Create a Central Personnel Office in the General Services Commission

Create a central personnel office in the General Services Commission to coordinate and help guarantee a full range of personnel services to state employees and to help reduce or eliminate duplicated personnel activities.

According to a survey by the National Association of State Governments, Texas is the only state government that does not centralize at least a portion of its human resource services. 1 More than 300 state agencies, boards, departments and institutions of higher learning perform a myriad of personnel functions, including maintaining new job postings and applications, developing personnel policy, providing employee training and services, and handling payroll and benefit issues.

Numerous problems result from this fragmented system. A common complaint is that it is difficult to apply for state positions. The lack of a standard job application requires each agency to provide and process its own application form, all collecting basically the same information. Despite having a centralized location for job listing s at the Governor s Job Bank and Texas Employment Commission, applicants generally must visit each agency to pick up the application form, and fill out comparable information several times. This process is inconvenient, difficult for persons with disabilit ies, and biased toward applicants living in Austin.

A Senate State Affairs Committee survey in 1992 found that only ten out of the 90 (11 percent) agencies surveyed thought there were difficulties associated with a standard application, with a one-page addendum attached for individual agency requirements. 2 The concerns cited included providing sufficient space for skill description and satisfying information needs for all agencies. Benefits cited included providing the application in braille and large pri nt to meet requirements of the American Disabilities Act (ADA) and reducing liability from requesting illegal information.

The fragmented structure of personnel services also causes duplication of effort and inefficient use of resources. For instance, no guidelines exist for personnel policy or procedures, except those provided by Article V of the General Appropriations Act. C ontinuing changes in interpretation of labor legislation such as the Fair Labor Standards Act, Americans with Disabilities Act and E qual Employment Opportunity Act (EEO) mean that policies must be constantly revised to ensure legal consistency. Research, legal consultation, rewriting and publishing are time-intensive activities duplicated by every agency and the state s leadership has no certainty that agencies are consistently meeting legal requirements.

In addition, many agencies do not have the resources to train employees on the procedures required by those policies. Lack of expertise in drafting and implementing personnel policy may lead to illegal practices which expose the state to legal risks. A national study of public employee litigiousness indicates that inconsistent personnel policies lead to increased lawsuits against state governments. 3 An estimate of personnel claims paid out by Texas was $4,731,000 for 1990, 1991, and 1992. 4 The state could reduce the number of claims by providing employee training on labor issues and establishing alternative methods of resolving employee disputes.

With each agency providing individual personnel services, expertise is dispersed and resources are limited. In the 1990s, the labor force s composition will change dramatically, increasing the need for human resource services. Findings from the Hudson Institute s Workforce 2000 study reveal that the labor force growth rate and the availability of low-skill jobs is declining; women and minorities entering the work force, the average age of the labor force, and skill requirements are increasing. 5

To adapt to these changes, state government m ust provide a wide range of programs and services to attract employees from a shrinking labor pool, to train employees in new technologies, and to improve the quality and flexibility of the work environment. Such changes require a comprehensive approach to human resources services.

Table 1 shows the kind of services state employees should have to ensure a well trained and effective work force. Programs such as these will be essential to improve productivity, job satisfaction and reduce turnover rate. Whil e many large agencies offer some of these programs, small agencies very often simply do not have the resources to do so. This difference is not only unfair, but leads to the loss of valuable employees.

Table 1 Potential Functions of Proposed Central Personnel Office

1. Recruitment and Employment Services 4. Agency Support Services
A. Recruitment Services A. Hotline
B. Job Postings B. Centralized Legal Information
C. Outplacement Services C. EEO Strategies *
D. Job Applications D. Employee Attitude Surveys
E. Agency/Applicant Shared Database E. Mediation, Employee Assistance
Programs, Wellness Programs
2. Position Classification
A. Job Descriptions 5. Training
B. Job Classifications A. Planning and Curriculum Development
C. Personnel Classifications B. Agency Training Facilities
D. Position Classification Plan C. Benefits Training
E. Employee Salary Studies D. Other Personnel Training

3. Policy Development and Support
A. Strategic Planning
B. Reduction in Force
C. Grievance
D. Employee Complaint
E. Performance Appraisal
F. Incentive and Productivity
G. Other Basic Personnel Policies

* Functions should not duplicate those performed by the Texas Commission on Human Rights.

As competition for skilled workers increases, adequate compensation will become more important. While the state classification system was intended to provide equitable pay for state jobs, the system has become antiquated, resulting in an inflexible structu re that makes it difficult to reward employees for quality performance.

Improvement in technology, increases in legal complications, changes in work force composition and tightening budgets are prompting several state governments to reorganize personnel services. For instance, California, which has a decentralized system simil ar to Texas, has a personnel office that provides general guidelines for policies, but leaves particulars to the individual agencies. 6 New Jersey recently eliminated duplicative training functions and saved an estimated $5 million a year. 7 In Oklahoma, there are recommendations to centralize data collection and analysis of labor-related issues in order to evaluate effectiveness of employee services. 8

Past attempts to better organize human resource services in Texas have failed. The 71st Legislature considered and rejected a proposal to centralize personnel services into a single Texas Office of Personnel Services, partly because it was perceived to thr eaten agencies control over personnel decisions and to create an unnecessary layer of bureaucracy. But the need to better manage employees growing needs with limited resources remains.

The struggle, then, is to find the appropriate mix of centralized and decentralized functions which use resources efficiently and provide quality services to agencies, employees and taxpayers. The structure should leave managers with flexibility and contro l over their personnel decisions, such as selection, interviewing, hiring, termination and promoting. However, it sh ould also better coordinate human resource functions to expand services and minimize legal risks. The best way to accomplish this goal would be to create a central personnel office that acts more as a consultant than administrator to other agencies. A cent ral office could advise agencies on personnel policy such as training, classification, grievance, reduction in work force appraisals and other general personnel issues, which are currently being duplicated. This type of organization would not consolidate a gencies human resource offices but would offer those offices support and coordination of services. It would provide a central source of information for employees so that agencies would be free to concentrate on their core functions.

A. State law should be amended to create a central personnel office as a division of the General Services Commission (GSC). This office would coordinate state personnel services and provide expert assistance to agency personnel, state employees and the job -seeking public.

Another recommendation in this report further defines the role of GSC as the state s business manager and establishes the agency as a service center for administrative support to other agencies. The personnel office should be staffed by a director, appointed by the Executive Director of GSC, and an administrative technician. The office should be supported by a working task force comprised of personnel from large and small agencies. Agencies, depar tments, and institutions with more than 2,400 employees should be required to loan one half-time equivalent to this task force for a period of two years. One full-time equivalent from each university system should be loaned for a period of one year to ensure equal representation of institutions of hi gher learning. In addition, small agencies should participate on a voluntary basis to ensure that the duties of the task force reflect small as well as large agency concerns. State law would require the cooperation of all state agencies in providing inform ation to the central office that will facilitate the effective and efficient provision of personnel services in state government.

The duties of the office, with the support of the task force, should be to coordinate and help facilitate the full range of personnel services to all state employees and to help reduce or eliminate duplicate personnel functions. The statute would require the office to develop a standard personnel application for use by all state agencies, enhancement of central job information and creation of a common applicant pool that could be accessed by agencies, a set of common, broad personnel policies governing FLSA, classification, merit and promotion guidelines, evaluation procedures, grievance and mediation procedures and other proced ures that would be useful to all state agencies. This office would also be charged with studying the current position classification system and recommending changes for improvement to the Legislature. Table 1 provides a listing of the types of activities t hat could reasonably be provided by a central personnel office.

B. The personnel office should rely on an existing consortium of state personnel experts to develop strategic planning for current personnel needs, future human resource goals and emerging work force issues.

Representatives of state agencies and higher education personnel offices have already established a consortium of experts on personnel issues from other agencies including the Governor s Job Bank. In addition, the Governor s Management Development Center should be included in coordination efforts. This group will address concerns including, but not limited to, Workforce 2000 issues, grievance and complaint procedures, reduction in work force programs and other labor relations issues.

A central personnel office is not intended to take away the legitimate and appropriate functions performed by the Texas Employment Commission (TEC). The office should help agencies use TEC resources as well as to furnish services TEC does not provide. TEC should enter into a memorandum of understanding with GSC that describes how the central office and TEC will work together to expand but not duplicate services. In this capacity, the office should assist TEC in examining ways to provide better recruiting, application processing and selection services for state agencies. The office should provide employment services in coordination with TEC, such as developing recruitment strategies for state agencies and sponsoring recruiting fairs. All services other than those of loaned staff should be funded by fees paid by participating agencies.

The office should also help TEC find innovative, cost-effective services for agencies to tap. For instance, the costs and benefits of developing an on-line applicant database, to which all agencies may subscribe, should be explored. This service could emp loy efficient technology, such as resume scanning devices and key words software to find quality applicants. This service would save agencies time in reviewing applications, help small agencies with limited resources and identify Affirmative Action candidates.

C. The State Classification Office should be transferred from the State Auditors Office (SAO) to GSC s central personnel office and the appropriation for this function should be eliminated.

The statute should require that the classification function be funded by fees assessed on all state agencies. This would reduce general revenue funding appropriated to the SAO.

D. GSC should address specific implementation plans, recommend future funding and staffing levels, and further define functions and duties of this office.

After seeking input from medium and small agencies, the GSC director should report to the 74th Legislature on these issues and make recommendations for the further elimination of duplication in personnel functions and improvement in personnel operations.

The central personnel office would expand the range of personnel services available to all agencies, departments, boards and instituti ons by coordinating personnel services such as training, employee assistance programs, mediation and strategic planning for work force issues. Furthermore, it would allow larger agencies that currently provide numerous personnel services to streamline thei r operation so that they may concentrate on issues specific to the roles and functions of the agency.

The office would not consolidate agencies personnel divisions into a single, central agency. It would coordinate existing services and provide a central source of information. The office would not impede agencies control over hiring, promoting or terminating employees. It would simply provide employment services to those agencies that wish to subscribe to them. A comprehensive applicant database and stan dard application form would improve access to quality candidates and make it more convenient for the job-seeking public. The office would not delay the hiring process by administering central screening or testing. Agencies would maintain control over selec tion, hiring and promotion but would have quicker access to candidates.

The office would not increase the cost of providing personnel services, because it would not involve relocating personnel or building new facilities. It would use available resources and expertise but provide better coordination of these resources to expan d service.

The office would provide guidelines for personnel policy and procedures, grievance and complaint processes and interpreting labor legislation. Each agency would have direction on legally consistent practices without reinventing the wheel. The office will also allow all state employees to have equal access to employee services. Agencies could then devote resources to meeting their particular needs.

Fiscal Impact
Creating a central personnel office should result in savings to the state by coordinating existing services to reduce or eliminate duplicated effort. Training and support services could be virtually self-funded, since these programs would rely on staff bor rowed from other agencies and revenue generated from services they provide. The Classification Office would be transferred from the State Auditor s Office into this central personnel office. General Revenue Funds totaling $241,280 annually, previously funding the office would be saved as the costs of this function would now be recovered through agency fees.

Funds should be made available to establish a position for a director of the central office, one administrative technician and materials and equipment. The director s position should be funded at a salary level determined by the executive director. Materials and equipment would also be needed for the loaned staff; the needed funds are included in the estimate.

Each government entity including all agencies, departments, boards and institutions of higher learning should be assessed an amount based on the number of classified employees within the entity. As of May 1992, there were 111,754 classified employees in Te xas state government. Based on that number, each entity should be assessed $3.37 for each of its employees to provide funds for the Human Resource Support Division. The Legislature should specify that fees paid for the support of this office should be appropriated to GSC. These fees would be paid from ag encies existing appropriations and would total approximately $376,000 per year.

Savings to the
Fiscal General Revenue Change
Year Fund 001 in FTEs

1994 $241,000 +2
1995 241,000 +2
1996 241,000 +2
1997 241,000 +2
1998 241,000 +2

1 National Association of Personnel Executives and The Council of State Governments, State Personnel Office: Roles and Functions (Lexington, Kentucky, 1991).
2 Senate State Affairs Committee, Survey of State Agency Personnel Policies and Programs, September 1, 1992.
3 Don Jaegal, Public Personnel Administration by Lawsuit: The Impact of Supreme Court Decisions on Public Employee Litigiousness, Public Administration Review (May/June 1991), p. 219.
4 Texas Comptroller of Public Accounts, Claims Division Report for object code 7226, fiscal 1992. (Report run on November 10, 1992.)
5 Office of the State Auditor, Biennial Report of the Classification Officer (Austin, Texas, October 1992), p. 17.
6 Jonathan Walters, How Not to Reform Civil Service, Governing (November 1992), p. 34.
7 Interview with Dr. Alma Joseph, Director, New Jersey Human Resource Development Institute, November 13, 1992.
8 Council of State Governments, Comprehensive Review and Evaluation of Oklahoma s Personnel Function: Full Report (Lexington, Kentucky, September 1991), p. 21.