Research and practitioner literature focuses on strategies and practices, and espouses that their application is suitable across large and small private and public organisations. It is therefore appropriate to consider the applicability to the public sector HRM approaches and practices derived from the private sector.
Walsh, Bryson and Lonti’s (2002, p. 177) study of public and private sectors in New Zealand found that whilst there were similarities between the sectors, there were also significant differences, mainly evidenced by the much greater degree of formalisation of the HR systems in public sector organisations and a greater emphasis on control. Walsh, Bryson and Lonti (2002, p. 177) found that the reasons for this were: the public sector regulatory environment; differences in key sources of organisational capability and risk minimisation; differences in the nature of work; and the influence of historical
legacy whereby public sector organisations look more like each other than do private sector firms.
Literature exploring HRM and SHRM has noted changes in the public sector since the advent of ‘new public management’ and at the academic and practitioner level suggestions have been made that public sector organisations should mirror private sector practice (best practice models and approaches to HR and SHRM) (Gibb, 2001; SSA-Vic, 2006; Boxall & Purcell, 2008). The question then arises as to whether perceived or actual differences apply to public sector HRM and SHRM and if so what they are. According to Brown (2004, p. 304), there has been limited theoretical and empirical attention given to this topic.
Brown (2004, p. 304) stated that while changes to the public sector over the last two decades have had a significant impact on employees of public sector organisations and the conditions under which people work, there has been scant attention afforded to the specific field of HRM research and a lack of academic inquiry in relation to the public sector. Brown (2004, p. 304) added to this by stating that contemporary HRM texts often disregard or give only cursory acknowledgement of HRM within the public sector, relying instead on appropriating business models as the general context for HRM scholarship. This links to Wright and McMahan’s (1992) comments about the need for empirical research to further develop SHRM theory.
SHRM holds considerable promise for improving government performance by aligning workforce activities and structures to organisational goals (Tompkins, 2002, p. 95). Tompkins (2002) noted that government agencies rarely operate in competitive markets and thus do not develop business strategies in the same sense that private organisations do. They function within larger systems of authority, but without the same degree of autonomy that private organisations have to alter their personnel policies or provide performance-based incentives to employees (Tompkins, 2002, p. 95). Hence it is not only the legislative framework that may restrict the adoption of a private sector SHRM model by the public sector, but other factors that may impact on the successful application of SHRM.
Brown (2004, p. 308) found emerging concerns in relation to new directions and approaches for HRM in the public sector that centre on the organisational effects of ever-increasing levels of technology, changes in population patterns affecting labour markets and new demands on management leadership. Brown does not identify, however, other changes such as changes of government, changes to government
priorities and decreasing levels of resources with which to provide increasing types and levels of public services. For Brown (2004, p. 307):
The different orientations of the public and private sectors mean that while HRM has commonalities across all sectors in its attention to workforce issues, HRM in the public sector will exhibit a range of differences from that of private sector HRM.
Brown (2004, p. 305) goes onto comment that the particularity of the public sector, with a focus on public interest outcomes rather than private interests, may add a layer of complexity that does not easily fit with HRM as a strategic partner in achieving organisational goals. Brown (2004, p. 305) purported that in the public sector the focus is on outcomes other than market share or profit and therefore SHRM or HRM may need to be structured differently in terms of having HRM as strategic (or pivotal) partner.
There are a number of differences between private and public sectors, and the management of people resources is one of them. ‘Public sector organisations have become a paradigm case of how much can go wrong with HRM within the management process’ (Boxall & Purcell, 2008, p. 218).
A large part of the difficulties experienced in the quality of employee relations in the public sector occur because governments (in effect, the owners) change frequently, introducing new philosophies, policy requirements and senior leaders. In addition, the public sector is characterised by high-level policy groups, which can ‘dream up’ new bureaucratic initiatives, often from elegant theory, but without in-depth management and at a great distance from the people who actually deliver public services
Boxall and Purcell (2008, p. 218) Performance or productivity in public sector organisations also differs from that of private sector firms for a number of reasons. There is a legislative framework that guides and sets minimum and maximum provisions for recruitment advertising, selection, promotion, performance management and remuneration. Reporting frameworks also vary in how performance is measured and reported upon. Changing government priorities can result in program changes or policy redirections where people resources are realigned to suit. This occurs with minimal notice at times, and reporting frameworks are not always changed in a timely fashion for resource realignment to occur (Ogle, 2009). Productivity is very difficult to measure in the public sectors, as outputs are often difficult to define and there is no marketplace in which
they are provided. Furthermore, government agencies are under sustained pressure to improve the quality of their services, which often adds to costs (DCAC, 2007).
Public sector organisations have also faced matters detailed in the literature review in regard to ageing, changing workforce participation, work-life balance and flexible work provisions. These all impact on SHRM and the ability to attract, engage and retain employees. The New Zealand State Service Commission (2004, p. 1) identified that overseas research concerning ageing shows that all advanced jurisdictions (public service authorities) face the situation in which: the proportion of older workers in the labour force will increase more rapidly than any other age cohort; the public sector labour force has a higher proportion of older workers than the private sector, and the education sector tends to have the highest proportion; and advanced jurisdictions have policies targeting older workers, focusing on factors including retirement and pensions, education and training; and flexible working conditions.
The role of SHRM and effective HR policies is not only to align the current workforce to organisational goals, but to also address emerging or future challenges. The performance and measurement of HR is an essential element of SHRM and HR needs the capacity to develop, deliver and continuously evaluate its practices. The role of HR must extend beyond the delivery of workforce management systems and practices and address emerging challenges. For example, Claes and Heymans’ (2008) research identified the value of eliciting HR professionals’ views about ageing workforces and found a wealth of information that could better inform organisational approaches to the ageing of the workforce.
Adapting to changing environments, reporting frameworks, service delivery and policy changes requires careful planning. The New Zealand State Service Commission (2004, p. 1), in researching and reviewing the ageing factor, noted that: most departments do not have specific policies on managing ageing workforces (e.g. three out of four departments do not consider the issue in their succession plans); health problems and resistance to change were noted disadvantages of having an older workforce; work-life balance and flexible work practices were considered the most important factors in managing an ageing workforce; reduced hours and/or flexible work arrangements were the most practical solutions to the concern of an ageing workforce; and departments would apply the same standards to both older and younger workers. These changes to the employment landscape are likely to lead to adaptive changes to SHRM theory as it needs to consider and address the implications of ageing workforces and changing
employment contracts and needs in terms of HR structure, organisation, workforce management policies and practices, and their application.
Whilst many organisations experience periods of contraction or expansion of their workforces because of changing environments and circumstances, the public sector has had to adjust or adapt its activities during contraction periods, whilst still meeting the public demand, meeting government priorities and facing a continual balancing act to grow people skills and capabilities. Downsizing in organisations means that the work is either no longer undertaken or is reallocated. Management of this is difficult and involves careful planning, and when change is not managed well there may be a number of detrimental effects including low morale, a drop in productivity, a reduction in employee numbers and the provision of adequate training and development or promotion opportunities (Boxall & Purcell, 2008).
Public sector organisations have been affected by the same sort of cost pressures as the private sector. According to Boxall and Purcell (2008, pp. 138-139) drawing on Green, 2001; Smith, 2001; Kersley, Alpin, Forth, Bryson, Bewley, Dix & Oxenbridge, 2006):
Downsizing and budget constraints have been applied while client demands, for example in public education and health, have risen. These pressures have often been as intense as anything in the private sector or worse.
Harel and Tzafrir (2001) agreed that there are number of significant factors that shape the differences between the practices of private and public sectors, the first being the profit motive, where private organisations are judged on their profit rather than the public sector focus on service delivery. The legal and constitutional framework makes the public employment relationship fundamentally different from that in the private sector and in the public sector an employee must respond to executive and legislative authority (Harel & Tzafrir, 2001). In the private sector the profit obtained is deemed to be the key result, whereas in the public sector the end result or goals achieved are not as tangible, given the environment and structure within which they are achieved. It could be questioned, given Harel & Tzafrir’s (2001) study, whether HRM‘s strategic role and alignment is different in the public sector, given that it needs to respond to more than one position: e.g. to the Secretary of the Agency, the Minister and the executive and legislative authority rather than the Chief Executive Officer alone; and how this impacts on SHRM in its approach or application. It is evident from the literature (Harel & Tzafrir, 2001; Kallenberg, Marsden, Reynolds & Knoke, 2006; Teo & Rodwell, 2007; Bach & Kessler, 2007) that the public sector has different structures and challenges
from the private sector, not only in terms of being able to apply SHRM theory to practice; but also the changing demands placed on it that will affect how people- management policies, practices and any alignment with organisational goals can be undertaken within identified constraints.
Boxall and Purcell (2008, p. 138) note that there are ’two broad patterns of work organisation are important in the public sector. The first occurs in the public service ministries and local government departments, which are typically much larger and much older than private sector establishments’ (Kallenberg, Marsden, Reynolds & Knoke, 2006).
Boxall and Purcell (2008, p. 138) drawing Bach & Kessler, 2007) hold that:
[Public sectors] have therefore relied heavily on tall hierarchies and such bureaucratic devices as job descriptions, job evaluation and performance appraisal systems. To ensure that governments can account to taxpayers for how public funds are spent, pressure for standardisation of conditions have been strong, as have procedures which help to show equity of treatment across different grades of workers and across different individuals.
‘The other major pattern in the public sector is the existence of a high degree of highly skilled professional work’ (Boxall and Purcell, 2008, p. 139). ‘In the public sector, where there are large organisations with tall hierarchies, this means a higher level of bureaucracy can be expected than one finds in private sector professional firms, but it also means a high level of independent action by professionals’ according to Boxall & Purcell (2008, p. 139).
Another factor is ‘new public management’, which imposes on the individual greater mechanisms for accountability such as individual performance targets and performance-related pay (Boxall & Purcell, 2008, p. 139).
Boxall and Purcell (2008. P.139) drawing on the writings of Guest & Conway (2002) stated that ‘there is little doubt that the target/audit culture has brought work intensification of a kind that has antagonised public sector professionals, lowering levels of trust in the public sector and exacerbating problems of recruitment and retention (Audit Commission, 2002).
Applying theoretical and practical models of SHRM in the public sector may raise difficulties, given the different size, structure and function and management practices of Agencies and also at the jurisdictional level. HR Policy and practice may be governed by different legislative and reporting requirements and the actual management
practices may vary across Agencies. Public sector jurisdictions and individual Agencies may experience resource scarcity at times, with cutbacks or budget reductions. This may necessitate restructuring or realignment of employment, which can cause performance to drop and can also, because of employment legislation, be costly in terms of redundancy payments (Boxall & Purcell, 2008). Such costs then may be offset by changing staffing structures, reducing service delivery or training and development budgets. Whilst downsizing and/or restructuring are not limited to the public sector, they are perhaps different in that resources (people) are considered in the public domain more than private sector restructures and downsizing.