Chapter 4: Human Resource Management
Introduction
Workplace changes driven by technology, demographics, and the labor market are affecting state government just as they affect the private sector. With an aging workforce, a shortage in key skill sets such as technology expertise, and difficulties competing against the private sector for talented young workers, Texas government is on the verge of facing a human capital crisis.
Rather than viewing this as a reason for panic, it should be viewed as an opportunity to reshape the state workforce to meet the demands of the new economy. The state’s goal should be to manage these changes creatively and use them as a catalyst to improve the state’s workforce policies. Unless the state begins to devote more attention to recruiting high-caliber employees and creating a culture in which the best and brightest will want to stay, it can expect major performance problems in the years ahead.
Reward Employees Who Produce Results
The notion of creating incentives for performance and compensating those who perform well—and penalizing those who don’t—is a critical component of any results-based government. While Texas’ pay system provides that state employees receive merit salary increases only on the basis of performance, opportunities exist to strengthen current law. More than 70 percent of America’s private companies have implemented pay for performance systems, resulting in increased productivity and improvements in service quality.
To improve performance, the state must link its pay more closely with its performance management system. Two steps would bring the state closer to an effective pay for performance system. First, agencies should be required to adopt policies that ensure that individual performance expectations are linked to the agency’s strategic plan. Second, the state should form a task force of state agencies to assist in implementing this recommendation.
Additionally, Texas should allow state agencies who meet specific criteria as high-performing organizations to pay deserving employees one-time merit bonuses using a portion of the money the agency saves through employee participation in the State Employee Incentive Program (SEIP). One-time merit pay awards funded by agency SEIP savings should not count against an agency’s merit salary cap.
Enhance the State’s Human Capital
In today’s labor market, the state must learn to redefine employee worth by performance rather than time served, and improve workers’ performance in ways that are most meaningful to workers for as long as they decide to stay. A 23-year old who comes into state government service now is quite different from the 23-year old who entered government service in 1975. State agencies and their human resource specialists should think about what a modern state workforce should look like, and what benefits they can offer employees to attract and retain them.
While Texas has serious problems with recruiting and retention, the state is in a good position to make positive changes. Many other states and countries with similar problems are burdened by rigid, archaic civil service systems. Because Texas is an at-will employer, the state can make fundamental changes quickly. The continuation and expansion of the Comptroller’s IT academy will help ensure a qualified IT workforce for the state and private sector.
As we enter the 21st century, Texas must re-evaluate and modernize its employee policies and practices. Texas state agencies should conduct strategic staffing analyses and develop total workforce plans, and adopt innovative solutions to government human resource recruitment, posting, and hiring. Agencies also should be authorized to implement a formal telework program to reduce costs to Texas taxpayers and improve air quality and traffic congestion in the metropolitan areas of Texas.
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