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Governor Signs State Employee Workforce Recruitment, Retention Revamp

The state is overhauling how it hires and fires state employees, a move Gov. Bill Haslam contends “might be the most important” task his administration has undertaken since he took office.

Haslam signed HB2384 into law Tuesday, a bill that stresses employee performance over seniority, creates a worker evaluation system and paves the way for merit pay among top-performing state employees.

“We want to make certain that when we hire new employees, when we decide who gets promoted, we really are promoting and hiring those folks who can best serve our citizens. That’s what it’s about,” Haslam told an audience of 100 or so state workers outside Tennessee Tower, a 31-story building down the street from the Capitol Building filled with state employees.

Tennessee’s workforce is aging, Haslam added. The administration notes that 40 percent of state employees will be eligible to retire in the next five years, and those workers will need to be replaced.

The Tennessee State Employees Association originally fought the changes, which were handcrafted by Haslam’s administration. The union, which represents some 40,000 state workers, argued shifting employment decisions away from tenure would open the door to politically-driven hiring and firing decisions.

But even the tenure system could be abused, Haslam said.

“There’s a whole lot of unfilled executive positions right now in state government. … So if you just wanted to hire your buddies, you could do that right now,” Haslam told reporters.

The union eventually signed on in support of the bill after securing a 2.5 percent raise for all state employees, a say in developing the new evaluations and other concessions like ensuring tenure is still taken into account in hiring and firing decisions.

A press release issued by the Tennessee State Employees Association described the bill as an improvement over what was initially being talked about.

“State employees and their families can rest easier knowing important job protections that exist under the current civil service system are still in place in the new law,” TSEA President Phil Morson said in a statement.

Lt. Gov. Ron Ramsey hailed the policy shift as suggestive of the kinds of reforms likely to occur going forward if Republicans continue to dominate elected posts in state government.

“Tennesseans gave Republicans a mandate to transform state government into an efficient, transparent entity that puts a premium on customer service,” Lt. Gov. Ron Ramsey said in a statement. “This landmark reform is incontrovertible proof that it matters who governs.”

The new law, called the T.E.A.M. Act, or the Tennessee Excellence Accountability and Management Act, will be implemented in stages with use of the new evaluations taking the longest — until July 2013 — to kick in.

Mark Engler contributed to this report.

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Comptroller, Governor on Same Page in Seeing Need for Gov’t Workforce Reforms

The state’s top auditor is backing up Gov. Bill Haslam’s push to reform how Tennessee hires and fires some 34,500 state workers in a report calling the current system “fundamentally flawed.”

The 47-page “Special Report” from Comptroller Justin Wilson’s office says the state’s civil-service system is slow, lacks transparency and bases decisions more heavily on seniority instead of merit, which leads the public to “feel their worst fears are true.”

According to the report, “the system is either reflective of a general ineptitude in state government or the lack of transparency is intentional to ensure that only those with inside knowledge have the ability to ‘play the system’ and circumvent the processes that are purportedly designed to provide a fair and equitable system for hiring state employees.”

The report continues, “The dysfunction of the state’s hiring process is driven home to officials seeking new staff who discover on the back end of the process, after untold time and dollars have been spent, that the candidates, in spite of being rated favorably, in fact lack the essential skills to perform the job. The bureaucracy of the current system frustrates the intent of the laws seeking to promote fair employment practices.”

Haslam has been batting away criticism of his reform proposal, which he announced earlier this year as one of his top priorities. So far, the Tennessee State Employees Association has worked with the governor’s office to tweak the proposal, but walked away and then returned to the negotiation table.

Since then, lawmakers have raised several concerns about the overhaul, including downgrading the preferential treatment given to military veterans applying for jobs.

Halsam argues the changes are necessary to encourage government to perform more “like a business” and effectively address institutional inefficiencies in order to ultimately “provide the very best services we can at the lowest price.”

“When you live in a world without competitors, which is what government does…it is easy to not live by the rules of business,” the governor said after speaking to the Tennessee Hospitality Association Wednesday.

“Competition is what drives costs down in business, but you don’t have that factor in the government so sometimes it’s easy for costs to go the different direction because you’re not worried about the impact,” Haslam said.

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No Raises for ‘Disciplined’ State Employees

Gov. Bill Haslam shrugged off complaints by the state employees union over his administration’s decision to withhold pay raises from workers who got themselves in trouble on the job during the last year.

The state denied raises to an estimated 2 percent of executive branch state employees — or as many as 850 people — this month after high-ranking commissioners agreed that workers who had been written up at least twice, demoted or suspended should not get a 1.6 percent raise written in this year’s state budget, according to the Tennessee Department of Human Resources.

“Raises are for those employees who performed their jobs well,” Haslam told TNReport after a fundraiser for Republican Rep. Ryan Williams in Cookeville Wednesday evening. “If an employee has been disciplined or had two written reprimands, I’m not certain that qualifies them (as) the type of folks that in a very limited economy we want to give raises to.”

An administration spokesman added that “the administration believes the increase should be provided to state employees that are adequately doing their jobs.”

Gerald McCormick, a top-level House Republican, said there’s little drive within the Legislature’s GOP-led leadership to defend employees who have slipped up.

“I’m not going to take a stand to give raises to someone who, maybe, has had disciplinary write-ups,” said the Chattanooga Republican.

Lt. Gov. Ron Ramsey, the highest-ranking Republican in the Senate, declined to comment.

The Tennessee State Employees Association isn’t happy about the decision.

Punishing employees twice for getting in trouble nearly constitutes “double jeopardy,” said Bob O’Connell, executive director of the TSEA which represents 15,000 of the 46,000 state employees on the payroll.

Employees who were reprimanded in the last year already paid the consequences, whether it was time off without pay or a demotion paired with a lower salary, O’Connell said.

“It violates every principal of fundamental fairness that we all hold in common, that it’s just not fair either to punish somebody twice for the same offense and also to let them know what the penalty is after the fact,” he said. “This person is good enough to keep working here and that raise is supposed to be enough to lift them up so they can continue to put bread on the table.”

According to the public code, (Section 49, Item 2)

“lt is the legislative intent that the across-the-board  salary increase  shall apply to all state employees unless an employee is denied on the basis of unsatisfactory work performance, which shall be set forth in a statement from the head of the department  or agency detailing the circumstances surrounding the denial, which shall be sent to the affected employee. The person shall have the opportunity to respond either orally or in writing to the head of the department or agency or their designee.”

Approximately 270 people were denied raises in the Department of Corrections when the new budget year kicked in July 1. Thirteen of those workers were ineligible for raises because of poor performance and the rest had recent disciplinary actions on their record, according to the TSEA.

“It feels like what they want to do is spend the least amount of money possible on this raise,” said O’Connell.

In light of the governor rejecting the TSEA’s request he repeal his administration’s decision to omit disciplined employees from pay increases, O’Connell says the union’s next step may be to ask that workers be eligible for a raise after they’ve gone a calendar year without incident.