State personnel office outlines new pay plan, pools and timeline for merit pay

Kaye Barnhill, director of the Office of Personnel Management in the Department of Transformation and Shared Services, told a legislative personnel subcommittee that the agency will implement a new pay plan and has updated how it will handle position requests, special pay and performance evaluations.

Barnhill told committee members the office runs payroll for “28,000 state employees,” administers classification and compensation, and manages the ACES human-resources system used to record personnel actions. She said the pay plan developed during the last legislative session will take effect June 29, with merit increases implemented June 22.

Why it matters: The changes affect how new positions are approved, how recruitment and retention incentives are paid, and how departments must request reassignments or special pay. Barnhill said that some pay differentials on the current books will expire before the new plan and departments must re-request them for review under the new structure.

Key details presented to the committee included three kinds of position pools created under the Pay Plan Act: surrender pools (positions given up by agencies in exchange for other positions), growth pools (new positions agencies may establish within existing budgets) and transition pools (temporary six‑month training posts intended for retirements or transitions). Barnhill said growth-pool positions do not come with new funding and transition-pool positions last six months.

Barnhill described two kinds of special entry or special-rate pay: “exceptionally well qualified applicant” rates for hires whose skills exceed minimum requirements, and labor-market rates when OPM’s market review finds the assigned grade or range lags local market wages. She said OPM used multiple salary sources in the pay-plan study, including other states’ surveys and private-sector data. As an example, Barnhill said the entry level for a nurse moved in her numbers from 68 to 75 under the new plan.

Committee members pressed Barnhill on vacancies and accountability. She said the state has about 26,000 authorized positions and roughly 22,700 filled positions, leaving about 4,000 vacant; higher-education institutions account for a larger pool, with Assistant Commissioner Nick Fuller saying institutions have about 38,000 authorized positions and roughly 10,000 vacancies across 33 institutions.

Barnhill said OPM reduced the number of distinct job titles during the pay-plan rewrite and is sending new job descriptions to departments for review so they can confirm minimum qualifications before the July implementation. She also described special compensation plans that departments may request; one example she gave was a $5,000 bonus for nurses hired by the state, paid either as a lump sum or in split payments.

On performance evaluations, Barnhill said the state moved from five to four rating categories last year; agencies evaluate employees against common standards such as accountability, job knowledge, initiative and customer service. She said the governor and agencies determine percentage payouts each June and that OPM is currently costing multiple scenarios for how different payout levels would affect budgets.

Nick Fuller, assistant commissioner for higher education, told the committee institution positions operate under a different classification and compensation structure with maximum line‑item salaries for titles, and that many institutional vacant positions reflect faculty and enrollment-driven needs rather than the same budgeting approach used by state agencies.

The committee received staff guidance materials and summaries of Act 499 (the Pay Plan Act) and was told the office will bring requests for differentials, new titles and other personnel items at upcoming meetings for committee review.

Ending: Committee members asked for follow-up information on positions vacant more than two years and on the funding treatment of vacant positions for employee benefits; Barnhill said OPM has sent departments a list of long‑vacant positions and is reviewing options for employee-insurance funding.