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Georgia Merit System
Annual Report 1998

1998 Annual Report
State Merit System of Personnel Administration
If you have a disability and need this material in an alternative format, please notify the Georgia Merit System in advance of your need at 404-657-0373,
or for TOO Relay Service only: 1-800-255-0056 (Tex-telephone) or 1-800-255-0135 (voice). The Georgia Merit System is an equal opportunity employer.
Prepared by the Communications and Marketing Unit Georgia Merit System

Our Mission
The Georgia Merit System's mission is to be a strategic partner with public agencies
in enhancing organizational performance; in providing human resource services that enable them to
hire, develop, and retain high-quality employees; and in administering responsible benefit programs that aid
participants in maintaining personal health and financial security.

A Message from the Commissioner

As we look back over the past fiscal year, we are pleased with our accomplishments and encouraged by our progress. Our second year of operation in the post-Merit System reform era ended with noteworthy successes in every division.

In keeping with the renewed mission of the agency and the objectives of our strategic plan, we broadened our focus on training the state's workforce by expanding our curriculum and increasing the number of classes offered. We revised the State Deferred Compensation Program to give employees more options. Choices now include six new mutual funds, three diversified portfolio models, and a 401k plan available to all state employees.

Faced with increasing health care costs and increased health care

demand, we initiated several strategies to maintain the quality and

affordability that employees expect of the State Health Benefit Plan. We developed and marketed software that helps managers meet the

Dana R. Russell

heightened management requirements of GeorgiaGain. We streamlined internal and external communica-

tions through the use of such vehicles as the Internet, face-to-face customer advocacy initiatives, and news

and information publications. And finally, we changed our organizational culture to become more versatile

in our responses to the needs of state agencies.

We will continue to refine the products and services we provide for our valued customers-the employees of the state of Georgia and the agencies, boards, offices, and authorities that employ them. By building on our successes and moving ahead with innovations in human resource methods and programs, we can continue to assist agencies as their challenges grow in the areas of personnel management and compensation.

The Georgia Merit System looks forward in the months and years ahead to continued service to the citizens of Georgia through our commitment to quality in employee benefits and human resource products and services.

Dana R. Russell, Commissioner Georgia Merit System

Contents

Page Highlights of FY 98 . . . . . . . . . . . . . . . . . . . . . . . . .. 1

Compensation and Staffing

3

Financial Services

7

Health Benefit Services . . . . . . . . . . . . . . . . . . . . .. 9

Training and Organization Development . . . . . . .. 11

Ancillary Services. . . . . . . . . . . . . . . . . . . . . . . . .. 13

Highlights of FY 1998
Training and education activities Training and educating employees received additional attention this year. Georgia Merit System curriculum for technical, managerial, and interpersonal skills development was expanded and more classes were offered. Information was provided in a variety of ways to educate employees about the new opportunities available through the Deferred Compensation and Flexible Benefits programs and the State Health Benefit Plan. Training workshops were also held to illustrate the power and efficiency of new Georgia Merit System products and services, most notably the PMToois performance management software.
Human resource consultant activities The shift in focus to solution-oriented products and services continued to drive our human resource programs during FY 1998. The agency began studies to trace the effectiveness of new Merit System procedures and processes on the operations of customer agencies. Development of products that enhance management decisionmaking and employer/employee communications was begun. And as solutions providers, Georgia Merit System representatives made great advances in effectively linking the needs and desires of our customers with the technical capabilities and resources of the agency.
Ancillary program activities Other programs managed by the Georgia Merit System, such as Charitable Contributions, Service Awards, Medical and Physical Examinations, and EmployeelManagement Relations, continue to be significant services for state government and its employees. The 1998 Charitable Contributions Program, for example, reached an
1

all-time high of $2,507,337 in donations from 33,974 state employees. As the Merit System continues to fulfill the legal requirements of managing these functions, they are increasing in volume and value to the overall operation of state government.

Benefit plan activities

Employee benefits underwent a number of changes in FY 1998. The

Deferred Compensation Program experienced a great amount of

change and growth with the introduction of new investment options,

a 401k plan, and a new third-party administrator that provides

employees with on-line account access. The State Health Benefit

Plan also received increased attention in the areas of cost contain-

ment and auditing functions, future

plan design alternatives, and scru-

tiny of vendor performance.

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Communications activities The agency initiated substantial changes in relating information to both employees and senior decisionmakers of the state. Efforts were undertaken agencywide to improve the quality of employee communications, expand the amount of informa-

tion available to both managers and

lawmakers, and make use of the

latest in information technology to achieve better results while

lowering the cost to government. In addition to thorough informa-

tion on benefits, personnel rules and polices, and human resource

processes, the agency's Web page has become highly effective for

both applicants and agencies as a clearinghouse for job openings.

2

Compensation and Staffing

The Compensation and Staffing Division came into being July 1, 1997, as a result of a reorganization that merged the Applicant Services Division and the Classification and Compensation Division. The purpose of merging the divisions was to create a streamlined, unified entity that would better serve the state of Georgia. In keeping with its belief that the workforce of the state of Georgia can and should be competent, productive, and quality conscious, the new division's mission is to
respond to changing agency needs, support agencies in achieving their business objectives, develop effective and efficient human resource processes, and apply technical expertise to create customized human resource solutions. To better respond to the changing needs of agencies brought about by the decentralization of human resource functions, the Compensation and Staffing Division put together a team of Merit System human resource experts to link its services to those changing needs. This team, called the Customer Interface Team, helps agencies develop solutions to their human resource problems, and agencies have come to rely on it as one of their most trusted links to Georgia Merit System services. The division also customizes its services to meet particular agency needs. During FY 1998 it worked with the Georgia Real Estate Commission in the selection of their Director of Information Services and Director of Investigations. Merit System services included recruiting SS applicants, developing screening criteria, and prescreening and ranking applicants. To help the Department of Industry, Trade and Tourism assess its salary structure, the division collected and analyzed market data on 49 ITT benchmark jobs. And, it adapted an evaluation instrument to test more than 400 appli-

"Compensation and Staffing (C&S) has always been quick to respond to our needs, from screening applicants to assisting with agency -unique positions. We asked C&S to assist us in setting up an Epidemiologist II position. Shortly after this request C&S informed us that DHR had created a position and they would be glad to fax a copy of the job description. Thanks to C&S our agency was spared the expense, and we look forward to using C&S again."
Bea Cook Columbus Health Department

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cants to fill approximately 60 Disability Adjudicator positions for the Department of Human Resources' Disability Adjudication Section.
During FY 1998 division staff conducted 34 workshops on the Merit System's popular PMTools, a computer program that facilitates the performance evaluation process. More than 350 managers were trained.
In preparation for the year 2000, the division coordinated an interagency work group to develop recommendations to the Office of Planning and Budget (OPB) that address the state's chronic shortage of information technology (IT) professionals. Recommendations presented to OPB included IT job salary adjustments and a salary supplement proposal for IT hot skills.
Each year the Compensation and Staffing Division conducts salary data research as a basis for recommendations to OPB on employee pay schedule adjustments for the coming year. Compensation and Staffing continued to provide direct services in human resource processes for agency hiring and pay practices. Test administration services were provided for agency-unique jobs and for jobs common to multiple agencies. Three fourths of the
4

49,200 tests administered during FY 1998 were for agencyunique jobs. For greater applicant convenience most of the Atlanta test sessions are now administered on a walk-in basis rather than by scheduled appointments. Testing continues to be offered once a month at eight other sites around the state.
A revamped Statement of Eligibility (SOE) process, using fax transmission or a dedicated post office box and priority attention from division staff, resulted in a turnaround time of one to two days for more than 13,000 requests. For SOE actions flagged as critical by agency personnel departments, turnaround was virtually instantaneous. In addition, the division assisted agencies with approximately 18,000 certificate decisions and more than 14,000 training and experience ratings.
Recruitment services in the Atlanta office received nearly 16,000 in-person visits from applicants and managed approximately 60,000 inquiries and requests for application materials through the Interactive Voice Response system. In addition, 163,000 hits were recorded on the Careers page of the GMS Web site. Posting vacancies on the Internet was a new service during FY 1998 and was used 140 times by various agencies. Professional recruiter presence on college campuses continues to be a highly productive means of marketing the state as an employer among this sought-after group of emerging workers.
Division staff responded to more than 3,000 calls from agencies for technical assistance on the JOBS and position systems, GeorgiaGain, and GEMS and Internet databases. They managed more than 1,100 updates to the JOBS system and maintained quality assurance for four pivotal JOBS databases. Staff also developed new jobs by writing comprehensive descriptions and then evaluating their appropriate pay grades, reviewed PMFs for

Recruitment services in the Atlanta office received nearly 16,000 in-person visits from applicants and managed approximately 60,000 inquiries and requests for application materials through the Interactive Voice Response system.
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classification recommendations, processed conditional pay plans, and fielded more than 1,000 assistance calls in direct service delivery to agencies not equipped with the GeorgiaGain systems.
As part of state government's efforts to improve the quality of its workforce and increase productivity, Compensation and Staffing continued an applicant assessment initiative to aid agencies in the identification and selection of superior-performing employees. The division developed a behavioral interviewing methodology designed to improve hiring decisions. The method merges three of the most effective interview techniques into a process that is easy for managers to learn and apply. Division staff also collaborated with Georgia Merit System programmers to develop SelecTools, a computer program that further simplifies the behavioral interview method. Tests to screen entry-level applicants for Georgia Bureau of Investiga-
tion Special Agents and Department of Human Resources' Child Support Enforcement Agents were developed as part of this initiative. Several practical approaches to identifying and quantifying performance were also provided to agencies.
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Financial Services

In addition to managing agency accounting functions that include the State Health Benefit Plan and the State Charitable Contributions Program, the Financial Services Division also manages the Deferred Compensation and Flexible Benefits Programs. The division's mission is to establish and maintain accurate financial records, report financial data to appropriate entities, and attract a skilled and dedicated workforce for the state by offering effective and responsible benefit plans.

Deferred Compensation Growth in Plan Contributions

Deferred Compensation

The Deferred Compensation Program provides state employees with

tax-efficient and cost-effective supplemental retirement savings and

investment options. In addition to the 457 plan, a 401k plan was intro-

duced to all employees during FY 1998. To introduce the 401k, deferred

compensation staff conducted a lengthy statewide campaign that included the distribution of printed materials, investment education seminars, individual counseling opportunities, interactive kiosk sites, and information posted on the Georgia Merit System Web page.

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New investment options involving six new mutual funds and the

availability of three diversified portfolio models were introduced along

with the 401k plan. Training on investment option changes and 401k

implementation was also provided statewide for agency personnel!

payroll staff.

Working with agency accounting staff, deferred compensation

administrators designed and implemented an enrollment and

payroll reconciliation system to improve processing and allow for

closer monitoring of program participation and compliance. Addi-

tionally in FY 1998, a new third-party administrator offering im-

proved customer service and on-line account access was selected.

Participation in the Deferred Compensation Program has

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increased 100 percent over the past five years. Total plan assets are $400,242,424.12.
Flexible Benefits Flexible Benefits managed by the agency are Term Life Insurance, Dependent Life Insurance, Accidental Death & Dismemberment Insurance, Short-term and Long-term Disability Insurance, Dental Insurance, Spending Accounts (medical care and dependent care), Legal Insurance, and Long Term Care Insurance. All except Dependent Life, Short-term Disability, Legal Insurance, and Long Term Care Insurance are before-tax deductions, which results in a tax savings for employees. Approximately 82 percent of employees take advantage of Term Life coverage and slightly more than 78 percent participate in either Short-term or Long-term Disability coverage.
Flexible Benefits accomplishments during FY 1998 include implementation of dental insurance for retirees, streamlining of the PACSIFACS (payroll and flexible ac-
counting control systems) reporting process to advise agencies and members ot outstanding Flexible Benefits issues, statewide Flexible Benefits training for agency personnel, reduction of the Spending Accounts claims payment process from 6-8 weeks to 1-2 weeks, and increasing the number of agencies that offer their employees Flexible Benefits.
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Health Benefit Services

As manager of the State Health Benefit Plan, the Health Benefit Services Division's mission is to provide cost-effective health insurance programs that help employees maintain financial security, that foster a healthy and productive workforce, and that aid the state in attracting and retaining top-performing employees.
The State Health Benefit Plan consists of six options from which employees may choose. In addition to the Standard Option and High Option indemnity plans, the four health maintenance organization (HMO) plans are BlueChoice, Aetna U.S. Healthcare, Kaiser Permanente, and Prudential.
Coverage is available to full-time state employees, teachers, school service personnel, and retirees and their dependents. Most active and retired employees (75 percent) participate in either the Standard or High Options plans. Current Standard and High Option participation is 407,000; HMO participation is 139,000.
In fulfilling its mission the division monitors vendor performance and recommends benefit
program changes, determines eligibility for benefits and processes member
appeals, and provides support services to agency personnel and employ-
ees covered by the Plan. Because the division has the responsibility of maintaining knowledge of the insurance marketplace and measuring current plan components and practices against industry trends and fluctuations, it added a Quality Assurance Manager during fiscal year 1998. Major quality assurance initiatives during the year included several compliance meetings with HMO contractors and

Participation in Health Plan Choices
State Health Benefit Plan
High Option Standard Plan
HMO Choices 51,269
Blue Choice
0 Aetna
Prucare
0 Kaiser
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an analysis of the Plan by the Pricewaterhouse Coopers (PWC) consulting firm. Recommendations to control costs and keep the Plan competitive included a modification of coverage for inpatient hospitalization and approved, non-network transplants. It is expected that these coverage adjustments will reduce Standard and High Option plan costs by $20 million annually. To further preserve the Plan's competitiveness PWC also recommended implementing regional provider networks. Such networks offer discounts to health plans in exchange for increased patient volume.
The Eligibility and Support Services units of the division each quarter handled a combined average volume of 93,000 transactions, correspondence, phone calls, and in-person contacts in the execution and maintenance of services to Health Plan members. However,
workloads reached even higher levels during annual open enrollment in April and at the beginning of the school year when teacher transfers were processed.
A coding manual was created in FY 1998 to improve accuracy and consistency in the processing of Health Plan forms. Additionally, the purchase of a telephone system that interfaces with the computer system to record telephone transactions on CD ROM has been initiated.
To further facilitate services to members, new communications mechanisms, such as use of the Internet to provide members with additional access to documents and forms, an HMO Member Handbook, and presentations to school system benefits coordinators were made available during FY 1998.
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Training and Organization Development

The division's mission is to enable state agencies and employees to develop their abilities, enhance their performance, and achieve their goals by providing and coordinating government-specific training and development programs statewide.
The division makes training available for state employees in seven general areas.
Management and Supervisory Development Quality Service Georgia Training Series Secretarial and Support Staff Development Communication Skills Development Workplace Skills Development Trainer Skills Development The Professional Secretaries Development Program For fiscal year 1998 the division set three goals. To assist agencies in strengthening the skills of their
workforce and in meeting organizational objectives To assist state agencies in meeting their statewide communi-
cation and training objectives through the use of GSAMS (Georgia Statewide Academic and Medical System) To partner with agencies in developing, delivering, or supporting strategies for state government policy initiatives In accomplishing its goals the division provided 53,000 training hours in the classroom and 2,232 training hours via satellite. It provided training and related services for 150 customer work units and 576 days of classroom and meeting space at the Decatur Training Center. Fifty employees completed the Professional Secretaries Development Program, and 53 supervisors and managers completed the Associate Public Manager requirements.

"I have always firmly believed that training is a vital element to a successful organization. Without people like you providing the essential instruction, an agency ultimately fails to prosper. To me, the essence of quality training is hearing the comment, "what professional employees you have in your organization." Because of the quality of your training, we hear that a lot here at Pardons and Paroles."
Charles Topetzes Director of State Board of Pardons and Paroles

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The division also facilitated training via teleconference using the GSAMS network for 1,903 state employees and providers of state services in the Department of Human Resources' Division of Aging, Rehabilitation Services, and Public Health and the Georgia Merit System's Financial Services Division. Furthermore, the division was a founding member of the Georgia Distance Learning Association, the new state chapter of the U.S. Distance Learning Association.
More than 490 agency budget officers and program managers were trained in the Results-based Budgeting (REB) initiative with REB training curriculum developed by the division. The division also trained 350 managers, supervisors, and prospective supervisors from 48 agencies in the GeorgiaGain Performance Management Process (PMP). To further facilitate GeorgiaGain PMP training, the division coordinated the production and distribution of 2,000 training manuals, four interagency training schedules, and the certification of six new agency PMP training instructors.
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Ancillary Services
Other services provided by the Georgia Merit System support its mission and fulfill requirements set by the General Assembly.
Employee Appeals Classified state employees now appeal adverse actions directly to the Office of State Administrative Hearings. However, employees dissatisfied with the decision of the Administrative Hearings Office can appeal to the State Personnel Board by filing an Application for Review with the Board's Executive Secretary. The Commissioner of the Georgia Merit System, as Executive Secretary of the State Personnel Board, is a nonvoting participant in appeals reviews. Presently, the State Personnel Board reviews an average of seven decisions each month.
Charitable Contributions Programs The 1998 Charitable Contributions Campaign resulted in the highest ever contribution of $2,507,337. The money, contributed by 33, 974 state employees of agencies, the university system, authorities, boards, and commissions, will be distributed to 40 charitable organizations throughout Georgia. The Georgia Merit System has operated the Charitable Contributions Program since its inception by the General Assembly in 1982. A Policy Advisory Committee made up of members selected each year from agencies, colleges, and universities and certain Georgia Merit System staff administers the program. An official campaign chairperson rotates annually among state agency heads and college and university presidents. The Georgia Merit System contracts with the United Way of Metro Atlanta to manage and distribute campaign funds.

The 1998 Charitable Contributions Program reached an all-time high of $2,507,337 in donations from 33,974 state employees.

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Communications and Marketing The Communications and Marketing Unit enhances the understanding of Georgia Merit System products and services through development and implementation of communications and marketing strategies. In addition to the agency's annual report, printed communications include The Georgia Statement, a quarterly newsletter for all state employees featuring topics about state government; and Executive Vision, a quarterly news summary of human resource and management issues for senior agency executives and elected officials of state government.

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Drug Screening Program The Georgia Merit System administers a Drug Screening Program that assists agencies in complying with the law that certain public employees be tested for drug use before employment and randomly
after employment. To ensure objectivity of post-employment testing, the Merit System maintains the testing schedule and uses a computer program to select employees. Nearly 29,000 positions are subject to random drug testing, and about 1,100 employees are selected each month for testing.

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A positive test results in instant dismissal. Preemployment positive test results disqualify an applicant from reapplying for two years. Employee Management Relations The Employee Management Relations Unit provides state agencies with dispute resolution services that include recruiting, training, and continuous coaching of hearing officers and mediators; case assignments; and follow-up evaluations. During FY 1998 unit staff trained 240 agency personnel officers and managers in alternative dispute resolution and responded to more than 3,000 request for technical assistance. The unit also provides assistance in the administration of discipline, the application of State Personnel Board Rules, and the development and review of policy. Employee Medical and Physical Examination Program The Employee Medical and Physical Examination Program covers any hiree in state government with the exception of Authorities and is intended to ensure that prospective employees will be physically able to carry out their duties. All employees must be certified as medically able whether through self-certification of medical status or through certification by a physician. Each agency is responsible for certification of its employees. Physicians under contract to the Georgia Merit System are available for agency use, but agencies may also contract individually with physicians.
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Employee Suggestion Program The Employee Suggestion Program pays a cash award to the employee based on the amount of savings the suggestion creates for the agency. Awards are 10 percent of the first years' savings up to $5,000. This year the program processed 15 suggestions and implementation of one resulted in a $2,200 award to an employee. Presently, only classified employees below the level of division director may participate.
Equal Employment Opportunity Program The Georgia Merit System provides assistance to agencies in interpreting and applying federal EEO laws, in developing agency-
specific EEO policies and procedures, and in meeting Americans with Disabilities Act requirements by providing information in alternative formats. During FY 1998 the program responded to more than 350 contacts for technical assistance with federal EEO responsibilities. Information on Flexible Benefits and the Health Plan was provided in Braille.
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Service Award Program The Service Award Program is coordinated with the Employees' Retirement System for verification of years of service. Awards certificates are presented to all employees with 10 and 15 years of service. Pins are awarded for 20 years of service and every five years thereafter to 40 years. Employees with 40 or more years of service are honored in a ceremony hosted by the governor. Honorees for FY 1998 included two employees with 40 years of service, two with 45 years of service, and one with 48 years of service.
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Georgia Merit System 502 West Tower
200 Piedmont Avenue Atlanta, Georgia 30334
Dana R. Russell, Commissioner
1998