Management Public vs Private Employee - Research Paper Example

Management Public vs Private Employee Introduction Management of the human resource is one of the most significant tasks in any organization. Humanresource management can be defined as one of the most strategic and rational approaches taken by the management to administer the most expensive assets. These important assets are none other than the people working with the organization to accomplish the goals of the organization (Armstrong, 2006). Managing of the human resource in the public sector as well as in the private sector is a major challenge for the managers. However, the challenges relating to ageing population forces the management to introduce change in the service delivery and human resource management in the public sector. It has been observed that the public sector employees are ageing at a rapid rate in the US. Such workforce tends to enhance the fiscal burden and reduces immediate capacities to deliver the services (OECD, n.d.). Differences between Public Sector and Private Sector The degree to which the private and the public sector employees vary in the significance they attach to numerous types of inducements as part of their employment deal and their assessments of these inducement needs to be studied. Among the five components of the psychological contract such as job satisfaction, career development opportunities, social ambiance, financial rewards and respect for life, the private sector employees are motivated by other numerous incentives in comparison to the public sector employees. The public sector employees provide less significance to career development chances as well as financial rewards assurance in relation to their psychological contracts (RePEc, 2011). The privately-held companies are owned by the founders of the company i.e. the management or group of private investors. The public companies are the companies that sell component of its business to the public by using initial public offering (Investopedia, 2011). It has been observed that the private sector is subjugated by competition as well as turbulence. In the private sector, the employees are compensated according to performance related pay system and redundancy is also one of the norms. On the other hand, the public sector is considered as asylum of security and stability. However, in certain instances employees have jobs for life and there are lesser performance enhancing measures undertaken by such sector (Hunter, 1999). One of the significant differences among the public and the private sectors can be determined in the areas of competition and customer choice. For instance, the private sector in lieu of negotiating union contracts with lesser wages and ineffective work rules may have an effect on the prices of products offered by it. The customer service might also get hampered in order to meet the needs and the requirements of their labor agreements. However, customers have numerous choices and can avoid high price as well as poor services by switching to other businesses. It is because of this competition that has forced the labor unions to be logical in what they demand or on the other hand face the issues related to unemployment of their members because of business bankruptcy. It has however been observed that there is no such competition in public sector. Public sector employees’ unions face little external pressure to be reasonable in their demands. It is because of this fact that the salaries and the benefits obtained are basically funded by the government i.e. the tax payers in the public sector (Hunter, 1999). One of the significant differences among the private and the public sector employees is that the private sector employee do not have the same job security like that of the public sector employees. There is greater likelihood of the private sector employee losing their jobs ranging from relocation of their activity to any other cities or even another country, corporate takeovers or because of downturn in the economy. The other significant difference among the private and the public sector employees is that the private sector employees have the right to strike which serves as the foundation for collective bargaining and therefore encourages both the parties to reach to an agreement. It is because of this rights, the private sector union derives power and therefore motivates them to center on wider issues related to pay, job security and benefits. However, this is not true for the public sectors. Most of the public sector employees are restrained from strike (Liff, 2007). The basic difference between the private and the public sector enterprise can be demonstrated in the table below. Basis of Difference Private Sector Enterprises Public Sector Enterprises Objective Maximize profit Enhancement of social welfare and therefore ensure balanced economic development Ownership Owned by individuals or corporate entities Owned by government Management Managed by owners of the business and the professional managers Managed by government Area of operation Operates basically in all areas along with proper return on investment Operates generally from government funds and at times through public issues Capital It is generally raised by the owners by means of loans along with private sources as well as public issues It is conjured from government funds and also through public issues Source: (National Institute of Open Schooling, n.d.). Challenges The public sector employers confront many challenges. The trust upon the government is found to be declining among the American employees. During the early 1960s, nearly six employees out of ten approved to trust the federal government. However, by 1994, only one American out of five made such claim. Such declining trust can erode the morale of the employees working with the public sector and therefore reduce the productivity and the performance. Rebuilding of the trust is considered as one of the significant challenges. This challenge brings in the issues related to high frustration among the employees in the organization (Berman, Bowman, West, & Wart, 2009). The other challenge that has been noted in the public sector is that public sector managers are confronting greater diversity, vagueness and conflicts of goals and performance criteria in comparison to that of the private sector employees. When such conflicts arise, the issues related to conflicts of interest arise and therefore it leads to declining level of job satisfaction among the employees in the public sector enterprises (Rainey, 2009). The other significant problem is related to motivation of the staffs as public sector is characterized to be providing lower career development and promotion opportunities to the staffs. The employees are found to be stagnant in certain position for indefinite period of time and promotion basically takes place after many years. This makes their job unattractive and monotonous. Career development is quite significant aspects for any employee which needs to be taken care of by the employer. It motivates the worker to work with greater enthusiasm and enhance the productivity as well (Rainey, 2009). Steps To Meet the Challenges The issues related to reduced trust in the government brings about frustration and thus the employees may lose the zeal to work with the organisation. In such context, it is quite significant to comprehend the reasons behind the loss of trust in the government. Significant reasons can be such that the employers have not fulfilled their obligations to the employee in terms of pay, promotion or certain other aspects which needs to be dealt as soon as possible. There must be appropriate flow of communication in the organisation so that the employee gets the chance to present his grievances. Proper grievance handling system will be of great assistance in such circumstances (Liff, 2007). The issues related to role and goal conflicts can be resolved by providing the employees with proper training. This issue becomes more prominent when the employees are introduced with new job roles and goals in an organisation. The HR managers need to ensure that prior to assigning the new tasks, the employee is equipped with adequate knowledge regarding his new roles and goals. The employees must be provided with the necessary tools such as manuals, computers and other related job aids so that the jobs can be completed effectively (Liff, 2007). The employees in the public sector also demand career development opportunities and promotion after certain period of time for the purpose of personal development. By paying attention towards the career development of the employee force, the employee as well as the employer will be capable of managing change in the structure of the employment opportunities. It is through career development that the companies can attract and hence retain the best people with the organisation as it assists the employer to recognize and to respond to the individual needs of the employees. The public sector can avail the scope of superior performance from the employees if due attention is paid towards the career development of the employees. The employees of the modern times generally prefer taking challenges and therefore are motivated when they are provided with challenging job opportunities. Therefore, the public sector employers need to take these factors into consideration and also focus upon timely promotion of the employees. It can also make use of other reward systems in an organization in order to motivate the employees to work for the achievement of the goals of the organization (Liff, 2007). It can be argued that if the above strategies are adopted by the public sectors in order to confront the challenges faced by it, the other related issues of public sector enterprises can be resolved to a greater extent. References Armstrong, M. (2006). A handbook of human resource management practice. United Kingdom: Kogan Page Publishers. Berman, E. M., Bowman, J. S., West, J. P., & Wart, M. R. V. (2009). Human resource management in public service: paradoxes, processes, and problems. United Kingdom: SAGE. Hunter, R. P. (2009). Important differences between government and private-sector unions. Retrieved from http://www.mackinac.org/2309 Investopedia. (2011). Whats the difference between publicly- and privately-held companies? Retrieved from http://www.investopedia.com/ask/answers/162.asp#axzz1gJJqJDCb Liff, S. (2007). Managing government employees: how to motivate your people, deal with difficult issues, and achieve tangible results. United States: AMACOM Div American Mgmt Assn. National institute of Open Schooling. (n.d.). Public sector enterprise. Retrieved from http://www.nos.org/srsec319new/319EL8.pdf OECD. (n.d.). Ageing and the public service: human resource challenges. Retrieved from http://www.oecd.org/document/49/0,3746,en_2649_34139_39126065_1_1_1_1,00.html RePEc. (2011). Differences between private and public sector employees’ psychological contracts. Retrieved from http://ideas.repec.org/p/rug/rugwps/07-440.html Rainey, H. G. (2009). Understanding and managing public organizations. United States: John Wiley & Sons. Read More