| March 27, 2012
State could save millions with better employee-performance reviews
Following is an excerpt from OCPA’s Proposed State Budget for the Fiscal Year ending June 30, 2013.
With Oklahoma government spending at an all-time high (see chart), the time has come to set priorities and to exercise spending discipline.
To that end, policymakers should require all state agencies to implement and use rigorous semi-annual performance evaluations for employees. These evaluations would include private-sector-like evaluations of employee computer and Internet time management, benchmarks and requirements for employee output to hours worked, performance and incentive pay for work that leads to the reduction of full-time equivalent employees (FTEs), and so on. Agencies would then be able to make retention decisions based on the results of these initiatives.
To their credit, some agencies have already started these evaluations, and have discovered startling information about the low workload and output of some of their employees. In some agencies, more than six percent of the FTEs were grossly underperforming their required duties and contributed little to the completion of agency tasks. These evaluations have allowed agencies to reward and reassign duties to performing employees, separate non-performing employees, and save hundreds of thousands of dollars in personnel expenses.
As OCPA has repeatedly pointed out, the state has too many employees; therefore, it is time to reduce FTE authorizations. Many decisions were made during the 2011 legislative session based upon reduced appropriations. As with most organizations, when cuts are necessary, this will result in reduced FTEs. Every agency that has experienced FTE reductions to accommodate available revenue should have its agency FTE authorization reduced to one of the following, whichever is lower: (1) its current FTE level, (2) the new (lower) level as a result of this past session’s appropriations reduction, or (3) reductions in the upcoming 2012 session.
Further, to add much-needed accountability to the hiring process, all state-appropriated agencies should be required to notify the Office of State Finance, Division of Personnel Management, and the Governor’s office before any new hires are made. Once the agency has provided a detailed notification and justification for filling the position, the Governor’s office or the Division of Personnel Management will have 30 days to approve or disapprove the new hire. This will prevent future growth in personnel expenses without careful consideration and approval of the Legislature and the Governor.
The potential savings from implementing such reforms would be $5.4 million for FY-2013 (half a fiscal year), $23.4 million for FY-2014, and $41.4 million for FY-2015.
These reforms are not only good policy, they’re good politics. A recent SoonerPoll survey reveals that 73 percent of likely voters support such reforms.
Submitted each year by the Oklahoma Council of Public Affairs, Inc. to the taxpayers of the State of Oklahoma and their elected Officials, the OCPA “Budget Book” is carefully crafted by Fiscal Policy Director Jonathan Small to help lawmakers set priorities and exercise spending discipline while creating a state budget that respects your family budget. Offering unmatched fiscal policy analysis and recommendations, Small draws on his experiences as a former budget analyst for the Oklahoma Office of State Finance, former fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and former director of government affairs for the Oklahoma Insurance Department to provide perspective on the state budget that you cannot find anywhere else.