HRM in the public sector: [PART 2]

1. TRADITIONAL PUBLIC SECTOR HRM

Whether more influenced by the notion of being "sovereign employer" or its role as a "model employer", traditional HRM systems share a number of features:

- There are centralised and standardised practices

- Strong job security, compared to the private sector

- There are numerous procedural guarantees that employees can recur to

- Seniority and length of service is an important criterion for many decisions, such as promotions, pay and redundancies

- There are nationally comparable standards that apply to across the whole public sector

- Professional norms are integrated within HRM systems, in the sense that the

professions define their own criteria for HRM decisions such as hiring, pay, performance evaluation, training, etc.

Looking at particular HRM areas:

-->In selection, traditional HRM systems are geared towards ensuring equal access to government employment. Hiring is merit driven, often through open competitions in which tests are carried centrally, rather than by each unit or department. Also, hiring is done into the service, rather than into a particular position.

-->In careers, there is the expectation of lifelong employment. Careers are based on a standard classification system. Staffing decisions (who is assigned to each position) and promotions are determined centrally, often through a system of seniority where employees are ranked according to a point system. Points are awarded for length of service, formal training and education and for performing particular functions.

-->In terms of pay and rewards, there are centralised systems of pay determination, based on standard rates for each level or grade, plus service-related increments.

-->Performance management (what is good or bad practice and behaviour) relies on professional norms, and may even be carried out by the professional bodies themselves.

-->Finally, discipline procedures for misconduct, absence, etc. is handled by centralised

departments, rather than line managers.

2. NEW PUBLIC MANAGEMENT

-In the 1980s, a different way of arranging public services developed, as a response to a certain context. There was higher demand for high-quality public services by a more educated and affluent electorate. At the same time, this electorate was increasingly tax conscious. Finally, there was a small-government ideology in the Thatcher and Reagan administrations, by politicians who regarded public employees more as knaves than
knights.

NPM had a number of general elements. Among the most important are
-Opening public services to competition, and making them adopt a user-focus.
-Introduction of numerous explicit performance metrics, particularly efficiency (benefitto-cost) measures
-Decentralisation of decision making, giving managers discretion over the running of their departments.

-NPM has been adopted to different degrees in different countries.New Zealand is often quoted as the country where NPM reforms have been taken furthest. Sweden and the UK too. On the other side of the spectrum, countries like France, Germany and Spain have adopted few elements of NPM.

Under NPM, HRM in the public sector introduced many elements of private-sector HRM. The most important are:
-Line managers are given a larger roll and discretion for hiring, promotions and rewards,
-Hiring is position based, lifetime careers are rolled-back
-Individual performance appraisals are introduced
-And these are linked to pay

Evaluations of NPM are mixed.
-There has been considerable resistance to NPM by workers, particularly in those aspects where a user- or managerial- focus has clashed with professional norms (e.g. should assessments of the quality of education include the opinion of pupils; should assessments of the quality of healthcare mostly focus on clinical statistics or patient perceptions)

-There has been limited use of HR discretion: units that have had HR responsibility devolved to them have not done anything different from others. This has been attributed to lack of managerial expertise, but also to possible difficulties with unions and in accounting for decisions.

-Performance related pay has in many cases been awarded on top of salary increases, limiting the financial savings. There have also been widespread difficulties in setting meaningful goals, so the motivational effect has been limited. On the brighter side, PRP has been credited with stimulating change and an upwards renegotiation of effort norms (Marsden, 2007)

-Finally, reforms in HRM seems to have been successful in reducing head counts in the public sector, but this has been done at the expense of work intensification and loss of skills, which have had an impact in the quality of worker lives and of service provided.

3.HRM and the economic crisis: living in the "age of austerity"

It started  off with Northern Rock being the first bank run in the UK in more than 150 years.A year later, Lehman Brothers was let to collapse by the US government.This sparked a series of banking bailouts in the UK, the Netherlands, Ireland, and other
countries.

In 2009 and 2010, the crisis moves to sovereign debt, affecting particularly countries in the Euro area. The US and the UK remain under pressure (fiscal cliff, etc.)This has brought enormous fiscal pressures onto governments.

Governments need to cut spending. More than a third of UK government spending goes out in direct payments of benefits and grants. Another third is spent in procurement of goods and services, and just under a quarter is spent in paying public employees. The first area that governments have targeted is public employment. The benefits bill is politically difficult to cut, particularly in times of high unemployment, and with the issues of an aging population. Procurement spending is also difficult to cut because much of it relates to citizen services that have been outsourced, cutting those services is also politically difficult. Result? Cutting the public pay bill is being done through reductions in employee numbers, and through cuts to remaining employee terms.

How will the public sector react?: Lodge and Hood (2012) have suggested that governments may react to the situation in four ways:

1. they may become more directing, intervening in areas where it did not use to.
2.they may move further into contracting services out to the private sector
3.they may become more reliant on community organisations
4.they may give up altogether on providing some public services

Although they suggest central governments are more likely to become directing or hollow, whereas local governments are more likely to become communitarian or coping,they envisage each government moving in different directions for different areas.

The implication for HRM is that workforce requirements for each of those state roles is very different, thus it can be argued that HRM in the public sector will become more diverse within individual countries, and even within individual governments.