People Management In Large Public Sector Organisations - Case Study Example

People Management In Large Public Sector Organisations Human resource management (HRM) in the public sector is a partner and influencer in the effect of public sector change. This paper will analyze situations related to the performance of people at work, team management and the recruitment and selection of people in public organizations are going through an operational boundary change. It will also explain the critical differences between the career service model and the position based model and how they have been impacted by the de-centralisation and devolution shift through the delegation of authority and accountability for employment related matters to the individual departments and agencies. The rise of performance management to realise organisation objectives has focused more on the individual in recent times which will further display the critical shifts under the new public management regime. The management of public services in the United Kingdom has experienced a period of major change, which can be traced back to the Conservative Government of 1979 who had the vision that the sector had too large a share of gross domestic product was ineffective in its operation and was not properly responsible for its activities (Glynn and Murphy 1996). Much was made at the time of the good of the private sector and the bad of the public sector. As Isaac-Henry, Painter and Barnes (1997) portray the Thatcher Government placed the private sector on a pedestal to which the public sector should aspire whether they agreed to or not. The writers also sketch the managerial view at that time which was that public sector failure up to 1979 was because of a lack of proper management which should be derived from the private sector, and the need for a stress on the role of the consumer leading to improved quality at lower cost. Performance evaluation approaches represent an attempt to address both the consumerist and managerial agendas. It is significant to note that the New Labour Government, post 1997 has, despite criticising the Conservatives whilst in opposition for its reform of the public sector, not only held the approach but expanded the model further through the public private partnership, service first and best value initiatives. The acceptance of performance evaluation can, therefore, be seen as having the ideological commitment of both main political parties (Glynn and Murphy 1996). According to Stone, as cited in Brown (2004), the realm of human resource management is embedded in the employee life cycle of attraction, selection, development, reward, tenure motivation and exit through the strategy of workforce ability assessment and human resource planning within legislated employment frameworks, internal and external market forces for change. The public sector has an important differentiator to the private sector in that it has a government master servant relationship with all voters and citizens as customers as opposed to the shareholder and market segments (Colley, 2001). However, common to all sectors is that efficient HRM is significant to competitive advantage (Brown, 2004). Organisations that arrange their people efficiently are more able to respond to market changes and achieve business outcomes. Just as the private sector do, public sector organisations need to hire, train and establish payment systems and employment conditions based on clearly defined employment policies that match the labour market. The other point to note regarding public sector organisations is that the outcomes required are for the benefit of the citizens of Britain adding an additional layer of complication that the private and not-for profit sectors have limited exposure too if at all. For HRM, this provides additional scope that is not generally considered in strategic practice and affects the capability to be a true partner in achieving organisation market competitiveness and business objectives (Brown, 2004). The traditional model of HRM in the public sector was argued by Shin, as cited in Brown (2004), to have been transitioned from personnel related activities to expand to include strategic competence when the shift from rule and procedure based task culture to the current performance outcome culture. This approach, under new public management (NPM), provided for a more flexible and receptive approach to being an employer of choice and expounding the employee value proposition (Brown, 2004). This is noticeably different to the traditional view of high tenure, job for life, generous superannuation and notably more leave entitlements run by central agencies under the notion of a career service through an internal labour market (Brown, 2004; Colley, 2001). Colley (2001) summarised six principles of employee relations under the bureaucratic traditional model. They are merit based hiring through an entry exam; promotion by seniority; position classification structures; standardised salary and conditions administered by a central agency; tenure based on the premise of honest and fearless advice and a code of rights and protections (Colley, 2001). The internal labour market was launched after the experience in the 18th century regarding nepotism and advantageous political hiring into the public sector and was aimed at the premise of honest and fearless advice without fear of retribution (Colley, 2001). However, this created a service-wide remuneration and condition structure with job design influence by Taylorism on administrative task and routine principles in order to attain economies of scale. Promotion was based on seniority rather than potential or performance. Therefore, the focus was on the process rather than the outcome required and job security for the mediocrity (Brown, 2004; Colley, 2001) In the 1980’s the public sector truly began examining this approach and reinvented itself in order to allow for greater flexibility, openness and efficiency, particularly challenging the employment models (Brown, 2004). This saw the transfer from traditional administration model to a model of management focused on competence, effectiveness, economy and quality of service. This shift required a major change in managing public sector employees which is where HRM became a vital part of the public sector reform agenda (Brown, 2004; Ingram, 2005). The reform witnessed the de-centralisation and devolution of HRM responsibility to individual departments and agencies. The creation of flexible, flatter structures, processes and greater responsibility placed on line managers coupled with more largely designed jobs requiring multiple skills (Brown, 2004; Gardner, as cited in Colley, 2001; Ingram, 2005). Significantly, there was a greater focus on the measurement of performance and outcomes, rather than process and outputs. The traditional model provided for bad performers through continued tenure (Colley, 2001). Performance frameworks provide the capability for an individual to directly align their work objectives with that of the organisation. The new public management introduced the idea of attracting and retaining employees willing to get on board with the direction thus dismantling the internal labour market and job tenure, creating workplace and workforce flexibility and foremost, productivity (Brown, 2004; Colley, 2001). The government encouraged the development of serious requirement for change with the aim for it to be more relevant and understandable. The impetus was on the approach to the work and the management style that reflected a dedication to the whole of government approach and shared values. The approach set out the apolitical requirement of the public service, meritorious recruitment and promotion, ethics and accountability coupled with timely and perfect advice based on impartiality and courtesy, respect and quality leadership. For human resource management, a fair, flexible and safe workplace that reflects a workplace relations model based on cooperation and consultation and communication whilst maintaining a focus on performance and outcomes. The idea to corporatise the public sector provides the opportunity to reduce reliance on traditional models and makes for a smaller more competent service that utilises specific expertise from the wider market when required (Colley, 2001). The recent development of the purchase provider model has seen a further separation of public sector policy advice and service delivery (Colley, 2001). While the conventional model of employee management focused on an internal career based service with issues including consistency and equity, the de-centralised model of managers responsible for career development, hiring and performance management is just as challenging in terms of consistency and equity. Colley (2001), further claims that centrally developed human resource systems can still be extraneous, symbolic or incorrectly implemented because there is no guarantee of ample change implementation. The assessment concluded that a strategic approach was required for a values based culture, leadership is critical when aiming to encourage and motivate employees and that agencies need to work with their employees to ensure awareness. The public sector reorganisation is not without criticism. It is argued that employment conditions and career development opportunities have been reduced over time as a result of this wide scale agenda of reform. Couple this with role clarity confusion, lack of central management and inconsistency, the senior executive service have a tough job to manage new hiring process, manage tenure, capture knowledge and maintain relevant. This has been understood through large scale organisation restructures, downsizing and the development of outsourcing, or contracting out. According to Klijn (as cited in Brown, 2004), the new public management influence of outsourcing through competitive tendering and utilising contract models has provided for a market based delivery, however, questionably contributed to a decrease in service and quality. However, new public management has placed HRM on the centre stage for change and affecting such change. Further concern surrounds HRM’s capability to keep pace with the advances in information technology and the impetus of workforce planning in times of an ageing demographic profile, skill short labour market that is highly competitive from a compensation and conditions perspective and a leadership group requiring further development on how to manage in this type of employment market. Particularly, during the transition from the traditional model to new public management, a vital strategic error in the lack of good workforce planning data was realised. As the public sector was de-centralised, the responsibility and overall picture of the service was not noticeable and the information systems not reliable nor were HRM areas provided the partnership responsibility at the senior level to continue this important work. It is in the current impasse that this error has been realised and both central and de-centralised strategic and operational workforce planning is occurring. A significant factor in any HRM model is that of compensation and conditions. Public sector reform has seen a shift from the centralised standard for all to a de-centralised agency based negotiation at a collective or individual level. This has led to further competition between departments and agencies for capacity. The disagreement for retaining a centralist approach is to maintain fairness and equity; reign in labour costs; avoid poaching and uphold a unified service. Though, this approach has proven to be fairly constricting in an open labour market where the public sector has struggled to attract and meet the private sector remuneration levels particularly in senior or high specialised positions (Colley, 2001). Furthermore, this disparity can cause turnover, however, O’Neill and Hughes (as cited in Colley, 2001), warn that the public would not indisputably agree to matching the private sector. A genuine challenge for HRM is with the senior executive service in that the recent trends for appointment on contract suggests an extremely fluid workforce with generic management skills and knowledge relevant to the government of the day (Colley, 2001). This purposeful separation of power and knowledge directly flies in the face of outsourcing as this requires a level of senior management familiar with the content and, therefore, able to effectively, efficiently and economically manage the outcomes of the contracted work (Colley, 2001) Additionally, the notion of honest and fearless advice could be challenged should the individual employment contract be possibly affected by such advice to a minister. Consequently, the traditional model of career tenure is advantageous, when compared with position tenure, posing less risk and arguably a better outcome. Principles of Performance Measurement In the private sector performance measurement efficiently comes down profit or profitability (Glynn and Murphy 1996). The public sector needs to show different aspects of performance. Isaac-Henry, Painter and Barnes (1997) see public performance management as a variety of processes, techniques and methods aimed at attaining productivity, quality and added value in public services. In creating a structure for measuring performance it is essential to be clear that such a structure highlights the needs of the organisation in terms of areas for improvement. Isaac-Henry, Painter and Barnes (1997) describes public sector organisations as having multiple stakeholders which gives a greater complication to that found in the private sector. Performance measurement is a means to an end rather than an end in itself and must deal with organisational and stakeholder needs. Osborne and Gaebler (1993) underline that what is measured gets done but it is, therefore, equally vital to ensure that the organisations core business, and particularly those areas most in need of improvement are focused on. Bolton (2003) explains this as the monitoring of vital success factors, which lead to the fulfilment of the organisation's mission. He also raises the need to find a balance, which offers views from different viewpoints and covers both quantitative and qualitative measures. Such an approach allows for a factor of triangulation between the realism of quantitative measures and the insight of qualitative. If a service areas performance is improving against a measurable target but customer satisfaction rates are falling what is the analysis of performance? Ownership of the performance measures is vital to ensure effectiveness and accuracy. Flynn (1997) says that managers, workers and service users must all be consulted on what should be measured and that a performance measurement culture is about learning and improvement rather than blame. This is an important element in respect of accountability. For a performance measurement system to be efficient it must be subject to analysis to ensure that the correct measures are in place and that the data generated is dependable. Such analysis can be carried out internally through audit or peer evaluation but for the public sector the various regulatory regimes, such as HMI and Audit Scotland play a significant role. This is a model of what Wilson and Hinton (eds. 1993) call performance requirements as “methods of regulation” and key to the debate on the use of performance measurement in the public sector. In making and maintaining performance measurement systems it must be recognized that the changing environment both internally and externally must be addressed and systems must be updated to ensure measures remain recent, suitable and challenging. Isaac-Henry, Painter and Barnes (1997) connect this point to the need for public organisations to use performance measurement as a means of learning. The continuing re-evaluation of mission and objectives is vital and the selection of appropriate measures flows from this. In conclusion, performance measurement must be seen as an aid to improvement. It is vital to manage our performance as well as measure it and frameworks must pinpoint areas where corrective action must be taken to ensure performance targets are met. This underlines the issue raised earlier of performance measurement as a means to an end rather than an end in itself. It also demonstrates the significance of a performance framework, which does not merely report retrospectively but is constantly updated and has the acceptance of all parts of the organisation as highlighting the performance of individuals towards organisational objectives. Measures for performance measurement For finding out the measures to be used in the performance measurement framework it is vital to recognise the different types of measure available. Flynn (1997) categorizes three types of measure, economy, efficiency and effectiveness. Economy measures basically show how much money is spent by an organisation over a given period. Then improved economy would be the acquisition of a greater number of units for the same level, or a lower level of resources. Flynn is of the opinion that though such measures say little about quality and customer satisfaction they are dominant in performance management systems due to their links to the budgetary process. Achieving high levels of success can only be seen as an accomplishment if done within financial limits. Efficiency measures also recognized as productivity measures are more sophisticated and ask how much was produced for a given level of expenditure. Improvements in competence take place when more units of output are produced without an increase in expenditure or expenditure is reduced and the level of output is maintained. Such competence measures are often used as comparators in the public sector and Flynn warns that this can be deceptive as it says nothing about the standard of the output and fails to take account of wider social issues. Measures of efficiency are concerned with outcomes and the impact of services provided. Flynn underlines differences of opinion on what are the desired outcomes of public services and the political factor contained in these debates i.e. outcomes related to voters rather than service users most in need. It is also possible to merge different types of measurement to produce for example measures of cost effectiveness which link the economy factors with the outcomes achieved. The Value of Performance Management From the deliberation of the rationale behind performance measurement in the public sector and the types of measures to be set we can begin to recognize some potential benefits. Internally performance measurement can aid both the practice and responsibility of management. Performance measures give confirmation that intended outcomes are being achieved and allow for reallocation of resources in areas of under performance. Bolton (2003) credits performance measurement with delivering better services as managers have improved information on which to make decisions and greater accountability through reporting of performance which allows stakeholders to take a greater interest in and have a better level of understanding of public sector organisations and the services they provide. It can be seen, therefore, that there are also external benefits to be derived from performance measurement. Problems with Performance Management in the Public Sector The clear criticism of adopting what is basically a private sector technique in the public sector is that goals and objectives for the public sector are less clear cut and are likely to be complex, multiple and hard to measure. Performance can also be seen as elusive as it is not based on agreement and is subject to political considerations (Isaac-Henry, Painter and Barnes, 1997) Conclusion Much of the matters around the use of performance measurement are linked to its dual purpose of internal management and public accountability. Many public sector organisations have designed broad performance management frameworks linked to wider objectives and have built these into service plans, which break performance targets down to individual level. However, the achievement of centrally set performance indicators has far more significance in the public domain. This performance information is often published in the form of comparative data or “league tables”. Flynn (1997) and Gaster (1995) notice the positive area of performance improvements through benchmarking as being enhanced by league tables (study the methods of those above you in the league table) but Flynn warns that managers may focus on the targets contained in league tables to the detriment of other service areas. He provides an example in schools where a performance sign was introduced to measure the number of pupils receiving five "C" passes or above. In overall terms the performance in this area improved sharply but the numbers of children failing to gain any passes also increased. Osborne and Gaebler's claim that what gets measured gets done can, therefore, be put in a more negative perspective. The public reporting of performance establishes the area of regulation and the concern raised by Flynn 1997 that the dual purpose of improving management performance and public accountability may not be served by the same performance measures. Measures used to underline poor performers may not be the most appropriate to help management learn and in turn bring about improvements. The “blame culture” of naming and shaming the poorest performers can also has a harmful effect on motivation within an organisation that may be performing well in other less tangible or measurable areas. Ranson and Stewart (1994) argue that no set of measures can be deemed to be complete and they consider “final outputs” to be the quality of life in society which are judged through public and political discourse. In the same way, they see different groups within society as having different perspectives and in turn have different requirements for performance. Isaac-Henry, Painter and Barnes (1997) tell about technical difficulties in gathering information and the need for adequate management information systems. Although performance information is audited by regulatory bodies there is a factor of self assessment which can be influenced by the quality of information systems and in more extreme cases by the deliberate actions of organisations to tailor processes to meeting performance data requirements. In real meaning, HRM is continually challenged to partner and tactically align people management within public sector reform. The de-centralised and devolved model of public sector management has created a catch up state for HRM as cited in recent errors of strategic workforce planning. However, important learning reflects that HRM are getting better at understanding and forecasting change to employee requirements in the public sector and are continually seeking to improve that change process through best practice benchmarking with the private sector. References Bolton, Mike. Public sector performance measurement: delivering greater accountability. Work Study, Volume 52 . Number 1 . 2003 . pp. 20-24. Brown, K 2004, 'Human resource management in the public sector', Public Management Review, vol. 6, no. 3, pp. 303-309. Colley, L 2001, 'The changing face of public sector employment', Australian Journal of Public Administration, vol. 60, no. 1, pp. 9-20. Flynn, Norman. Public sector management. 1997. Hemel Hempstead. Prentice Hall. Gaster, Lucy. Quality in public services. 1995. Buckingham. Open University Press. Glynn, John J., Murphy, Michael P. Failing accountabilities and failing performance review. International Journal of Public Sector Management, Vol. 9 No. 5/6 1996, pp. 125-137. Hughes, Owen E 2003, 'Personal and performance management', Public management and administration: an introduction, 3rd edn, Palgrave Macmillan, London, Chapter 8. Isaac-Henry, Kester, Painter, Chris, Barnes, Chris. eds. Management in the Public Sector: Challenge and Change. 1997. London. Chapman and Hall. Osborne, David, Gaebler, Ted. Reinventing government. 1993. New York. Penguin. Ranson, Stewart, Stewart, John. Management for the public domain. 1994. London. MacMillan. Wilson, John, Hinton, Peter. eds. Public services in the 1990's. 1993. Wirral. Tudor Business Publishing. Read More