1. (1) Employees in eleemosynary or penal institutions shall be selected on the basis of merit.

(2) So much of any agency that is required to maintain personnel standards on a merit basis by federal law or regulations for grant-in-aid programs shall, except for those positions specified in subsection 2 of this section, select employees on the basis of merit and maintain such standards as specified in this chapter and as otherwise required.

2. State agencies operating eleemosynary or penal institutions shall not domicile the following positions in such institutions and such positions shall not be selected in accordance with subsection 1 of this section:

(1) Other provisions of the law notwithstanding, members of boards and commissions, departmental directors, five principal assistants designated by the departmental directors, division directors, and three principal assistants designated by each division director;

(2) One principal assistant for each board or commission, the members of which are appointed by the governor or by a director of the department;

(3) Chaplains and attorneys;

(4) Persons employed in work assignments with a geographic location principally outside the state of Missouri and other persons whose employment is such that selection by competitive examination and standard classification and compensation practices are not practical under all the circumstances as determined by the board by rule;

(5) Patients, inmates, or residents in state penal institutions who work for the agency operating the eleemosynary or penal institution;

(6) Persons employed in an internship capacity in a state department or institution as a part of their formal training, at a college, university, business, trade or other technical school; except that, by appropriate resolution of the governing authorities of any department or institution, the personnel division may be called upon to assist in selecting persons to be appointed to internship positions;

(7) The administrative head of each state medical, penal and correctional institution, as warranted by the size and complexity of the organization and as approved by the board;

(8) Deputies or other policy-making assistants to the exempt head of each division of service, as warranted by the size or complexity of the organization and in accordance with the rules promulgated by the personnel advisory board;

(9) Special assistants as designated by an appointing authority; except that, the number of such special assistants shall not exceed two percent of a department’s total authorized full-time equivalent workforce.

3. To encourage all state employees to improve the quality of state services, increase the efficiency of state work operations, and reduce the costs of state programs, the director of the division of personnel shall establish employee recognition programs, including a statewide employee suggestion system. The director shall determine reasonable rules and shall provide reasonable standards for determining the monetary awards, not to exceed five thousand dollars, under the employee suggestion system.

4. At the request of the senate or the house of representatives, the commissioner of administration shall submit a report on the employee suggestion award program described in subsection 3 of this section.