Download Recent Trends in Civil Service Reform:

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.
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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.
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