematic sequence, bearing in mind the personnel model in Chapter IV. B. The personnel rules should be reissued in one booklet-including recent rule amendments and additions reported in Chapter V. C. State personnel rules should be expanded to include administrative procedures on employee training and career development programs, use and need-criteria necessary for decentralization, annual reporting requirements of principal officers, and necessary amendments and additions from implemented -289-

PAGE 328

study recommendations.29 D. A readable employee personnel handbook should be prepared and issued to employees outlining all applicable policies and rules. State Personnel Information and Analysis Systems Introduction. Two major personnel information systems are needed to manage and administer State personnel operations. These include (1) an integrated system which stores and processes information on personnel positions, FTEs, and personnel costs --geared to the budgeting, accounting, payroll systems of the State; and (2) a personnel inventory and personnel transactions information system designed to provide information for personnel planning, management analysis and review, and activity monitoring/control needs. This system should contain the key information on all personnel employed by the State so that appropriate analyses can be prepared. State statutes provide for the maintenance of an employment record for each State employee, a personnel data inventory, proper certification of payroll, and responsibility for the format of records and reports used in the State personnel system. The State Department of Personnel currently operates a cental computerized Personnel Data System (PDS) for storing personnel records for agencies where personnel records are decentralized. The Department is currently designing a new integrated payroll-personnel-accounting system designed to provide management with a data base oriented Management Information System (MIS) on a statewide basis.30 29 7-8 30Ibid., PP• • State Department of Personnel, Annual Budget Request: Fiscal Year 1979-80, PP• 24B and C. -290-

PAGE 329

However, while the State Department of Personnel is slowly improving and expanding their information systems' capabilities, there currently is a lack of automated computer teleprocessing for both personnel data and management information systems. These systems need to be modernized and strengthened to provide all central personnel and agency managers with useful and timely information/management analysis data which can improve managerial ability, policy and program planning, and quality controls and reviews. Recommendation 7-15: A. The State Department of Personnel should speed development of a centralized data base Management Information System (MIS) to provide all agency managers with timely monthly and annual data on status and interrelationship of personnel costs from the accounting, payroll, and budgeting records, the related numbers of positions, and the FTEs utilized. B. The Department should also develop the MIS to provide a sophisticated management accountability system that allows for computerized generation of statistical and numerical data on workload, productivity, employment planning, and defined management success indicators. C. Data base files on personnel data such as total State service sick and annual leave records, and names and addresses and pertinent other information on all classified employees should be centralized into the Personnel Data System (PDS) of the State Department of Personnel. D. Sufficient appropriations should be made to bring the MIS on line within the next two years, as well as to improve the data fields of the PDS in the State Department of Personnel. -291-

PAGE 330

Budgets and Financing in State Personnel System Legal Basis for State Personnel Appropriations, Budgets and Accounts. The legal basis for funding the State personnel system is found in the 1970 Constitutional Amendment 2 and subsequently in Article XII, Section 14. It states that "adequate appropriations shall be made to carry out the purposes" of Section 13 the State personnel merit system provisions and Section 14 (establishment of the State Personnel Board, State Personnel Department, and the State Personnel Director.) Expenditure/Budget History of State Department of Personnel. Table 7-3 presents a summary of all State Department of Personnel and State Personnel Board annual expenditures (1973-1979) from State general, cash, and federal funds. It also presents the applicable State-cash funded and federal intergovernmental personnel programs implemented during each fiscal year, as well as a summary of total State and federal personnel expenditures by the Department of Personnel. Annual full-time equivalent State Department of Personnel employees are reported. This table does not include operating agency staff working in personnel activity or decentrally performed personnel functions. Analysis Budget and Financing Problems. Financing for the State personnel system through the budgeting process is a critically important ingredient for overall personnel management viability of State government. There are some noticeable deficiencies surrounding State personnel system financing and administration. Foremost is the pervasive lack of sufficient appropriations for the Department of Personnel and personnel agencies in other departments. The inadequacy of appropriations for proper performance of decentralized personnel activities is apparent. The statutes provide for char.ging certain -292-

PAGE 331

I N \0 w I Tnhle 7 3 F.XrF.tlllJTIIRf.S MID f'TF.11 OF TilE COI.ORAOO DF.I'AR111EtiT OF Pf.RSOilNF:I. AND THE STATF: PF.RSOHNF.I. IIOARD, FlSCt\1. YEARS 1'17l-79 (Actual by 5uurcc, In Thou"nn''" of Onllnn: Ac-tunl Ho. of Fi'f.R Agt!ncy, Source, and Purpose ____ --1974 1975 1976 1977 1978 $ !"'lr.. s M'E M'E s M'E ]: M'E M'E ::l llu•lgt•t Dntn State rcrsonnel Roard ••••••••••••••••••••••••••• 49 2.7 57 ).0 5211 2.5 94 ).8 10) ).0 5A J.O Genr.ral f"unds., •• , •••••• , • , ••• , •••••• •• ••••• • 49 '2:7 S7 3.0 52 a D 88 3.8 99 r.o 51 J.O Cash Fund• ••••• , •••• ,,., •••••••• , •••••••••••• ---6 4 5 or 1,125 87.9 1,373 !.QQd 1,574 &?. 1,804 !hl 1,782 84.0 1,898 78.4 General Activities: Funds ••••••••••••••••••••••••••••• 836 68.9 1,005 73.4 1,2)5 77.2 1,515 81.7 1,379 71.9 1,419 67.5 FundR •••••••••••••••••••••••••••••••• 22 2.0 22 2.1 12 -17 -26 -16 .7 Federal Funds ••••••••••••••••••••••••••••• Special rurroee Projccts:b . 134 6.5 104 7.6 185 7.4 224 6.6 159 7.1 200 6.1 lle11r1ng OHicere (CF) •• ,., •••••••••• ,.,,., c c c c c c c c c c 48 Services Study (C:F) • • • • • • • • • • • • ----------AOP Servlcu (CF).,,,,,,,,,,,,,,,,,,,,,,,, ---------96 -Herlt Contract ••••••••••••••••••••• f f 50 4.0 7) 4.6 f f 111 5.0 86 4.1 CETA-WIK Progro• (CF),.,, ••••••••••••••••• ----19 -48 -33 Public Service Cnreers (FF) •••• , , ••• , , • , •• 133 10.5 192 13.0 50 3.5 -----CRA.ND TOTAL •••• , , • , , , • , • , , , , , , •• , • , • , , • , , , , , , •• , 1,174 90.6 l,430 103.1 1,8?6 92.1 87.0 1,956 81.4 General Fund ••.••••••••••••••.••••••••••••••• 885 TI:6 1,112 1, c,oe 84.] 1,609 8S.S 1,589 74.9 1,6H 70.5 Fund ah, ••• , •.••••••••••••••••••••••••••• 22 2.0 22 2.1 Jle 65 137 s.o 102 4.8 federal Fundab .•••••••••••••••••••••••••• , ••• 267 17.0 296 20.6 235 10.9 224 6.6 159 7.1 200 6.1 Anallsis of Cont'UIIICtlt0 Prlce lndf'X (1973 C.Y • 100) ••••••••• 100.0 XXX 110.9 XXX 121.8 XXX 128.0 XXX 1]6.3 XXX 146.7 lUX Number State Employees (OOOs) •••••••• XXX 18.9 XXX 19.8 XXX 19.5 XXX 19.7 XXX 22.3 XXX Total Pereonnel Expenditures in 197) $ •••••••••• 1,174 1nOt 1,289 XXX l,:D5 XJCX 1,483 XXX 1,383 XXX 1,134 F.xpenditurcs per Clot'alficd Employee ln 1973 $ •• 65 XXX 65 XXX 68 XXX 75 XXX 62 liXX 52 No. Classified Employees_p_er Personnel FTE •••••• XXX 209 XXX 192 llllX 205 lilt X 214 XXX 256 X 'XX Compiled from Actual year columns in Department o( Per11onnel buJtet for iacal yeara 1975 through 1981. estimated. 25.5 llliX XXX 31) 1979 M'E 79 3.1 TI r.o 7 .l _!,051 80.6 1,507 68.7 76 .3 204 6.7 fiB -14 -82 100 4.9 ---l..t.!1Q 8).9 1,768 n:o 158 5.2 204 6.7 16). 2 Xllll llliX 26.2 1,305 XXX 50 XXX liXX 312 Sourc<': a) b) Fund Rourccs ar. c usr.d ae reported in budget document11. llowever, eome lteme t'uch as CETA-WIN which are treated as "caah funds" because they h4d Leen transferred from one account to another origlno11y were federally funded. c) d) e) () Funds for Hearlng Officers part of State Peraonnel Board as General Fund 1973-1976; Cash Fund thereafter ln thla table. Adjusted to treat CETA-WIK as Cash Fund lte•. Mot available aeparate1y; Included ln ceneral actlvltlea 1lnee.

PAGE 332

personnel costs to agencies. These relate to grant-in-aid funded operations. However, there is lack of uniform administration of these provisions for the following reasons: 1. Agency just refused to pay costs, 2. Billing of costs was incorrectly prepared, 3. Agency did not receive the bill in a timely manner before all available agency funds were spent, 4. Inequitable billing has resulted in most agencies not being billed their pro rata share of costs.31 In addition, there is no ongoing institutionalized system for coordinated personnel FTE and expenditure tracking to provide continual documentation of agency personnel utilization in relation to budget expenditures for personnel. Furthermore, there is no effective performance management analysis of personnel functions overall for the Department of Personnel and operating agencies through the State budgeting process. In short, financing of the State personnel system is minimal for developing a sound, comprehensive and uniform personnel system, while the State personnel budgeting process operates in a vacuum disassociated from employee performance and productivity management considerations. A 1977 study by the City of Phoenix found that, when compared to 30 other state and local personnel jurisdictions, the State of Colorado was ranked 29th in funding provided for recruitment, testing, and selection functions State applicants. It was ranked 27th in funding those same functions per total employees hired during calendar 31Report of the State Auditor, Department of Personnel Financial Statements: Fiscal Years 1975 and 1976 (April 20, 1977), pp. 21-22. -294-

PAGE 333

year 1976. (See Chapter X Ob Recruitment for more detailed discussion.)32 Thus, vital personnel functions in Colorado are being grievously underfunded. Recommendation 7-16: A. The State Legislature should provide increased appropriations at an adequate level as directed by the State Constitution, to both the Department of Personnel and the personnel functions in state agencies in order to allow for the sound, comprehensive, and uniform development of State personnel management and administration. B. An annual management and policy review process of the entire State personnel system should be instituted to parallel the annual budget reviews of all State agencies to review overall management progress, needs, and problems relating to the human resources management functions in government-wide and in agency management. (Refer to the Decentralization Section in this chapter.) C. The cost-sharing statutory provision should be rewritten to include only federal fund and private fund outlays so that appropriate overhead costs are recovered from all State agencies and transferred to the Department of Personnel. Direct State general fund and cash fund appropriations should be made to all State agencies to cover all other appropriate personnel administration costs. Development of an integrated accounting-budgeting-payroll-personnel data base information system for personnel operations should be vigorously pursued and brought on line in the State Department of Personnel as soon as possible. 32city of Phoenix, Personnel Department, Recruiting and Testing Cost Survey (January, 1977), p. 17. 295-

PAGE 334

Professional and Ethical Standards in Colorado State Service Introduction. The State of Colorado is presently weak in setting and implementing standards for professional and ethical conduct in the public service of the State. Under an Executive Order first issued by Governor Love in 1966 and reissued by Governor Vanderhoof in 1974 and Governor Lamm in mid-1975, a "Code of Ethics" is prescribed for all Colorado State employees. In addition, a Colorado Board of Ethics was established in 1974 with three non-paid Board members appointed by the Governor to review department head appointments and complaints, as well as to accept and comment on financial disclosure statements. In 1975, Governor Lamm expanded the Board membership to five members. Appendix 7-A presents the original 1966 code of ethics Executive Order and subsequent Orders by Governors Vanderhoof and Lamm. Analysis of Colorado Code The present code of ethics outlines certain ethical principles, largely as issued in 1966. It stipulates that the board shall review and advise the Governor of its approval or disapproval of certain gubernatorial appointments as well as review the annual financial disclosure statements of those appointees and any complaints, as requested in writing by the Governor. While the ethical principles are applicable to all Executive Branch employees, only the appointments of non-elected department heads and non-clerical staff of the Governor's office were reviewed by the board, along with their annual financial disclosure statements. There has been little publicity about the board's work and inquiries showed an evident lack of documentation in those activities. It appears that the ethical standards program in Colorado State government is restricted to a small group of appointees and may be pro -296-

PAGE 335

forma. The code is quite narrow and there has been no organized administrative process for applying it. While Governor Lamm's initial 1975 department head appointments were reportedly reviewed and approved by the board, there is no documented evidence that the board has been active in subsequent years. There seems to be no process for applying the ethical standards to career appointees in the senior ranks. Annual financial disclosure reports do not seem to be required from them. No regular staff unit in the Department of Personnel or in the Governor's office is known to be responsible for monitoring activities or the work of the ethics board or for keeping records of results. The State Legislature has not provided legal authorization for the creation of the board, although this is not a plausible excuse for inaction to date. The lack of authorization appears to reflect the Legislature's and Chief Executive's lack of systematic attention to insuring high standards of integrity in the State government. In total, the Governor appoints more than 2,000 people to his own staff, to head cabinet departments, and to serve on various regulatory and/or administrative boards and departments throughout the Executive Branch. Many of the appointees on regulatory bodies come from the ranks of occupations they are to regulate or form special interest groups. Numerous division chiefs in the career service handle delicate matters and have relationships with powerful special interests. It is not clear in the existing situation how well the line is drawn in the State government between private and public interests and whether adherence to high professional standards is required and enforced. The Colorado government lacks a well thought out, comprehensive set of standards governing ethical and professional conduct and conflict

PAGE 336

of interest for State officials and e mployees in their capacity as representatives of the State government. There is also no effective independent machinery to handle official misbehavior, possible conflict-of-interest violations, and no effective provisions which ensure that the State regulators and officials do not use their public power and responsibilities for private gain either during or immediately after their public service. There is also no designated, effective administrative channel by which merit service employees or citizens who believe they have been improperly treated by State government can get an assured review and response. Too, State officials at times refuse to respond to complaints in a meaningful way. As the Common Cause survey indicated, a substantial proportion of State employees believe that "whistle blowers" in the State government are improperly treated. Under legislation effective June 15, 1979 (CRS 1973, 1979 Section 24-50.5-101 to 107), whistle blowers were given certain rights and protections. However, the authority in such cases is divided between the Personnel Board and the Department of Personnel. Effective investigational resources are limited and whistle blowers still have an exceptionally heavy burden relative to officials or supervisors who may be the subject of charges.33 All of these factors point toward neglect of high standards and ethics in the State government and of effective procedures to enforce them. Recommendation 7-17: A. The Governor should promptly develop and submit to the General Assembly comprehensive legislation governing 33Bill Symons, "CU Whistleblowers Near E nd of Grievance Procedure," Denver Post (November 6, 1980), p. 3. -298-

PAGE 337

conflicts of interest and ethical and professional standards for State officials and employees in all branches of the State government. For this purpose the Chief Executive might seek advice from public interest groups and citizens on the scope and content of such legislation. The standards should apply proper discharge of the public trust, to conflict of interest questions, including questions of gratuities, contributions, moonlighting, nepotism, and the like. The proposed legislation should establish effective criteria and provide adequate independent administrative facilities for monitoring, investigation, processing, and adjudication of possible violations of such standards and codes of conduct. B. The implementation should include regular financial disclosure statements by all top State officials and all agency administrators and managers, including members of the regulatory boards and commissions exercising policy or adjudicatory or administrative powers. C. Sufficient appropriations should be made annually to develop and operate an effective and meaningful program governing conflict-of-interest reviews, ethical and professional standards enforcement, complaint and violation resolutions, disclosure, and pre-appointment review for all State officials and employees in the top ranks. This function could be placed under the reconstituted Personnel Board. D. Specific provisions should be made for adequate independent investigation and effective protection by the Board of whistle blowers within the State service and outside on State matters. -299-

PAGE 338

This should include effective sanctions against o fficials and employees who are found to have engaged in offenses. Analysis of Implementation of Colorado Code of Ethics. The coverage of the present Colorado code of ethics is extremely narrow and there has been no effective and orderly administrative procedures for implementing the State Code of Ethics and no follow up on violations as they occur. While Governor Lamm's initial 1975 department head appointments were reportedly reviewed and approved by the Board, there is no documented evidence that the Board has been active in the last three years --although numerous department head appointments have been made during this period. In short, there is an evident lack of documentation on the Board's activities under the current administration, and there seems to be no one person in the Governor's office staff or in the Department of Personnel responsible for monitoring the Board's activities or keeping records of those activities. The fact that the State Legislature has not provided legal authorization for the creation of the Board is not a plausible excuse for the inaction to date. The lack of authorization appears to reflect the Legislature's and the Chief Executive's lack of attention to high standards of integrity in the State government. A largely pro forma ethics board has been created by Executive Order which assures little impact on developing or maintaining State government integrity and ethical conduct of its employees. All classified employees are under State personnel control and rules concerning ethical conduct. However, the only rules governing ethical considerations for most State employees are those relating to -300-

PAGE 339

political activity restrictions. Analyses of regulatory boards and agencies under the Sunset Review Program enacted in 1976 has revealed an absence of statutory provision and/or administrative rules to govern the sensitive relations between the State regulators and the representatives of regulated businesses and occupations, many of whom serve on State boards. In total, the Governor appoints approximately 800 persons to various regulatory and/or administrative boards and departments throughout the Executive Branch of the State government, although only a minute fraction of these appointments are reviewed by the Board --and even this modest effort has not been consistently performed in a meaningful manner. This might be regarded as contributing to a system of hidden government by unreviewed vested interests. In short, Colorado State government lacks a well thought out and comprehensive set of standards governing ethical conduct and conflictof-interest for State officials and employees and the private personnel they deal with. There is also no effective machinery to handle possible conflict-of-interest violations or provisions which ensure that State regulators and officials do not use their public power and responsibilities for private gain either during or immediately after their public service. With the growing size of the State government and its regulatory, tax benefit, and expenditure programs, more explicit standards governing possible conflict-of-interest and violations of public ethics are necessary. Effective machinery should exist for the expeditious disposition of any complaints and for investigation of evidence of violations of proper principles for the ethical conduct of all elective, appointive, and merit service public officials and employees .who are -301-

PAGE 340

included in important policymaking and administrative roles. Recommendation 7-17: A. The Governor should promptly develop and submit to the General Assembly comprehensive legislation governing conflicts-of-interest and ethical standards for State officials and employees. This should include regulation of possible problems surrounding gratuities, moonlighting, and other conflictof-interest of questions. B. The proposed legislation should establish effective criteria and independent administrative facilities for the implementation of the programs for investigating, processing, and adjudication of possible violations of such standards and codes of conduct. The implementation should include provision for regular financial disclosure statements by all top State officials, department and division heads, and all agency administrators and managers, including members of regulatory boards and commissions and their top staffs. C. Sufficient appropriations should be made annually to develop an effective and meaningful program governing conflict-of-interest reviews, ethical standards enforcement, complaint and violation resolution, disclosure statement review, and gubernatorial appointment review for all State officials and employees. -302-

PAGE 341

. . . ' f I:XI:CUTIVC CHAMDCR5 EXECUTIVE 0 It 0 E R COlORADO COOE OF ETHICS It Is essential to the effective efficient operation of government that public officials be Independent and that public office not be used for private gain, and that there be complete public confidence In the integrity of state governrnent. Q.uallr"ied persons should be encoun>ged to serve In state government. Therefore, state employees should equal opportun.ltles with all citizens In developing private economic and social interests, unless there Is a conflict with their to the public. It Is not the Intent of this Executive Order to sanctions that would limit publlc service to any p a r ticular economic or social group. It Is the Intent of this Order to implement the objectives of protecting the integrity of the state government of Colorado facilitating the recruitment a n d r etention of personnel. This Executive Order shall apply to all st?.te employees In the executive of the government of the State o f Colorado, and serve as a basis for appropriate discipline when It has been in a he;:,ring that the. standards of .conduct In this Color.ado Code of Ethi-.:s have been violated. As used herein, " state employee" shall be defined as officers and employees In the execut_lve depa.rtment. The Governor may amend this Executive Order to expand, alter, or delete sections of the Colorado Code of Ethics If It that . any section or sections of the code are not meeting the purpose of tloi!: II No state employee shall engage In any employment or othe r outside activity incompatible the proper discharge of the rcsponsibllities of his office or position. It shall be
PAGE 342

' I (F) Any <>dverse effrct C.n tltr of the public In the Integrity of the government <'f the StOlte of Color.,do. No state e"1Pioy<'e h;,ve 11 person;,! In <>ny tr;,ns;,c.tlon within his area of Influe-nce in state govcrnrn"nt nor shi'lll t . e have any prlvi'lte bus incH rel<>t lonship or m-mcrshlp of property thi'lt m a y c.onfllct with his p ublic duties . If a c.onflict !.hr:>uld the shall be not only p:nnltted, Lut required, to nd their deputies or <>ssistants as term agency Is defined in S ection 3-2-4, Colorado Revised Statutes, 1963; Membersor the staff; Sal arled members of boards and cor.rnlss Ions appol nted by the Governor; Salaried executive employees of boards and commissions whose members are appointed by the Governor. tlot later. thiln ,lanuary 15, 1967, the employees now holding positions listed submit to Governor' a written report containing the following: 1. The n ame s of every corporation, company, firm, or business enterprise, partnership, nonprofit organization, and educationa l or othe r institution which does business with or Is regulated, controlled, or otherwise affected by the activities of any d epartment, agency, board, or commission of the Stute of Colorado In "thlch he has an interest In any of the following ways: (a) (b) (c) As anemployee, off1cer, director, trustee, partner, or legal, accounting, or business adviser or consultant; A continuing fln<>nclal interest through a pension or retirement plan, shared Income, or otherwise, as a result of any curr.,nt or prior emp loymcnt or b .us 1 ness or professional association; A financial interest throush the o ... nership of stocks, bones, or utner s ecurities, the va'lue of which Is in excess of $5,C;OO.OO. 2. The names of his creditors who do business with or are regul<>ted, controlled. or"otherwise affected by the activities of his a9"ncy, board, or corr:nission, other than those to he rnnd livin9 expenses. 3. A list of all his interests In real property or rights In l<>nds , other th<>n property h":lich he occupies as a person;,! residence, are, or may be, affected by of real prcrerty or Interest therein by nn agency ,• depar tm:nt, board or cor:-rniss len of the St<>te of -304-

PAGE 343

: Henceforth, prior to to ;,ny of the above, the Governor will first require the the of the Colorado Revised Statutes de;, I irog with conflicts of interest. Each state department und !>hall make available to eac.h of Its cmployees particular sections of the statutes dealing with the -)OS-

PAGE 344

. . VIII employee shilll .:.t "11 tlmes usc his Lest rHorts to pcrft•rm hls iiSSl!Jncd t<>:-.ks proon;>tly efficiently ond to bo rourtc-ous, lr.>l'artl.,l, 01nd consillc, In roind tl,,t, his position, he <>Cts <>5 "rrprcscnt01tlve of the of Colorado. ORDERED: Th"t the foregoing Exccut lve Order be cst.,b l hhed t h e Color.,do Cod e of Ethics <>s of tllis d;,te. Given under my h;,nd and this Thirteenth D<>y of September, the Executive Sc<>l of the State of A.D •• 1966. . . Governor , -306-

PAGE 345

f:XECUTJVE ORDER WHEREAS, Governor John A. LoveLy J:xeeutive Or.der, Scpternber 13, l96C, a Code of Ethics for yee s oi the Hr:.nch or StOlle Go,ernrn t nt; Rnd WIICRI::AS, public conridcnce in thr !ntq:rity of the Government e>f tlae State of Colorad o is of utmost importance; t-:OW, TliF:Ill::f'OHE, l, John D. V::and;:orhoof, Governor of th<: State of ColonuJo, do ht:reby all of the principlec of the Color01do Code of f.thies developed in 1966 by the Govcrnc..r's Committe<: on Respect for the Law, :and do hereby orc:'er: J. CODE OF ETIIICS f'OR COLORADO STATE GOV.I::RNi,;EN T SERVICE The purpose of this code is to e.:;tablish a clear standard of ethics for officers and employees in the Executive Branch of government in order to assure public confidenc::ado Co;.lc of Ethics in order to as5ure complete conformance with nil of the principlt:s and provisions of the C\ldc. ' OHOEP.ED : Th:.t tl•e foregoing Executive Order be e:::;tablished. GIVEN under my hand lh'! Executive Seal of the State of i t ' " ' : ci Day of May , A . D . 1974. -107John D. V nnderhNJf, Gi.wernor

PAGE 346

I w 0 (X) I EXECUTIVE ORDER M embers COLORADO BOARD OF ETHICS Pursuant to my Executive Order d' •• ad May 28, 1974, rea!!irming all ol the principles ol tho Colorado Code or Ethics developed in 1968, ilia hereby ORDERED: That the follow ing-named persons be and they are hereby appointed members or the COLORADO BOARD OF ETHICS ' HONORABLE CHESTER M, ALTER or Denver, Colorado, tor a term expiring at tho pl easure or the Go-vernor; WALTER K, KOCH of Colorado, for a term expiring at the pleasure or the Governor; HONORABLE 0. OTTO MOORE of Golden, Colorado, tor a term expfringat the pleaeure o! the Governor, GIVEN under my band and the Executive Seal of the State of Color11do, thia twenty-ninth Day of May, A.D. 1974. . John D. Vanderhoof, Governor ------------------------------------------------------

PAGE 347

WIIEREAS, \'YHEREAS, WHEREAS, IE lit 1: CUT IV 1: C t1 AM II 1: HI> J) t :"-'' I:U EXECUTIVE COLOP.ADO I>OAI\0 OF lTtiiCS Governor John A. Love by executive order doted September 13, 1966, established o "Colo:odo Co.:le of Ethics for Empl o )ee s of the Executive Branch of the Stole l>overn:nent•; uovernor John D. Vanderhoof by Executive Orde r doted Moy 28, 1974, reaiiirrned all the principles of that Code and a "Code c.f Ethics for Colorado Stole Governrr.enl Service• for oHicers and employees of the Exec.:.tive Branch; (;,c,•ernor Vanderhoof by Executive Order doted N . oy 29, 1974, establi:hed a Colorado Boor d of Ethics; and public confidence in the integrity of the Governm
PAGE 348

. . II Arrr.OVAL Of CRTAIN APf'OINTMlNTS BY BOAW That, to the of the Code:'> itl•:utifi c d ubavl:', tl o<: llo urtl review and thereafter the bovernor of ih app rovol ur of < : uch mujor gubernatorial oppointmr nt .,.. hom the Gov ernor submits to it in writirog. 1\pp::.intm:nh to be subrnillrd include, omonn written request of the Governor, the Board shall review a complaint of violation of the aforesaid principles. IV FINANCIAl DISClOSURE Each oppoi ntce whose nome is submi to the 'Boord under II above .upon bcins noli!'ied of opp.-oval by the Boord, file promptly with the Boord's secretory, for public examination, o financial disclosure statement in the form prescribed b; the Attorney General pursuant to tloe Colo: odo Sunshine Act. Thereafter, each Jch . appointee (ir.clvciing all prese,,t ccporlrmnl heads, non-clerical staff of thF. '>overnor's Off:::::::::::! c:!1cr cpp-u!:::::.:::; w!-.c ..-.. ere required Ia file such statements on J •o. Jory 14, 1975) shall file with the secretory, on o r be fore January 31 of each year, :.u • 1 a statement coterins the p recedi::a calendar year. All gu bernatorial oppointP..s not Overed by the preceding provisions ore invited to Uie volv,-,tcdl;,:i . ' GIVEN under my hand and •he Executive Seal of the Stole of / , f ; 1) : .. Co!crodo this twenty-fifth oay .,-,•'t > ' >.. of July, A.D., 1975 • . -f l ): ( :'}=:\..1) ; t) a cu.._.__ : • . : : . ;' :: / : 1 l\1cnard D. lamm ..; ,,. . -/ Governor . I I ••• . • ) . ' I} .' • I o I .--310-

PAGE 349

CHAPTER VIII HUMAN RESOURCE PLANNING Introduction The long-term success of any organization depends on effective and efficient human resource planning. Human resource planning consists of four main components which are: analyzing and forecasting future staff needs and employee skill needs; inventorying the organization's existing work force; projecting present work force resources into the future; and planning necessary personnel programs such as recruitment, selection, training, and compensation required to meet future human resource needs.1 Human resource planning usually included a skills assessment and inventory; an analysis of current and expected vacancies due to retirements, discharges, transfers, promotions, sick leaves, leaves of absence, and an analysis of current and expected expansions or curtailments in departments. Plans are then made for internal shifts, training and development of present employees, recruiting and hiring, and/or promoting human resources. Human resource planning must "be responsive to rapidly changing forces in our society such as technological innovations, new program needs, labor market conditions, governmental legislation, regulations, and court decisions."2 1B.S. Turner, "Manpower Planning or Trained Incapacity," Australian Journal of Public Administration, Vol. XXXV, No. 3 (September, 1976), Management Process (Boston, Mass: 2wpe.nd2 e 5181• L. French, The Personnel Houghton Hifflin Company--,---:-1-=-9=-7-=-8-:-)-, p. 199. -311-

PAGE 350

In summary, human resource planning is the process by which an organization insures that it has "the right number of people and the right kind of people in the right places, at the right time, performing work for which they are economically most useful."3 It is a mechanism for resolving simultaneous decisions concerning recruiting and screening methods, hiring standards, job structure and mobility, quantity and quality of training, compensation and related personnel functions which have traditionally been considered to be a series of separate, unrelated decisions. Human resource planning is a process of establishing a clear relationship between skill needs and work requirements and the available work force both in the present and the future. It is an interdisciplinary activity involving economists, statisticians, behavioral scientists, and organizational and personnel specialists. Background Importance of Human Resource Planning Overall, planning and analysis are indispensible ingredients for the achievement of an efficient and effective personnel system. Long-term planning on a comprehensive basis is especially important for large public sector organizations like state governments. Planning is future oriented and largely directed toward setting overall goals and objectives and determining how they can best be achieved. Policy analysis is particularly concerned with determining the cost effectiveness of alternative programs for achieving stated goals and 3 Thomas H. Patten, Jr., Manpower Planning and the Development of Human Resources ( N ew York: John Wiley & Sons, 1971), p.4. -312-

PAGE 351

objectives. Program evaluation, which tends to be retrospective, is concerned with the assessment of past performance and developing information which feeds back into the planning process as well as into the day-to-day adjustment of operational policies and procedures. All are important to public sector human resource planning and affect organizational performance. Different Approaches to Human Resource Planning areas: The concept of human resource planning encompasses the following 1. Projection of the number of employees needed in the future by skill group. 2. An inventory of available skilled workers both in the work force of employers and in the labor force for recruitment by the employer. 3. Plans to remedy deficiencies in the employee-employer match through training or job restructuring. Consequently, different entities have different goals regarding human reource planning. For example, organizations are primarily concerned with relating human resource planning to their management goals and objectives. Organizational planning directly interfaces with human resource planning since it provides direction to human resource planning. On another level the organization is dependent on the quality and quantity of skills external to it. Changing demands for skill and educational levels in the labor market directly affects the staffing process in general and human resource planning in particular. These changing demands greatly affect colleges and universities who attempt to tailor educational programs to employer needs. In addition, the government has been involved with meeting organizational human resource -313-

PAGE 352

needs through its various employment and training programs. In summary, the perspective on human resource planning is quite different depending on whether the entity is finding people to fill jobs (the focus of most organizations) or finding jobs for people (the focus of governmental employment and training programs). Government "Manpower" Programs for the L abor Force Current federal "manpower" programs (as they were originally termed) can be traced to legislation of the 1920s. At the beginning of Uorld War I, the emphasis was on labor force supply and talent to enhance productivity for the war effort. After the war, government was faced with assisting in the placement of thousands of military personnel no longer needed in the war. This same situation occurred after World War II. Many veterans lacked civilian skills and/or experience to be immediately absorbed in the work force. To combat this problem, the government established the GI Bill and other employment programs to provide veterans with training and education for better employment opportunities. Most of the current "manpower" programs emerged out of legislation from the 1960s. The Area Redevelopment Act of 1961, the Manpower Development and Training Act of 1962, and the Economic Opportunity Act of 1964 were aimed at assisting the poor and unemployed. "The results of these acts and others was a substantial increase in federal expenditures for manpower programs, rising from $0.5 billion in 1961 to $3.5 billion in 1970."4 (By 1980 such expenditures had multiplied several times to around $10 billion.) 4Robert D. Lee, Jr., Public Personnel Systems (Baltimore, Maryland: University Park Press, 1979), p. 294. -314-

PAGE 353

However, complaints arose over the s e e ming absence of p lanni ng and coordination of manpower programs. To overcome this problem, the Cooperative Area Manpower Planning System (CAMPS) was created in 1967 to coordinate manpower programs. CAMPS was not very successful in this effort. As a result, President Nixon proposed a major overhaul of manpower legislation. Congress was not supportive of his proposal and instead passed the Emergency Employment Act (EEA) in 1971 which provided for the creation of transitional jobs in state and local governments for which persons in these jobs were expected to find private jobs afterwards. The next major manpower legislation came in 1973 with the passage of the Comprehensive Employment and Training Act (CETA). CETA created hundreds of thousands of jobs to provide an economic stimulus during the recession and to provide training opportunities for the unemployed. CETA was renewed in 1976-77 and again in 1978 when the program was authorized to continue for another four years. Government Legislation Affecting Employment Government action at both federal and local levels has had a dramatic impact on human resource planning for all organization; both private and public sector. Recent laws have been aimed at preventing discrimination in employment on the basis of race, color, religion, sex, national origin, age, or handicap. For example, Title VII of the Equal Employment Opportunity Act, as amended in 1972, forbids employers to discriminate in hiring or in any terms or conditions of employment. Government affirmative action programs have also had an effect on employment and human resource planning by attempting to reverse the effects of past discrimination. "Affirmative action plans required of -315-

PAGE 354

all bidders on federal contracts under Executive Order 11246 are an important influence on human resource planning especially on recruitment and selection practices."5 These aspects are more fully discussed in Chapter XII. Other legislation with corresponding governmental regulations which affects human resource planning includes the Age Discrimination in Employment Act of 1972, the Occupational Safety and Health Act of 1970, the Rehabilitation Act of 1973, and the Employee Retirement Income Security Act of 1974. During the 1980s, organizations will be required to comply with and implement continuing human resource legislation. The aging work force, retirement laws, and younger workers will pressure organizations to move into sophisticated human resource planning, and 6 training and development programs. Future of Human Resource Planning The 1990 predictions are that there will be severe shortages of energy, food, and other resources. In addition, there will be increased leisure time and less work available than what was experienced in the previous decades. "Job sharing, 30-hour work weeks, working at home, no retirement cut-off ages, and increases in dual career couples will be typical."7 5 Lawrence A. Klatt et al., Human Resource Management: A Behavioral 6systems Approach (Illinois: Richard D. Irwin, Inc., 1978), p. 72. J. W. Walker, Human Resource Planning (New York: McGraw-Hill Book Co., 71980), p. 10. Robert L. Minter, "Organizational Readiness for a Human Resource Planning System," Training for the 1980s and Beyond, ed. Robert Van Johnson (Denver, Colorado: International Personnel Association, 1980), p. 31. -316-

PAGE 355

In the United States human resource planning is applied to the following areas in public administration:8 1. National human resource planning to determine the levels of economic growth necessary to achieve employment targets or to fill the human resource needs for meeting national goals. 2. National human resource program planning for administration of programs designed to remedy the problems of special groups of people. 3. Micro-human resource planning for the specialized needs of public sector organizations. In this report human resource planning will be primarily discussed at the government organizational level where management forecasts future work force needs and evaluates its competitive position to decide what quantities and qualities of personnel it can encourage to enter the organization as well as promoting current personnel. Public Sector Human Resource Planning During the 1970s, the federal government assumed overall human resource planning responsibilities beyond those which certain federal agencies has undertaken for their own personnel management purposes. Agencies such as the Bureau of Census, the Bureau of Labor Statistics, and the former U.S. Civil Service Commission increased their general involvement in human resource planning and forecasting. However, the major portion of responsibility for the development of human resource planning programs in the public sector rests with state and local governments.9 Bwinston w. Crouch, (Washington, D.C.: gP. 42. Crouch, p. 44. Local Government Personnel Administration International City Management Association, 1976), -317-

PAGE 356

The 1960 and 1970 trend in state and local governments established separate agencies to administer human resource programs resulting in varying degrees of centralization shared among personnel departments, budget departments, and general planning agencies.10 Also, the Intergovernmental Personnel Act of 1970 allocated funding for grant programs devoted to the improvement of personnel management and human resource planning at state and local levels. However, "the debate about the appropriate degree of federal responsibility for assisting state and local governments in solving their manpower problems--an important issue both in its practical and its ideological aspects--continued throughout the 1970s."11 Overall public sector organizations perform little human resource planning compared to their private sector counterparts. Some of the reasons for this are discussed in the following section. Problems with Public Sector Human Resource Planning Comprehensive human resource planning is not common in government. A survey in early 1970s "found that only 2% of responding local governments reported that they had developed a human resource planning system and none of the states reported that they had such systems."12 One view is that comprehensive human resource planning probably is neither cost efficient nor feasible for most governments. To implement "such planning for an entire government requires considerable staff and probably extensive computer support."13 10 11Ibid., P• 43. Ibid., p. 44. 12Personnel Office, Manpower Planning: The State of the Art 13(Washington, District of Columbia Government: Lee, p. 288.

PAGE 357

Overall, the discontinuities blocking human resource planning, especially long range planning, are caused by: 1. Elections with changes in administration and program emphasis. 2. Federally funded, state administered programs. 3. Shifts in emphasis of popular public priorities such as poverty programs, environment, inflation, and the like. In summary, human resource planning has become an increasingly important and useful tool for public management. In the past, it has been used to facilitate recovery from recession as well as to equalize employment opportunities for disadvantaged groups. More recently it is being used to improve employee productivity by assessing and acting timely to meet staffing needs. It is integrally related to other functions of personnel management such as recruiting, turnover, employee utilization, employee productivity and performance, training and development, and equal employment opportunity. Key Principles A variety of techniques have been employed in attempting to implement a human resource plan that accurately forecasts current and future government work force needs. Regardless of design, human resource planning should be structured according to the following key 1. Key Principle: Human resource planning should be related to and integrated with the government's missions, goals, and objectives. Human resource planning should: -319-

PAGE 358

--Be a regular and ongoing process both on a government-wide and a departmental basis. --Take into account staff reductions, promotions, and transfers in all parts of the government. --coordinate staffing decisions based on government-wide and agency forecasts of current and future work force requirement. --Be integrated with the budgeting process where the budget reflects a realistic appraisal of human resource requirements. 2. Key Principle: Human resource planning should be coordinated by the central Personnel Department which is responsible for coordinating all staffing requirements. The central Personnel Department should: --Assess long-range personnel skill and numbers requirements. --Be the center of information on labor-market conditions. --Analyze the skill-mix of all current employees. --Be responsible for collecting and maintaining all basic staffing data. --Be responsible for coordinating wage and salary structure with human resource planning. closely with top management in creating an efficient and effective work force. 3. Key Principle: Human resource planning should be related to the organization's classification, recruiting, and selection functions. Human resource planning should: --Be based on job classifications that in turn stem from assessment of existing and emerging skill requirements and job design. -320-

PAGE 359

closely with recruiting in forecasting and planning future staffing patterns and new job classifictions. --Develop with top management and recruiting a projection of the types of skill and personnel needed to perform current and future job tasks. with manpower and policy analysis units in forecasting the quantity of required skills likely to be available in the labor market. 4. Key Principle: Human resource planning should include a strong emphasis on personnel training and development. Human resource planning should: --Identify needs for training and developing current staff. --coordinate with training and development in establishing programs to update or increase skill-level of present staff. --Project future skill requirements of personnel to meet organizational goals and objectives. 5. Key Principle: Human resource planning should develop and maintain a comprehensive data base that included: --Analysis and studies of required skills to carry out current and projected agency program missions. --Skills inventory bank. --Individual career plans. --Projected vacancies due to retirements, resignations, transfers, promotions, leaves, and dismissals. --Data on labor market conditions. --Data on training and development programs. -321-

PAGE 360

6. Key Principle: Human resource planning should take account of external conditions such as the: --Trends affecting the government; its missions, goals and programs. --Status of the labor market. --Educational background of the available labor force. --Developments in technology and science. --General economic conditions. --Developments in personnel legislation and court decisions. Analytical Model Linkages As illustrated in the model matrix in Chapter IV, human resource planning impacts or affects the following performance criteria for good government: effectiveness and efficiency, good organization, adequate resources, qualified human resources, high productivity and motivation, merit service, career development system, equal employment opportunity and social responsibility and equity. Each of these performance criteria is discussed below. In order to have an effective and efficient government, the organization must have a highly qualified and competent work force which is partially the responsibility of human resource planning. It is through human resource planning that the organization sets its personnel policies and its staffing structure and forecasts future personnel needs. Good organization involves proper work force structuring and continual evaluation. This often results in changing the organizational structure to better meet work objectives. These changes should be -322-

PAGE 361

coordinated with human resource planning since they frequently involve new demands for various skills and education requirements which directly impact the staffing process. To perform human resource planning, the organization should develop and maintain a comprehensive data base that included a full range of basic data on the government's personnel including a skills inventory bank, turnover statistics, and labor market conditions. This requires that adequate resources be allocated to establishing and maintaining a personnel data base. Human resource planning forecasts the types of skills and qualifications required by the organization so the best qualified people may be hired and promoted to accomplish governmental goals. Human resource planning also contributes to high productivity and motivation by coordinating staff reductions, promotions, and transfers. It can reduce employee dissatisfaction by insuring that staff reductions in one department are coordinated with new hirings so employees laid off in one department may be transferred to another department where their skills are needed. Therefore, human resource planning facilitates retention and development of industrious, competent, and secure employees, thereby helping to fulfill the goal of maintaining a merit service. Human resource planning is involved with the career development system by identifying and matching employee skills and qualifications with current or anticipated job openings. Human resource planning is closely associated with training and development so employees may be offered opportunities to improve their skill level allowing them to grow and develop with the organization. Affirmative action plans and equal -323-

PAGE 362

employment opportunity have a major influence on human resource planning, recruitment, and hiring policies and vice versa. Human resource planning can greatly affect equal employment opportunity by helping to identify women, ethnic minority, and disadvantaged group members from both internal and external sources for employment opportunities. It can also help these individuals promote within the organization through the skills and experience data bank that identifies available internal resources. This, in turn, can help the organization better meet its social responsibility by promoting social equity. Human resource planning is an integral part of this process by identifying training and promotional opportunities for these individuals .throughout the organization. Colorado Human Resource Planning Colorado Legal Provisions The Colorado Constitution, the Rules and Regulations of the Colorado State Personnel System, and the Employee's Handbook are all silent on the subject of human resource planning. The 1973 C.R.S. refer narrowly to human resource planning by stating:14 • • • the state personnel director shall establish and maintain a personnel data inventory of all employees in the personnel system, which inventory shall contain such items as education, training, skills, and other pertinent data. The state personnel director shall make available such data to department heads for the most 14c.R.S. 1973, Section 24-50-127. -324-

PAGE 363

efficient utilization of the state's manpower." Current Status of Colorado Human Resource Planning In 1967, the Governor appointed an Efficiency and Economy Committee to study state performance. This committee found that: 1. The total human resource management function has historically been "undernourished and underfunded." 2. The nature, scope, and thrust of the central personnel agency needs to be changed from one of direct delivery of human resource management services to one of program and policy planning and evaluation, consultaiSon, and concomitant delegation and decentralization. These findings encourage the Department of Personnel to establish a comprehensive human resource planning program which the Department has barely begun to undertake. In December of 1978 a report entitled, "Operational Concept and Reporting System for the Department of Personnel" was completed by the Department of Administration, Division of Management Services. It also recommended a management reporting system for the Department of Personnel to include:16 --Implementing a management reporting system based on this study and the personal desires of the Executive Director and managers of the Department of Personnel. --Establishing and firmly pursuing a schedule for data collection, analysis, and report preparation. --Reviewing the management information provided by the on a regular and timely basis. 15Governor's Efficiency and Economy Committee, Requested Performance Audit (1968), P• 3. 16"0perational Concept and Reporting System for the Department of Personnel," Department of Administration, Division of Management Services (December 1978), p. 7. -325-

PAGE 364

--continuing d evelopment of p erformance m easures and system improvements. According to the Personnel Data System Manager from Personnel Records, the State's current Internal State Information System is quite antiquated.17 It primarly tracks all classified employees through their employment history with the State, provides for a position control system, and generates statistical reports when requested by a gency management. More specifically, the current system consists of the following:18 1. Batch document processing and file update system. 2. Real-time document processing, file update and information retrieval system. 3. A management reporting system. 4. Equal employment opportunity and affirmative action reporting system. S. Salary survey system. 6. Address label system. 7. Examination application system. 9. Personnel/payroll interface system. Colorado Management Information System The State's data and information system will be expanded and included in the Colorado Management Information System (CMIS) currently being developed and implemented in phases. When completed, CMIS will integrate the Department of Personnel data with those for the Department 17Interview with Personnel Data System Manager, Personnel Records, 18colorado Department of Personnel (July, 1980). Agency and Planning Document, Colorado Department of Personnel (July 1980 through July 1981), pp. 2-5. -326-

PAGE 365

of Administration, Divisions of Payroll and Accounting; the Office of State Planning and Budgeting; and the Treasury Department. The f irst phases of developing CMIS began in 1978 and the final phase is projected for completion by the latter part of 1984. The initial stage of implementation currently underway is to interface personnel records with the data base system which is known as the Personnel Data System (PDS) • 19 The Department of Personnel does serve as the central record repository and clearinghouse of all personnel activities concerning the classified work force which consists of approximately 26,000 employees. The remainder of exempt or non-classified state employees (approximately 25,000) may be recorded in the PDS as a service to state agencies. "Although the Personnel Data System (a computerized personnel reporting and record keeping system) has in the past been used primarily by the classified system, there is considerable pressure at present to require it to report all the employees of the state to a central management information system ... zo According to the Personnel Data System 'Hanager, planning for the PDS began about two years ago. This data base, primarily concerned with tracking the employment history of all state employees, began about two years ago. When completed in January or Feburary of 1981, it will have approximately 200 core data elements. These core elements are listed in Table 8-2. It is projected that the size and number of the data (July 1980 through July 1981), p. 1. -327-(July, 1980). Planning Docu ment

PAGE 366

elements will be expanded three times by 1983.21 Immediate application of the data bank is to interface records with payroll data and integrate personnel records to the data base system. Integrating the application and examination scoring, adding non-classified employee records, tracking letters by subject and print, tracking the appeals system, implementing time and project accounting, and interfacing personnel records with the examination systems are projected activities by July 1981. Establishing a skills and experience data bank, establishing a task analysis data bank for classification, establishing a training data bank, interfacing personnel records with accounting, developing an examination item data bank, and interfacing employee skills with experience and training are to be completed by July 1984. The following Department of Personnel five-year plan for the CMIS further elaborates on implementing these activities. However, the achievement of implementing the CMIS depends on the support and availability of necessary staff and financial resources which have been lacking in the past as pointed out by the 1968 Report by the Governor's Efficiency and Economy Committee. Analysis of Colorado's Personnel Planning System Overall, the Department of Personnel lacks an effective planning process especially concerning human resources. The current and even projected system tends to be more of a record system than a valuable management tool for improving state efficiency and effectiveness. The Executive Branch overall has an extremely rudimentary planning system, although recent efforts have been made by 21rnterview with Personnel Data System Manager (July, 1980). -328-

PAGE 367

the Governor's office to involve citizen groups in future studies for the Front Range and some other longer range planning issues. Another committee, appointed by the Governor, has made projections of long-range public facilities needs assisted by the Office of State Planning and Budgeting but human resource planning remains neglected. The Department of Personnel does not have an adequate statistical data base which can serve for planning and analysis purposes. It has no organized, interactive process for working with operating agencies on long-term human resource planning which is the most vital step for effective personnel policy development. Elements of an Effective Human Resource Planning System While it is widely recognized in public personnel administration literature that planning and analysis are essential to an effective personnel system, it is not easy to find well-developed systems for this purpose in governments. Drawing on the literature and practical experience, the following elements are suggested as being essential parts of a well-developed human resource planning system for the Colorado Department of Personne1.22 1. Personnel planning should be carried out for long range, intermediate, and short range time frames. Significant changes in the composition of the work force and the retirement systems are clearly multi-year issues. Operational planning may be comparatively short range. 22u.s. Civil Service Commission, Bureau of Policy and Standards, Planning Your Staff Needs, (Washington, D.C.: Government Printing Office, 1977), U.S. General Accounting Office, Handbook for Government Workforce Requirements (Washington, D.C.: General Accounting Office, 1980). Municipal Manpower Commission, Governmental Manpower for Today's Cities (New York: McGraw Hill Book Company, 1962); -329-

PAGE 368

2. The planning staff should have the capability of (a) analyzing and forecasting future needs for various kinds of employees' skills and abilities, taking into account the changing missions of the government and the nature of its problems; (b) preparing an analytic inventory of the State's existing work force in considerable detail; (c) projecting present work force resources into the future and comparing them with future needs in specific terms; and (d) planning necessary programs, such as revisions in the classification structure, changes in the work force mix, recruitment, selection, and training, which are required to meet future human resource needs. 3. The key essential for a good planning and analysis program is a computerized data base containing considerable detail on the characteristics of the government's total work force, by class, by agency, and for the government overall. 4. There should also be a well-organized, institutional process, paralleling the budget process, in which the Department of Personnel obtains data from agencies and meets and works with agencies annually to review their personnel problems, needs, and plans in the light of their changing missions and programs and in light of the analysis done by the Department of Personnel. 5. The Department of Personnel should produce annually a long range State Personnel Management Report containing plans and assessments based on the data obtained from the agencies and from the budgetary process. This report should be submitted by the Governor to the General Assembly as a counterpart to the annual budget document in order to give the Joint Budget Committee and other State legislative committees an overall view of the State's personnel policies, programs, and funding / -330-

PAGE 369

needs, both short and long range. This is important because for most State agencies personnel costs are the largest element in the budget. 6. The Department of Personnel should have an adequate, professionally trained planning and analysis staff which builds the data base system, operates the interagency planning process, prepares analyses and studies, and assists in the preparation of the annual State Personnel Management Report. Clearly, additional funds for the Department of Personnel will be needed to carry out this vital aspect of the proposed program. Key Issues Inadequate Human Resource Planning Although the State has recognized the need for the Department of Personnel to be responsible for program and policy planning concerning human resources, as recommended by the Governor's Efficiency and Economy Committee in 1968, the CMIS and five-year plan lacks a comprehensive and integrated long and short range human resource plan and an adequate planning component. Overall the scope of the data base, current and projected, will be used primarily for collecting routine data concerning pay, employment status, demographic information, employment history and position control information. The key data for implementing human resource planning such as skill and experience data bank, training data bank and interface skill, and experience and training data bank will not be collected until approximately 1984. -331-

PAGE 370

The most important internal data for establishing a human resource planning system includes:23 1. Studies of trends affecting the State government and its personnel needs. 2. Staffing requirements by agency and function, covering needed skills and number of employees. 3. Information regarding internal job vacancies such as retirements, resignations, transfers, promotions, dismissals, and leaves. 4. Skill requirements of any given technology. 5. Data on planning and forecasts relating to finances, facilities, and services. 6. Profile of employee's past and present work experience, specific skills and education, and individual career plans. External data needed for human resource planning consists of: 1. Economic and socio-economic analyses and projection for the same as they affect State government. 2. Area wage rates, future projections and economic forecasts. 3. Census data of population by broad occupational groups and educational background. 4. Rate of growth or decline of major occupational groups. 5. Unemployment statistics. 6. Mobility patterns, occupationally and geographically. Although the State has already to a modest extent incorporated most of the external data presented in this model, the majority of the 23Elmer H. Burack and Thomas G. Gutteridege, "Institutional Manpower Planning: Rhetoric vs. Reality," California Review (Spring 1978), p. 14, and Wendell L. French, The Personnel Management Process (Boston, Massachusetts: Houghton Mifflin Company, 1978), pp. 200-204. -332-

PAGE 371

internal data is currently lacking and not formalized in CMIS or PDS. In addition, the CMIS does not contain any plan for short and long range human resource planning by individual agencies with final coordination by the Department of Personnel. The Department of Personnel should solicit projected future needs from agencies and relate these needs to probable rate of turnover. Personnel should plan for promotions at an overall organizational level by identifying future openings in agencies. This type of planning affects employee training and development programs. However, this type of formalized and integrated planning needs support and direction from top State management. According to the Personnel Data System Manager responsible for designing the CMIS, its greatest shortcoming is the lack of an agreed upon formalized plan. He believes that the current system is extremely fragmented with little centralization of information. In addition, he points out that the current system generates few management summary reports of personnel activity unless specifically requested by agency management. Recommendation 8-1: The Governor should assign the overall responsibility for human resource planning'to the Department of Personnel and provide for integration of personnel planning with overall State agency program planning. A formalized and comprehensive human resource plan should be developed by the Personnel Director embodying the elements described earlier in the effective Human Resource Planning System. He should be advised by a committee consisting of representatives from the larger State agencies and from the State Office of Budgeting and Planning. -33}-

PAGE 372

This committee should review the five-year plan for CMIS to include internal and external elements necessary to establish a systematic human resource plan containing both long and short range projections. These projections should be closely coordinated with recruitment to insure continuous and proper staffing. The results of this institutional planning process should be incorporated in the annual State Personnel Management Report which the Governor submits to the General Assembly. Failure to Plan Ahead for Growth and Change The State personnel system has no organized planning and analysis ability to keep account of (a) how rapidly changing economic and social conditions in Colorado are affecting the missions of the government; (b) how changes in those missions and programs affect personnel requirements with respect to new occupational specialities and higher level skills changing the numbers of staff in various occupations and agencies; (c) how this should affect the personnel operations of the Department of Personnel and operating agencies. Futures analysis and strategic planning are essential in the present growth phase in Colorado if the State government is to be prepared to discharge the tasks which rapid change is thrusting upon the government. Recommendation 8-2: The State government needs futures-oriented overall planning capability--including strategic planning capability in the State personnel field. It needs to consider and determine what kinds of specialists are needed in agencies to address new technical and administrative tasks and produce more effectively with due regard to the values of the State's people. -334-

PAGE 373

Lack of Coordination Between Budgeting and Human Resource Planning Many State managers have complained that budgetary process makes no allowance for long-range planning and only allows agencies to perform some type of short-range planning. In fact, they felt that when long-range planning was attempted, the budgetary process neutralized this effort. More specifically in 1979 ten mid-level managers were interviewed from the State Department of Personnel, Division of Highways, Department of Labor and Employment, Department of Revenue, Division of Criminal Justice, Division of Mental Health, and the State Planning and Budget Office. All managers interviewed had the responsibility for human resource planning, training, or evaluation. Not one of the managers interviewed offered any positive expectations of improvement in the human resource planning activity in their respective agencies or in the State as a whole. The standard response reason for this feeling was that the budgetary process was a year-by-year exercise which neither recognized, encouraged, nor tolerated long-range human resource planning.2 4 The Joint Budget Committee (JBC) is the de facto budgetary authority in the State. It determines and sets the personnel ceilings of all State agencies in terms of full-time equivalents (FTEs). The JBC also appropriates funding for each State agency. The JBC can force an agency to stay below its FTE ceiling by merely not appropriating enough funding. This results in positions remaining vacant. The JBC frequently cuts these vacant positions the next fiscal year since the agency has managed without filling them. Agencies then have a difficult 24Frank Macolini and Ali Massoud-Ansari, Planning for Meeting State Manpower Needs (1979), student paper and study. -335-

PAGE 374

time justifying these positions the next fiscal year. Managers interviewed felt that this seesaw process all but destroys effective human resource planning and causes a serious morale problem.25 The representative from the Department of Revenue stated that this agency attempted a two-year human resource plan. However, changes imposed by the JBC in the form of FTE cuts and operating priorities destroyed this plan, making it merely a reactive process. This agency felt that human resource planning can only be short term and reactive to the budgetary process rather than the budgetary process being reactive to planning. The Division of Criminal Justice complained that their human resource planning is done on a short-range basis because of the budgetary process whereby annual personnel ceilings are set by the JBC. Even when their agency submits a long-range comprehensive human resource plan to qualify for LEAA funding, the plan is done on a yearly basis to correspond and conform to the State budget. This representative felt that the JBC was extremely conservative and consistently cut FTEs for each State agency regardless of agency goals and objectives and corresponding FTE justifications. The representative from the State Planning and Budget Office stated that human resource planning was a year-to-year process. He felt there was a dichotomy of planning at the State level, which like the budgetary process, was divided between the Executive Office and the Legislature. "The planning done by State agencies is short term in nature because it is dependent upon the yearly appropriations of the 25Ibid., paper and study. -336-

PAGE 375

Legislature which is more control conscious than planning oriented in its budget philosophy and, therefore, restricts its planning to yearly budget cycles."26 He felt that the JBC is not supportive of personnel or staff development in State agencies and there are no executive development plans being considered at the present time. The Personnel Data System Manager also concurred with these agency representatives. He stated that given the present lack of enthusiasm on the part of the legislative budgeting process for long-range planning, there is little interest on the part of executive directors and agency managers to utilize human resource planning (both short and long range) even if it was available. Recommendation 8-3: The Colorado General Assembly and particularly the JBC should recognize, encourage, and support short and long range human resource needs assessment, goal setting, program planning, and related human resource and performance analysis. Adequate funds should be appropriated for these functions. Plans should be made to incorporate a State Personnel Management Report into the State annual budgetary review process with participation of the Office of State Planning and Budgeting leading the overall process and the Department of Personnel should lead in the human resource phase. Lack of Integration of Human Resource Planning \Jith Overall State Management Organized, periodic, institutional processes are the key to improvement of governmental plans and the administration. Not only is 26rnterview with Personnel Data System Manager, Colorado Department of Personnel (July, 1980). -337-

PAGE 376

there evidence to indicate that State agencies perform little if any human resource planning, but also the Department of Personnel is not properly utilized in leading and coordinating personnel planning government-wide system. The Department of Personnel should be a key resource agency in the budgetary process with each State agency for the purpose of discussing personnel policy goals and objectives, staffing requirements, patterns, classifications, salaries, and new programs as well as reductions in staff. However, the Department of Personnel is rarely contacted by State agencies and asked to participate and advise in these decisions. Again, agencies are not encouraged to engage in this type of human resource planning, so it is seldom done especially when it conflicts with the current budgetary process. Recommendation 8-4: Top State administration should encourage and support human resource planning to be performed by each agency with proper coordination with the Department of Personnel as a management resource. The Governor should order such a planning process to be created and delegate the appropriate responsibilities to the Office of State Planning and Budgeting (OSPB) and the Department of Personnel with the specific objective of preparing an annual review of the State government's personnel needs, requirements, status, and future goals, plans, and programs. Personnel for the OSPB planning function will have to be increased to execute the planning functions. Improve the Data Base for the Personnel System The Department of Personnel, assisted by the Department of Administration in 1978, has plans for an improved computerized management information system and an enlarged data base system for the -338-

PAGE 377

State Personnel System. The accomplishment of this goal is questionable because of personnel and stringencies. Recommendation 8-5: The Governor and the General Assembly should expedite the development of a personnel management system and a personnel data system and should provide the additional personnel and funds which the Department of Personnel needs to carry out this program expeditiously. An appropriate planning and analysis staff composed of experienced and well-trained professionals should be created in the Department of Personnel as part of this effort. -339-

PAGE 378

Introduction CHAPTER IX CLASSIFICATION Classification is the foundation upon which a personnel system is based. A classification system is the process whereby positions with duties and responsibilities of a similar kind and level are grouped into classes and form the basis for making employment and compensation decisions. A classification system establishes the structure for positions and sets the guidelines for required qualifications in respect to education, experience, knowledge, and abilities necessary to perform the duties and responsibilities of every classified position. It provides the focus upon which recruitment efforts are based in order to attract the most highly qualified applicants. Position descriptions provide the basis for constructing examinations used in the selection process. Examinations are developed from the description of duties and responsibilities of the class as well as from the statements of required knowledge, skills, and abilities necessary to perform such jobs. The classification system is the key element used in determining compensation and in constructing the pay plan to insure that employees performing similar or identical work are paid the same rate. The linking philosophy between classification and compensation systems is "equal pay for equal work." A classification system also affects equal employment opportunity and affirmative action goals by specifying the minimum years of -340-

PAGE 379

education and experience required for each position. A classification system defines the lines of promotion, provides career ladders, and provides standards against which employee performance can be measured. It also provides vital information from which training programs are developed to help employees become more effective and efficient through increased productivity. Lastly, classification systems delineate authority and supervisory responsibility by establishing chains of command within the organization. A classification system is in effect the organization's position inventory. Job classifications may be quantified based on factor comparisons or rankings or they may be qualitatively based on job rankings or position classifications, the latter being the most widely used format. Background History The development of classification was an integral part of the American civil service reform movement " ••• in reaction to the excesses of the spoils system and the gross pay inequities that were rampant under it • • • • The first application of the position classification principle was in 1909 in the Chicago Civil Service."1 Later in that same year, Illinois was the first state to implement 2 a position.classification system. Within the next two decades, 1Daniel F. Halloran, "Why Position Classification?" Public Personnel Review, Vol. 8, No. 2 (April 1976), p. 89. 2Leonard D. White, Trends in Public Administration (New York: McGraw-Hill Book Company,JL933), pp. 8-9. -841-

PAGE 380

"position classification systems were implemented by many of the largest state and local jurisdictions and certainly by all of the progressive ones."3 In 1917, Congress authorized its first large-scale salary survey. The Bureau of Efficiency was requested to investigate the compensation rates of private industry and report back on the problems of pay and position classification within a year. The report was never completed because of World War I.4 The principles of position classification that constitute the foundation of most personnel systems in government were promulgated by the 1919 Congressional Joint Commission on Reclassification of Salaries. The Commission's 1920 Report recommended that:5 1. Positions and not individuals should be classified. 2. The duties and responsibilities pertaining to a position constitute the outstanding characteristics that distinguish it from, or mark its similarity to, other positions. 3. Qualifications in respect to education, experience, knowledge, and skill necessary for the performance of certain duties are determined by the nature of those duties. (Therefore, the qualifications for a position are an important factor in the determination of the classification of a position.) 3Jay M. Shafritz, Position Classification: Analysis for the Public Service (New York: Praeger Publishers, 1973), p. 16. 4-Ibid., P• 16. 5Jay M. Shafritz, Dictionary of Personnel Management and Labor Relations (Oak Park, IL: Moore Publishing Company, Inc., 1980), P• 267. -342-

PAGE 381

4. The individual characteristics of an employee occupying a position should have no bearing on the classification of the position. 5. Persons holding positions in the same class should be considered equally qualified for any other position in that class. The report found that, "Equal pay for equal work as a standard for employment does not prevail in the U. S. Civil Service •••• Statistics compiled by the Commission show that the Government frequently pays very much more to some employees than to others for the same work."6 The commission maintained that "it was the lack of a comprehensive position classification plan that caused so many inequities in pay, morale, turnover, and inefficiency."7 "While Chicago apparently deserves substantial recognition for its early undertaking of position classification, the emergence of this idea, however, stemmed from several different sources."8 One source was the scientific management school and Taylorism, both known for some of the most significant research conducted on job design. An outgrowth of job design was classifying like positions into groups. E.O. Griffenhagen, a private consultant located in Chicago, worked with private corporations in classifying positions. He began working with the Commonwealth Edison Company in Chicago and went on to aid banks, 6u. S. Congress, House, Report of the Congressional Joint Commission on Reclassification of Salaries, 66th Cong., 2d Session, House Document 686 (March 12, 1920), p. 32. 7shafritz, Position Classification: A Behavioral Analysis for the Personnel Systems (Baltimore, Maryland: University Park Press, 1979), p. 53. -343-

PAGE 382

insurance companies, and other firms.9 The 1939 Dictionary of Occupational Titles (DOT) was also a very influential private sector force for developing classification systems that related positions to one another. The DOT contains information about job titles, job descriptions, examples of work performed, job requirements, guides for matching applicants with requirements, guides for matching training with methods of entry, and job classifications. The DOT has been revised several times (1949 and 1965) and the current (4th edition, 1977) represents the most comprehensive compilation of employment standards and categories in use throughout the United States in both the public and private sector.10 Almost all classification procedures previously in practice were catalogued and popularized in 1941 by a landmark study sponsored by the Civil Service Assembly--the former name of the Public Personnel Association (now called International Personnel Hanagement Association). Most of the current classification literature in public administration is based on the 1941 report by the Committee on Position Classification and Pay Plans in the Public Service of the Civil Service Assembly of the United States and Canada. "This report, Position-Classification in the Public Service, is commonly referred to as the Baruch report after the chairman of the committee, Ismar Baruch."11 He is considered the father of traditional classification methods. Baruch wrote that: "Public 9E.O. Griffenhagen, "Job Analysis for Position Classification," in W.J. Donald, ed., Handbook of Business Administration (New York: Book Compnay, 1931), pp. 1135-1144. Winston W. Crouch, ed., Local Government Personnel Administration, (Washington, D.C.: International City Management Association, 1976), p. 71. 11shafritz, Position Classification, p. 4. -344-

PAGE 383

personnel policies and transactions affecting positions and employees should be supportable by facts and in the light of broad considerations applicable to the service as a whole. Further, considerations of fairness and equity require uniform action under like circumstances in the management of public personnel affairs, particularly in the establishments of pay rates."12 At the federal level, position classification was launched by the Classification Act of 1923 which applied only to workers in Washington, D.C. According to the U. S. Civil Service Commission, the primary objectives of the 1923 Act were to assure that:13 1. Pay shall be based on the principle of equal pay for substantially equal work. 2. Differences in pay shall be in proportion to substantial differences in difficulty, responsibility, and qualification requirements of the work performed and to contributions to efficiency and economy. 3. The position classification plan should facilitate all phases of personnel administration. The Ramspeck Act of 1940 as well as some earlier legislation extended coverage to federal field personnel, and the Classification Act of 1949 replaced the 1923 legislation. In 1970, Congress passed the Job Evaluation Policy Act, which mandated a two-year study of federal classification practices. "At the state level, as of the early 1970s, all but two states used some form of position classification for at least part of their I 12rsmar Baruch, "Basic Aspects of Position Classification," Public Personnel Review, Vol. 1 (October 1940), p. 1. 13finited States Civil Service Commission, "Structure of the Federal Position Plan," Classification Principles and Policies, Personnel Management Series, No. 16 (Washington, D.C.: U. S. Government Printing Office, 1963), p. 13. -345-

PAGE 384

staffs.14 State and local jurisdictions have modeled their classification systems on the federal classification plan. Over the years, classification has been regarded as a welcome relief from the spoils system because, "It gave management an orderly administrative plan for the utilization of personnel. To employees it assured equal pay for equal work • • • (and) because of its impersonal approach to salary it has an aura of democratic fairness about it which strongly appealed to employees who had become accustomed to seeing favoritism. .. 15 Purpose "Reduced to its simplest terms, classification of positions means the process of finding out, by obtaining the facts and analyzing them, what different kinds or "classes" of positions, calling for different treatment in personnel processes, there are in the service; it further includes making a systematic record of the classes found and of the particular positions found to be of each class."16 "The duties and responsibilities of the positions are the basis upon which classes are determined and the individual positions assigned or 'allocated' to their appropriate classes."1 7 Classification systems are the foundation of any personnel system and serve the following purposes: 14 Lee, p. 56. 15Holloran, p. 89. 16Griffenhagen & Associates, "Report on Classification and Compensation of Positions in the Service of the Commonwealth of Virginia" (Richmond, Virginia: 1937), p. 5. 17rsmar Baruch, Position-Classification in the Public Service, Public Personnel Association (Chicago, Service Assembly of the United States and Canada, 1964), p. 3. -346-

PAGE 385

1. Utilizing an impartial and scientific approach which safeguards against favoritism and providing procedures for equitable treatment of personnel. 2. Guaranteeing equal pay for equal work. 3. Bringing order to the recruiting and examining process by eliminating inconsistencies. 4. Defining lines of authority and supervision. 5. Providing standards against which employee performance can be measured. 6. Contributing to the development and conduct of training and human resource development programs. Concept of Job Classification Classification terminology as defined by Baruch include the concepts of "position", "class", and "classification." These terms have become enshrined in hundreds of texts and publications as the fundamental vocabulary in the literature of position classification. Baruch defined the elements of classification as follows:18 Position. A 'position' is a group of current duties and responsibilities, assigned or delegated by competent authority, requiring the full-time or part-time employment of one person. Class. The term "class" means a group of positions sufficiently similar in respect to the duties and responsibilities, and authority thereof, that the same descriptive title may be used with clarity to designate each position designated to the class, that the same requirements as to education, experience, capacity, knowledge, -proficiency, ability, and other qualifications should be required of the incumbents, that the same tests of fitness may be used to choose qualified employees and that the same schedule of compensation can be made to apply with equity 18Baruch, "Basic Aspects of Position Classification," pp . 258-259. -347-

PAGE 386

under the same or substantially the same employment conditions. Classification. It is the decision whether or not positions are in fact 'sufficiently similar' that constitutes the essence of classification." Classification Development Classification Criticisms Historically, the purpose of classification systems was to eliminate patronage, to guarantee equal treatment of applicants for public service and of public employees, and to apply the logic of scientific management to _public sector employment. Critics feel that these developmental emphases have led to at least two unfortunate consequences. The first is what Wallace Sayre calls the "triumph of technique over purpose. The second criticism is that classification focuses on the position nearly to the exclusion of the person filling the position. Classification Complexity. Traditionally, classification systems have been characterized by complex methodology. According to Sayre, classification " ••• has tended to become characterized more by procedure, rule, and technique than by purpose or results. In the public field especially, quantitative devices have overshadowed qualitative. Standardization and uniformity have been enshrined as major -virtues. Universal (and therefore arbitrary) methods have been preferred to experiment and variety. From the perspective of the clientele (the public, the manager, and the employees), these traits increasingly connote rigidity, bureaucracy, institutionalism -and they are now beginning to evoke a reciprocal system of formal and informal -348-

PAGE 387

evasion."19 Jay Shafritz's criticism is that the principles and practices of position classification generally used in the public service today are throwbacks to the heyday of the scientific-management movement, never adapting to the modern currents of management thought that began in the 1930s. He further states that, "While position classifications are almost universally recognized as essential for the administration of a public personnel program, they are frequently denounced as unreasonable constraints on top management, as sappers of employee morale, and for being little more than polite fictions in substance."20 Focus on Position -Not Person. In addition to its bureaucratic complexity and rigidity, classification has been characterized by its focus on positions rather than individuals. One result of this focus has been the depersonalization of the very processes which classification has been intended to facilitate on behalf of the public employee such as recruitment, selection, testing, promotion, and pay. Classification theorists have succeeded in abstracting a process which achieves the objectivity required to support personal actions with facts and logic in order to achieve fairness and equity and competence through uniform action. Classification establishes a structure and corresponding standards and criteria so rigid in practice to be impractical. Reactions to Earlier Criticisms. These criticisms have caused public administrators to pursue other alternatives such as reallocation 19wallace S. Sayre, "The Triumph of Techniques Over Purpose," Public Administration Review, Vol. 8 (Spring, 1948), p. 135. 20shafritz, Position Classification, p. 3. -349-

PAGE 388

or decentralization to achieve desired ends. "Yet it is precisely because the pay plan blindly follows the classification plan that a tremendous amount of organizational effort goes into obtaining classification reallocations in order to raise the salaries of incumbents."21 This system of formal and informal evasion of the classification system is frequently used with regard to compensation and to a lesser extent with the related areas of evaluation and promotion. The tendency to reallocate positions upward is frequently referred to as "grade escalation" or "grade creep". Classifiers admit that although escalation and creeping may be a result of changing and expanding work assignments, much of it is unwarranted. Instead managers misuse the classification system to solve pay problems. Decentralizing the classification function in public personnel systems has also contributed to this problem. A recent survey of 283 federal officials conducted by the House Subcommittee on Position Classification of the Committee on Post Office and Civil Service quoted officials as saying that the classification system encourages exploitation by having a built-in incentive to exaggerate. "Many officials dismissed the use of classification as a management tool, feeling that the only function of classification in their organizations was as a basis for fixing pay."22 Classification Achievements As expressed earlier, many criticisms of classification relate to its complex and technical nature as well as to its broad application and 21Jay M. Shafritz, ed., The Public Personnel World: Readings on the Professional Practice (Chicago, Illinois: International Personnel in Government (New York: Marcel Dekker, Inc., 1978), p. 102 . -350-

PAGE 389

relation to other personnel functions. Although some of these criticisms may be valid, they have not addressed the merits of classification which brings order and equality to the personnel system. For example, classification provides the foundation for eliminating discrimination based on race, color, creed, national origin, sex, or handicap through its class specifications based on job analysis. By taking into account the work performed and not the person doing the work, classification plans bring objectivity to the personnel system. In addition, it is the basis for establishing like pay for like work based on the duties of the class and adhering to the requirements of the Equal Pay Act. This act prohibits employers from paying, " ••• at a rate less than the rate at which he pays the wages to employees of the opposite sex in such establishment for equal work on jobs, the performance of which, requires equal skill, effort and responsibility •• .. 23 Last but not least, classification forms the framework for performing the other personnel functions of recruitment, selection, performance evaluation, compensation, discipline, appeals and grievances, promotion, transfer, and other types of employee mobility. All these functions are based on and related to the class specification. Classification Challenges There are many challenges to classification plans which further complicate its mission. For example, the equal pay/comparable worth debate calls for much broader classes than the current practice. On the 23Equal Pay Act, 29 United States Code, Section 2006(b)(l). -351-

PAGE 390

other hand, test validation requirements call for narrow classes. Both concepts are related to equal employment and both are mandatory for state and local governments. As a result, classification specialists have to strike a balance between incompatible requirements. Decentralization Classification has generally been regarded as so important in preserving the merit system that for many years it was administered on the federal level only by central administrative authorities such as the earlier Civil Service Commission. However, that was changed in 1949 when, "The authority from taking position classification actions, without prior approval for the Commission, has been decentralized and d i h h . ..24 veste w t t e agenc1es. The reasons for decentralizing classification have been to:25 1. Save time. 2. Reduce paperwork. 3. Help agencies focus on their responsibility for proper classifications. 4. Deemphasize the "policeman" role of central personnel. 5. Facilitate joint development of classification allocation standards. 6. Facilitate participative management. 7. Achieve greater acceptance of classification standards. 24Bernard H. Baum, "Getting Caught in the Middle on Classification Decisions," in Decentralization in (Englewood, New Jersey: Prentice Hall, Inc.), p. 104. 25Permin R. Everett and Wade J. Williams, "Line Management's Participation in Classification Decisions," Public Personnel Review, Vol. 24, No. 1 (January 1963), pp. 30-36. -352-

PAGE 391

8. Help supervisors better manage their staffs. 9. Allow classification analysts -to spend more time on developing classification standards rather than making individual classification decisions. However, there is no evidence that decentralization has accomplished any of these claims. Instead, evaluations produce mixed reviews of the accuracy and consistency achieved by a decentralization plan. One report from California's 10-year old decentralized classification program indicates that today 81% of the state's classification decisions are made without prior central review and that " ••• post-audit programs ••• (and) classification surveys ••• have not disclosed an increase in misclassified positions following inauguration of the (decentralized classification) program."2 6 However, another analysis of post-audits from a decentralized program showed that, " •• 16.0 percent of the actions taken by agencies were changed. " 27 after post-audit review and that 82% of these mis-classifications involved upward reassignment to grades higher than were appropriate. It is not clear whether these figures indicate that agencies cannot classify properly, or whether the classification standards are so complex and difficult to apply that they leave too much room for differences in judgment, or whether this is about an average number of mis-classifications.28 There seem to be no generally accepted classification standards against which to evaluate the relative and \-lilliams, p. 36. 28 Baum, p. 105. Ibid., p. 104. -353-

PAGE 392

efficiency of a decentralized classification program. The earlier U. S. Civil Service Commission had complained that, "decentralization of authority makes it possible for the agency officials to relegate (classification) ••• to such a role as the agency head dictates."29 This in turn allows decentralization of authority to circumvent the merit system.3 From this perspective, decentralization may be described as a technique of formal evasion of classification consistency required by a merit system. The disadvantages of decentralized classification programs are that: 1. Decisions can be made without much forethought and without taking the necessary time required for rigorous application of classification standards. 2. Local agency conditions and political situations can tend to have more influence than under established classification standards. 3. Special interests can take advantage of the flexibility and discretion allowed agencies and preclude the consistent application of standard classification techniques and specifications. 4. Reallocation can be misused as a technique for true promotion. 5. The post-auditing system sometimes has little affect in reversing mis-classification decisions. 29 30Ibid., p. 111. Baum, p. 111. -354-

PAGE 393

Although these situations could also occur in a centralized classification system, they are more predominant in a decentralized system. Classification Methods The most widely used classification method is position classification which consists of examining work performed in various jobs and grouping similar jobs or positions into classes.31 Position classification allows for treating differently positions that diverge in skill requirements or level of responsibility. It facilitates testing, career development, and employee evaluation. It also advances the equity principle by ordering or ranking positions so employees are aware of career opportunities and career ladders. Development of a position classification plan begins with developing criteria for measuring work. Usually four to ten clusters of measures are used such as: difficulty of duties, supervisory responsibility, non-supervisory responsibility, requisite . . qualifications or subject matter, difficulty and complexity of duties, non-supervisory responsibilities, supervisory and administrative responsibilities, and qualification standards. The position classification plan is constructed on the basis of defined classes Qf positions and within each class specific criteria are applied. Then all positions are studied by means of a job analysis to determine the proper classification. Various techniques can be used for classifying positions. One widely used technique is a field audit. This is when an employee is observed at work for a period of time to 31 Lee, p . 52.

PAGE 394

determine what and how the work is being performed. Field audits, although useful, are expensive and cannot be applied to all positions. Another techniqu e relies on employee job descriptions and supervisory evaluations and job descriptions known as desk audits. A system often used to classify jobs assigns points to positions according to the work performed where the greater demands receive more points and a higher ranking classification. Since the art of classifying positions is so complex, any metho d used faces problems of deciding how many classification to establish, when and when not to create new classifications and job series, how often to obtain and update information on all positions, how to determine education and experience requirements to perform the job, and who should be responsible for final classification decisions. Future Trends Classification sysems have been fairly successful in preserving . t . . 1 32 equ1 y 1n mer1t personne systems. Classification systems e mphasize the facts and logic required to bring equity and fairness to public personnel management, with the purpose of preserving the merit syste m and insuring competence, efficiency, and effectiveness of government. In emphasizing the merit principles achieved through scientific management, classification has been characterized by rigidity and complex techniques that are closely interwoven with other functions o f personnel administration. In an attempt to be more effective, classification programs have been decentralized in many jurisdictions, 32Ibid. , pp. 105-lll.

PAGE 395

although problems of timeliness, accuracy, consistency, and equity still remain. There are indications of a trend to convert to a newer method of job evaluation called the point-rating or factor comparison or benchmark evaluation system of classification developed by Philip Oliver.33 Under Public Law 91-216 a new job evaluation system for federal government employees was implemented, known as the Job Evaluation Policy Act of 1970. It authorized the U. S. Civil Service Commission to establish the Job Evaluation and Pay Review Task Force. The final report released in January 1972 is popularly known as the Oliver Report after the task force director, Philip Oliver. This report recommended a new comprehensive job evaluation and pay plan for the federal government. The report found:34 1. A multiplicity of uncoordinated job evaluation and pay systems results in serious inconsistencies and inequities in pay and other personnel practices for Federal employees. 2. Efforts have not been made by Congress or the Executive Branch to bring all Federal agencies under a single system. 3. The Federal government's classification and ranking systems are obsolete. 33Ester C. Lawton and Harold Suskin, Elements of Position Classification in Local Government (Chicago,:fllinois: International 34Personnel Management Association, 1976), pp. 1-2. Report of the Job Evaluation and Task Force to the United State Civil Service Commission, 92nd Congress, 2nd S .ession (January 12, 1972), House Committee Print No. 16, II, p. 7. -357-

PAGE 396

4. Line management is not involved sufficiently in the job evaluation process. 5. Job evaluation is not used as a broad-gauged management tool. As a result of this study, "the factor ranking/benchmark/guide chart system replaced the earlier classification system used in the federal government for over fifty years."35 This system is also being used in some state and local governments. Oliver was instrumental in assisting the State of Indiana in adopting this new system of job evaluation. He feels this system will address the following classification problems: "difficulties in maintaining job distinctions based on the existing evaluation system; the rigidity of the old class specification system not being responsive to the needs of expanding government; and interrelated problems such as qualification requirements and performance measurements causing problems f i . ..36 rom a management v ewpo1nt. Oliver went on to say that in Indiana the task force made the decision to completely replace the existing state classification and pay system with the factor ranking/benchmark/guide chart system. According to Oliver, "The methodology lends itself to adaptation by other public sector organizations and places Indiana in a leadership role among the states in this vital program of public sector employee administration."37 Washington and other states have converted to this system for their top 35Philip M. Oliver, "Modernizing a State Evaluation and Pay Plan," 36Public Personnel Management, No. 5 (May-June, 1976). 37oliver, p. 2. Oliver, p. 6. -358-

PAGE 397

executives.38 In Colorado, the City of Aurora used this system and after consultation with Oliver, the State is beginning to implement this system for top level executives.39 Classification Principles The following key principles should be utilized in establishing a classification plan that attains and sustains the principles of equity and competence inherent in the government's merit system philosophy. Key Principle: The classification system should form the foundation of public personnel merit systems. Therefore, the classification system should relate to the following personnel functions: --Human resources planning. --Recruitment. --Selection. --Equal employment opportunity and affirmative action program. --Performance evaluation. --Training and human resource development. --Employee counseling. --compensation. --Retirement. --Appeals and grievances. 38Paul Albright, ed., The States 1976-77, Vol. XXI, (Lexington, Ky.: The Council of State Governments, 1976), p. 510. 39Interview with Colorado State Classification Supervisor, De.partment of Personnel (April, 1980). -359-

PAGE 398

--Labor and employee relations. --Separations. Key Principle: Classification systems should establish a systematic structure for position ranking of generic positions which properly relates the duties and responsibilities of each class to rates of compensation which attract and retain competent personnel on a career basis. Therefore the classification plan should consist of: --class specifications that are established and periodically updated through job analysis. --class specifications that are sufficiently broad to permit employee to use the range of their skills and permit managers flexibility in utilizing staff according to changing work loads and agency objectives. --class series that are distinguished in terms of generic duties and responsibilities and without unnecessary differentiation of positions to insulate agencies from one another. --Positions that are grouped into broad occupational categories and then subdivided according to levels of difficulty, responsibility, and complexity. --Formal classification plans that include individual position descriptions periodically updated to identify job changes. --classifications are flexible enough to allow for job redesign. --Positions that are objectively analyzed with the involvement of line management. --Positions that are uniformly classified among all agencies to insure equity. -360-

PAGE 399

Key Principle: Class specifications should set the minimum requirements of training, education, experience, skills, knowledge, abilities, and other qualifications necessary to enter each class. Class specifications should be developed in accordance with equal employment opportunity guidelines. Class specifications should insure that: --Minimum qualifications are realistic, adequate, and current. qualifications do not place an improper emphasis on credentials. qualifications allow for substitution of education and experience wherever appropriate. Key Principle: Classification systems should provide career ladders and promotional opportunities for all employees which apply across agency lines. These systems should: --Provide career ladders thus encouraging and providing for career development opportunities. --Provide for promotional opportunities as employees gain experience. --Enable and define lines of inter-agency promotion and transfer. Key Principle: Classification systems should be future oriented and provide job specifications and criteria for skilled and able people who meet the program and management needs in a changing and increasingly complex government. These systems should: --Facilitate, not stymie, management capacity to achieve public goals and objectives effectively, efficiently, and equitably. --Attract, encourage, and motivate career public service with personnel of the highest caliber. -361-

PAGE 400

Analytical Model Linkages As illustrated in the model matrix of Chapter IV, classification impacts or affects the following performance criteria for good government: effectiveness and efficiency, good organization, adequate resources, qualified human resources, high productivity and motivation, merit service, career development system, equal employment opportunity, social responsibility and equity, and accountability. Classification is the only personnel function that interacts with all the performance criteria for good government. Each performance criterion is discussed below. Effective and efficient government requires that government employ competent, capable, and highly skilled human resources. It is the function of the classification system to determine what kinds and levels of knowledge, skills, and abilities are needed to perform every job in the organization. Recruitment plans and selection techniques are then based on this key information which directly reflects on the quality of candidates hired by the organization. In addition, a good classification system is the bulwark of a strong merit service because it provides for attracting and retaining highly skilled and competent workers on a career basis. A classification system assures like pay for like work. It also provides career ladders for promotion within the government service, thus establishing a career development and progression system. Class indicate what type of training is required for jobs in the organization. This information is utilized by the training department so programs can be developed and offered -362-

PAGE 401

which encourage employees to update and increase their skills in order to meet their career development objectives. The classification system establishes the criteria and qualifications for appointment in the service through class specifications which helps the organization in selecting highly qualified applicants. Proper organizing involves the structuring of an organization so government can perform effectively and efficiently. The classification system refines the organizational structure and establishes job classes to fit that structure as outlined by management. The classification system should insure that employees are classified properly within the organizational structure which provides equity in the context of the merit system. Class specifications should also be flexible to allow management to institute changes in job responsibilities and reassignment of job duties in a more efficient manner. To provide all these personnel services, the classification section should be adequately staffed to develop innovative classification techniques, to develop new job specifications as needed, to revise outdated job specifications, to audit positions as requested and needed, and to monitor job reassignment and organizational restructuring. A classification system can contribute to high productivity and motivation by insuring that employees are always properly classified throughout their careers with the organization. Mis-classifications can cause employee dissatisfaction and unrest. Job structuring and design performed by the classification section can provide for motivation, development, creativity, growth, and advancement. -363-

PAGE 402

Classification systems affect the organization's attainment of equal employment opportunity by establishing job specifications that require only the minimum qualifications necessary to perform job duties. This helps to insure that no artificial barriers exist when recruiting and selecting applicants for employment that might unintentionally discriminate against ethnic minorities, women, handicapped, or members from other disadvantaged groups. Job specifications based on management's needs can help the organization meet its social responsibility and social equity criteria by providing job opportunities for unskilled or low skilled applicants. Classification systems frequently establish classes for trainees and interns which can help the organization meet its social responsibility by providing employment opportunities and meeting its affirmative action goals. Lastly, the agency should be accountable for the classification decisions it makes. The classification system provides a mechanism for maintaining consistency throughout the organization which can insure that employees are properly classified through periodic reviews. Colorado Classification System Colorado Constitutional Provisions The Colorado Constitution specifies that, "Appointments and promotions • • • • shall be made according to merit and fitness to be determined by competitive tests of competence . . . . Persons in the personnel system ••• shall be graded and compensated according to standards of efficient service which shall be the same for all persons -364-

PAGE 403

having like duties."40 In addition, "The State personnel board shall adopt ••• rules concerning the standardization of positions, determination of grades of positions, standards of efficient and competent service, the conduct o f competitive examinations of competence, grievance procedures, appeals ••• hearings • The Constitution clearly calls for appointment according to merit and fitness, equitable assignment of pay grades based on established standards, and determination of position-pay relationships. It is actually the State statutes which define more clearly the important role that classification has in carrying out these constitutional directives. The Constitution addresses the desired results of merit, fitness, competence, efficiency, and equity. The inference of equity comes from the phrases "same for all persons having like duties," "competitive examinations," "grievance procedures," "appeals," and "hearings". The classification plan establishes a structure through which these constitutional goals can be met. Many personnel procedures (examination, selection, promotion, compensation, as well as classification) are implemented through this structure. Statutory Provisions The 1973 C.R.S. clearly spells out the purpose of the classification plan to meet these constitutional provisions: "In order to preserve the integrity of the merit system of employment and to insure that employees in the state personnel system are graded and compensated according to standards of efficient service, which shall be the same for all persons having 40colorado Constitution, XII, Section 13(1). 41Ibid. -365-

PAGE 404

like duties, the state personnel director, with the approval of the board, shall establish a classification plan under which all such employees shall be placed."42 The General Assembly of the State of Colorado then enacted these provisions in the State Personnel System Act and clearly stated the purpose of the classification plan to be: 1) to preserve the integrity of the merit system, and 2) to insure that employees are graded and compensated equitably and according to established standards. The statute goes on to outline the policies and procedures for its classification system. The Act specifically states: (3) Classification plan principles: 42 (a) The classification of positions shall be based on the principle that positions having comparable duties and responsibilities shall be grouped into classes subject to the same descriptive title, a definition of duties and responsibilities, and requirements for filling positions in the class. (b) The allocation of individual positions to a class shall be based on a clear and distinct evaluation of duties and responsibilities assigned by proper authority. Subject to the rules of the board, each position shall be allocated to a class by the state personnel director after considering the recommendations of the appointing authority of the appropriate principal department or division. (c) Classes of positions shall be grouped and related to occupation levels of work which can be clearly distinguished and logically related to a compensation plan. (d) The pay grade, salary rate, or salary range for each occupational level of classes shall be such as to reflect accurately and clearly the relative level of compensation of comparable employments in other places of public and private employment in appropriate competitive labor markets. (e) The classification plan shall be based on sound, systematic occupational analysis and position evaluation methods which provide for consistent occupational groupings of classes and uniform alignment of classes and salaries among the various C.R.S. 1973, Section 24-50-104. -366-

PAGE 405

departments, institutions, and agencies. (f) The state personnel director shall assign and may reassign classes of positions to grades, rates, or ranges in a pay plan, subject to the provisions of this article. (4) Revision and maintenance of classification plan: (a) The state personnel director shall revise the classification plan whenever conditions indicate that change is necessary. Such revision shall be made on the basis of evidence which clearly indicates the need for change. Such revision may consist of the addition, abolition, consolidation, division, or amendment of existing classes, occupational groupings, and level. (b) At the same time the state personnel director revises the classification plan, he shall assign the class to an appropriate pay grade, salary rate, or salary range •••• (d) The board shall provide by rule for review of such actions."43 This section of the State Personnel System Act specifies the principles, policies, and procedures required by statute to be applied to the classification system. These principles are elaborated into operational guidelines for classification by the Colorado State Personnel System Rules and Regulations, in Chapter 2, entitled Classification. Colorado State Personnel System Rules and Regulations The Rules and Regulations specify in reference to classification that, "The Director shall establish and maintain a position classification plan comprised of classes ••• (which) will be comprised of positions that have comparable duties and responsibilities."44 With the exclusion of those positions exempted from classification provisions by the constitution, there were in 1980 approximately 30,000 classified positions in state service grouped into Rules and Regulations of the Colorado State Personnel System (April 1980), Rule 2-1-1. -367-

PAGE 406

1,568 classes.45 The rules also provide definitions and procedures for class specifications, class titles, changes in class specifications, allocation, and reallocation of positions to classes, delegation of allocation authority from the Director to appointing authorities, the Director's right to review such decentralized classification actions, the compensation and administration of reallocated positions, notice of new or revised positions, multiple range classes, and types of positions. 46 Unique Characteristics of Colorado Classification System Several of these classification provisions warrant further elaboration. First, the use of the term "allocation" with regard to classification refers to "allocation" or assignment of positions to classes based on duties, responsibilities, knowledges, skills, abilities, and the level of difficulty of the position. Hence, allocating or reallocating a position to a class is basically classifying a position. This type of "classification allocation" should not be confused with the appointing authority's actions in allocating positions organizationally or budgetarily. The rules state that nothing in the classification plan must interfere with the appointing authority's right to assign duties and responsibilities to positions, which is an important distinction. Second, the responsibility for allocation of positions to classes may be delegated by the Personnel Director to appointing authorities. 45rnterview with Colorado State Classification Supervisor 2-1-11. -368-

PAGE 407

"All allocations and reallocations of positions to classes shall be the responsibility of the Director. The Director, in writing, may delegate to an appointing authority, within specific limitations, authority to allocate new positions and reallocate existing positions."47 This rule is the basis for decentralization of classification activity in Colorado. Such delegation has occurred, with the result that nearly two-thirds of State classification allocation decisions are now made by agency personnel rather than by the Classification Unit of the Personnel Department.48 A third provision in the Rules provides for a notice of new or revised positions. "When the appointing authority establishes a new position he shall submit to the Director a written notice that the position has been established; a written job description; and a request for proper classification when he has not been delegated the authority to allocate positions to existing classes."49 This provision makes it explicit, by omission, that when an appointing authority has been delegated the authority to allocate positions to existing classes, there is no requirement to submit to central personnel a request for proper classification. This rule is workable only if agency personnel units are fully trained to classify positions and if all classification decisions are reviewed by the central personnel department to maintain consistency throughout the State. 47Rules and Regulations of Colorado State Personnel System (April, 1980), Rule 2-1-5. 48rnterview with Colorado State Classification Supervisor 4 (December, 1979). 9Rules, 2-1-9. -369-

PAGE 408

A fourth provision of the Rules provides for multiple range classes. "A multiple range class identifies a wide range of duties and responsibilities grouped together into a single class which is assigned more than one salary range. The range assignment of an occupied position in such a class is intended to reflect the performance of an incumbent ••• with the assignment upward or downward dependent on the employee's ability to function atthe level defined under established guidelines."50 The Colorado Department of Personnel Classification Manual defines a multiple range class as " • a single class having more than ne salary range and adjustment from one range to another is based on departmental evaluation of an employee's level of functioning against predetermined standards. The ranges generally identify the entry level, working and developmental level, and the full operating and/or journey level of the class series. The tasks assigned may be the same from level to level but performance factors or the ability of the employee to take on the full assignment with limited supervision are h i i f h 1 . 1 .. 51 c aracter st cs o t e mu t1p e range concept. The class specifications for multiple range classes define the duties and responsibilities assigned to the full functioning level, and the subordinate levels are written to support a continuum of functioning within that broad assignment of duties.52 The concept of the multiple range class was first developed as part of the statewide (EMS!) classification study and was first introduced in March 1974. "The logic behind multiple range classes is 50rbid., 2-1-10. 51colorado Department of Personnel, Classification Manual, 198. 52 Ibid., p. 115. -370-

PAGE 409

to identify a class series in which job elements or tasks from one level to another are the same, but the differentiating factor is in the area of performance criteria or actual level of functioning on the job."53 However, "It was determined that the position-classifier was in no position to determine the 'functioning level' of employees ••• (and that) performance factors are best identified by the supervisor."54 Hence, Colorado Rules and Regulations states that "an occupied position in such a (multiple range) class may be reassigned (i.e., reclassified) upward or downward by the appointing authority or his designee at any time based on the recommendation of the supervisor in accordance with the guidelines."55 The multiple range class concept is a novel approach to making classification workable and responsive to administrative and managerial needs. At the same time it is fraught with peculiarities that can allow for inaccuracy and inconsistency in implementation. Classification Case Law The most important Colorado case law concerning the authority to classify positions was decided in Bloom, 1947. The Colorado Supreme Court found that the classification into grades shall be based on the nature of the duties. In addition, "Authority to fix compensation affords no control as to classification. Authority to classify all employment within the classified service is plainly and specifically vested by the constitutional Civil Service Amendment in the commission."56 The power of the Commissiort is now vested in the personnel board. 53Ibid. ; 4Ibid., p. 114-5. 5Rules, 2-1-10. 56vivian v. Bloom, 115 Colo. 579, 177 P. 2d 541 (1947). -371-

PAGE 410

The court went on to say that the General Assembly has no right to classify employees within the classified Civil Service and the right and duty to classify is vested exclusively in the Civil Service Commission. This decision goes on to link classification to compensation. "It is insistently urged that power to classify carries with it by necessary implication the power to fix compensation •••• The duties and responsibilities of the positions may be • the bases of classification • The differences in the responsibilities of two positions may be used as the basis for a distinction_ in class that may reflect a difference in compensation."57 The court further directed the Commission to standardize classification decisions. "This can only mean to set up standards by means of which classes and grades of employment can be distinguished; standards by which competitive tests can be prepared and graded; standards by which the fair and relative compensation for different classes and grades can be determined."58 This decision further emphasizes that classification is intricately linked with all other personnel functions. Colorado Organizational Classification Structure Personnel Director. The statutory authority to administer the classification system lies directly with the State Personnel Director. While this authority has been delegated to the Classification Unit of the Department of Personnel and to agency personnel units, the Director has the final authority on classification decisions, unless his decision is appealed to the State Personnel Board. 57 Ibid. 58Ibid. -372-

PAGE 411

Classification Unit. In order to comply with legislative mandates the State Personnel Director has created a Technical Services Section, located in the Classification Unit. This work unit is supervised by the State Classification Supervisor who is directly charged with the responsibility of establishing and maintaining a uniform classification system for all positions in the state service.59 Other Units within the Department of Personnel as 1979. In order to preserve the integrity of the merit system and to insure that employees are graded and compensated equitably and according to established standards of efficiency and effectiveness, the Classification Unit works closely with other Personnel Department work units. The Classification Unit constructs and revises all class specifications with direct input from three other units within the Technical Services Section. The Test Development and Research Unit makes recommendations on the appropriateness of the "knowledges, skills, and abilities" section of proposed class specifications and validating these elements through job analysis used for developing examination material and devices. The Examination Administration Unit reviews the "minimum qualifications for work" section of all proposed classes used in developing tests in the examination process. "The Compensation Unit, responsible for salaries and fringe benefits, reviews the salary and grade recommendations proposed for each class. This unit also conducts special salary reviews and surveys to validate the established salary relationships of classes ... 60 Manual, p. 12. Ibid., p. 11. -373-

PAGE 412

In order to insure impartial treatment of appeals and audits of classification decisions, the Post Audit and Appeals Unit is located outside the Technical Services Section. This unit is delegated the authority to review and resolve all appeals on classification decisions. "It is also responsible for post-auditing classification decisions delegated to agencies, and making recommendations regarding compliance or noncompliance of decentralized classification activities based on established classification standards. "61 State Personnel Board. The State Personnel Board does not have administrative responsibilities for classification. It does promulgate rules which regulate classification activities. It also serves as an apperrate body in reviewing classification decisions which have been appealed beyond the Personnel Director, exercising an important influence on the classification system. As adjudicator in the appeal process, the Personnel Board, through its hearing officers, makes the final decisions on all classification appeals. Through its hearing officers, "the Personnel Board has modified classification actions taken by the Classification Unit and the Personnel Director."62 and has developed an extensive 'classification jurisprudence" which has significant impact on the classification system. For example, through the appeals process the Board has overturned technical classification allocation recommendations for specific positions as well as changed the grade relationships established for a particular class series.63 61Ibid. 62Ibid., P• 9. 63Ibid., p. 9 and pp. 179-93. -374-

PAGE 413

Agency Personnel Units. Adding to the organizational complexity of the classification system are the many agency personnel units directly involved in making classification decisions. Decentralization of the State's classification activities from the Classification Unit to departmental and agency personnel units began in fiscal year 1976-77. Classification activities were first assigned to agencies with personnel units judged experienced and capable to handle the complex tasks and standards involved in classification. For three years, after some attempts at on-the-job training and a series of three-day seminars designed to train agency personnel in classification procedures, more and more of classification decisions were delegated to remote personnel units in departments and agencies. The net result has been that by April 1980 "there are some 60 to 65 personnel units spread over 19 State departments and their agencies, and many of these (remote personnel units) are involved in classification activities."64 In fact, the central Classification Unit is authorized to allocate positions to classes for only 9,453 of the 30,000 State classified positions.65 The Personnel Director monitors decentralized classification activities through the Post-Audit and Appeals Unit which makes recommendations regarding compliance or noncompliance based on established classification standards. Colorado Classification Procedures. Position classification consists of two basic steps: 1) analysis of the position, and 2) allocation of the position to a class based on that analysis. with Colorado Classification Supervisor 1979). Ibid., April, 1980. -375-

PAGE 414

1. Job analysis is performed by classifiers located either in the Classification Unit in central personnel or in the agencies' decentralized personnel units. To determine assigned duties and responsibilities of each position, the classifier reviews job descriptions prepared by the incumbent or by the supervisor of the vacant positions. Job descriptions must be authenticated by supervisory or administrative authorities. The classifier then conducts a "job audit" consisting of one or more interviews with the position incumbent or the position supervisor. By conducting a job audit, the classifier verifies through discussion and direct observation the nature of the work actually being performed in the position being 2. Allocation of positions to classes is the second step in the classification process. Allocation is made according to "basic allocation factors," which are those elements of the job description which indicate the kind and level of work. The kind of work is determined by examining the subject matter and functions of the position. Establishing the degree of difficulty and level of responsibility is more complex and involves examining the difficulty and complexities of the duties, responsibilities, education and experience, and qualifications. It is the similarity of basic allocation factors which determine whether different positions may be grouped into the same class. Therefore, it is critical that classification specialists be well trained and experienced to render proper classification decisions. Through these procedures--job analysis and allocation of positions to classes--the work of classification is carried out. These activities 66 Classification Manual, p. 25. -376-

PAGE 415

are performed by classification specialists in both the central Classification Unit and in agency personnel units. The role of the central Classification Unit is t wofold: 1) to conduct position reviews for those agencies not delegated this activity. (Tied in with this activity is training of personnel analysts in state agencies); and 2) to conduct occupational studies relating to the maintenance of the State classification plan. Through this second activity the Classification Unit must respond to all requests for creation or revision of class specifications. It also establishes "key classes" and makes ' recommendations for establishing the grade relationships between key classes and each class series."67 Multiple Range Classes. The multiple range class concept is an innovative approach which, coupled with decentralization, has been intended to make classification more responsive to agency needs. It restores some power ?f promotion to the supervisor. It reduces the time required for classification decisions because central review has been eliminated. It restores incentive by creating a type of "career ladder" with prompt pay increases commensurate with skill development. But, according to the State Classification Supervisor, "the implementation of the multiple range class concept was done with good intentions, including the intention to establish standards. But these standards have been internal to each agency, lacking external consistency across the state personnel system."68 The multiple range class concept may also be defeating rather than "preserving the merit principle." According to the State Classification 67Interview with Colorado Classification Supervisor (December, 1979). 68Ibid. -377-

PAGE 416

Supervisor, "the levels of performance are the key element, not the classification level. But agencies interpret it as the classification level that's important and they move underqualified personnel to new, higher classes, and they reclassify automatically, based on time, for example, after one year on the job."69 Under the implementation of the multiple range class concept, classification decisions are sometimes based on time in the job rather than functional levels of performance and merit. Classification Studies and Cyclical Audits. The State Classification Plan is constantly being reviewed and amended through occupational studies (also called classification studies) conducted by the Classification Unit. These studies and audits should be distinguished from the post-audits and reviews conducted by the Post Audit and Appeals Unit, which focus on specific classification actions (allocations of positions to classes). Classification studies review groups of classes by occupational fields to assure that class specifications are current, accurate, and consistent. The Classification Manual, in its glossary, defines a Cyclical Audit as: "A review, by examination of current job descriptions and by job audits, of all positions within an organizational unit, an agency or throughout the entire State Personnel System. This process is continuous and should proceed from one occupational group to another until all positions have been studied, whereupon the cycle is repeated."70 The glossary also defines Classification Study: "Often referred to as an occupational study, it is an investigation and Classification Manual, p. 196. -378-

PAGE 417

analysis conducted to determine whether or not existing class structures are current and adequate to identify all applicable job situations and/or to require revisions of existing concepts or the establishment of new ones as shown to be needed by the investigation."71 Key Issues Restructuring the Classification System As the foundation of the merit system and as the primary determinant of how other personnel functions operate in the system, it is essential that the classification system be well organized, professionally operated, uniformally applied, and protective of employee rights. However, the Colorado classification system's primary focus is on compensating employees. Although this is an important function of the classification system it is by no means the main one. Instead the classification system's main purpose should be to organize all positions into government-wide classes on the basis of duties and responsibilities for the purpose of selection, recruitment, training, performance evaluation, and compensation. The Colorado system is especially weak in safeguarding an employee's class rights. For example, employees should have some rights to maintain their classification. If they are not performing satisfactorily, appropriate disciplinary action should be taken. State supervisors-have improperly used the classification system to discipline employees or solve other personnel problems. Generally employees have 71 Ibid., p. 192. -379-

PAGE 418

no recourse for out of class assignments. Additionally, the State's career ladders and promotional opportunities are not well established, defined, and publicized. Instead of relying on generic, government-wide classes, many agency-specific position classes have Balkanized the classification structure. Recommendation 9-1: The State's classification system should be restructured to emphasize generic classes based on duties and responsibilities for the purpose of selection, recruitment, training, performance evaluation, and compensation. Central and Uniform Decision-Making Authority The responsibility for establishing and maintaining the classification plan lies with the Personnel Director. However, the authority for classification actions has been delegated to numerous units within the personnel department and through decentralization, to more than 30 departmental and agency personnel units. Additionally, the Personnel Board hearing officers add input to classification decisions, which have overturned administrative decisions. The organizational structure for classification decisions has no single, central, fully authorized focus of decision making. Procedural and policy decisions are generally made "post facto" through reviews conducted by the Post Audit and Appeals Unit. The Test Development and Research Unit makes recommendation as to the knowledges, skills, and abilities section of the class specification and their validation through job analysis. The Examination Unit reviews minimum qualifications of all class specifications. Decentralization of classification activities has contributed most significantly to diffusion of decision-making authority. As.of December -380-

PAGE 419

1979 job analysis and position allocation decisions are made by agency personnel for two-thirds of classified State positions. Many inconsistencies in classification arise in this fragmented process. If the Post Audit and Appeals Unit finds discrepancies in agency classification decisions or discovers mis-classifications, they only make recommendations regarding compliance to decentralized agencies. The final authority to implement these recommendations lies with the agency appointing authority. In addition, the State Classification Supervisor, who is responsible for establishing and maintaining a uniform classification system, has no direct authority to implement the recommendations made by the Post Audit and Appeals Unit or by the Classification Department. Recommendation 9-2: The authority to administer the state classification system should remain with the State Personnel Director who should effective and uniform administration throughout State government. The Personnel Director should delegate this authority to the Classification Supervisor whose unit would have the authority to enforce classification equity and consistency within the State system. In addition, the auditing of classification decisions made by decentralized agencies should be performed by this unit, which should have final authority on reversing or changing decentralized agency classification decisions in the context of the overall State classification system. Adequacy of Trained Agency Personnel Analysts There is evidence to indicate that agency personnel responsible for making classification decisions are relatively untrained .and -381-

PAGE 420

inexperienced in classification techniques and procedures. However, they have been delegated the responsibility of allocating two-thirds of the State's classified positions. Post-audit reports on decentralized classification activity have identified a number of interagency discrepancies and inconsistencies. Reports document lack of training in classification procedures and criteria, lack of proper and sufficient evaluation, and examples of improper reclassification of positions.72 In one instance, a clerical worker in one agency was placed in the same class as an analyst in another agency. As the State Classification Supervisor stated, the technicality of the State's classification plan and system is significant. To classify properly and within the classification plan, and to maintain consistency--not just internal agency consistency, but statewide class consistency--requires constant training and expertise which is not present in all decentralized agency personnel."73 As noted above, it is doubtful that training would be sufficient to achieve consistency in the absence of thorough central auditing to correct misclassifications. Recommendation 9-3: The classification unit should be assigned the responsibility for reviewing the qualifications of and for properly training all decentralized agency personnel analysts that make classification decisions in their respective agencies. Decentralized agency classifications-should be reviewed periodically to insure Statewide consistency. The classification unit should receive adequate staff to train and monitor decentralized agency classification activity through pre-auditing. 72rnterview with Colorado Classification Supervisor, (April, .1980). 73Ibid. -382-

PAGE 421

Continuous classification training through scheduled and required seminars and workshops should be required. Continuous Problems with Classification Decentralization There is evidence to indicate that decentralizing classification activity to State agencies has not solved the problems previously identified by State administrators. The State classification supervisor has found that decentralization of classification has resulted in increased paperwork, time delays, and inconsistency in the application of classification standards. Decentralization has led to conflicting information and inconsistency among agencies' classification decisions. Different agencies have similar duties allocated to classes with varying pay levels. This has disrupted the concept of 'equal pay for equal work'. Each agency has its own internal consistency, but no external consistency with classification procedures across the State personnel system. The authority for reclassification has been taken from the State Personnel Department and placed in the hands of agencies; the agencies are ill-equipped to handle this responsibility in compliance with the State classification plan.74 This critique is verified by the results of post-audits of agency classification work. When recommendations are made to bring the agencies into compliance, the decentralized system often corrects the problem only after long delays involving many referrals back and forth between agency and central personnel. Often the review has no real effect because the agencies refuse to act.75 74Ibid., (December, 1979). 75Ibid. -383-

PAGE 422

Decentralization has complicated the classification process, and there is evidence that it has resulted in inconsistencies and in some cases, inequities.76 It is clear also that untrained agency personnel often contribute to the inaccuracy of the classification system by making improper classifications, and that decentralization has created more paperwork and greater time delays. These are not the results envisioned by the Department of Personnel's memorandum on "Selective Decentralization of Certain Personnel Activities." This memo states that certain aspects of our centralized process have become counterproductive, in some situations resulting in lengthy delays. The mission of both the central agency and operating agencies should be • the most timely, responsive services ••• (and that) there will be a heavy emphasis on training of both supervisors and personnel officers to improve technical skills. 77 Unfortunately there are no statistics that reflect the number of improper classification decisions before and after decentralization so it is difficult to fully judge the effects of decentralized classification. Recommendation 9-4: A task force should be assigned to study the status (success or failure, efficiency or inefficiency) of decentralizing classification activity. This task force should re-evaluate which agencies should continue to perform internal classification activity and make appropriate recommendations to Colorado Department of Personnel, Memorandum, "Selective Decentralization of Certain Personnel Activities," Rudolph Livingston, Executive Director, Colorado Department of Personnel (January 24, 1977). -384-

PAGE 423

the State Personnel Director. Agency classification statistics should be kept to indicate the effectiveness and efficiency of each program. Periodic evaluations should be made whether to continue to decentralize this activity. Agency personnel analysts making classification decisions should be properly trained. Lack of Consistently Applied Classification Standards Decentralized agencies have made improper classification decisions as discovered by the Post Audit Unit. However, no consistent follow up or correction is carried out. In fact, the final decision concerning identified post-audit errors is left up to the agency appointing authority. There are no clearly written and enforced policies and procedures when this situation arises. Central resources for auditing and enforcement are inadequate for a decentralized system. Recommendation 9-5: When classification errors are identified and corrective actions recommended, the Personnel Director should take administrative actions to assure prompt and accurate compliance. The Director should issue a policy and procedures manual reiterating the authority for post-audits and insuring that these recommendations be promptly implemented. Compliance responsibility should be assigned to the Classification Unit in the Department of Personnel. Additional resources should be enacted for strengthening these functions. Poorly Constructed and Written Classification Manual The Colorado Department of Personnel Classification Manual, published in April, 1979, is intended to standardize the classification allocation process as it is used in the Colorado State Personnel -385-

PAGE 424

System.78 The manual provides over 200 pages of detailed procedures for classifying positions in an accurate and timely manner. However, this manual seems to suffer from major editorial lapses. In addition to frequent and repeated grammatical errors, the manual contains long and unclear sentences; inconsistent use of captions, titles, and headings; and the omission of critical data. Recommendation 9-6: The Classification Manual should be edited and revised to correct the frequent and repeated grammatical errors, use of unclear and lengthy sentence structure, etc. It should be periodically updated to reflect new policies and philosophies of classification and to spell out clearly the classification standards and methods which each State agency is obligated to follow. Lack of Qualified Hearing Officers for Classification Cases There is evidence to indicate that State's hearing officers are not properly trained or do not have required experience for rendering decisions on classification hearings. Classification appeal decisions have significantly impacted classification as it relates to the compensation plan and other personnel functions. It is important that appeal decisions be rendered in light of the overall classification plan, its structure, and the relationship of classes to each other, especially for compensation purposes. Case-by-case classification decisions are found to lead to inconsistencies. Classification appeal decisions in one agency often affect positions in other agencies not part of the original litigation. 78classification Manual, p. 25. -386-

PAGE 425

Decisions made with regard to a single position often end up affecting a whole class of positions. This is consistent, but may disrupt the overall classification plan.79 One recent example involved a revenue agent, like other state revenue agents, was classified at a PAT 3 level (professional-administrative-technical). The revenue agent appealed the classification of his position, and after the Classification Unit and the personnel director had turned down the appeal, the personnel board hearing officer reclassified the position to a PAT 4 level, increasing the pay grade. Based on the specific case and decided without clear reference to the overall impact on the classification plan, other agents and accountants were affected. Such hearing officer decisions have disrupted the consistency of the position-grade "pay relationship" established in the classification plan. Reclassifying a whole class of positions to a new grade or pay level alters the carefully established pay relationships among classes and also disrupts the "equal pay for equal work" concept, because each class of positions has certain "distinguishing characteristics" which determine its relative pay level. In some cases, hearing officer decisions are ruining the State classification plan80 in terms of its internal consistency and its capacity to guarantee equal pay for equal work by disrupting the statutory mandate for "consistent occupational groupings of classes and uniform alignment of classes and salaries among the various departments, institutions, and agencies."81 with Colorado Classification Supervisor (December, 1979). C.R.S. 1973, Section 24-50-104. -387-

PAGE 426

Recommendation 9-7: Hearing officers selected by the State Personnel Board should be experienced in classification matters or should be required to receive training and instruction on the most current procedures and policies involving a classification plan. The State Personnel Board should make findings of fact but refer cases back to the Personnel Department for specific classifications in a consistent framework. Desirability of Five Year Review Cycles for Occupational Studies It is necessary to continually review and _revise the . . Classification Plan to assure that class specifications are current and accurate. It is also necessary to review each organization, position by position, to determine whether the classification of positions is in compliance with Statewide classification standards and hence equitable among State employees. Class specifications for all 1,300+ classes were reviewed and considered accurate and current when a new classification system was implemented with the aid of consultants in 1975. The classification supervisor has indicated that there is no written, long-term schedule to assure that subsequent classification study cycles are completed within any specific time period, although, "It is the position of the Personnel Director that the classes should be reviewed each four or five years."82 Summary figures of occupational studies show that 100 occupational studies were conducted during fiscal year 1978-79, and 81 studies were during 1979-80. This means that the last two-year period, only 181 classes were reviewed out of 1,336 making it impossible 82Interview with Colorado Classification Supervisor (April, 1980). , -388-

PAGE 427

to completely review all classes every four to five years.83 Recommendation 9-8: The State Personnel Director should establish written, comprehensive long-range schedules for these review activities. Studies should be completed within the required fiveyear period. Responsibility for establishing these schedules and performing the studies should be assigned to the Classification Unit with proper coordination with past audit schedules and activity. The State Budget and the Long Bill should provide funds adequate for the achievement of the scheduled reviews. Accuracy of Job Descriptions There is reason to question the accuracy of job descriptions and the consistency with which classification criteria are applied in evaluating job descriptions. The Common Cause Questionnaire found that 31% of the respondents felt that job announcements for vacancies in their agency or unit are not usually an accurate description of actual responsibilities. One-third of the respondents felt that job descriptions, upon which classification decision are based, are not accurate. Another question asked whether respondents believed that the procedure by which jobs were reclassified is fair and equitable. Respondents who felt that the reclassification process was not equitable comprised almost 40% while 28% indicated a lack of familiarity with the reclassification process. The remaining one-third of the respondents felt the process was fair and equitable. 83Ibid., December, 1979. -389-

PAGE 428

Recommendation 9-9: Efforts should be made to ensure that all classification decisions are accurate, fair, and consistent throughout the State. This responsibility should be assigned to the Classification Unit. Division of Classification Responsibility Currently, the Post Audit Unit reviews classification decisions made by decentralized agencies. This unit then refers problems to the Classification Department. Oftentimes this does not insure that the correction will be made. In addition this creates more paperwork and delays lending to the slow process by which corrections are sometimes made. Recommendation 9-10: The Personnel Director should reorganize and reassess the responsibility for post-auditing decentralized classification activity to the Classification Unit. Reassigning this responsibility will help insure that classification post audits are current and performed in compliance with State standards. In addition, it will combine the identification and correction of classification problems into a single process thus contributing to effective use of audits and eliminating delays. Misuse of Multiple Range Classes There are 191 multiple range classes encompassing some 3,000 positions in the State, and approximately 2,000 to 2,500 "reassignments" (reclassifications) are made each year, the vast majority of which are upward reassignments. The multiple range class concept coupled with decentralization is worth examining because it has been intended to make classification more responsive to agency needs. Among its asserted good features are: it restores the power of promotion to the supervisor, it -390-

PAGE 429

reduces the time required for central review of what is technically still a classification decision because it has eliminated central review altogether; and it was developed to restore incentive by creating a type of "career ladder" with prompt pay increases commensurate with skill development. However, according to the State Classification Supervisor, the implementation of the multiple range class concept was done with good intentions, including the intention to establish standards. But these standards have been internal to each agency, lacking external consistency across the State personnel system.84 The procedural basis for this critique is substantiated in print in the Classification Manual, which notes: "The necessity of guidelines (for multiple range classes) is obvious from the (State Personnel System Rules) ••• however, the language as to who is responsible for their creation is not clearly stated. Appointing authorities are advised and should be advised by their departmental personnel analysts that it is their responsibility to develop specific guidelines which will govern their own employees.85 Hence, established guidelines and predetermined standards to which the rules and regulations refer are, in practice, non consistent throughout the State personnel system. However, the rules and regulations guarantee that "An employee who is reassigned to a lower range in a multiple range class who believes such action is not justified shall be granted a hearing which shall be confined and limited to a factual determination as to whether the action of the appointing authority is consistent with previously established with Colorado Classification Supervisor 1979). Classification Manual, pp. 115-116. -391-

PAGE 430

guidelines for such reassignment and is not arbitrary or capricious."86 The irony stems from the fact that judgment may be rendered in terms of the agency's own "previously established standards" which, relative to the Statewide classification standards, may themselves be "arbitrary or capricious." The multiple range class concept may be defeating rather than "preserving the merit principle." According to the State Classification Supervisor, the levels of performance are the key element, not the classification level. But agencies interpret it as the classification level thatis important and they move underqualified personnel to new, higher classes, and they reclassify automatically, based on time, for 1 ft th . b 87 examp e, a er one year on e JO • In other words, under the implementation of the multiple range class concept, there are times when classification decisions are based on time on the job rather than on functional levels of performance and merit. Recommendation 9-11: A task force should be assigned to review multiple range class concept and made appropriate recommendations as to its continuance. If this concept of promoting employees within multiple range classes remains, the responsibility for insuring internal Statewide consistency should be assigned to the Classification Unit. Reducing Number of Job Classifications As of July 1980, the State had some 1,336 different classifications of which approximately 213 were "one-of-a-kind" jobs. 86Rules, 2-1-10. 87rnterview with Colorado State Classification Supervisor (December, 1979). -392-

PAGE 431

There are also 195 multiple-range classes. The number of classes have been proliferating under pressures to make them more precise in order to combat employee appeals and to satisfy requests from managers who feel many positions are unique to their agency. Previous recommendations have been made in other personnel studies to reduce the number of job classifications. A 1973 study by Executive Management Service, Inc., advised that the number of classifications should be reduced to about 1,000. However, the Department of Personnel has not implemented this recommendation. One of the growing barriers to maintaining a fair and equitable classification system has been the tendency of decentralized agencies to create job classifications with superficially different job duties and titles instead of using generic classifications which increases promotional opportunities. For example, there are many different classifications for State counselors and accountants although the generic training and duties of each of these classifications are quite similar. Many agency-specific classes have been established for the purpose of insulating their staff reductions-in-force actions. Recommendation 9-12: The State's classification system should be revised by reducing the number of classes and consolidating positions into generic occupational classes of government-wide applicability. The 1973 goal of 1,000 classes seems realistic since approximately 90% of all jobs could fit into about 400 classes. A thorough review and revision of the classification structure would require additional financial resources. -393-

PAGE 432

Revising Requirements for Entry Level Professional Positions Although the State has some 35 colleges, universities, and technical schools for which hundreds of millions of dollars are spent annually in tax dollars, the State personnel system is not well linked to these institutions. Classification standards and selection procedures in many instances make it most difficult for new graduates of those institutions to enter the public service even though they may intrinsically be highly qualified. Position requirements at the entry level sometime specify experience requirements unattained by new graduates. These arbitrary minimum standards may discourage and prevent competition from entry level professionals. Systematic provisions for entry into beginning level professional or technical jobs based on educational achievement are not made. Recommendation 9-13: The Department of Personnel should work with universities and colleges in developing rigorous standards for entry level professional positions especially in the general administration category. A competitive entry-level internship program for bachelor and master level graduates should be developed to permit entry into the State personnel system of top-ranking graduates. Establishment of a Senior Management and Technical Corps It has been noted that there is a shortage of highly qualified general administrators and technical specialists at the top level of the State service for administering departments on a career basis and for carrying out special studies or discharging senior administrative -394-

PAGE 433

assignments which arise from time to time. Recommendation 9-14: A Senior Management and Technical Corps should be created composed of experienced and highly trained career administrators and technical specialists who would be available to hold special positions or be placed in special assignments at the call of the Governor or his Cabinet or agency heads. -395-

PAGE 434

Introduction CHAPTER X RECRUITMENT The staff of any organization constitutes its most important resource. An effective recruitment program is essential for attracting, selecting, and retraining by organizations' human resources. The recruitment program is affected by the type of work performed (job classifications); by the various technological, organizational and other changes (human resource planning); and by the efficiency with which work is performed (selection and performance evaluation). In order for promising and able applicants to be recruited, they must be made aware of employment opportunities and be given encouragement to apply for and be considered for job openings. Recruitment techniques include advertising; job posting; outreach recruitment; visits to educational institutions, business organizations, and community agencies; contacts with public or private placement agencies; and development of resources both professionally and occupationally, including affirmative action contacts. The success of recruiting efforts which encourages individuals to apply for governmental positions is affected by the public sector's image -in general and the jurisdiction's image in particular. "On the other hand, recruitment is likely to be more successful if a is perceived as a place in which employees perform interesting work, make real contributions to solving societal problems, have opportunities -396-

PAGE 435

for developing productive careers, and enjoy substantial pay, benefits, and job security."1 Background The Status of Recruitment for Public Employment Until recently, the image of public sector employment was perceived as having low salaries and benefits and lack of a career system. Perceived barriers to minorities have tended to blight efforts of public jurisdictions to attract and hire the quality and quantity of highly skilled applicants that government needs.2 Studies have shown that the public has had a higher regard for private employment than for public sector employment. Moreover, local government employment has been rated behind both states and federal government as desirable places to work.3 One study found that low salaries and inadequate fringe benefits have been forceful deterrents preventing state, local, and federal recruiters from competing with private employers in attracting highly skilled manpower. 4 In another 1973 study, Local Government Approaches to Capacity-Building, the National League of Cities found that low salaries, a national shortage of selected skills, and competition were the three most significant factors accounting for recruitment 1 Robert D. Lee, Jr., Public Personnel Systems (Baltimore, Maryland: University Park Press, 1979), p. 104. 2Ibid. 3Felix A. Nigro, Modern Public Administration, 2nd ed. (New York: Harper & Row, Publishers, 1970), p. 16. 4winston w. Crouch, ed., Local Governmental Personnel Administration (Washington, D.C.: International City Management Association, 1976), p. 83. -397-

PAGE 436

difficulties. 5 A 1970 study found that a systematic career system was lacking for two out of every ten public sector employees. Career systems often lack the flexibility and continuity that allow for regular progression or for systematic improvement of individual skills that make effective use of university programs, or that involve adequate recognition and support of above-standard employee performance.6 The courts have found that many state and local government recruitment systems have followed discriminatory hiring practices.7 Public sector affirmative action programs address this problem by providing special recruitment programs and activities to encourage more women, ethnic minorities, disadvantaged and handicapped members to apply for public sector job vacancies. Various self-imposed restrictions such as citizenship, residence, age limits, sex, and veterans preference have affected recruiting efforts.8 In addition, the practice of posting unattractive public sector announcements in post offices, public office buildings, and city halls reflects an outmoded assumption that qualified candidates are clamoring for positions and that the main thrust of a recruiting program is to keep the crowd down to manageable proportions.9 5National League of Cities, U.S. Conference of Mayors, Local Government Approaches to Capacity Building (Washington, D.C.: National 6League of Cities, U.S. Conference of Mayors, 1973), p. 16. L. Chapman and Frederic N. eds., Meeting the Needs of Tomorrow's Public Service: Guideline for Professional Education in fublic Administration (\olashington, D.C.: National Academy of Public Administration, 1973), p. 54. 7William H. Brown III, "Moving Against Job Bias in State and Local 8Governments," Good Government, 89 (Winter 1972), p. 15. 0. Glenn Stahl, Public Personnel Administration, 7th ed. (New York: 9Harper & Row, Publishers, 1976), p. 119. Ibid., P• 123. -398-

PAGE 437

Overall government recruiting has been haphazard, unimaginative, passive, and low budgeted. Failure to recruit extensively sometimes results in few or no qualified applicants which may force organizations to hire marginally qualified applicants or leave positions vacant. The U.S. Office of Personnel Management has committed to make its recruitment program more effective through a centralized system called the Managed Approach to Recruitment (MAR). The purpose of MAR was to make job information more specific by publishing every six weeks a Federal Job Opportunity List which advertises job opportunities by category for each state. The National Civil Service League addressed state and local recruitment problems in its Model Public Personnel Administrative Law which states:10 The jurisdiction must develop a system of recruitment that interests the most capable persons in public service and a selection system that insures the highest caliber employee. The work to be performed in the public service challenges the best ability in the country. Governments must seek out ability and persuade the able to serve the public. History Recruitment programs developed from patronage recruiting during the spoils system of the mid-1800s to the merit philosophy now being modified by the current concept of hiring a representative work force as required by many affirmative action programs. Originally recruitment and selection was primarily based on political loyalties and campaigning efforts. The passage of the Pendleton Act in 1883 marked the beginning of merit-oriented recruiting and appointment systems. Governmental 10National Civil Service League, A Model Administration Law (Washington,-D.C.: League, 1971), -399Public Personnel National Civil

PAGE 438

organizations adopted the philosophy that the public should have equal opportunity to apply for public service positions on the basis of merit. With the passage of the 1964 Civil Rights Act, this philosophy was slightly altered still making job opportunities available to a wide spectrum of individuals but with emphasis on outreach recruiting to acquire a more representative work force. Recruitment Function "Recruitment is the process of advertising staffing needs and encouraging candidates to apply. Recruitment is designed to provide organizations with an adequate number of viable candidates from which to make its selections."11 In situations where the labor supply is ample, the challenge is to supply organizations with candidates of the highest quality. In situations where the labor supply is scarce, the challenge is even greater. Organizations must compete for talented applicants and the recruitment program must supply the organization with adequate numbers of viable and qualified candidates. The recruitment function should be an active process operating in a highly competitive environment. The ultimate success or failure of government programs depend on men and women who are highly qualified, motivated, skilled and dedicated to their careers. Attracting the best candidates requires that public personnel systems develop positive recruitment which is imaginative, well planned, and which searches for the best qualified applicants.12 11Jay M. Shafritz, Personnel Management in Government, (New York: 12Marcel Dekker, Inc., 1978), pp. 119-120. Crouch, p. 81. -400-

PAGE 439

Public sector recruitment program must be adequately funded for success. Costs associated with recruiting efforts usually include salary of recruitment specialists, costs of advertising and brochures, medical expenses for pre-employment physicals, travel, overhead and administrative costs of hiring new employees. Traditionally, public sector recruiting programs received meager funding. Overall, recruitment problems, costs, and equal employment opportunity goals must be coordinated in order to attract the most talented and motivated individuals to the public sector. Recruitment Methods Methods used in recruitment programs vary depending on the size of the organization, the location, goals of the program, and funding. All public sector organizations issue public announcements containing job vacancies and scheduled examinations. These advertisements may appear in the classified section of newspapers as well as in poster form in government buildings, community centers, and other types of public facilities. This approach is intended to reach a wide range of people but is usually not focused enough to attract the best qualified applicants while meeting affirmative action objectives. A more directed approach is to advertise in newsletters and journals of professional associations but mostly governmental recruiting programs are too financially limited to pursue this technique. Governmental brochures and pamphlets covering general career opportunities are often published. The Federal Office of Personnel Hanagement issues the Federal Career Directory: A Guide for College Students, which is intended to provide general information about job opportunities. Many state and local governments also publish this type -401-

PAGE 440

of information which is distributed to libraries, high school counselors, and college placement offices. Job information centers and telephone hot lines are also used. The federal government has about 100 job information centers throughout the country. Toll-free numbers sometimes may be offered giving information on how to apply for government jobs. Personnel or job banks are frequently used by public sector organizations. Local governments, often having small personnel staffs, do not have the resources to develop elaborate recruitment programs. The personnel bank serves as a matchmaker containing applications of people interested in government employment and referring these people with appropriate skills to the jurisdiction with vacancies. The New England Municipal Center in Durham, New Hampshire, serves this role for the New England states. One of the most expensive forms of recruiting is in person. Recruiters often interview interested applicants at job placement centers established at state and national professional conventions such as the American Society for Public Administration (ASPA). Recruiters are also sent to college placement offices. A city government may send recruiters to particular neighborhoods or community centers.13 Often such recruiters use specialized professional organizations such as the Association of Black Accountants to contact and recruit potential 13 Lee, pp. 106-7. -402-

PAGE 441

Relationship to Other Personnel Functions All recruitment efforts are based on the classification system which identifies essential knowledges, skills, and abilities as well as minimum educational and experience requirements. All advertising and recruitment announcements must specify requirements as listed in the job specification. If job classifications are outdated and inaccurate, recruitment specialists will have difficulty in attracting highly qualified candidates needed by the organization. Additionally, the recruitment program should be linked to human resource planning so the organization can anticipate job vacancies, plan for turnover, and develop.applicant resources for the type of skills on a continual basis. Recruitment Principles Many different recruiting techniques are available to governmental agencies. The recruiting approach and combination of techniques depends on the characteristics unique to each organization. The following key principles should be utilized to establish a successful recruiting program. Key Principle: The recruitment program should be aggressive, active, and imaginative. This program should: --Actively seek out promising and able applicants for public sector positions. --Develop recruiting contacts throughout the community, state, or nation as appropriate. -403-

PAGE 442

and utilize extensive mailing lists of schools, vocational counseling offices, and organized occupational groups by sending out copies of job announcements and other job opportunities. --Establish newspaper, radio, and television outlets for news about public job opportunities on a public service basis. Also supplement with media paid advertising. --Develop a resource of college, trade, and professional journals for paid advertising. --Prepare and distribute well-illustrated pamphlets listing career opportunities. --Participate in institutional career days. --Develop contacts with specialized affirmative action groups such as the Colorado Epilepsy Association or the National Association for the Advancement of Colored People. Key Principle: Fairness and equity should comprise the ethical foundation of the recruiting program. The recruitment program should be based on merit and: --Emphasize that the organization is an equal opportunity employer. --conduct special outreach recruitment when needed. --Develop professional relationships with community, professional, and occupational groups. --Prepare informational materials focused on attracting women, ethnic minorities, disadvantaged and handicapped members. --Recruit on a national basis where necessary. -404-

PAGE 443

Key Principle: The recruitment program should coordinate closely with the human resource planning function. The recruitment program should: --Be involved in human resources forecasting. --Be consulted on the length of time necessary to recruit for certain occupational groups. --Maintain occupational lists of interested applicants for which there are currently no job opportunities. --Accept applications on a continuing basis for job classification with high turnover. Key Principle: The recruitment program should be adequately funded. It should: --Educate public officials as to the need for enough staff to meet organizational goals. --Educate public officials as to the advantages of advertising in the media. --Develop evaluation techniques to measure success of the program and show cost effectiveness. --Be accountable for results. Key Principle: The recruitment program should utilize area educational institutions as applicant resources. It should: --Maintain a close working relationship with area educational institutions by communicating employer present and anticipated needs. --Seek out potential employees by working closely with career guidance counselors. -405-

PAGE 444

--Develop input into vocational educational programs so educational institutions can expand and/or develop training programs to meet organizational hiring needs. Analytical Model Linkages As illustrated in the model matrix of Chapter IV, recruitment impacts on or affects the following performance criteria for good government: effectiveness and efficiency, adequate resources, qualified human resources, career development system, equal employment opportunity, social responsibility and equity and accountability. The recruitment program directly affects the effectiveness and efficiency of the organization in two ways. First, in order for the organization to operate effectively and efficiently, it must have high quality and competent human resources which is the goal of the recruitment program. Second, when vacancies occur, the recruitment program must search out and attract highly qualified applicants within a relatively short period of time. Otherwise the organization operates less effectively and efficiently because positions are left vacant and overtime must be assigned to keep up with the current work load. Recruitment programs must be well organized, adequately staffed, and funded with necessary resources. Recruitment specialists often complain that they do not have a large enough advertising budget to reach potential applicants. They also grumble about small staffs which are severely limited in performing outreach recruitment to better meet affirmative action goals. Ultimately, the success of the organization is dependent on obtaining highly qualified human resources wh.ich is the -406-

PAGE 445

primary goal of recruitment programs. With new and expanding functions of government, it cannot affort to content itself with anything less than the best qualified applicants available for the salaries to be paid. The organization must also have a career development system to attract, accommodate, and retain high qualified applicants who are looking for a public service career that provides for growth and personal development. Recruiting programs are also the first significant phase in establishing a fair employment system. The organization must support special recruitment efforts to seek out and familiarize women, ethnic minorities, disadvantaged and handicapped individuals with public sector job opportunities. Many governments have recognized their goal of social responsibility and equity by providing trainee and intern positions for members of these groups. However, the recruitment program must still publicize these programs and search for potential applicants among these various communities. Lastly, the organization must evaluate the success of its various recruitment programs to ensure that it is accomplishing established goals and objectives. Therefore, the organization must be accountable for results of recruitment efforts. Colorado Recruitment System Colorado Constitutional Provisions The Colorado Constitution is the basic authority providing the foundation of fair merit hiring. Article XII, Section 13 (1) and (6) of -407-

PAGE 446

14 the Constitution states: (1) Appointments and promotions to office and employments in the personnel system of the state shall be made according to merit and fitness, to be ascertained by competitive tests of competence without regard to race, creed, or color, or political affiliation. (6) All appointees shall reside in the state, but applications need not be limited to residents of the state as to those positions found by the state personnel board to require special education or training or special professional or technical qualifications and which cannot be readily filled from among residents of this state. Colorado Statutory Provisions The 1973 Colorado Statutory Provisions delineate recruitment procedures 15 to the State Personnel Board in Section 24-50-112: (3) The board shall provide by rule, considering the recommendations of the State personnel director, the conditions under which applications will be accepted, the procedures by which tests will be held, the frequency with which candidates may compete in the same examination, and the standards by which candidates shall be deemed qualified. Colorado State Personnel Rules and Regulations The Rules and Regulations of the Colorado State Personnel System further elaborate on the recruitment procedure in Chapter 4 directing that announcements for every examination shall be distributed to inform interested and qualified persons of the opportunity to apply. Announcements shall be posted in offices of the Department of Personnel and in other places determined by the Director where eligible persons might reasonably be expected to be located. Announcements for posting outside the State shall be mailed only when the State Personnel Board has approved out-of-state recruitment. Announcements shall be posted 14colorado Constitution, Article XII, Section 13 (1). 15c.R.S. 1973, Section 24-50-112. -408-

PAGE 447

for the minimum time period indicated by the Department of Personne1.16 Article 2 stipulates the application filing time as follows:17 (B) Statewide open competitive and service-wide promotional examinations: 10 working days prior to the filing deadline. Geographic area open-competitive examinations: 3 working days prior to the filing deadline. Department or division promotional examinations: 5 working days prior to the filing deadline. Continuous examinations: Continuously until rescinded. This article also refers to extending the filing date and outreach recruitment.18 The filing date may be extended whenever it is found that an insufficient number of applications have been received from qualified persons on any announced examination. If a representative number of protected class candidates, within the meaning of rules 1-7-1 and 5-6-1 (B) (2), has not applied for a position in a class in which underutilization exists, as determined by the agency or the State Personnel Department, applications shall be accepted for an additional period of time, as determined by the State Personnel Department, during which time the agency and the State Personnel Department shall conduct intensive outreach activities. In addition, Article 3 specifies under what conditions applicants can be denied admission to the examination. An applicant may be denied admission if he or she lacks the announced qualification, if he or she is physically or mentally unfit to effectively perform the duties of the class, or if he or she is within one year of reaching the mandatory retirement age unless currently employed by the State.19 Note: This section may be inconsistent with Section 5 of the Rehabilitation Act of 16Rules and Regulations of Colorado State Personnel System (April, 1980), Rule 4-2-1. 17Ibid. 18Ibid., 4-2-3. 19Ibid., 4-3-3. -409-

PAGE 448

1973 because the Act permits consideration of physical, mental, or emo-tional handicaps of applicants only upon . a conditional offer of employment. Other factors that may lead to denial of admission are: a recent history of excessive use of alcohol, narcotics, or other drugs which may affect job performance; conviction, deferred prosecution, or nolo contendere to any felony or other crime involving moral turpitude; a record of unsatisfactory employment; the use or attempted use of political pressure or bribery for advantage in testing or appointment; any false statements on the application; any unauthorized access to information concerning the contents of the examination; and belonging to or advocating any organization which supports the overthrow of the United States Government by force or violence.20 Article 4 concerns the application process which is the final stage in the recruitment program.21 All applications for examination shall be made on forms approved by the Director. One application must be submitted for each examination, unless otherwise prescribed in the announcement. (A) Normally, applications shall only be accepted for consideration when they are submitted in response to an examination announcement or to effect temporary appointments. (B) The applicant's signature on the application shall his certification that, to the best of his knowledge, all information he entered on the application is true. (C) Applications must be submitted to the office prescribed in the announcement within the time period specified in the announcement. (D) The Personnel Department shall develop a procedure for voluntary self-identification as to protected class 20Ibid. 21Ibid., 4-41.

PAGE 449

affiliation which shall become an official part of the application. The article also allows an applicant a review by the Director of the examination admission decision when denied entrance to the examination within seven days from the date of notice.22 The Director shall give written notice to the candidate of his The candidate may then appeal in writing to the Board within seven days from the date of mailing the Director's determination. This appeals process, dependent on the nature of the appeal, may add many days to the recruitment and examination process, causing significant delays in the hiring process. Organization of Colorado Recruitment Program As a result of the decentralization in the Colorado State Personnel system, recruitment responsibility is shared between the Department of Personnel and agencies to which this function has been decentralized. Job announcements are distributed by agency and department to about 1,000 different State locations by the Department's Examination Unit, which is comprised of some 14 employees, 6 of which are classified professionals. Besides posting job openings, this unit is responsible for developing and administering examinations. Three other units which have some type of recruitment responsibilities are the Research Unit, the Affirmative Action Unit, and the Records and Referrals Unit. The Research Unit develops and State examinations. The Affirmative Action Unit is responsible for most outreach recruitment activities as well as consulting agencies on the development and maintenance of the State's 22Ibid. -411-

PAGE 450

affirmative action plans. The Records and Referrals Unit maintains eligible lists of qualified candidates and provides recruiting information. Agencies with decentralized recruitment authority are allowed to conduct recruitment for specialized positions, whereas the Department of Personnel tends to recruit for general use posit.ions. The Department is currently responsible for recruiting about one-third of State classified positions whereas the agencies conduct recruitment for the remaining two-thirds. The November 1979 Department of Personnel's policy statement elaborates on the State's operating procedure by specifying that, "Funding should be provided to the Personnel Department to conduct specific recruiting, typically for general use classes •••• Operating agencies should be primarily responsible for specialized recruiting."23 Essentially this policy statement allows decentralized agencies to recruit for jobs unique to the agency with the stipulation that these functions shall be subject to the scrutiny of the Department of Personnel. Proponents of decentralized personnel functions argue that much of its viability in this mode is related to its proximity to management. Agency personnel responsible for recruiting functions feel they have two advantages over their counterparts in the Department of Personnel. They can begin recruitment efforts sooner and they are more familiar with the particular vacancy and therefore have better insight as to the desired qualifications for vacant positions. Opponents claim that 23colorado Department of Personnel, "Policy Statement on Functions to be Centralized and Decentralized in Colorado State System" (November 1, 1979), p. 3. -412-

PAGE 451

decentralization can encourage abuses of the merit system, may not be cost effective by allowing redundancy, may facilitate a lower degree of professionalism, and may precipitate a move away from uniformity. Characteristics of Colorado Recruitment Program The major characteristics of the State's recruitment program are the residency requirement, the method of advertising vacancies, the decentralization structure, and the timeliness or lack of it in recruiting. Residency Requirement. The Colorado Constitution and the 1973 C.R.S. require that potential employees be recruited from within the State. Only in special cases may non-residents be recruited for State positions. The State Personnel Board, which may waive residency requirements, exercises a stringent policy over these requests. Usually the Board will grant a waiver if less than three candidates respond to a particular job announcement. In fiscal year 1978-79, the Board approved 30 of approximately 54 waiver requests.24 Usually positions that are difficult to fill are posted Statewide on "continuous" announcements without application deadlines. During the first quarter of 1980, the difficult to fill classes listed on continuous announcements consisted of clerical, medical, and computer vacancies. Of these 85 continuously advertised classes, only 13 had residency waivers.25 Advertising Techniques. The use of advertising media in the Colorado State Personnel System is more the exception than the rule. 24state Personnel Board Records for Fiscal Year 1978-79. 25Department of Personnel, 1979 Workload Questionnaire and State Personnel Board Records. -413-

PAGE 452

The primary method for disseminating information on job vacancies is distributing State job announcements to pre-selected Statewide locations. Job announcements are distributed on a bimonthly basis to about 1,000 locations which include all offices of the Department of Personnel, all regional offices, universities, post offices, and county offices. To learn of State job openings, a potential candidate must know where and when job announcements are posted and be persistent to check announcements on a regular basis. Since media advertising is not funded by the legislature, it occurs on an infrequent and non-systematic basis. State agencies placed approximately 480 classified newspaper advertisements which covered 11% of State positions filled during fiscal year 1978-79.26 Promotional examination in some cases were given minimal agency publicity. Scattering recruitment among many different agencies, which essentialy announce similar positions as they come open, places a considerable burden on potential applicants to reapply for the same positions in different agencies. The coristitutionally mandated principle of competitive hiring and promotion is not being fully attained. Other recruitment techniques used in State government consisted of interactive processes such as attending school career days, making recruitment presentations, contacting community agencies for affirmative action recruitment, and contacting other professionals in the personnel field. The Department of Personnel Budget Request for fiscal year 198081 showed that the Examination Unit visited five high schools in the 26Ibid. -414-

PAGE 453

State the previous fiscal year to make presentations on careers in State government. Recruiting Decentralization Structure. The movement to decentralize State personnel functions began in 1970. Currently, most of the 42 State agencies are either fully or partially decentralized. The Post Audit Unit in the Department of Personnel is responsible for insuring that decentralized agencies comply with the Rules and Regulations of the Colorado State Personnel System. The Department of Personnel 1979 Workload Questionnaire compared recruitment activity levels of centralized versus decentralized agencies. Decentralized agencies showed significantly greater amounts of activity in contacting job applicants for recruitment purposes. Decentralized agencies also indicated a slightly greater propensity to advertise openings in the newspaper. Centralized agencies showed slightly greater activity levels in contacting other recruitment professionals and in initiating residency waivers. Timeliness of Recruitment Efforts. According to the Department of Personnel, it takes approximately nine days to write and post job vacancies in the announcement. Jobs usually remain on the announcement an additional 10 days. It then takes an average of four more days to screen applicants and send out acceptance/rejection notices which totals 25 days before applicants are tested.27 If appeals are filed, this further delays the hiring process. Overall, the Colorado recruitment process is unimaginative, haphazard, low budgeted, and passive. For example, in a 1977 study of 27Interview with Personnel Analyst in Colorado Department of Personnel (March, 1980). -415-

PAGE 454

recruiting and testing costs for state and local governments conducted by the City of Phoenix, Colorado ranked 22nd among the 25 respondents in advertising costs although it ranked third in the number of full-time employees. In total recruiting and testing salary costs Colorado ranked 21st out of 30 respondents. Per applicant processed, Colorado ranked last in recruiting and testing salary costs among the 29 respondents.28 Statistics The 1979 Common Cause Questionnaire asked two questions directed at the State's recruitment program. One question asked whether the State's hiring process was fair and based on merit. Forty-five percent (45.8%) answered "no", 33.4% answered "yes", and 14.6% responded "don't know". The second question asked respondents to rank some suggestions for improving recruitment in the State personnel system. The three choices most often listed were: improve the quality of tests and testing procedures (30.6%); expand the Rule of 3 (23.9%); and expedite the process (19.2%). Other choices were to provide more active recruitment (8.3%) and to give wider notice (8.7%). Recruitment Problems Because of the mere size of the State of Colorado and the geographic area it covers, recruitment efforts are more complex and require different techniques. For example, labor market conditions in metropolitan Denver differ greatly from the labor market conditions on the Western Slope. The available media and its coverage also vary. 28City of Phoenix Personnel Department, Employee Selection Research Division, Recruiting and Testing Cost Survey (January, 1977), PP• 16-17. -416-

PAGE 455

Therefore, recruitment efforts should be tailored to the specific area as well as to particular occupational category. Key Issues Lack of Highly Qualified Applicants Department of Personnel employees have reported that they are not always able to keep pace with the staffing requests of State agencies. They have also stated that there has been some dissatisfaction among State agencies with the quality of employees and the time taken in filling vacant positions.29 Positions are sometimes left vacant or filled with provisional appointments or by contract in order to fill the vacant position. There also seems to be a problem with the quality of applicants recruited. For example, the Director of Food Services at the University of Colorado at Boulder claims that applicants for professional positions in his department are usually very marginally qualified and sometimes unacceptable for hire.30 Recommendation 10-1: State recruitment activities and staff should be increased to allow for an active and ongoing search of qualified candidates to be more responsive to State agencies. More time should be spent in developing applicant resources, promoting State employment, and publicizing employment opportunities. 29rnterviews with Recruitment Program Administrator and Personnel Analyst, Colorado Department of Personnel (November 1977). 30rnterview with Director of Food Service, University of Colorado, Boulder, Colorado (May, 1980). -417-

PAGE 456

Lack of Sufficient Funding and Staffing for Recruitment Programs The Phoenix study showed that Colorado recruitment was grievously underfunded in relation to other state and local governments as discussed earlier in this chapter. The Affirmative Action Unit in the State has complained that it does not have sufficiertt staff or resources to perform outreach recruitment to meet the State's equal employment opportunity goals.31 The director of this unit stated that there are currently one professional and one clerical employee for all State agencies. The Governor did request one additional position in fiscal year 1980-81, but the Joint Budget Committee denied this request. As discussed earlier, the Legislature does not fund advertising expenses for the Department of Personnel and consequently very little advertising is done by State agencies. In fiscal year 1978-79, only 11% of State vacancies were advertised in the media. Recommendation 10-2: State Legislature should provide allocation for additional staff to perform outreach recruitment in the Affirmative Action Unit. Funding should also be provided to the Department of Personnel for advertising expenditures. Additional resources should allow the Personnel Department to develop an active recruitment program that attracts highly qualified candidates instead of maintaining its current passive program which relies on candidates searching out State job opportunities. The Department of Personnel should assign the responsibility for coordinating all advertising for State vacancies to a staff person to reduce fragmentation and cost inefficiencies. 31rnterview with Director Affirmative Action Unit, Colorado Department of Personnel (May, 1980). -418-

PAGE 457

Lack of Evaluation System for Recruiting Function Currently there is no evaluation or data system used to measure the effectiveness of recruiting efforts. In addition, decentralized agencies that perform recruiting functions do not gather any data evaluation. Statistics should be kept and evaluated to determine what the most cost-effective recruiting techniques are. Recommendation 10-3: The Department of Personnel should establish a recruiting reporting system that measures the effectiveness and cost/benefit performance of the State's recruiting program. Lack of Timely Response in Recruiting Potential Candidates An attitude survey of department and division level directors administered by the Department of Personnel in October 1976 indicated that the "timeliness of staffing (the period of time required for filling vacant positions) was at the top of the list in problems identified."32 Administrators from centralized agencies were more critical of the Department of Personnel timeliness of service than administrators from decentralized agencies. Statistics compiled by the Department of Personnel indicated that centrally processed recruits take an average of 42 working days while those processed by decentralized agencies took an average of 57 working days.33 However, decentralized managers still felt that they could do a better job of recruiting than the Department of Personne1.34 For example, the Department of Personnel offers continuous testing for 32colorado Department of Personnel, "Study of Perceptions of Personnel 33Department by State Administrators" (1976), p. 21. Colorado Department of Personnel, Budget Requests Fiscal Year 341980-81 (October, 1979), p. 19A. Interview with Colorado Department of Revenue (November, and Colorado Department of Administration, (December, 1979). -419-

PAGE 458

clericals, but still cannot keep up with the demand. Frequently by the time many clerical applicants are certified to various State agencies, they have found other employment. In one decentralized department, the personnel officer simply tests clerical candidates every day. Those who pass the test are offered a job within 24 hours of applying. In another department, clerical applicants are offered temporary positions and then tested later and put on permanent status. Recommendation 10-4: Department of Personnel should improve its response time in filling State vacancies by advertising more frequently, by developing active and innovative recruiting techniques, and reorganizing the process as proposed below. Eliminate Duplication and Inefficiency in the State Recruitment Process The State recruitment process appears to be overly decentralized, fragmented, full of duplication, underfunded, and passive. This undercuts the merit principle. The present operation places a heavy burden on applicants to keep up with numerous individual position announcements and is subject to abuses of the system through preselection and favoritism. As pointed out in the Classification Chapter, there is excessive use of agency-specific classes, whereas generic job classes should be used. Although State law prescribes examinations by classes or class series, the practice is veering heavily toward individual job recruiting and testing. Much of the difficulty stems from structural deficiencies. Absence of government-wide position recruiting and decentralization of the recruitment and examination process creates an inefficient organizational structure. -420-

PAGE 459

Recommendation 10-5: The Personnel Director should recentralize and strengthen recruitment efforts as the position classification structure is revised to create government-wide occupational classes and more career ladders. This restructuring should include assignment of statewide recruitment for particular specialities to "lead agencies" which are the principal users of those classes and have more knowledge about the occupation and agency needs. This restructuring should eliminate duplication and waste as well as increase the intensity and breadth of recruiting while speeding up the recruitment process by creating rosters of qualified eligibles in advance of actual vacancies. Emphasis on broader and regularized recruitment should be given first to entry-level general-use administrative and professional classes. Lack of Consistent Policy Concerning Decentralized Recruitment Program There is evidence to indicate that State agency decentralization responsibility for recruiting may be inconsistent, unjust, and in conflict with delegation criteria. Table 10-1 in Chapter X . summarizes the degree of decentralization among State agencies. The general policy concerning agency delegation of staffing functions is that most agencies recruit for job classifications unique to their own agency. Yet several agencies recruit for generalized clerical vacancies which do not meet the criteria established by the Department of Personnel. For example, the Colorado State Department of Revenue recruits and hires for clerical positions. Yet the Delegation of Authority Agreement between them and the Department of Personnel states that, "The Appointing Authorities • are delegated pursuant to Rule 4-1-3 the responsiblity for recruitment, examination, and referral activities for open competitive -421-

PAGE 460

Table 10-1 COMPARISONS OF RECRUITMENT ACTIVITY LEVELS PER HIREa Level of Agency Decentralization: Activity Full High Low None Contacts with other personnel professionals 15.6 18.4 39.0 27.0 Applicants directly recruited 56.8 35.7 2.1 5.4 Newspaper Ads 32.1 28.6 10.7 28.6 Residency waiver granted 12.5 12.5 25.0 50.0 Affirmative Action recruiting contacts 46.4 21.8 12.7 19. 1 3 + 3 eligible 1 i sts used 41.7 10.4 0.0 47.9 Source: Department of Personnel 1979 1 oad Questionnaire and Original Hire Date a Numbers are the percentage of recruitment technique utilized per line by four degrees of decentralization. Institutions of higher education are not included . . -422-Total 100 100 100 100 100 100

PAGE 461

examinations for all classes or positions peculiar to the Department of Revenue and for promotional examinations for all classes used. " 35 In 1978 the Division of Management Services of the State Department of Administration criticized the decentralization program for the widespread practice of narrowly advertising individual positions and conducting special examinations for each instead of widely advertising a general written examination.36 This indicates that outside applicants as well as current employees may not have an opportunity to apply for State vacancies. Recommendation 10-6: Department of Personnel should establish firm and consistent criteria for delegating recruitment functions to State agencies. These functions should be monitored to insure compliance. A data base should be established to provide performance measures for staffing functions as they occur in centralized and decentralized agencies. The Department of Personnel should be responsible for recruiting for classifications common to State agencies to eliminate a waste of scarce resources and insure outreach recruitment to meet affirmative action goals. If the Department is unable to perform these services, they should establish centers to provide these services staffed by qualified professionals. 35Division of Management Services, An Operational Concept and Reporting System for the State Department of Personnel, State 3 Department of Administration (December, 1978). 6colorado State Department of Personnel and Colorado State Department of Revenue, Delegation of Authority Agreement (1978), p. 3 . -423-

PAGE 462

Existence of State Residency Requirement The Colorado Constitution and the 1973 C.R.S. require that candidates be recruited from within the State and be residents thereof. Only in special cases where a position cannot be readily filled from among State residents may non-residents be recruited for a State position. In fiscal year 1979, the State Personnel Board approved 30 of approximately 54 waiver requests indicating that oftentimes out-of-state recruitment is required. Imposition of waiver requests minimizes competition and adds to the recruitment time causing unnecessary delays. In our mobile nation, residency requirements appear parochial and contrary to the achievement of maximum State government effectiveness. The best possible candidates should be sought for all levels of positions. Recommendation 10-7: The Colorado Constitution and the 1973 C.R.S. should be amended to abolish the State's outmoded residency requirement for all classified positions. Lack of Coordination with State Secondary and Post-Secondary Educational Institutions Although a major goal of colleges, universities, and other posteducation institutions is to prepare graduates for employment, there is virtually no coordination between these institutions and the State's recruiting efforts. The State's future human resource needs are not made known to the educational institutions so their curricula can be adjusted to produce graduates better qualified for State employment. Nor have systematic internship arrangements been made between educational institutions and the Department of Personnel for placement of graduates on a competitive basis into entry level professional and -424-

PAGE 463

administrative positions. State recruiters do not visit classes or establish testing periods in conjunction with graduations, even when students are being specifically trained for public administration careers. In addition, the State makes little effort to coordinate its hiring needs with high schools that are engaged in much occupational training. The State has few internships available for graduating high school students. Recommendation 10-8: The Department of Personnel should establish a close liaison with post-secondary educational institutions concerning projected human resource needs in various occupational areas. In addition, internships should be established for entry level positions on a competitive basis to assure a steady flow of the most qualified graduates into the State service. Such internships are particularly appropriate in general administration areas in which improved professionalization of State management is a high priority. Restrictions Concerning Length of Announcement Period for State Vacancies The rule permitting an announcement period of only five days for promotional announcements coupled with the publicity sometimes only within the employing agency hardly appears to be in compliance with the competitive merit principle. The same criticism applies to "geographic area open-competitive" examinations, for which announcements can be limited to three working days. Recommendation 10-9: Competition should be encouraged for all positions, especially mid-level and higher level positions. Filing times should be extended to allow for ample response time -425-

PAGE 464

from applicants. Promotional examinations should be broadly publicized and competitive applications encouraged. The Department of Personnel should monitor all agencies for compliance with procedures which.encourage genuine competition and foster lateral entrance by qualified eligibles into mid-level and higher level positions. -426-

PAGE 465

CHAPTER XI SELECTION Introduction As noted in earlier chapters, the manner in which public employees are hired is the essence of the merit system concept. The heart of the merit process is competition for jobs for the purpose of hiring of the best qualified candidates to conduct the public business. The success of this process contributes to the quantity and quality of public services rendered, and to the effectiveness with which those services are rendered. The objective of obtaining the best qualified public servant has become less clear in the last fifteen years. As one observer noted:1 Since the 1960s the mechanisms by which employees are selected and placed in an organization have emerged as the most controversial area of personnel management. What was once simply a matter of seeking the "best man for the job" has given way to disputes about equity and representativeness. Even the newer notion of seeking the "best person" for the job may no longer be tenable. Considerations of equity may necessitate passing over the best candidates in favor of one minimally qualified. This frequently occasions the "Catch-22" of personnel management-no matter how honorable a personnel manager's selection or promotion decision may be, such a decision may be subject to legal remedies because of discrimination if a minority group member is adversely affected, or because of reverse discrimination if a white male is adversely affected. The ideal is to attain these social objectives in the context of a merit system which achieves highly efficient and effective government. 1 Thomas H. Patten, Jr., "Dynamics of Selection, Staffing, and Employee Mobility," in Classics of Personnel Management (Oak Park, Illinois: Moore Publishing Company, Inc., 1979), p. 105. -427-

PAGE 466

Background Evolution of Testing Methods For the purpose of this chapter, selection encompasses the procedures by which applicants for employment are evaluated by examination techniques. While there are many definitions of the term "selection", the most influential one in public personnel at this time is the one found in the Uniform Selection Guidelines issued by the federal government.2 Selection Procedure. Any measure, combination of measures, or procedure used as a basis for any employment decision. Selection procedures include the full range of assessment techniques from traditional paper and pencil tests, performance tests, training programs, or probationary periods and physical, educational, and work experience requirements through informal or casual interviews and unscored application forms. Informal selection measures probably can be traced back to antiquity, but the beginning of the systematic formal measurement of differences in human capabilities in the employment context probably dates from the end of the nineteenth century.3 Benet in France and Terman in the United States developed the first general intelligence tests in 1900. By administering these tests to thousands of children representative of the total school population at each grade level, the test developers were able to assesss average mental skills at each age. The mental age constituted a standard yardstick for assignment to instructional alternatives. By dividing the 2Federal Register, Vol. 43, #166, 38308, Subsection 16-Q (Au gust 25, 1978). 3J. Nunnally, Tests and Measurements: Assessment and Prediction (New York: McGraw Hill Book Co., 1959), p. 5. -428-

PAGE 467

mental age by the chronological age, the IQ (intelligence quotient) could be computed.4 When the United States was about to enter World War I, the military was confronted with the task of making occupational assignments of thousands of men. Individually administered tests were not suitable for this purpose. To overcome this difficulty, the Alpha and Beta group tests of intelligence were developed. When measured against supervisory ratings and against academic achievement, these tests proved to have significant value in predicting future performance. World War II caused a broadening in the types of occupational skills measured by the tests used for placement of recruits. Again, the relationship between test scores and success in military assignments based on these scores was high.5 During the same period, the U.S. Office of Strategic Services created tests which required a demonstration (work sample) of the knowledges, skills, and abilities required for success on the job. This included a problem-solving discussion exercise (a discussion group with no pre-selected leaders).6 This exercise is still one of the best selection procedures for predicting managerial performance.7 The successful testing techniques developed by academic and military organizations were adopted uncritically by civilian employers, both public and private. During the civil rights movement in the 1960s, K. Buros, The Third Mental Measurement Yearbook (Highland Park, 6New Jersey: The Gryhan Press, 1949), p. 220. U.S. Office of Strategic Services, ed., Assessment of Men: Selection of Personnel for the Office of Strategic Services (New 7York: Johnson Reprint Corporation, reprint of 1948). Jerry Deignan, Ph.D., psychologist for the Air Force Human Resources Laboratory (May, 1980), mms. -429-

PAGE 468

documentation of disparate selection rates (on the average minorities scored lower than whites for certain job's) and the lack of documented "job relatedness" (the relationship between the selection procedure and actual requirements to perform particular jobs) culminated in the u.s. Supreme Court landmark case of Duke Power Company. 8 The court summarized the problem in these terms:9 We granted the writ in this case to resolve the question whether an employer is prohibited by the Civil Rights Act of 1964, Title VII, from requiring a high school education or passing of a standardized general intelligence test as a condition of employment in or transfer to jobs when (a) neither standard is shown to be significantly related to successful job performance, (b) both requirements operate to disqualify Negroes at a substantially higher rate than white applicants, and (c) the jobs in question formerly had been filled only by white employees as part of a longstanding practice of giving preference to whites. The actual tests being used were the Wonderlic Personnel Test and the Bennett Mechanical Aptitude Test. The latter had been designed for academic use, not for employment use. The Court found that this practice violated Title VII of the Civil Rights Act of 1964. It added, however, that this decision did not rule out the use of tests for employment; and concluded: "What Congress has commanded is that any tests used must measure the person for the job and not the person in the b "10 a stract. Extensive litigation on various types of selection procedures followed the Griggs decision.11 One result of this litigation and related statutes and regulations is that considerably more emphasis has Duke Power Company, 424 U.S. 401 (1971). 1bbid., p. 410. Ibid., P• 415. 11u.s. Office of Personnel Management, Bureau of Intergovernmental Programs, Equal Opportunity Court Cases (1979), revision. -430-

PAGE 469

been placed on establishing the job relatedness of selection procedures in employment. National Legal Environment Despite the apparent independence of the states in the American federal system, the federal government largely regulates how state and local personnel systems operate. There are two sources for such regulations: grant-in-aid contract requirements and regulations under the Fourteenth Amendment of the U.S. Constitution. Grant Contracts (Merit System Standards): When a state or local government accepts a federal grant contract, it agrees to conform to the conditions under which the funds are provided. The first general regulation in personnel practices was imposed upon state agencies administering Social Security Act/welfare programs, based on a 1939 amendment to the Social Security Act. Now, most federal grant programs require merit system selection, including those related to health, social services, education, employment (Comprehensive Employment and Training Program), and emergency preparedness.12 The Intergovernmental Personnel Programs Act of 1970 made the U.S. Office of Personnel Management (then the Civil Service Commission) responsible for evaluating compliance with the contract conditions relative to personne1.13 Only the state or local unit involved in administration of the federal program must comply with the contract requirements. However, if the state has a jurisdiction-wide merit-based personnel system, as in 12Federal Register, Vol. 43, No. 95, 21003 (May 16, 1978). 1Jo.s. Office of Personnel Management, Office of Intergovernmental Personnel Programs, Standards for Herit System of Personnel Management (January, 1980), p. 2. -431-

PAGE 470

Colorado, it is customary practice to have the entire jurisdiction comply with the merit system standards rather than having separate systems. The impact of the federal merit system requirements in the last forty years has been to move the states into merit systems of personnel administration for part or all of their personnel, if they had not been using such systems earlier.14 On February 19, 1979, the current "Standards for a Merit System of Personnel Management" were issued.15 These are reproduced in the appendix at the end of this chapter. In summary, the standards relative to selection and appointment require an open, competitive system based on job related selection techniques, and appointment based on the "relative ability, knowledge, and skills." Fourteenth Amendment Requirements (Civil Rights Act of 1964 as amended): The Fourteenth Amendment to the U.S. Constitution provides in part: "No state shall make or enforce any law which shall abridge the privileges or immunities of citizenship of the United States; nor shall any state deprive any person of life, liberty, or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws." Congress is expressly given the power to pass statutes required to carry out the provisions of this amendment. Statutes based on this amendment relate to all activities of the States and are mandatory in nature. Rules issued by enforcement agencies based on the statutes are also binding. 14u.s. Office of Personnel Management, Intergovermental Personnel 15Notes (September/October, 1979), p. 1. . 44 Federal Register, Vol. 44, No. 29, 8520 (February 9, 1979). -432-

PAGE 471

The principal although not the only statute enacted by Congress relating to employment is Title VII of the Civil Rights Act of 1964, as amended. The Equal Employment Opportunity Act of 1972 extended the provisions of Title VII to States and their political subdivisions. The main provisions applicable to public merit systems are: Sec. 703(a) (1) It shall be an unlawful employment practice for an employer to fail or refuse to hire ••• any individual ••• because of such individual's race, color, religion, sex, or national origin. This is modified by Section 703(h) which provides in part: ••• nor shall it be an unlawful employment practice for an employer to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended, or used to discriminate because of race, color, religion, sex, or national origin. Uniform Selection Guidelines: After years of negotiation, the four principal federal enforcement agencies: (Equal Employment Opportunity Commission, Office of Personnel Management, Department of Labor, and Justice Department) finally issued Uniform Selection Guidelines in 1978 16 to carry out Title VII of the Civil Rights Act as amended by the Equal Employment Opportunity Act of 1972. These guidelines are applicable to tests in which a group (race, ethnic, sex, religious, or national origin) has a passing rate or an appointment rate less than 80% of the highest group's rate. (This is also known as the 4/5 rule). Allowances are made for affirmative action programs and for very small numbers. In a multi-racial community, tests commonly result in rates below the 80% level. this occurs, the 16 43 Federal Register, Vol. 43, ll66f 38290 (August 25, 1978). -433-

PAGE 472

test must be demonstrably shown to be reliable17 and valid.18 These terms are not defined in the guidelines. There are several techniques used for determining validity; some are statistical and others analytical. The guidelines set forth in some detail what these techniques are and how they are to be used. From a legal standpoint, however, the first issue is the "bottom line"; i.e., is there an impermissible disparate effect on some enumerated group. In the absence of a disparate effect, test validation is not required by the federal guidelines. Professionals in the personnel field suggest, however, that testing for the knowledges, skills, and abilities required to perform the work for which the applicant is seeking employment is the basis of sound personnel practice in a merit system.19 Public Sector Selection A survey conducted by the Intergovernmental Personnel Programs Bureau of the U.S. Office of Personnel Management, the National League of Cities, the National Association of Counties, and the Council of State Governments in 1977 and 1978 showed that all fifty states have personnel agencies, at least for the administration of federally funded programs requiring merit systems.20 However, "between 40 and 50 percent of the cities and counties surveyed lacked the professional leadership 17Reliability means "the consistency with which a test measures or the degree to which repeated measurement of the same individual would tend to produce the same result." Grace H. Wright, ed., Public Sector Employment Selection (Washington, D.C.: 1974), p. 243. 18Validity means "The extent to which a test measures what it is supposed to measure or the accuracy of inferences drawn from the test scores." Ibid., p. 247. 19For instance, this position has been taken by F. Arnold McDermott, retired Personnel Director of Denver Career Service Authority, past 2 president of the International Personnel Management Association. OU.s. Office of Personnel Management, Intergovernmental Personnel Notes (September/October, 1979). -434-

PAGE 473

of a full-time personnel director, one of the key indicators of a minimal staffing situation for the personnel function."21 Of the 48 states responding to the questionnaire, 90 percent indicated that they used job analysis in developing or revising selection procedures,22 but there was no indication about how well the job analysis was conducted. All three levels (state, city, and county) indicated a need for outside technical assistance in test validation.23 Key Principles The selection process in a merit system begins with the candidate's application for employment, and ends with the completion of the probationary period. Requirements fall into three general categories: 1) Minimum qualification for admission to the test. This includes education, experience, special qualifications such as an occupational license, and any additional qualification unique to a given position. Usually, these are based on the probability of candidates being able to compete at least at a minimum level of competency. 2) Competitive applicant testing, which measures the 21Ibid. 22Ibid. 23Ibid. knowledges, skills, and abilities deemed essential for successful performance on the job. The resulting scores -435-

PAGE 474

for any part of the test may be pass/fail or ranked. 3) A probationary period, which tests the appointee's ability to perform the actual tasks of the position. Various measurement devices can be used singly or in combination in phase 2, including written tests, oral tests, performance tests, and comparative evaluation of relevant education and experience. Whatever device(s) are selected they should be demonstrably related to the work, and ideally to the career ladder. The following key principles should be utilized to achieve a truly competitive selection system which identifies competent employees needed to carry out the mission of the appointing authority. 1. Key Principle: Selection techniques should be reliable and valid. To achieve this, the selection program should: --Identify the critical tasks for positions in the class. --Determine objectively the knowledges, skills, abilities, and other requirements needed to perform those critical tasks, and determine which knowledges, skills, abilities, and other requirements performed with a high degree of proficiency will make a better worker. This is typically the phase where competency and objectivity on the part of the personnel analyst are imperative. --Select appropriate testing devices to measure job related knowledges, skills, abilities, and other requirements. Objective devices are preferable to. -436-

PAGE 475

subjective ones. --Use multiple selection techniques whenever feasible. For example, a written test, an evaluation of relevant education and experience, and a performance test would be a multiple selection test in contrast to using only one of these devices. --Develop test instruments which conform to professional standards for job relevance, ob jectivity, level of difficulty (including instructions and language used in questions), and clarity (not ambiguity). --Administer tests under as uniform conditions as possible (technically, this is standardizing administration). --Follow up tests with evaluation of results (including item analysis, consistency of oral panel ratings, and actual job performance by successful candidates). 2. Key Principle: An effective selection procedure increases the probability of providing competent eligibles in a timely fashion, consistent with an open competitive system. To achieve this, the selection program should: --Administer tests at times and in locations where candidates may compete. --Employ technology to improve standardization of administration. --Score tests promptly, using automated scoring devices when appropriate. -437-

PAGE 476

--Maintain a sound security system to guard the integrity of the selection process. --Periodically revalidate the selection measures. --Maintain a continuous testing program for hard-to-fill classes. --Anticipate personnel needs whenever feasible, and test for probable future vacancies. (See Chapter VIII, Human Resource Planning.) possible, schedule examinations when the largest number of eligible and competent applicants would be available (e.g., entry level public administrators might be tested in the spring when graduate students are job-hunting). 3. Key Principle: The selection should encourage a balanced and representative population of applicants from which to select. To achieve this, the selection program should: cultural or sex or racial bias in selection devices. (It is not feasible to eradicate such bias totally because of conflicting, non-job-related goals such as veterans' preference). --Evaluate for disparate effect the pass rates and appointment rates (respectively the number of applicants taking and passing an examination and the number of applicants taking an examination receiving appointments). If a disparate effect is evident, determine if the cause is a feature of the program.which -438-

PAGE 477

is measuring a characteristic essential to successful job performance. If it is the feature, it should be changed or eliminated. 4. Key Principle: Whenever possible, testing should be done by class, and if the class is common to two or more departments, the testing should be done centrally, resulting in common lists. This would lead to a reduction in redundancy and economies of scale. 5. Key Principle: If the selection system is decentralized, the selection program should maintain evaluation and quality control standards. 6. Key Principle: Appointments should be made on the basis of merit. To achieve this, the selection program should: --Minimize non-merit considerations in test scoring and certification. --certify from lists based on the rank order of scores. --Train supervisors and appointing authorities in job interview techniques. NOTE: Social objectives such as "employer of last resort", veterans' preference, and some aspects of affirmative action can be inconsistent with selection on the basis of merit. Analytical Model Linkages As illustrated in the model matrix in Chapter IV, selection impacts or affects the following performance criteria for good -439-

PAGE 478

government: effectiveness and efficiency, qualified human resources, merit service, career development system, equal employment opportunity, social responsibility and equity, and accountability. For an organization to be effective and efficient, it must have highly qualified and competent employees. The function of a selection system is to predict successful job performance with validity and reliability by testing qualified applicants. A merit service compels the organization to select, retain, and reward industrious and competent employees. The selection system also interrelates with the career development system by determining which employees applying for promotional opportunities are the most likely to be successful in performing job duties at a higher level within the organization. The selection system should be sensitive to and supportive of the affirmative action goals of the organization. Examination devices should not arbitrarily screen out or disqualify any members from ethnic or racial minority groups, women, handicapped individuals, or other workers. The selection system should be oriented toward establishing selection techniques that permit entry into the system for these types of applicants, distinguishing between poor and outstanding potential performance. Colorado Selection System Colorado Legal Environment The Constitution, statutes, and personnel rules all refer to the State's selection procedures. (See Appendix A to this chapter.) In -440-

PAGE 479

brief, the Constitution provides for:24 --Selection on the basis of merit and fitness as determined by competitive tests. --Non-discrimination on grounds of race, creed, color, or political affiliation. --Appointments from among the top three names on the eligible list. --Limitation of temporary appointments to six months. --Probationary periods extending to one year. --Authorization to the State Personnel Board to establish rules on selection. --Veterans' preference. Both the legislation and personnel rules are detailed and lengthy. ' In some respects, they are contradictory. For instance, the statutes specify that testing shall be done by class or groups of similar classes; whereas the personnel rules permit testing by position.25 (The section on affirmative action reviews the disagreement between the General Assembly and the State Personnel Board on the issue of certification under the "3+3" rule to encourage greater employment of minorities and women.) These inconsistencies reflect the unresolved legal issue of the extent to which the General Assembly can control rule-making by the State Personnel Board. The Colorado courts have insisted on compliance with the basic concepts of merit but within those broad principles, the courts have 24colorado Constitution, XII, Section 13, 14, and 15. 25c.R.S. 1973, Sections 24-50-111 to 115 and Rules and Regulations of Colorado State Personnel System (April, 1980), Rules 4-4-1 and 4-4-2. -441-

PAGE 480

used judicial restraint in reviewing the e xercise of discretion by the State Personnel Board, the staff of the State Department of Personnel, and their several predecessors. Organization of Colorado Selection Program This is fully described in Chapter X on Recruitment. Characteristics of Colorado Selection Program Test Plan. The selection process starts with the Test Research and Development unit in the State Department of Personnel. This unit stipulates what the test plan shall be for each class (for instance, 50 % written, 50% oral, or qualifying written and 100% oral.) It also must approve the selection of alternative test plans used for any given examination (generally, utilizing the criterion of the ratio of candidates to vacant jobs). The tests may have several variations.26 --They may be open competitive or promotional examinations. --They may be by position, by class, or by multiple classes. --They may be State-wide or geographic area examinations if they are open competitive. --They may be service-wide or departmental examinations if they are promotional. --They may be given under separate announcements or continuously open for applications under a single announcement. Test Content and Administration. If a written examination is part of the test plan, it is prepared or procured by the Test Research and Development Unit of the State Department of Personnel, in cooperation 26Rules and Regulations of the Colorado State Personnel (April, 1980), Rule 4-1-2. -442-

PAGE 481

with the agency with the vacancy. Oral examinations are prepared either by the Department of Personnel or the department with the vacancy, depending on whether or not testing has been decentralized. If the testing is decentralized, the Department of Personnel reviews the test for technical competence before it is given, and establishes passing points. Test administration also can be decentralized, but guidelines for the process are established by the Department of Personne1.27 Quality Control Over Decentralized Tests. An assistant director for the State Department of Personnel indicated that post-audits of tests under decentralization agreements also are conducted.28 Results of such audits are not available. Validation. The Department of Personnel also retains the responsibility for test validation.29 Test validation is done principally by utilizing persons familiar with the work, including former employees, to develop the questions. Some occupational surveys are made, but this practice does not appear to be prevalent. Eligible Lists and Certification. When tests are scored, lists of eligibles are prepared and certification of names are made from these lists to fill vacancies. Certification is on the basis of the "Rule of 3" (i.e., three names are certified for each vacancy). In multiple vacancies, three are certified, and when one is appointed, another one 27This discussion of procedure is based on an interview with the Officer, State Department of Regulatory Agencies (June, 1980). 28Interview with Assistant Director, Colorado Department of Personnel 2 (May, 1980). 9Delegation of Authority Agreement, Colorado State Department of Personnel and Colorado State Department of Revenue, Paragraph 7, p. 4. See also in general terms, Colorado Department of Personnel, "Policy Statement on Functions to be Centralized and Decentralized .in Colorado State Personnel System" (November 1, 1979). -443-

PAGE 482

is added to the list for the next vacancy. In a situation involving three vacancies, one of the original top three candidates was passed over by this procedure, and he challenged the validity of this rule. However, the Colorado Court of Appeals supported its constitutionality.30 Open competitive lists are maintained for one year, unless they are exhausted or extended by the Personnel Director. Certification of names from eligible lists may be decentralized.31 Appointments. When an appointment is made from an eligible list, the employee serves a probationary period up to one year, although an appointing authority may certify the proficiency of the employee in a shorter period of time. The responsibility for certification is vested in the appointing authority, but if that executive fails to act before the end of the probationary year, the employee gains certified status by default.32 Statistics From the viewpoint of operating agency management, the Personnel Department's mission is to provide competent eligibles for appointment to vacancies in a timely fashion.33 This section presents data illustrative of performance in meeting this expectation. Workload and Performance. The State Department of Personnel conducted 41% of all open competitive and promotional examinations, the 30Haines v. Colorado State Personnel Board, 39 Colo. App. 459, 566 31P. 2d 1088 (1977). Ibid., note 27. 32Rules and Regulations of the Colorado State Personnel System 3 (April, 1980), Rule 5-5-1. 3colorado Department of Personnel, "Study of Perception of Department by State Administrators" (1976). -444-

PAGE 483

majority being open continuous examinations in fiscal year 1978. Estimates from work sheets of the Examination Development and Research Unit indicate that the proportion of decentralized open competitive examinations by class rose from approximately 49% in fiscal year 1976 to approximately 72% during the first eight months of fiscal year 1979. Table 11-1 shows the magnitude of the testing activity in the Colorado Department of Personnel during fiscal year 1978. Of the Department's activities, 87% of the Department's open competitive and promotional examinations and 71% of the open continuous examinations were conducted by the Examination Administration Unit. The balance were administered by the branch officers of the Department.34 Timeliness of qualified candidates to fill vacancies is a continuing issue of concern, although it must be balanced with access to the system by potential candidates and the need for reliable and valid selection instruments. Table 11-2 shows average turnaround times after the recruitment process is completed. When these times are combined with the times required for recruitment shown in Chapter X on Recruitment, a multi-part examination requires 61-76 working days or 12-15 weeks before a vacancy can be filled. A single part examination would take approximately 4-7 weeks less. Decentralized examinations take longer than centralized ones under the multi-part format. This process is relatively slow as compared with the typical performance of State jurisdiction-wide merit systems, shown in Table 11-3. Testing Instruments Used. As noted earlier, the Colorado Department of Personnel has many variations of test plans. Estimates 34colorado Department of Personnel, Budget Request for Fiscal Year 1980-1981 (October, 1979). -445-

PAGE 484

Table 11 . 1 WORKLOAD INDICATORS FOR EXAMINATION ADMINISTRATION UNIT COLORADO STATE DEPARTMENT OF PERSONNEL, FISCAL YEAR 1978 Workload Indicators Number Applications 16,167 Examinations: Open Competitive and Promotional 1,029 955 1,984 Open Continuous Total Examinations Source: Colorado Department of Personnel, Budget Request for Fiscal Year 1980-1981, October, 1979, p. 19d. Table 11 -2 AVERAGE TIME FOR COLORADO DEPARTMENT OF PERSONNEL TO ESTABLISH ELIGIBLE LISTS FROM OPEN COMP.ETITIVE EXAMINATIONS AFTER CLOSING DATES, 1976-1979 Type of Examination Administration Centralized Decentralized Average Time in Work Days One Part Exams Two Part Exams 23 23 42 57 Soure: Estimates based on worksheets of the Examination Development and Research Division, Colorado Department of Personnel, compiled through March, 1979. -446-

PAGE 485

Table ll -3 COMPARISON OF TIME TO ESTABLISH OPEN COMPETITIVE ELIGIBLE LISTS AFTER CLOSING DATES OF EXAMINATIONS COLORADO AND STATE JURISDICTION-WIDE MERIT SYSTEMS FISCAL YEAR 1977-78 Time to Establish Number of Lists Per Cent Lists All States Colorado All States Under 4 weeks 4,884 54 60 4 -6 weeks 949 42 12 Over 6 weeks 2,360 39 29 Total 8,193 135 lOOa of Lists Colorado 40 31 29 100 Source: National data from U. S. Office of Personnel Management, Bureau of Inter-governmental Personnel Programs, State and Local Governments, 1978 Annual Statistical Report: Sta tistical Indicators for Self-Evaluation, 1979, Table 4, page 9; Colorado data from report entitled: "Merit System Agency--Review of Personnel Operations", filed with U.S. Civil Service Commission, July 28, 1978. a The percentages do not add to 100% because of rounding. -447-

PAGE 486

vary concerning the frequency of using different types of tests in the aggregate. The Common Cause survey indicated that tests have been 37% oral, 8% written, 3% job skills, and 26% combined written and oral. The remaining 26% of the test formats were unknown. Table 11-4 indicates a marked difference in the testing patterns of the Department of Personnel and of fully and highly decentralized agencies, with the latter about half as likely to give written examinations, and about 2 1/2 times more likely to give oral examinations. This is a significant problem because of the great difficulty in validating oral examinations.35 Nonetheless, the rationale for this choice by decentralized agencies is that it allows better customizing of the examination to the specific requirements of the position.36 In general, test experts favor use of several selection instruments (multi-part exams), such as an evaluation of relevant experience and a written test, as a more comprehensive and valid way of appraising the knowledges, skills, and abilities of candidates, rather than use of a single selection instrument.37 Table 11-5 shows the comparable pattern of the centralized and decentralized testing systems. Common Cause Survey. The 1978 Common Cause survey addressed two questions relative to selection: (1) relationship of job announcement description to work performed, and (2) quality of test instruments. 35Jerry Deignan, Ph.D., Psychologist, U.S. Air Force Human Resources 36Laboratory (June, 1980), mms. and interview. Interview with Personnel Officer, State Department of Regulatory 37 Agency (June, 1980). Interview with Employment Officer, Denver Career Service Authority and National Officer, International Personnel 1anagement Association Assessment Council (June, 1980). -448-

PAGE 487

I _;,_;,-1..0 I Agency Department of Personnel Fully and Highly Decentralized Agencies Table 11 -4 COMPARISON BETWEEN THE PERSONNEL DEPARTMENT AND DECENTRALIZED AGENCIES REGARDING ORAL vs. WRITTEN EXAMS SET UP AND CONSTRUCTEDa FISCAL YEAR 1978-1979 % Written % Oral % Written Set Up Set Up Constructedb 75% 25% 77% 38% 62% 3 % Source: Colorado Department of Personnel. % Oral Constructed 23% 97% Note: a The base data used here is largely comprises of estimates drawn from the November 1979 Department•s Workload Qu. estionnaire . . b In interpreting the construction of examinations by fully and highly decentralized agencies, it should be noted that the Department of Personnel does not delegate the construction of written examinations.

PAGE 488

Many employees did not perceive a close relationship between the description of the work to be performed as shown on the announcement and the work they actually were doing. Only a little more than half of all employees responding found that job announcements were accurate. An analysis by department is significant because of decentralization. (See Table 11-6.) The perceived adequacy in communicating the nature of the work to be performed ranged from 45.6% in the Department of Institutions and Corrections to 65.6% in the Department of Natural Resources. There also was a relationship between income or salary level and perception of the accuracy of job descriptions on announcements. Table 11-7 shows the results. Most of these ratings cluster around the overall average rating of 50.6%. Starting with a low of 42.9% in the $9,000$11,999 range, there is a consistent trend of greater acceptability, peaking at 75.9% in the range of $30,000 and over. In part, this may be because the higher in the salary range a position is, the more likely either it is going to be a single position class (see Chapter IX on Classification) or that it is going to have a position examination.38 Conversely, State administrators felt that there was a lack of relationship between the ability of candidates certified to fill a vacancy and the duties they were expected to perform.39 The second question examined by the Common Cause survey pertains to the quality of the examinations. Table 11-8 shows the perceptions by type of testing instrument used. 38rnterview with Personnel Officer, State Department of Regulatory Agencies (June, 1980). 39colorado Department of Personnel, "Study of Perceptions of-Personnel Department by State Administrators" (1976). -450-

PAGE 489

Table 11 -5 USE OF MULTI-PART EXAMINATIONS COLORADO DEPARTMENT OF PERSONNEL AND DECENTRALIZED AGENCIES FISCAL YEAR 1978-79a Number of MultiTotal Ratio: Multi Part to Total Testing Agency Colorado Department of Personnel Fully and Highly Decentralized Agencies Part Exams Exams 105 684 131 1,246 . 153 .105 Source: Workload records, Examination Administration Unit, Colorado Department of Personnel. a First nine months only. Table 11 -6 PERCEPTION OF ACCURACY OF JOB ANNOUNCEMENTS BY DEPARTMENT, 1978 Department A 11 respondents Administration and Finance Education Health Highways Institutions and Corrections Labor and Employment Natural Resources Per Cent of Employees Considering Job Announcements to be Accurate 50.6 57.8 47.6 59.9 51.8 45.6 49.3 65.6 Source: Tabulation of Question 5, Common Cause Questionnaire. -451-

PAGE 490

Tablell7 PERCEPTION OF ACCURACY OF JOB ANNOUNCEMENTS BY SALARY LEVEL, 1978 Salary Level ($) Under 9,000 9,000 -ll ,999 12,000 19,999 20,000 29,000 30,000 and over Percent of Employees Considering Job Announcements to be Accurate 49.2 42.9 50.5 54.6 75.9 Source: Tabulation of Question 5, Common Cause Questionnaire. of Test Written Oral Job Skills Other Table ll -8 PERCEPTION OF ADEQUACY OF TESTING INSTRUMENT BY TYPE OF INSTRUMENT, 1978 Rating ( % ) Poor Adeguate Good 32.0 51.2 16.7 26.6 51.2 22.2 23.6 51.6 24.8 36.0 47.2 16.8 Source: Tabulation of Question 7, Common Cause Questionnaire. -452-

PAGE 491

About one-fourth of the employees feel that all tests are poor, while about half consider most tests (except those in the "other" category) to be adequate. Employees particularly feel that written tests and "other" tests (such as ranking on the basis of education and experience) are of poor quality. Key Issues In the following discussion, issues must be considered together. For instance, there must be a balancing between timeliness and improving comprehensiveness and validity of tests by using multi-part examinations. Overemphasis of timeliness in the selection process may undermine the merit principle. In addition, selection is almost inseparable from recruitment and affirmative action and should be considered together with these chapters. Adherence to the Merit Principle Despite the constitutional mandate for selection based on "merit and fitness" and by "competitive" means, there is a climate of disregard for the merit principle. It seems to arise in part from the low regard for government generally and in part from the deficiencies in the personnel system which have undercut the merit process. Among the latter, some examples are: silence by top state policymakers regarding the importance of strong and dedicated career service to the integrity and productivity of the government; abuse of the system by excessive use of temporary and contract personnel; widespread side-stepping of merit selection processes by pre-selection, with tailoring of job descriptions and examinations to fit preselected applicants; and many other dodges. -453-

PAGE 492

Indeed some of these processes are carried on in order to obtain better appointees than the present system can generate. However, in the long run the disregard of merit principles can only bring inequity and waste to the State government. The merit process must be strengthened from top to bottom. Recommendation 11-1: The Department of Personnel should be directed by the Governor to: Strengthen standards, guidelines, monitoring, and post-audits of personnel selection instruments and procedures. Centralize monitoring of activities susceptible to abuse, and take action to vest in the Department of Personnel responsibility and authority to halt abuses. Report periodically to employees, management, and the public on the activities of the Department of Personnel, with special emphasis on subjects specially liable to abuse. Involve employees (including management) in the selection process as appropriate, with special emphasis on participation in job analysis, and with dissemination of information on how such participation has affected the system. Reaffirm on a regular basis the commitment to merit principles of selection, and give this reaffirmation wide circulation among employees. Systematically validate tests on a current basis to improve the reliability of the tests. Lack of Timeliness A delay of up to 15 weeks between a requisition for personnel and the filling of a vacancy has been identified by department -454-

PAGE 493

administrators as the most serious personnel problem they have experienced. Adverse effects cited are two-fold: (1) lowered ability to achieve the agency mission, and (2) loss of more skilled and qualified applicants to other employers before an offer of employment can be made by the State. Contrary to expectations, decentralization has not improved the timeliness of the selection process overall. Recommendation 11-2: Reduce lapsed time between close of the application period and certification from the eligible lists by: Increasing the proportion of positions for which standing rosters of eligibles are maintained through periodic examinations for use of State agencies. (This can be improved by following recommendations in Classification Chapter by grouping more positions into classes and standardizing class specifications across agencies for general purpose administrative and professional classes such as budget analysts, personnel specialists, accountants, and the like.) Starting recruitment when the vacancy is anticipated, rather than waiting for the vacancy to occur. (See Chapters on Human Resource Planning, Recruitment, and Training and Development.) Starting the examination process on a bi-weekly or a weekly schedule rather than the present monthly schedule. (See Chapter X on Recruitment.) Eliminating the one-week delays for appeals following completion of the eligible list and completion of the review for entrance requirements to take the test. The appeal rate is very low. (See Chapter XIV on Appeals and Grievances.) -455-

PAGE 494

--Automating as many phases of the selection process as feasible, to free personnel to work on auditing and validation. Considering use of two shifts in the Department of Personnel to expedite processing of paper work; and having specific personnel in decentralized departments dedicated solely to the selection process, instead of having other responsibilities such as payrolls. Small agencies could share a full time specialist. Quality of Examination Process The current system of selection uses experts to formulate the questions for written and oral tests. Jerry Diegnan, a psychologist for the Air Force Human Resources Laboratory, summarized the problem in these terms: "To the extent the expert (in some cases, current or former job incumbents)provides items or questions, which comprehensively measure the critical job tasks, then the measure may be a concurrent, valid predictor of job required knowledge. Knowing, however, differs from doing; i.e., task performance. It is task performance which is to be predicted."40 Dr. Deignan continues by noting that task performance is comprised of: (1) person's characteristics (e.g., aptitude, knowledge, skill, and motivation), (2) task characteristics (e.g., difficulty level, cognitive and/or perceptual-motor skills required, problem solving vs. rule following, etc.), and (3) situation characteristics (the various settings in which tasks are to be performed; e.g., pressured-calm, structured-unstructured and degree of unilateral vs. shared management.)41 1980. 1Ibid. -456-

PAGE 495

Although there have been reports of occupational surveys having been made by the State, the practice is not widespread. Instead, many oral tests are drafted in the agencies which administer the tests. The trend is toward oral tests; the more reliable multi-part tests are a smaller proportion of the total. The quality of promotional examination is an unknown -and the procedures seem more designed to limit competition than to broaden it. Very few of the test instruments used by the State appear to have been validated and resources for test validation are extremely limited-only 60 written tests were validated out of 1,888 tests used. Agency personnel specialists have indicated that most of the written tests supplied by the Department of Personnel are critical reasoning or general intelligence type tests. They may lack job relatedness. Recommendation 11-3: The Department of Personnel should make periodic occupational surveys by class or groups of closely related classes to identify tasks and standards of performance as defined in the recommendations by Dr. Deignan. The content and instruments in the testing procedure should be based on the findings of the surveys. In addition, the Department of Personnel should secure the assistance of outside experts on testing and the validation of test instruments, ideally by creating an advisory board of experts from other states and the federal government. Steps should be taken to improve tests and testing procedures by some or all of the following measures: -Use of more objective measurement instruments, whenever possible in written form. -457-

PAGE 496

Closely monitoring tests used in the decentralized agencies and reviewing their validity and reliability. Centralized preparation or procurement of all written tests and test instruments--and increasing their job relatedness. Ensuring that testing materials are safeguarded. Training departmental personnel and agency pesonnel in techniques of occupational surveys and job content validation. Excessive Use of Oral Tests The proportion of open competitive examinations by class which was decentralized rose from approximately 49% in fiscal year 1977 to about 72% in the first eight months of fiscal year 1980. At the same time, the decentralized agencies (1) use multi-part examinations in only about 10% of the cases, and (2) use oral examinations in 62% of the cases where tests are already prepared and in 97% of the cases where tests have to be prepared. Expert opinion on testing is that oral tests generally lack scientific validity--and that multi-part tests (e.g., written/oral, written/review of credentials, etc.) are distinctly more reliable as predictors of job performance. Oral tests are defended by agencies as being easier to customize and prepare. The quality of oral tests prepared by the agencies is dubious. Moreover, they are more difficult to administer objectively and, where there are large numbers of candidates, they are costly to the agencies and to the Department of Personnel in staff time. In the State system, the examination system is further complicated by refusal to make available to the examiners the applicant's application blank or resume at or before the oral examination. The -458-

PAGE 497

applicant assumes the examiners have the resume and answers accordingly. Also, there are reported instances of oral board members having an inherent conflict of interest; e.g., representatives of an industry sitting on the oral board to select an executive for an agency whose mission is to regulate that industry. Recommendation 11-4: The use of oral tests should be severely deemphasized as ranking instruments. When they must be used, quality control should be strengthened by: Establishing criteria for oral panel members to use in the selection process and closely monitoring compliance with criteria. Strengthening procedural requirements to document the job relatedness of the questions asked while assuring compliance with those requirements by utilizing outside experts to review proposed tests. Strengthening standards for oral test administration and monitoring for compliance. Assuring that oral test panel members have adequate information to evaluate candiate responses, including the application forms, resumes, and other relevant date on education and experience. Requiring selection of board members who are knowledgeable yet free from conflicts of interest. Validation of Test Instruments Once job tasks and performance standards are identified and this information is both valid and reliable, tests should then be content validated. (In general, content validation is a sample or a simulation -459-

PAGE 498

of the tasks performed on the job.) After the test has been given, psychologists recommend that a follow-up study be conducted to determine the predictive validity for those classes with enough appointments to make such a study statistically significant. At present, the State Department of Personnel assumes that the use of experts to prepare test items or questions results in valid tests in most cases, rather than formally analyzing and documenting these relationships. Very few testing instruments have been validated and resources for test validation are extremely limited -only 60 state tests were validated out of 1,800 tests used. Recommendation 11-5: (1) Content validation of tests should-be based on current, valid, and reliable occupational surveys and documentation of the relationship, on a systematic schedule should be made by the Department of Personnel. (2) Objective measurement instruments should be used whenever possible. (3) Reliability of items or questions should be verified through item analysis, insofar as feasible, as part of the post-audit of examinations. (4) Department of Personnel and departmental personnel officers and specialists should be trained by the Department. in techniques of occupational surveys and content validation, and the Department should develop a model and guide for them to follow. Action should be taken to assure that departmental personnel officers engaged in developing selection instruments are competent. (S) Validity and reliability of tests used in the decentralized system should be determined as part of the post-audit. (6) There should be centralized preparation of all test instruments which departmental personnel officers are not competent to develop, -460-

PAGE 499

including maintenance of centralized preparation of tests, including oral test questions which have been validated. Examination Post Audit of Decentralized Agencies It is not known if all decentralized tests are post-audited by the Department of Personnel. While some workload statistics were found, the standard content of a post-audit for quality could not be identified. Recommendation 11-6: Centralized monitoring and post-audit for quality should be strengthened by the State Department of Personnel. (See related recommendations in Chapter XII on Equal Employment Opportunity and Affirmative Action.) Testing There is widespread examination for individual positions rather than for classes. Redundant examinations are announced by different agencies for similar specialists such as budget and personnel analysts. The practice of each agency testing for individual positions wastes State funds, and inhibits reassignments, transfers, and promotions, since the transferability of position-only knowledges, skills, and abilities is an unknown feature. The absence of a career ladder discourages able potential candidates. Recommendation 11-7: The State Department of Personnel should broaden the base of selection to classes, including encouragement of examining a core of knowledges, skills, and abilities common to the class. For classes common to more than one agency, the testing should be either centralized in the State Personnel Agency or one lead agency should be designated to test periodically for itself and other agencies at the same time. The result should be -461-

PAGE 500

a common list of eligibles to be used by those agencies having vacancies in that class. Probationary Period There is evidence of lack of close observation of the work of probationary employees by their supervisors and appointing authorities. Periodically, such employees attain certified status by default. Recommendation 11-8: The Department of Personnel should train supervisors and managers in departmental use of the probationary period and institute a follow-up system to remind them in advance when action is required. Internships At present, screening requirements for admission to examinations excludes candidates with only academic training in favor of those with experience. On-the-job experience is required for entry level professional positions, making it impossible for educationally trained and promising candidates to compete. This prevents the State from benefiting from the personnel resources developed by the State educational institutions. The State has no organized internship program for entry level professional public administrators like the federal President's Management Internship Program. Recommendation 11-9: The requirements for entry-level professional position should: Provide for trade-offs between education and experience; e.g., permitting appropriate graduate level experience to be substituted for experience. -462-

PAGE 501

Increase and regularize internships to bring young professionals who have completed appropriate graduate training into the system. Hold competitive examinations for entry into beginning professional or pre-professional ranks for applicants completing appropriate college or graduate education. Contract Employment In 1977, 36% of all appointments were temporary or contract, which are not covered by the merit system. Hiring of personnel under these arrangements on such a large scale is a violation of the merit system when: (1) Certified personnel could do the job, and the agency has the resources to hire them. (2) The job in fact involves a long-term service which is be,ing performed through annual renewals of the contract. (3) The contractor is unable to work independently.4 2 The State Personnel Director stated in a 1977 interview that the reasons for these abuses were: (1) the slowness of the State Department of Personnel in meeting departmental personnel needs, and (2) efforts by departments to supplement full-time positions allocated by the General Assembly, which are considered inadequate to accomplish departmental program objectives. As prescribed above, ready measures exist for overcoming Points 1 and 2. Recommendation 11-10: The Department of Personnel should establish centralized approval of all contract employment for 42Interviews with personnel staff at the University of Colorado, Boulder, Colorado (1977). -463-

PAGE 502

conformance with the Personnel Rules and carefully monitor the durations for which contract personnel are employed. Political and Favored Appointments Periodically, appointing authorities try to "beat the system" and succeed by a variety of techniques in appointing a particular person who is not reachable on the certification list. Techniques include rejecting all names certified, delaying in filling vacancies until the name can be reached, delaying appointment until another test is announced, making contract or provisional appointment of the favored person so that individuals can learn the job before the test is given, and by giving a test by position while discouraging others from applying. Recommendation 11-11: Amend Constitution to authorize the Governor to appoint a deputy executive director as well as a departmental Executive Director politically subject to Senate confirmation. There also may be justification for exempting from the merit system one or two other confidential employees from each of the cabinet departments. Beyond these steps the merit system standards should be strictly enforced -and where the selection process is weak it should be strengthened to build the base of a genuine merit-based career system. Management Information System Most data about the selection system is either non-existent or available only in fragmented and unassembled form (work sheets, log books). Hence, most statistical information is either estimated or approximated. Documentation data about the selection instruments and processes appears to be lacking as required' by the Uniform Selection -464-

PAGE 503

Guidelines. Recommendation 11-12: Develop an adequate management information system as one basis of evaluating and administering the operations of the personnel system so performance can be evaluated and deficient selection procedures can be identified and corrected. Effectiveness of Decentralization of Selection Major policy issues in the selection process are inherent in the current decentralized system of selection. Among these are: (1) extensive testing by position, leading to redundancy and inequities in the testing process while claims are made of inadequate staff to operate the system; (2) considerably longer time from requisition to appointment in decentralized selection programs than in the centralized program; and (3) apparent widespread use of marginally validated or unvalidated oral tests in decentralized selection programs. Recommendation 11-13: Make a management study to evaluate the impact of decentralization of the selection process on the maintenance of merit standards. (Refer to earlier decentralization discussions.) Employee Perception of the Selection System Statistical data provided in this section indicate that employees at best, marginally approve of the selection system. A sizeable number of employees, at times approaching a majority, question if they are being told what the job is for which they are applying, and doubt if the selection instruments accurately measure their knowledges, skills, and abilities. Widespread use of temporary and contract personnel, and political efforts to circumvent the merit system of selection contribute to the poor image of the selection process by employees. is -465-

PAGE 504

evidence indicating that this dissatisfaction is shared by employees in management positions, although not as widespread in extent. Recommendation 11-14: The State Department of Personnel should: (1) Strengthen standards, guidelines, monitoring, and postaudits of personnel selection instruments and procedures. (2) Centralize monitoring of activities susceptible to abuse, and take action to vest in the Department of Personnel responsibility and authority to halt abuses. (3) Report periodically to employees and management on the activities of the Department of Personnel, emphasizing subjects especially vulnerable to abuse. (4) Involve employees (including management) in the selection process when appropriate, with special emphasis on participation in job analysis, and with dissemination of information on how such participation has affected the system. (5) Reaffirm on a regular basis the commitment to merit principles of selection, and widely circulate this reaffirmation among employees. (6) Systematically validate tests on a current basis to improve the perception of the value of the tests. (7) Increase centralized testing to establish rosters of eligibles for generic occupations, including professional positions which are commonly used by many or most State agencies. -466-

PAGE 505

The Necessity for Increased Funding for the Selection Process The Colorado recruitment and testing operations are grievously under-funded in relation to those of other jurisdictions. The 1977 cost survey by the City of Phoenix reported that recruitment and testing salary costs per hire in the State of Colorado were one-sixth of the median costs in 27 states and local jurisdictions studied; and only oneseventh per applicant of the median costs in 29 jurisdictions analyzed. It would appear that the quality of the Colorado selection process is being sacrificed at the cost of weakening the Colorado merit system. Recommendation 11-15: The Governor should recommend and the General Assembly,particularly the Joint Budget Committee, should appropriate more adequate funds for strengthening the personnel selection function in the classified service. -467-

PAGE 506

APPENDIX 11-A LEGAL REQUIREMENTS RELATING TO SELECTION U.S. Merit System Standards Statutory. The statutory requirement is set forth in the regulations as Section 900.603(a) as follows:43 Recruiting, selecting, and advancing employees will be on the basis of their relative ability, knowledge, and skills, including open consideration of qualified applicants for initial appointment. Rules. The statutory mandate is augmented by requirements issued by the U.S. Office of Personnel Management. Legally, these requirements are as binding as the statute itself.44 Section 900.603-2: Selection and Appointment. (a) Requirement. (1) Selection procedures including appropriate ranking for entry to the career service will be job related and will maximize validity, reliability, and objectivity. (2) Selection for entrance to the career service normally will be through open competition. Appointments to positions in the career service will be made on the basis of merit by selection from eligible lists established in accordance with the provisions of these Standards on recruitment, selection, and equal employment opportunity. (3) Certification procedures will be established by State and local governments to insure that appointing officials review and give equitable consideration to an appropriate number of eligibles based on whatever ranking system is used on the list when making a selection for initial entry to the career service. (4) Competition for appropriate positions may be limited to facilitate employment of those with a substantial 43 44Federal Register, Vol. 44, No. 29, 8520-46 (February 9, 1979). Ibid. -468-

PAGE 507

physical or mental impairment, the economically disadvantaged or participants in employment or rehabilitation programs authorized by Congress or related programs authorized by State legislatures. (5) In those occasional instances where there is evidence that open or limited competition is not practical, noncompetitive appointments may be made. (6) Job related minimum requirements for entrance to a class will be established wherever they are practical. They will be met by all successful candidates examined, appointed, and promoted. (7) Permanent appointment for entry to the career service will be contingent upon satisfactory performance by the employee during a reasonable, time limited probationary period. (8) Temporary, provisional, or other nonstatus appointments will not be used as a way of defeating the purpose of the career service and will have a reasonable time limit. If lists of eligibles are available, they normally will be used for filling temporary positions. Short term emergency appointments may be made without regard to the other provisions of this section to provide for maintenance of essential services in an emergency situation where normal procedures are not practical. Guidelines. Finally, the U.S. Office of Personnel Management issued guides, which are advisory only and do not have the force of law. The part of Section 900.603-2 relating to selection and appointment is as follows: (b) Guide. (1) More than one selection procedure should be used where that is necessary to measure the important skills, knowledges, and abilities needed for entry to a job. Any examination procedures including appropriate ranking utilized in career advancement or promotion programs need to be job related and to maximize validity, reliability, and objectivity to the same extent as selection procedures for initial appointment. Adequate job analysis needs to be conducted to insure job relatedness of selection procedures. (2) State and local governments have wide latitude in determining a manageable number of eligible candidates to refer for consideration for entrance to the career service. The procedures need to provide for.selection based on relative ability, knowledge, and skills of the -469-

PAGE 508

eligibles; for fair treatment without regard to an eligible's race, color, religion, sex, national origin, political affiliation, age, handicap, or other nonmerit factors except where provided for by Federal law; for the protection of the eligible's privacy and constitutional rights; and for the equitable consideration of all eligibles. (3) Provisions which would generally result in appointment from the whole list of eligibles or its equivalent would not meet the requirements of these Standards. Any one of a variety of approaches providing for appointment from among the most qualified available eligibles from lists meets the requirements of this section. For example, all candidates could be ranked by broad groups, and appointments could be made first from a best qualified category, and when it is substantially depleted, from a well qualified category, and third, from a qualified category or according to an equivalent system. (4) Handicapped persons who have, have had, or are regarded as having a physical or mental impairment which substantially limits one or more major life activities, may be hired through limited competition or noncompetitive procedures. (5) Noncompetitive procedures may be used where job related ranking measures are not practical or are not appropriate. They may be used for classes where the method of selection would have minimum impact on proper and efficient administration of the program such as unskilled positions or types of positions frequently exempted from merit systems. (6) Minimum qualifications and performance requirements and duties may be appropriately modified to permit the appointment and promotion of trainees to positions normally filled at full proficiency level. (7) State and local governments are encouraged to provide for entry through cooperative education, work study, internship, and similar programs. Colorado Constitional Provisions The State Constitution sets forth three major provisions relative to selection:45 45 Colorado Constitution, XII, Section 13, 14, and 15. -470-

PAGE 509

1. Section 13 of Article XII provides in part: (1) Appointments ••• to offices and employments in the personnel system of the State shall be made according -to merit and fitness, to be ascertained by competitive tests of competence without regard to race, creed, color, or political affiliation. (5) The person to be appointed to any position under the personnel system shall be one of the three persons ranking highest on the eligible list for such position, or such lesser number as qualify, as determined from competitive tests of competence, subject to limitations set forth in rules of the State Personnel Board applicable to multiple appointments from such list. (9) The State personnel director may authorize the temporary employment of persons, not to exceed six months, during which time an eligible list shall be provided for permanent positions. No other temporary or emergency employment shall be permitted under the personnel system. (10) The State Personnel Board shall establish probationary periods for all persons initially appointed, but not to exceed twelve months for any class or position. 2. Section 14 of Article XII provides in part: (3) The State Personnel Board shall adopt, and may from time to time amend or repeal, rules to implement the provisions of this section and sections 13 and 15 of this article as amended, and laws enacted pursuant thereto, including but not limited to rules concerning ••• the conduct of competitive examinations of competence •••• 3. Section 15 of Article XII deals with veteran's preference. In summary, subsection 1 provides that a veteran or the unremarried widow of a veteran who saw active duty during a period of hostilities is entitled to have points added to the score on an examination, provided that the person passes the examination without added points. Specifically, five points are added for each eligible veteran or unremarried widow of a veteran, and ten points are added if the veteran has a service-connected disability. Colorado Statutory Provisions In supplementing the Constitutional requirements, the General 46 Assembly enacted the following statutes relative to selection: 1. Section 24-50-111, CRS 1973 provides: 46c.R.S. 1973, Section 24-50-111 to 115. -471-

PAGE 510

Original appointments ••• shall be based on merit as determined by competitive examination. Examinations shall be in such form as will fairly evaluate the abilities and aptitudes of candidates but may not include any inquiry into or in any way be influenced by the political or religious affiliations or beliefs of any candidate. No examination shall involve any discrimination on account of sex except as a bona fide job requirement. 2. Section 24-50-112 provides as follows: (1) Examinations may be based on the duties, responsibilities, and requirements of a given class or upon specific knowledges, skills, and abilities common to several classes, in which latter case the State personnel director may create eligible lists for a class from among those who have established by examination their qualifications for special requirements of a class. (2) Any examination may be held at any time that candidates are available and the needs of the State Personnel System require. The normal life of an eligible list shall be for one year, but it may be extended for an additional period of one year at the discretion of the State personnel director. (3) The board shall provide by rule, considering the recommendations of the State personnel director, the conditions under which applications will be accepted, the procedures by which tests will be held, the frequency with which candidates may compete in the same examination, and the standards by which candidates shall be deemed qualified. (4) Candidates meeting the established standards for a class shall be placed on an eligible list in the order of their scores on the examination; except that veterans and their widows shall be given the preference prescribed by the constitution. 3. Section 24-50-114, CRS 1973, as amended, establishes procedures for temporary appointments. 4. Section 24-50-115, CRS 1973 provides as follows: (1) Employment lists for each class, in the order of their priority, shall be department reemployment lists, general reemployment lists, promotional eligible lists. (Subsections 2, 3, and 4 then define the first three types of lists.) (4) Eligible lists and promotional eligible lists shall be created as provided in Sections 24-50-112 and 24-50-113. (5) The person to be appointed to any position under the State Personnel System shall be one of the three persons ranking highest on the eligible list for such position, or such lesser number as qualify, as determined from competitive tests of competence, subject to limitations set forth in rules of the board applicable to multiple appointments from any such list. (6) The board -472-

PAGE 511

shall establish probationary periods for all persons initially appointed, but not to exceed twelve months for any class or position. After satisfactory completion of any such period, the person shall be certified to such class or position within the State Personnel System, but unsatisfactory rerformance shall be grounds for dismissal by the appointing authority during such period without right of appeal. Colorado State Personnel Rules and Regulations Chapter 4 of the State Personnel rules deals with examinations and eligible lists at great length. For the purpose of this analysis, the key provisions are found in Sections 4-4-1 and 4-4-2, which provide as fo11ows : 47 4-4-1 Characteristics of Examinations (A) Content. Examinations may include one or more of the following components: written tests, performance tests, oral tests, physical tests, training evaluations, experience evaluations, and evaluations for promotion. The State Personnel Department shall develop examinations so as best to ensure that when admini.stered to an applicant or employee who has a handicap that impairs sensory, manual, or speaking skills, the examination results accurately reflect the applicant's or employee's job skills, aptitude, or whatever other factors the examination purports to measure, rather than reflecting the applicant's or employee's impaired sensory, manual, or speaking skills (except where those skills are the factors that the tests purports to measure). (Effective March 1, 1978). (B) Competitiveness. An examination shall be deemed competitive regardless of the number of examinees when (1) the Director has established, within provisions of law, qualifications and requirements for admission to and successful completion of the examination that are based upon reasonable education, experience, and personal standards; (2) a reasonable opportunity to apply is afforded potentially qualified persons; and (3) all examinees compete against common standards. (Effective October 1, 1977). (C) Consultants and Examiners. Technical consultants and oral examiners shall be qualified by their training and experience to perform their functions. (Effective February 47Rules and Regulations of Colorado State Personnel System (April, 1980), Rules 4-4-1-to 4-4-2. -473-

PAGE 512

1, 1976). (D) Scoring. The scores on each part of every examination shall be determined by uniformly applying recognized grading procedures. The passing point may be applied either to the individual parts of the examination or to the total score on the examination. (Effective February 1, 1976). (E) Security. Test materials and test scores shall be confidential. The identity of oral examiners shall be confidential until the commencement of the oral examination. Such information shall be safeguarded by all personnel involved in the administration of examinations. Raw or converted test scores may be disclosed to the person in interest, but shall not be used or disclosed to any other person for any purposes other than test validation studies and audits of agencies operating under decentralized agreements. (Effective December 1, 1979). (F) Notice. Applicants who are accepted for admission to an examination shall be given adequate and reasonable notice of the examination date, time, and location. (Effective February 1, 1976). 4-4-2 Conduct of Examination (A) Candidates may not take into use any unauthorized materials in any examination. (Effective February 1, 1976). (B) Communication between candidates during a written examination shall be prohibited. (Effective February 1, 1976). (C) Candidates may not communicate the content of any examinaion to other applicants or potential applicants. (Effective February 1, 1976). (D) Each candidate shall be informed of the names of oral examination board members immediately prior to the beginning of an oral examination or interview. (Effective February 1, 1976). (E) The oral examiners may not be informed of the names of candidates prior to the beginning of the oral examination or interview except in the discretion of the Director. (Effective February 1, 1976). (F) An oral examiner shall disqualify himself from rating a candidate if he does not believe he can rate him fairly. (Effective February 1, 1976). (G) Prior to the beginning of his oral examination or interview a candidate may, without prejudice, challenge for cause any examiner. If the challenge is upheld by an authorized -474-

PAGE 513

representative of the Department of Personnel, the examiner will not be allowed to participate in the examination or rating of that individual. (Effective February 1, 1976). (H) Special arrangements may be made for the administration of tests to handicapped applicants. (Effective March 1, 1978). Chapter V details constitutional and legislative provisions relative to appointments, referrals, and status. Colorado Court Decisions About Selection Several important aspects of the selection process have been reviewed by the Colorado Supreme Court: choice of selection measure, certification from eligible list, termination of eligible list, rights of provisional employees, and abolishment of a position and creation of another with the same duties but with a different incumbent. Choice of Selection Measure. In three cases, the Colorado Supreme Court ruled that "there is no question but what the board (commission) has the discretion as to the method of testing applicants for positions and that this discretion is one that cannot be inquired into by the court.48 In the Getty case, the issue was assembled exams versus unassembled exams, and a requirement that applicants pass the written exam before being allowed to take the oral examinations. In the Hewitt case, the issues were promotional examinations, allegations that questions were "inadequately stated, impractical, purely academic, controversial, tricky, and required wrong answers, inadequate credit for training and experience, and weights assigned to different parts of the 48Getty and Others as Commissioners of the State Civil Service Commission v. Witter, 107 Colo. 302, 306, 111 P. 2d 635 (1941); see also Hewitt v. State Civil Service Commission, Watrous, Intervener, 114 Colo. 561, 167 P. 2d 961 (1946); and People ex rel. Metzger, Attorney General v. Watrous, 121 Colo. 282, 215 P. 2d 344 (1950); but see Spickard v. Civil Service Commission, 31 Colo. App. 450, 505 P. 2d 32 (1973) re need for common criteria to determine merit. -475-

PAGE 514

exam. The Metzger case included veterans' preference, a requirement for an engineers license, and an evaluationof experience. Experience evaluation also was an issue in People ex rel. Beardsley v. Har1.49 The general rule applied in all these cases. Certification. At one time, first the statutes and later the State Constitution required that only the person highest on the eligible list could be appointed. Two early cases which antedate the Constitutional provision held that appointments had to be made from the certified names from the eligible list.50 Termination of Eligible List. The Court upheld the action of the State Civil Service Commission in terminating an eligible list before the name of one of the eligibles was reached.51 Rights of Provisional Employees. In two cases, the Colorado Supreme Court held that provisional employees have no rights under the civil service system.52 Abolishment of Position and Creation of New Position with New Incumbent. In the 1923 case of People rel. Kelly v. Milliken, the Colorado Supreme Court held that the General Assembly could not abolish one position and create another new position with substantially the same duties, and have a new incumbent hired without violating the c