New Democrat Update - January 2004
MODERNIZING GOVERNMENT
Reform-minded state legislators and local elected officials should pay special attention to Denver Mayor John Hickenlooper’s government reform agenda. Progressives must realize that the old tendency - reflexive defense of the bureaucratic status quo - is a public policy and political loser.
As pointed out by the Progressive Polity Institute’s Robert D. Atkinson in a recent report on government reform:
“...Americans have not given up on their desire for activist government, but they rightly no longer trust a big, bureaucratic government to be an agent for progressive change. This points to a central dilemma for progressives who believe in activist government. Unless we can create a governing system that works in the New Economy, it will be difficult to restore Americans' faith in and desire for activist government. Without fundamental reinvention of government, conservatives will be much more likely to successfully assert that state failure is always a bigger problem than market failure, thereby cutting the legs out from any new progressive governance agenda.”
Clearly, on a wide array of public issues, voters want real solutions but often deeply fear government will only make the problems worse. Building more support for progressivism requires reinventing the public sector so that it is more responsive to those it serves and more accountable to taxpayers. It’s especially important in an era when the economy is more entrepreneurial, competitive, fast-moving, networked, technology-based and less hierarchical.
Of course, government cannot and should not be run like a business. But that does not mean it cannot become more entrepreneurial. Any institution, public or private, can be entrepreneurial, just as any institution, public or private, can be bureaucratic.
Throughout his campaign for mayor, Hickenlooper provided examples of when city government simply did not make common sense. Total quality experts say that only 15 percent of the problems in most organizations are caused directly by employees and managers. The other 85 percent stem from broader systems within which these people work - the personnel, budgetary and procurement systems.
Hickenlooper’s first major target is Denver’s civil service system which unbelievably had, among other maladies, prohibited bonuses to workers for saving taxpayer money and mandated pay increases for elected officials and employees - even when the city was short of funds. Since personnel costs are 70 percent of the total budget, past mayors and city councils were required to provide pay raises while, at the same time, sacrificing essential jobs and services.
Unlike most other governments, the details (like setting annual pay increases) of Denver’s civil service system were inflexibly embedded in the city charter. Any changes must be amended by the voters.
Hickenlooper wisely and successfully asked Denverites to yank the civil service system (which must still be merit-based and have some personnel protections) out of the charter. A commission of citizens and employees will recommend reforms to the mayor and city council.
Building the new system now begins. Revamping hiring and firing practices, employee testing processes, job classifications, worker performance evaluations and the seniority system should be part of the mix.
Any organization - private or public - has its share of people who, for a variety of reasons (poor work ethic, incompetence, venality) simply do not perform. While employees in businesses face consequences, including being fired, Denver’s civil service system virtually guaranteed lifetime employment.
While employees should always be treated fairly, the new system should not repeat the mistake of its predecessor - it must not be virtually impossible to fire or discipline those who do not cut the mustard. The good workers are the real victims because more of the work falls on them. Now, often the best that can be hoped for is that the problem employee will be transferred and become someone else’s headache.
Hiring employees can be almost as difficult as firing them. In highly centralized personnel systems, recruitment and testing processes often take incredible amounts of time. A more decentralized system will empower city departments to design their own examination components/materials, assist in placement of advertising, etc. Finally, agencies should be allowed to hire new employees initially under shorter-term contracts and not renew them if worker performance falls short of minimal expectations.
Reducing the number of job classifications should also be a priority. Overly-defined systems often prohibit managers from paying employees appropriate salaries. When workers hit the top of their pay range, they cannot earn a raise without getting a promotion into a new and different type of work. In addition, countless hours are spent on needless employee tests and deciding if such-and-such a job fits in a particular classification. Streamlining the structure will allow for better recruitment, hiring and retention of the workforce.
Denver’s employee performance evaluation system has completely broken down. In 2001 and 2002, virtually all employees were rated as eligible for merit raises from 2.25 percent to as high as 9.6 percent. Only one percent - evaluated as failing to meet expectations - did not qualify. Rating inflation has taken such a hold that receiving “meets expectations” feels like a reprimand. Like other governments without pay-for-performance systems, employees often move up regular salary schedules regardless of how well they do.
The seniority system must also be overhauled. If layoffs become necessary, employees who have worked longer for the city, can “bump” those with lesser seniority out of their jobs. Often, those bumped out of their jobs can do the same to others and so on. In the process, young eager employees are lost and the deadwood is left behind - in jobs they neither know or want. Morale goes through the floor.
Finally, the new system is sure to provide more managerial authority and responsibility. Because of that, the Hickenlooper administration should strongly emphasize management development and training.
The quality of city services is almost completely dependent on the thousands of transactions that occur everyday between employees and customers. If the customers of city services are to be satisfied, managers must treat workers with dignity and respect. Because, in reality, employees treat customers exactly the way their managers treat them.
Just as important, Denver city government’s work environments must encourage innovation, change, finding untapped resources and exploring new, better ways of getting things done more effectively. In a survey taken in another city government, workers were asked which strategies would improve their performance. The ability to put ideas into action actually surpassed increased compensation. Unfortunately, only 14 percent felt empowered to do just that.
Managers must know how to unleash the innovation bottled up in many city workers and involve them in the change process so that they feel "ownership" of the new way. When true participants in that process, workers can be incredibly ingenious in identifying and implementing improvements - if free of fear to explore what is wrong.
Progressive elected officials around Colorado should take a cue from Mayor Hickenlooper, roll up their sleeves and get to the work of transforming their governments. In an era where change is breathtaking and people have come to expect high-quality service, sluggish, centralized and bureaucratic government will not be tolerated. Governments must become supersonic jets, not luxury ocean liners - too big, cumbersome, expensive and difficult to turn around.
Otherwise, the disenchantment of the electorate will continue to grow so much that he or she will be more and more willing to throw the "baby" - an active public sector - out with the "bathwater" - ineffective government.