Executive vision: a forum for Georgia government leaders, Vol. 1, no. 1 (Feb. 1998)

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A Publication of the Georgia Merit System
Volume I, Number 1 February 1998

A Forum for Georgia Government Leaders

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NATIONAL ASSOCIATION OF STATE PElRS()NrlffiI

Team to Consider Changes in Pay-tor-Performance Process

"Considering the magnitude of the changes involved, implementation of pay-for-performance went remarkably well." This statement by an agency personnel director appeared to reflect a consensus of the more than 60 participants in two recent meetings of agency personnel officers.
The sessions were organized by the Georgia Merit System to gain feedback from two years of agency experience with the new Performance Management System and to learn about the reaction of managers and employees to the first awarding of variable pay increases.
While clearly the feedback was predominantly positive, this is not to say that there have been no bumps along the road to a new compensation system or that no needed changes have been identified.
As a result of discussion at the personnel officer meetings, a list of suggested improvements to the system was compiled and turned over to the reconvened Performance Management Work Team to develop change recommendations for presentation to the GeorgiaGain Task Force.
Following a review by the GeorgiaGain Core Team, the following recommendations were presented to the Task Force at a November 4 meeting: 1. Eliminate the Far Exceeds
Expectations level from the performance rating system. 2. Change the funding guidelines to allow for more employees within the Exceeds Expectations level.

3. Establish a mechanism to allow agencies to provide "bonus" (nonbase-pay) awards to employees who meet agency criteria for such awards, providing legal concerns can be accommodated.
4. Confirm that the current policy of no salary increases for employees above their pay grade maximums should be continued. The Task Force concluded that no
changes should be made to the system during the current performance cycle; however they requested that a multi-agency work team be established to examine the possibility of incorporating some form of bonus award into the state's compensation program.
The Task Force also asked that the work team consider the issues that have been identified relating to the number and definition of performance levels.
Continued on page 3
Georgia Makes an "A"
Georgia was one of the seven states whose economies were ranked as the best in the U.S. in 1997, according to a study by the Corporation for Enterprise Development (CFED).
The non-profit think tank prepares an annual report card that evaluates states for economic performance, business vitality, and development capacity. Only Colorado received an "A" in all three categories.
Continued on page 2

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viewpoint
Citizens Want, Expect Effective Service
By Commissioner Dottie W Roach
State government is changing the way it operates in order to earn and keep the public's confidence in our abilities to manage their tax dollars. Recognizing our role as purveyors of customer service and viewing citizens as the ultimate customers of government services are essential elements to achieving credibility and effectiveness in the public institutions we manage.
The same dynamics that led to the breakup of our nation's telephone monopoly-and are now targeting the electric and gas industries-are also taking aim at government, the largest monopoly of all. They are the driving force behind privatization and the public debate about the role that citizens want government to play in their lives. Citizens expect, demand, and deserve proven, effective services that are delivered in a timely, courteous, and ethical manner. They want greater accountability from their government. They want to know that their hard-earned tax dollars are being spent prudently.
To bring government closer to citizens, public managers and employees at all levels must continue to incorporate the principles of outstanding customer service in our processes. This means more than simply supporting policies and processes that give managers greater flexibility in managing personnel issues. It also means recogniZing employees who provide exceptional customer service and rewarding them in tangible ways. We must make the commitment to provide employees
Continued on page 3
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Georgia Makes an "A" (Continued from front page)
Georgia-along with Colorado, Minnesota, Missouri, Nevada, New Hampshire, North Carolina, Oregon, Utah, and Wisconsin-received an "A" in Economic Performance. (The economic performance category assesses states in terms of the opportunities and benefits its economy provides to residents.)
California, Mississippi, New Mexico, South Carolina, and West Virginia received "F"s on Economic Performance.
Georgia received a second "A" in Business Vitality and was given a grade of "B" in Development Capacity (which measures a state's capacity for future growth and potential recovery from economic adversity).
The 1997 Development Report Card for the States can be ordered for $70 a copy from CFED (call 202.408.9788). Individual state reports are available for $5 a copy.

State Will Offer Employees 401 (k) Plan Effective July 1

Beginning July 1, 1998, the state will offer employees a new deferred compensation option: a Qualified Trust plan. Commonly known as a 401(k) plan, the new option will be offered along with the existing 457 plan, thus giving employees two avenues for long-term, tax-advantaged savings.
Also on July 1, the state will offer a revamped investment selection lineup for both the 457 and 401(k) plans. The selection will consist of:
the existing Fixed Income Option; six newly chosen mutual funds,
the Vanguard Index fund; and three new diversified model
portfolios. On the same date certain of the plan administration and customer service functions now conducted by the Georgia Merit System will be turned over to a third party administrator.
Currently, the state's 401(k) plan is available only to certain employees of participating Community Service Boards (CSB) who were hired on or after July 1; 1994. CSB employees are not eligible for coverage under the state's defined benefit basic retirement plans. Unlike many private sector 401(k) plans, the statewide 401(k) plan will not include any form of employer contribution.

From an employee's point of view, the major differences between 457 and 401(k) plans include the amounts of money that can be deferred annually, the degree of portability of account accumulations follOWing termination of state service, and the circumstances under which plan balances can be withdrawn while still employed by the state.
401(k) Plan Participants can defer up to the
lessor of $10,000 annually or 10 percent of their gross pay. Thus, most employees could contribute more each year to the 457 plan than to the 401(k) plan. When participants leave state service, they can transfer (or rollover) their invested funds to another qualified retirement plan or to an IRA without paying taxes or being penalized. Participants can also roll into the 401(k) plan any vested balances being held in retirement plans of former nonstate employers. In most cases, upon leaving state service a participant cannot withdraw funds without paying a 10 percent penalty and current income
Continued on back page

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More than 77,000 supervisors, managers, and personnel staff statewide were trained in the Performance Management Process in preperation for implementing pay-for-performance. Many
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cite GeorgiaGain's intensive training and communications initiatives as key factors in the successful transition to the new compensation system.
Pay-far-Performance (Continued from front page)
The team is expected to complete its work and report to the Task Force by ApriL Task Force members in attendance at the November meeting expressed agreement with personnel staff that implementation of pay-for-performance had proceeded more smoothly than anticipated. Members also expressed enthusiastic support of the new Performance Management Process, characterizing it as a giant step forward for the state in managing job performance.
GeorgiaGain Review Stats at a Glance
Viewpoint (Continued from page 2)
with the training and resources they need in order to work responsively and efficiently. And yes, we must continue to involve employees in redefining the way government agencies operate and provide services.
At the Department of Administrative Services, we are making significant operational and philosophical changes to help our customer agencies hetter meet the demands and expectations of Georgia's citizens. As a service organization that measures its own success hy how well its customers succeed, DOAS must he a "value-adding" husiness partner for other state entities. Our vision "to he the hest husiness run hy a government" cannot he achieved without ongoing customer communication. Listening to customers and responding to their needs and concerns is one of the key components of outstanding customer service. As leaders in the public sector, we are ultimately responsihle for improving the customer service our agencies provide. We are also responsihle for working together to lead state government's pursuit of greater accountahility, responsiveness, and service to our ultimate customers-the citizens of Georgia.

newsbriefs
@ Richard Darby became the Executive Director of the Georgia Peace Officer Standards and Training (P.O.S.T.) Council on]une 1,1997. Director Darby formerly served for 18 years as Chief Financial Officer of MARTA Police Services and is past chairman of the PO.S.T. CounciL
@ W. Daniel Ebersole resigned as Commissioner of the Georgia Merit System to become Director of the Office of Treasury and Fiscal Services on Dec. 1, succeeding Steven N. McCoy. Gov. Miller appointed Dana R. Russell, who was serving as Deputy Commissioner under Mr. Ebersole, as the new Conunissioner of the Georgia Merit System.
@ Most American workers are "dismally unprepared" f"mancially to retire, according to the 1997 Retirement Confidence Survey released by the Employee Benefit Research Institute, the American Savings Education Council, and Mathew Greenwald & Associates. Only 36% of workers surveyed had even attempted to calculate how much they need to save for retirement. Among current retirees who retired earlier than originally planned-thinking they could afford to do so-30% report their standard of living has declined.
@ An innovative recruitment service has been launched by the Georgia Department of Education. DOE's Internet Web page allows employment seekers to view job vacancies posted by public school systems and apply for jobs on-line.The new service streamlines job search and application processes both for applicants and the local school systems. For a look at this new program, access DOE's Web site at www.doe.kI2.ga.uslhuman resources/ psrecruit.htmL
@ A recent ruling hy the Fifth Circuit Coun of Appeals has helped clarify the issue of what notice is required from employees to justify absences for a "serious health condition" under the FMLA. The Court ruled that an employer was justified in firing an employee for excessive ahsences under the FMLA when the employee extended her absence heyond the time for return specified in a doctor's written statement. More information on the case is available on-line at www.ca5.uscourts.gov/Opinions/Puh/ 96/60000/96-60884-CVO.HTM.

State To Offer 401 (k) Plan (Continuedfrompage2)

tax unless he or she has reached the age of 59 1/2. After 59 1/2 participants can withdraw funds penalty free, even if still actively employed by the state.
While a participant is still employed, funds can be withdrawn for certain purposes (for example, to make a down payment on a house) that demonstrate a heavy financial need.
Prior to age 70 1/ 2 terminated participants may start, stop, or modify their payout methods or schedule, as circumstances dictate.
457 Plan Participants can defer up to the
lesser of $8,000 or 25 percent of their taxable salary. Only employees earning more than $80,000 a year could contribute more to the 401(k) than to the 457.

When leaving state employment, participants cannot transfer (rollover) the 457 funds to another tax-deferred plan.
Participants pay taxes on any funds withdrawn, but there is never an additional 10 percent penalty, regardless of age.
While still employed, participants can withdraw funds only in cases of either inactive small account balances ($3,500 or less) or unforeseen extreme hardship.
Participants must choose a payout start date within 60 days of termination, which may only be changed to a later date, not an earlier date. Once payments begin a participant may not modify the chosen payment schedule in any way.

The Georgia Merit System will mail an announcement of the 401(k) plan to all state employees in March. The announcement will be followed by statewide group meetings, individual counseling opportunities, interactive kiosk sites, and a variety of other resources. The GMS will carry out a full-scale communications initiative to educate employees about long-term saving and retirement planning following implementation of the new program.

Georgia Merit System Suite 502, West Tower 200 Piedmont Avenue Atlanta, Ga 30334
EXECUTIVE VISION
Published quarterly by the Georgia Merit System
Dana R. Russell Commissioner
]udyWHall Editor
Submissions are welcome and should be sent to ]udyW Hall Georgia Merit System Suite 502, West Tower 200 Piedmont Avenue Atlanta, GA 30334 Tel: (404) 657-0375 Fax: (404) 656-5979 E-mail: www.@gms.state.ga.us

Georgia Merit
System
People. Partnerships. Performance
February 11, 1998

Dana R. Russell Commissioner
State Merit System of Personnel Administration
www.gms.state.ga.us
An Equal Opportunity Employer
(404) 656-2705

Dear State Agency Executive:
Welcome to the first issue of Executive Vision. The Georgia Merit System plans to publish Executive Vision each quarter to alert you to news that will be useful to you as you manage the personnel functions and needs of your agency.
This inaugural issue includes information on the changes that may occur in the GeorgiaGain performance review process and the new deferred compensation 401 (k) offering. And, because we see Executive Vision as a medium for sharing information and ideas, each issue will also include a column that we are calling Viewpoint. In this issue, Administrative Services Commissioner Dottie W. Roach shares with us her viewpoint on the value of good customer service to state agencies.
Our intention with Executive Vision is to summarize information about issues, trends, and events that affects the successful management of state agencies and employee productivity, efficiency and satisfaction. Your contributions and suggestions for content are encouraged and will expand the newsletter's capacity to benefit the executives of state government.
The Georgia Merit System is very pleased to add this publication to the array of services and products it now provides. I believe Executive Vision will prove to be a valuable tool for you.
::2~ Dana R. Russell Commissioner
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