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Recent Trends in Civil Service Reform: A Cautionary Note J. Edward Kellough The Decentralization of Personnel Management Authority A second theme popular among proponents of civil service reform is the idea that authority over public personnel management policy should be decentralized to the fullest extent possible. Typically, in the United States and many other countries, the major responsibility for personnel policy has rested in a central personnel agency. Such an agency, like the U.S. Office of Personnel Management for the federal government, retained responsibility for examination of the qualifications of applicants, analysis and classification of jobs, the structuring of the performance appraisal process, and the determination of pay and benefits. One purpose for centralizing these functions is to ensure that applicants and employees are treated equitably in the employment process. But reformers have argued that excessive centralization of authority over these processes robs managers in line agencies and bureaus of needed flexibility in dealing with particular organizational or individual contingencies. Recent years have seen a movement toward greater decentralization of virtually all areas of public personnel administration in an effort to further strengthen managerial flexibility. The potential trade-off between that kind of flexibility and the efficiencies it might produce on one hand versus broader safeguards to promote equity on the other has not received significant attention. The possible difficulties associated with greater decentralization can be illustrated by considering proposals for the reform of position classification systems and procedures. Indeed, position classification, i.e., the system for placing jobs into pay categories, has been one of the personnel management processes most frequently targeted for reform. Position classification involves the evaluation of positions (or jobs) based on an analysis of job content and requirements and the subsequent placement on that basis of positions into classes or grades that in turn determine compensation levels. The standard criticism of these systems is that they are too rigid. Managers, it is argued, need more freedom to classify jobs as they see fit and to reclassify jobs when they believe reclassification is necessary. Often times a need for reclassification arises when a manager believes that an employee=s job has changed in important ways. Perhaps responsibilities have been added or technology associated with performing the job has changed. At other times, pressure for reclassification arises when an employee has reached the top of a pay category and significant pay increases are not possible unless the position is placed into a higher class or pay grade. In both cases, it is argued that managers who would like to have the position reclassified are often frustrated by personnel analysts who may not agree that the position has changed sufficiently to warrant reclassification. Certainly in the later case, personnel analysts who would seek to protect the integrity of the classification system would not favor reclassifying the position simply to permit a higher salary for the current incumbent. A proposed reform of traditional classification systems aimed at giving line managers greater flexibility is known as broad-banding. This is an approach in which several pay grades are collapsed into a smaller number of broader grades of pay bands. As a result, a set of wide pay classes is established with a correspondingly wide range of jobs and salaries. Managers may then exercise greater discretion in determining compensation levels for positions within each pay band, provided, of course, that total salary levels remain within their overall budget limitation. This reform essentially supplants traditional approaches to classification in which rank is determined by position with a modified rank-in-person scheme within the various pay bands. 55 One potential problem with this reform, and certain other ideas that are designed to decentralize authority over personnel policy and increase managerial flexibility, is that differences in how employees are compensated may be perceived as being based on factors other than meaningful substantive differences in work. Within each of the larger pay bands established under the broad-banding scheme, there is a larger array of different jobs then would have existed previously in more narrowly defined pay grades. Presumably, the exercise of managerial flexibility under such a system will result in some jobs that had been treated similarly in the past in terms of pay being treated differently in the future. In addition, jobs that had been treated differently in the past might, under a broad-banding system, be treated similarly. If this is not the objective of broad-banding, it is hard to imagine just what the reform is supposed to accomplish. But either of the situations just described might be perceived as inequitable by some observers. Unless management is extraordinarily careful, there is a significant risk of causing as much employee alienation as satisfaction. Federal experiments with broad-banding, conducted under authority provided by the Civil Service Reform Act of 1978, have not produced dramatically encouraging results. When employees working within a broad-banding system were asked if they perceived that individual differences in pay reflected real differences in levels of responsibility and job difficulty, only one-fifth to one-third agreed -- depending on the experimental site surveyed (Schay 1992). By contrast, one-fifth to one-fourth of control site employees classified in traditional pay systems agreed that individual differences in pay under their system reflected real differences in levels of responsibility and job difficulty (Schay 1992). This is not a ringing endorsement of broad-banding. As many as two-thirds of the employees under both systems found pay differentials generally inequitable. Broad-banding did not significantly alter those perceptions, although it may have made life easier for some managers. In the United States, excessive decentralization of personnel authority may also raise important legal questions. The Constitutional guarantee of equal protection of the law limits governmental authority to draw distinctions between people -- including public employees. There is an extensive amount of jurisprudence on this issue that has evolved to the point where distinctions for which there is a “reasonable” or “rational” basis are usually not questioned. Of course, the definition of “reasonable” or “rational” ultimately falls to the courts and it may in some circumstances be difficult to defend certain distinctions drawn between government employees. When individual agencies or bureaus, for example, are given authority to determine employee compensation levels, significant pay disparities between similar jobs across different agencies could easily emerge. Employees on the lower end of such comparisons might then bring legal action charging a denial of equal protection. Similar situations could arise in situations involving disciplinary actions that differ across agencies when the purported offences are similar. Furthermore, if these kind of discrepancies occur along racial or ethnic lines the government will face a significant burden of demonstrating that the disparities serve compelling governmental interests and are narrowly tailored to meet those interests. In addition, Title VII discrimination law suits could arise in addition to equal protection claims when race, ethnicity, or gender issues are involved. Whether the claims are ultimately upheld or not, the process of defending against such legal action can be expensive. An awareness of the implications of equal protection and nondiscriminaton provisions may well point to a need for the application of consistent standards across agencies and arguably for some degree of centralization. References 56 Adams, J. S. 1965. AInequity in Social Exchange.@ In L. Berkowitz (ed.). 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