Legislature must lead in more LA pay raise reform

That the more Louisiana’s system of evaluating the majority of its employees has changed when it really remained the same illustrates the unfinished business remaining to creating a more efficient state civil service.

Last week, the Department of State Civil Service issued statistics regarding the past fiscal year’s evaluations of the roughly 39,000 employees that fall under this rating system for civil servants. While around 3 percent could not be rated mostly for reason of insufficient length of time of employment, about 96 percent ended up qualifying for a raise, although about a tenth of them will not have one as their agencies’ budgets lack funds to deliver it. This concluded the first full implementation of changes made in 2011 that at the time sparked controversy.

Needlessly, as it turned out. After pulling back on a more far-reaching overhaul, Gov. Bobby Jindal accepted a much more tepid set of adjustments that only marginally created incentives for a more efficient workforce through compensation policy. The data from last year verified that, from a system which had raised almost every employee’s wages annually and almost always with uniformity, the state now has a system that awards about as many of these proportionally with a slightly greater range of variation. Administration officials asserted still this represented improvement because with a different worldview installed that spells out expectations of employees that this approach would raise the standard of performance.

It was hoped that the retreat in aggressiveness of reform at that time signaled an incremental approach to follow, but the Jindal Administration made no further moves to pursue a gradualist strategy of change that ideally would have tied different reward levels to the two levels of rating and reflected more realistically the actual performances. In particular, wild inconsistencies had occurred across agencies as, and it transpired, this did not change under the new system; for example, about a third of the state Revenue Department’s 710 employees got the top rating, but at the Department of Insurance, no one got this “exceptional” evaluation rating.

This points at the crux of the matter. The relative system reform that creates differential raises for difference in performance will work beyond the marginal only if accompanied by absolute system reform that properly identifies the quality of the work being done and rewards accordingly. In the case of the Department of Revenue, clearly too easy of evaluation is occurring, while at Insurance, it’s well-meaning in outcome undoubtedly for taxpayers but perhaps too harsh. Standardization that produces results more likely to reflect actual distributions of quality of job done – it’s not probable that the Department of Insurance doesn’t have a few outstanding employees while, with all due respect to them, it seems improbable that so many superstars are among Revenue’s employees – always has remained crucial to a properly-functioning compensation regime.

That kind of matter is decided by the State Civil Service Commission, comprised of six gubernatorial appointees, all now there by Jindal’s hand, and a civil service representative voted in by peers, and then is accepted or rejected by the governor. It has shown no enthusiasm for returning to extend the mission of beneficial change. Neither does it appear that Jindal has the fire as well, who now serves his last year as governor and is unlikely ever to return in that capacity again where he might see such changes bear fruit in the future.

So if any reformation does come about in this area any time soon, the Legislature will have to operate as the driving force. This it can do by its power of the purse. Simply, its leadership should declare that it will not budget for widespread pay raises (leaving some money for automatic raises that come about through promotions, job or personal qualifications enhancements, etc.) until the SCSC tackles the issue of ensuring realistic evaluating standards. The Commission easily could do so by stating among the three categories that the total proportions of an agency’s ratings must fall between certain endpoints, such as the top category should contain of all ratings between 5-20 percent of them, the middle between 60-95, and the bottom 0-20 (rounded down for small agencies). While a crudely artificial bounding, at least it does attempt to make the end results conform somewhat to the actual distributions of performance in the real world and almost always would reflect that distribution within the agency.

The Legislature could assist here through its annual budgeting by deciding upon a uniform raise percentage for the middle category, then give 95 percent of that funding as the amount for the entire agency. This would discourage managers from being too lenient and putting too few employees into the lowest category (no raise) because they would have to diminish others’ raises. It also creates incentive to take from the middle category and give to the highest because if that did not happen, those high performers would know and become likelier to leave the agency for greener pastures, feeling they were not getting the remuneration nor respect that they deserve. That differentiation would encourage more effort from all employees, whether to enjoy a bigger raise or to prevent getting none at all.

Naturally, most legislators have feet of clay when it comes to issues like this, because (and especially in an election year) state employees, with their occupations so closely knit to the political world, are more likely to vote and to otherwise influence elections (except they can’t openly campaign), and many politicians would think civil service on the whole would view these changes negatively (even if high performers should support these, by definition they don’t make up much of the group). Regardless, their first loyalty is to taxpayers, who deserve the optimal performances out of those receiving their tax dollars. This current pay raise structure still is far from encouraging such behavior, and it is the obligation of policy-makers to make progress on this account, the sooner the better.