Fixing the Civil Service Mess

Walter K. Olson is author of The Excuse Factory: How Employment Law is Paralyzing the American Workplace (Free Press) and The Litigation Explosion: What Happened When America Unleashed the Lawsuit (Plume).  He is a Senior Fellow at the Manhattan Institute and writes frequently for such periodicals as The Wall Street Journal, The New York Times, and Reason.

One big reason for America’s economic success is that its business managers have traditionally hired and fired staff in search of high performance. Should public managers have freedom to do the same? Until now, public managers have resigned themselves to the entrenchment of incompetents and shirkers at every level, as a necessary evil of government service.

Yet suddenly change is in the air. Last year Georgia enacted a landmark law that abolishes civil service coverage for state employees hired after July 1, 1996; workers who start after that date can be hired and fired under rules similar to those governing private employment. As older workers retire, the new arrangements will in time cover the whole state workforce.

It’s about time. Civil service regulations, once seen as a crucial element of sound governance, have long since become a key barrier to it. Under civil service procedures, employees can challenge negative evaluations, like dismissals—a dispiriting maze few managers wish to enter, given so little hope of relief at the end.

Every big city—though the abuse isn’t limited to big cities—has its horror stories. In Boston, by the 1970s a dismissed public employee could petition four different panels, any of which could order reinstatement and none of which had authority over the others. The employee did not have to petition all the panels at once but could wait until he lost at one stage before moving on to the next. In Philadelphia, it took ten years to fire a school employee who was late to work nearly every day; he had pleaded a “neurotic compulsion for  lateness.”

It was not until World War II and its aftermath that civil servant regulations, including tenure, emerged in recognizably modern form. A law passed in 1944 gave returning GIs a variety of advantages in applying for federal jobs, and two powerful new weapons against losing those jobs once they landed them: automatic rights to an in-person hearing over dismissal and to an appeal. Before long, federal agencies were awash in personnel appeals. Meanwhile, the unionization of federal employees strengthened the culture of tenure. And at the state and local level, parallel developments fully entrenched the tenure revolution by the mid-1970s.

 While these battles unfolded, fighting raged no less fiercely on a second front. Activists brought the competitive examination—once thought to be the key to a corruption-free civil service—under devastating legal attack as insufficiently attuned to the needs of underrepresented groups. As courts began applying the notion of “disparate impact,” which judicial creativity had engrafted upon the 1964 Civil Rights Act, they soon found themselves on a slippery slope. Were they to hold suspect all hiring practices that did not result in a workforce proportional in race and gender to the surrounding population then they would find themselves holding nearly all results of competitive examinations to be suspect under the law, since such exams typically produce disparate outcomes.

The inevitable result: to undercut, and in some cases destroy, the value of competitive exams in guaranteeing a highly qualified applicant pool. After a court challenge to its test of applicants’ abilities, New York’s Department of Sanitation required prospective employees to drag an empty sanitation basket to and from a truck, rather than to carry a full one, and 98 percent of applicants routinely passed. Pittsburgh’s police department agreed to give more tries to applicants who had sued after failing a target-shooting test, thus establishing bad aim as another legally protected category.

Against this background, what’s happening in Georgia looks all the more revolutionary. In Georgia, much of the state’s workforce had held what are known as “classified” jobs—the ones awarded by competitive examination and protected against dismissal. Last year’s legislation simply declared that all newly filled jobs would be unclassified. While benefits remain similar for all employees, new hires get raises only on the basis of performance and can be promoted or demoted at managers’ wish.

The new law’s effects on firing, as opposed to hiring, come into sharp focus when, according to Georgia officials, two state correctional officers were caught using cocaine. The one hired before July 1996 has pursued his rights to appeal, and the state not only will be shouldering large process costs but is on the hook for substantial back pay should he win. The guard hired after July 1996 is gone.

By decontrolling hiring as well as firing, however, Georgia has overthrown the civil service idea in both its old and its new manifestations. Agencies can and sometimes do hire without competitive examination or other documentable yardsticks of competence—though in fact many state agencies voluntarily continue to use the tests. But those agencies can now choose to follow or dispense with earlier rules requiring that, for example, only the top ten scorers be considered for a vacancy, as they see fit.

In seeking to attract the best and eject the worst public servants, reformers will inevitably risk the charge that they are being “elitist.” In the 19th century, government reforming did want an elite civil service. That is why they focused on making the service hard to get into, but not hard to get kicked out of. Should we someday start taking government service seriously again, we may want to stop doing the reverse.