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Performance-based pay raise system is sought for Oklahoma's state employees

Legislative panel is urged to develop performance appraisals for Oklahoma's 34,000 state employees and to work to bring each state job up to at least 80 percent of what workers are paid in the private sector.
BY MICHAEL MCNUTT Modified: October 23, 2012 at 9:56 pm •  Published: October 24, 2012

“For fiscal conservatives, it's not a sin to talk about paying state employees appropriately,” he said. “The thing we need to focus on is performance. … I'm not a fan of awarding compensation across the board.”

Zearley, whose organization represents about one-third of the state's approximately 34,000 employees, said the state would be able to keep more qualified employees if it could bring salaries closer to what is being paid for similar jobs by private companies.

Competitive market compensation for state positions and pay for performance are essential in order to keep a trained and knowledgeable work force, he said. He suggested state pay be brought up to 80 percent of the private market and eventually increase to 90 percent.

Zearley said no price tag is available on the cost to the state to make that increase because the differences between state and private pay for all state positions haven't been determined.

A 1 percent across-the-board increase would cost about $15 million, he said.

Increasing pay for state workers partially could be funded from savings by having lower turnover, he said. Oklahoma's 13 percent turnover rate costs the state about $90 million in training employees to replace workers who retired or quit.

State employee salaries are about 19 percent below those paid for similar jobs in the private sector, Zearley said.

The lack of a recent pay increase and higher pay offered by private companies are main reasons for the state's turnover rate, which is more than twice the 5 percent rate considered ideal, said Lucinda Meltabarger, a human resources administrator in the state's personnel office.

Many state employees are leaving for the energy field, where accountants, engineers, truck drivers and oil rig workers are needed, Zearley and Meltabarger said.

A correctional officer's starting salary is $11.83 an hour; oil-field workers can earn as much as $25 an hour, Zearley said. Meltabarger said information technicians are paid about $20,000 more at local oil companies than at the state.

Pension issue

Jonathan Small, policy analyst for the Oklahoma Council of Public Affairs, a conservative think tank, said the state's retirement system is outdated.

He recommended the state move its defined benefits pension plan to a defined contribution plan for new state employees, which is similar to what is being offered in the private sector. Defined contributions plans, similar to a 401(k) plan, move with the employee; previously state employees spent their entire career with the state, while now newer employees are leaving after seven years, which is before the required eight years to be vested in the state's pension plan.

But he said the state can't afford to match salaries offered by the private sector, nor should it.

“That's why it's called state service,” Small said.