Week 4 – Assignment: Evaluate a Case in Public Personnel Management and Week 5 – Assignment: Recommend an Employee-Friendly Policy

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Battaglio, R. (2015). Public human

resource management: Strategies and

practices in the 21st century. London:

SAGE Publications, Ltd. Link

Herrera, J., & Miller, D. M. (2018). An

emergent taxonomy of public

personnel management: Exploring the

task environment of human resource

managers… Link

Kearney, R. C., & Coggburn, J. D.

(2016). Public human resource

management: Problems and prospects.

Los Angeles: CQ Press. Link

Seunghoo Lim, Tae Kyu Wang, & Soo-

Young Lee. (2017). Shedding New Light

on Strategic Human Resource

Management: The Impact of Human

Resource… Link

Week 4 – Assignment: Evaluate a Case in Public

Personnel Management Assignment

Due February 27 at 11:59 PM

This week, you have the task of analyzing a case study entitled, Louisiana and Vision

2020. In your evaluation, avoid summarizing the case. Instead, analyze the case critically

and assess how it pertains to this week’s readings. Refer to the Guide to a Successful Case

Study Analysis (see slides above) for additional guidance. Remember, excellent analyses

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are a combination of critical and analytical thoughts connected to greater themes

presented in the readings – and this is not an easy task.

Be sure to include the following personal reflections about the readings elements in your

assignment:

Provide a brief description of the questions/challenges you have regarding this

week's course readings.

Explain why the case is noteworthy.

Explain how it pertains to the assigned readings (i.e., complements, contradicts,

extends the readings).

Identify the implications for you as the newly hired Director of Personnel

Administration for Public Organization X.

Explain how these points or issues integrate with the material covered in the class

thus far and explain their relevance to you.

As you complete your analysis, keep the following questions in mind:

How might you coordinate such efforts across agencies, industries, and sectors?

What state agencies might be tasked with implementing the workforce-training

benchmarks?

What roles might secondary and postsecondary education have in advancing

toward the workforce-training benchmarks? How might community and technical

colleges contribute to achieving these benchmarks?

What benefits might you champion as ensuing from the achievement of workforce-

training goals for the state? What, if any, other benchmarks might be affected by

achieving a more educated and better-trained workforce in the state?

Do not include the following in your analysis:

A summary of the readings

A detailed description of the case

Any editorials

Length: 5-7 pages, not including title and reference pages

References: Include a minimum of 5 scholarly resources.

Your assignment should demonstrate thoughtful consideration of the ideas and concepts

presented in the course by providing new thoughts and insights relating directly to this

topic. Your response should reflect scholarly writing and current APA standards. Be sure

to adhere to Northcentral University's Academic Integrity Policy.

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Upload your document, and then click the Submit to Dropbox button.

https://doi.org/10.1177/0091026018791965

Public Personnel Management 2018, Vol. 47(4) 445 –471

sagepub.com/journals-permissions DOI: 10.1177/0091026018791965

journals.sagepub.com/home/ppm

Article

An Emergent Taxonomy of Public Personnel Management: Exploring the Task Environment of Human Resource Managers in Spanish Local Government

Justo Herrera1 and Daniel M. Miller2

Abstract This study presents a taxonomy for public personnel management based on emergent profiles of local human resource managers in Spain. The analysis focuses on the task environments of managers defined by three salient constructs from strategic human resources management research. Specifically, this study looks at the level of participation of human resource managers in strategic-level policy-making processes, vertical and horizontal policy integration, and the flexibility of human resource managers in interpreting and implementing key functions of personnel management (i.e., recruitment, hiring, and remuneration). The results yield five distinct profiles that describe different approaches of human resource management. The five profiles include Technical Administrative (TA); Technical Functional (TF); Managerial Administrative (MA); Managerial Functional (MF); and Strategic Executive (SE). The profiles are not a linear typology of human resource management practices. However, they do fit within a larger theoretical framework that captures central constructs of strategic human resource management (SHRM).

Keywords HRM, local government, strategic HRM, public administration, public management

1Universitat de Valencia, València, Spain 2ChangingSystems LLC, Greensboro, NC, USA

Corresponding Author: Daniel M. Miller, ChangingSystems LLC, 404 Arrowhead Dr., Greensboro, NC 27410, USA. Email: [email protected]

791965PPMXXX10.1177/0091026018791965Public Personnel ManagementHerrera and Miller research-article2018

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mailto:[email protected]

446 Public Personnel Management 47(4)

Introduction

Given the past two decades of global economic downturn, governmental agencies are facing pressures to become more efficient and effective through reduced cost and increased productivity. A critically important, yet costly element of every organization is personnel. In both public and private sectors, personnel management is an area that often garners a great deal of attention for enhancing efficiency and effectiveness (Klingner, Nalbandian, & Llorens, 2010).

In the public sector, governmental functions range from relatively predictable bureaucratic operations such as waste management to highly complex and adaptive operations such as crisis response to human and/or natural disasters. Of the many gov- ernment functions, personnel management impacts every division and agency. Personnel management often spans a wide variety of functional units within an orga- nization. Thus, personnel management functions (e.g., supervision, recruitment, train- ing, remuneration, and evaluation) coexist with general organizational strategic and operational aims and functions. Ideally, personnel management systems support the well-being of employees and contribute to the effectiveness and efficiency of the organization.

Innovative approaches to human resource management (HRM) that were previ- ously confined to the private sector are finding a place in public personnel manage- ment (Klingner, Nalbandian, & Llorens, 2010). In recent decades, some governments have responded to pressures for increased efficiency and effectiveness by adopting practices that have shown to be effective in the private sector. The response has included streamlining processes, out-sourcing programs and services, and moving away from bureaucratic features (e.g., top-down decision making, rigid processes, divisionalized operations, etc.) in favor of more strategic, inclusive, integrated, and flexible practices attributed to the New Public Management movement (Bryson, Crosby, & Bloomberg, 2014; Klingner, 2012).

The dynamic nature of the public sector (e.g., context, structure, shifts in political leadership and ideology, reallocation of resources, etc.) requires researchers and practitioners to continue to look for dynamic ways to think about and research public personnel management (Jordan & Battaglio, 2013). As public personnel manage- ment develops in complexity, there is a need to continue to explore and develop new ways to describe research and practice in this increasingly diverse and dynamic landscape.

Human resource managers are at the nexus of these undulations in the public sector. Some of the central questions that managers may encounter include the following: Does a given policy make sense? Is the policy effective? Does the policy run at odds with other functions/policies internal and external to the agency? Can the manager shape/influence the policy process at the strategic level? Can the manager shape/influ- ence policy procedures and implementation? This study presents a taxonomy that builds on existing work to describe and understand some of these fundamental ques- tions facing managers.

Herrera and Miller 447

Among public agencies, there are differences in approaches to public personnel management. Some agencies have adopted some aspects of “newer” and “different” approaches, while others have largely relied on classical and traditional models of HRM. This leaves a landscape of public personnel management that is far from uni- form and predictable in terms of form and function. Nevertheless, policy making, policy implementation, and policy integration are salient features that provide a robust way to describe and understand variations among approaches to public personnel management.

Researchers have developed frameworks and models to capture various approaches to HRM practice in both public and private sectors. This article uses a taxonomy approach for modeling HRM in the public sector. The purpose of a taxonomy is to organize or structure knowledge and/or information. When developing a taxonomy, there is a tension between over simplifying and overly complicating models (Bobko & Russell, 1991). If a taxonomy is too narrowly focused or context specific, it loses its ability to be applied more generally; on the contrary, if a taxonomy is too complex (aka kitchen sink), it can become too intricate and unwieldy for practical application in research or in the field.

Purpose of the Study

The purpose of this study is to develop a general taxonomy that has the ability to describe various forms of public personnel management. To avoid oversimplification or overcomplication, three core aspects of personnel management form the basis of the proposed taxonomy: policy making, policy implementation, policy integration. Specifically, the study presents a taxonomy based on the following constructs:

1. Participation: participation by human resource managers in strategic-level policy making;

2. Autonomy: flexibility of managers to implement human resource policy; and 3. Integration: vertical and horizontal integration of human resource policy within

the broader government policy framework.

Significance of the Study

In his review of HRM theory and research, Perry (2010) notes the contributions of both highly focused, contextualized research and general theories which more broadly characterize veins of the literature. However, according to Perry (2010), the field of HRM needs more works that represent the “middle range” theory to advance HRM.

Following Perry’s charge, this study distills HRM down to three salient features and uses them as the basis for developing a middle range theory—a taxonomy. The value of the taxonomy put forth by this study is its potential to capture and describe complex aspects of HRM while using a relatively simple framework.

448 Public Personnel Management 47(4)

Framing Public Personnel Management

HRM theory and research has its roots in the field of organizational behavior. So, it should be expected that perspectives in organizational behavior have influenced how researchers and practitioners approached HRM. Three general types of models are often used as advanced organizers for categorizing different views of the structure and dynamics of organizations. The three forms have many descriptors, but generally speaking, they are mechanistic, human-centered, and emergent models.

In a public administration context, the literature includes several taxonomies that describe various types of HRM. The taxonomies are most often built on central con- cepts grounded in general HRM and the field of organizational behavior (e.g., power, decision making, structure, roles, motivation, etc.; Watson, 2007).

For example, Delery and Doty (1996) categorize models of HRM into three general groups: universalistic, contingency, and configurational. Universalistic models gener- ally view organizations as closed systems, and the underlying assumption is that there is a set of HRM practices which “enable a firm to achieve its goals” (Wright & McMahan, 1992, p. 298). Contingency models emphasize that the “fit” between over- all organizational strategy and internal HR practices determines organizational perfor- mance. Configurational models are similar to contingency models; however, configurational models suggest that internal and external variables (including HR policy) impact business performance. Thus, from the configurational perspective, the HRM systems are ideally internally coherent (i.e., each HRM function is aligned with the managerial roles and responsibilities).

In Selden’s (2005) study of county governments in the United States, she suggests a typology for HRM that includes three fundamental forms of HRM: administrative, operational, and strategic approaches. The administrative form of HRM practice involves the day-to-day functions of HRM professionals. Administrative practices are characterized by the use of technical skills which apply policies to execute routine procedures. The administrative category is comparable with a traditional bureaucratic or Theory X (McGregor, 1960) view of organizations. Operational practices involve activities of professionals focused on design and managing the implementation of policies and procedures. The operational category views human resource managers as professionals with knowledge skills and abilities to contribute to the operations/func- tioning of the organization. The operational practices reflect a more humanistic, Theory Y (McGregor, 1960) point of view. The strategic practices involve upper level (e.g., executive, legislative, etc.) planning, policy making, and decision making. In this framework, ideally each of these forms of HRM practice is well integrated, pro- viding for effective and efficient HRM (Dickmann & Müller-Camen, 2006; Schuler & Jackson, 2007; Selden, 2005; Walker, 2013).

Denhardt and Denhardt (2015) describe public personnel management as having evolved overtime from Old Public Administration toward New Public Management. They describe Old Public Administration as reflective of traditional models of bureau- cracy, rational decision making, and control. On the contrary, while the more “evolved” orientation of New Public Management features more flexible and inclusive practices

Herrera and Miller 449

around policy making, implementation, and evaluation, emphasizing an orientation toward developing policy and practices meant to fulfill public needs. Denhardt and Denhardt also suggest yet another form of public personnel management in the form of “New Public Service.” They describe New Public Service as a distinct approach that builds on elements of the humanistic view of New Public Management yet goes further by using highly inclusive strategies to involve stakeholders in processes of dialogue with the purpose of co-constructing (i.e., defining) public needs, priorities, and strategies policy, implementation, and evaluation.

New Public Service has an orientation that resembles thought and practice in post- modern perspectives of organizational behavior. The inclusive democratization of the New Public Service approach mirrors the philosophical orientation of political scien- tists and activists such as Paulo Freire (1973). While New Public Service offers a vision of public personnel management, there is room for more cultural, anthropologi- cal, and inclusive participatory methods of inquiry; however, current research on public personnel management remains heavily focused on the New Public Management approach.

Policy Making, Implementation, and Integration: Where Are the Managers?

Each of these general models presents three general views of public personnel man- agement, and within each, there are implications for the role of the human resource manager in the areas of policy making, implementation, and integration. For example, strategic human resource management (SHRM) can be broadly characterized as efforts that include human resource managers in (a) the process of setting the strategic direc- tions of the agency (i.e., strategic decision making); (b) consideration of impacts and inputs from a human resources perspective during the strategic-level policy-making processes; (c) increasing the level of integration (configurational approach) among functional departments throughout the organization; and (d) granting authority and discretion to human resource managers to adapt policy to meet the conditions during implementation (Delery & Doty, 1996; Dickmann & Müller-Camen, 2006; Schuler & Jackson, 2007; Selden, 2005; Walker, 2013; Watson, 2007).

In addition to SHRM, other models suggest that adaptability and flexibility have an impact on organizational effectiveness (Dessein & Santos, 2006). Kathleen Monks (1992) adds the concept of “innovation” as an important conceptual dimension to HRM

Table 1. General Public Personnel Management Frameworks.

Delery and Doty (1996) Universalistic Contingency Configurational Selden (2005) Administrative Operational Strategic Denhardt and Denhardt

(2015) Old Public

Administration New Public

Management New Public Service

450 Public Personnel Management 47(4)

models of practice. She defines innovation as the ability for human resource personnel specialists to alter (adapt) policy to increase overall effectiveness. Monks highlights the need for autonomy given to human resource personnel to interpret and implement poli- cies and procedures such as hiring and remuneration to fit the context and needs of particular governmental agencies. Such freedom can be more generally viewed as man- agerial discretion (Wangrow, Schepker, & Barker, 2015) or executive behavior.

In a dynamic organization, autonomous/executive behaviors can be invaluable if it is accompanied by a clear understanding and commitment to the overall strategic goals and operations of the organization. However, without such understanding and commit- ment of overall strategy, autonomous behavior can easily result in inefficient and inef- fective outcomes such as confusion and suboptimization (Hitch, 1953).

Beer, Spector, Lawrence, Mills, and Walton (1984) suggest that managers need to play a role in the integration and alignment of human resource policies within broader policy frameworks: (a) Managers have more responsibility to ensure the alignment of organizational strategy and HR policies, and (b) HRM departments have the mission of setting policies that develop and implement activities in ways that make them more mutually reinforcing.

Power, Politics, and Influence in Public Personnel Management

Power in the form of authority and influence is an important component of the task envi- ronment of a human resource manager. It is equally important to consider the distinction between public and private sector sources and uses of power. In the public sector, power, politics, influence, and accountability may look quite different. For example, according to Klingner and Lynn (2005), three main groups share responsibility for public HRM: political leaders, personnel directors, and specialists. Political leaders are often respon- sible for authorizing personnel systems, establishing agency objectives, and playing a role in municipal policy making. However, personnel directors and specialists are often on the frontline of HRM and in an ideal position to design and implement personnel systems, or directly help those who do (Klingner and Lynn, 2005).

Nalbandian (1994) and Klingner, Nalbandian and Llorens (2010) focus their research on the differences between political leaders in representative democracies (appointed by elected officials) and administrative executives (professional bureaucrats). The nature of authority is distinct in these two different forms of HRM. Political authority has a broad capacity to manage professionals, while professional authority is often more technical and skilled. The professional (bureaucratic) authority often remains in place when changes occur in political leadership. Therefore, according to Nalbandian (1994) and Klingner, Nalbandian and Llorens (2010), the professional bureaucrat has the potential for gaining greater power and deeper knowledge over time due to political turnover.

Power and politics have the potential to determine who gets to participate in policy- making processes and the amount of discretion a manager has in implementing policy. Thus, depending on the values of the people who hold influence (e.g., political leaders, top agency officials, or human resource managers themselves), managers may or may

Herrera and Miller 451

not have access to strategic policy-making processes or granted the authority to use discretion when implementing policy.

The Influence of New Public Management in Public Personnel Management

New Public Management has had a significant influence on the public administration around the world. For example, Verheijen (1998) characterizes approaches to public administration vis-à-vis private sector models and privatization using three categories. The first category includes countries such as the United Kingdom, New Zealand, or Austria. Each of these countries has undertaken relatively dramatic shifts in the public sector by adopting management practices very similar to or the same as what one would expect to find in the private sector. The second category is characterized by a more measured and balanced adoption of private sector management tools. Rather than complete overhauls of traditional public sector practices, countries such as Ireland and the Netherlands blend key elements of traditional public and private administra- tion. The third category includes countries that have incrementally employed private sector solutions to public management. Verheijen (1998) include France and Spain in this category.

According to Verheijen (1998), Spain and France have similar profiles in their ongoing development of public management. However, no country can be absolutely placed in a given category. For example, in both France and Spain, managers at the local level tend to have more freedom, so that there are some administrations that have used more innovative private sector techniques, while adhere more closely to classic bureaucratic practices.

Theoretical Framework

The theoretical framework for the study focuses on three dimensions of the task environ- ment of the human resource manager: participation in policy making, the autonomy of managers to adapt and implement human resource policy, and human resource policy inte- gration. These dimensions are salient areas of the literature and have the potential to be useful in research and practice. Figure 1 illustrates the continua of these three dimensions.

1. Manager Participation in Strategic Policy-making

Low High

2. Manager Autonomy for Policy Implementation

Rigid Adaptive

3. Vertical and Horizontal Policy Integration

Low High

Figure 1. Three dimensions of manager policy task environment.

452 Public Personnel Management 47(4)

According to Sheehan (2005), the level at which policies are made can impact the effectiveness and efficiency of HRM practices. Sheehan further suggests that the par- ticipation of managers in policy making increases the effectiveness of HRM. Dyer (1999) further explains that human resource managers who participate in high-level decisions will have a clearer understanding of how HR fits within and supports the organization’s overall mission and strategy.

Increasingly, models of organizational behavior are examining how adaptive and agile behavior among managers and personnel can help organizations to respond to complex and changing contexts (Lavelle, 2006). Whether governments are faced with restructuring and reform or responding to crises, adaptation and agility are alternatives to relying on rigid or predetermined bureaucratic policies and procedures.

In our theoretical framework, manager autonomy (discretion) is thought of as adap- tive behavior. On the other end of the continuum, a bureaucratic view of public person- nel management is reflected by strict adherence to policy. Depending on the level of policy integration and an organizational unit’s commitment to enacting the strategic goals of the organization as a whole, compliant or adaptive behavior can have a posi- tive or negative impact on the effectiveness and efficiency of the entire organization. For example, if policy integration is low, strict compliance to subunit policies may conflict with the strategic aims of the organization. On the contrary, if policy integra- tion is high and subunits strictly comply with policy, there is the presumption that the practices of the subunit will be in alignment with the strategic goals of the organization and, therefore, improve the organization’s effectiveness.

Another potential benefit of manager participation in strategic policy making is increasing the extent to which human resource policies are aligned and consistent with the strategic-level policies of the organization, that is, policy integration. Policy inte- gration can be viewed in two basic ways, vertical and horizontal. Vertical integration is focused on the consistency between policies of subdivisions of an organization and the broad strategic goals of the organization as a whole, while horizontal integration is focused on the consistency of policies among subunits of the organization. According to several researchers, vertical and horizontal integration of human resource policies are critical to effective and efficient operations of the organization as a whole (Fombrun, Tichy, & Devanna, 1984; Miles & Snow, 1984; Schuler & Jackson, 1987).

Low levels of policy integration can have the impact of organizational units operat- ing in relative isolation, which can result in suboptimization (organizational subunits behaving in ways that serve the goals of the unit at the expense of serving the strategic goals of the organization as a whole; Van Thiel & Leeuw, 2002). Conversely, when policies are highly integrated, the operations of organizational subunits have a greater potential to complement and create synergies throughout governmental operations. In the case of extremely high-level integration, the line between different organizational operations is said to be embedded into the fabric of the overall operations of the orga- nization (Arthur, 1992, 1994; Baird & Meshoulam, 1988; Ichniowski & Shaw, 1997; Miles & Snow, 1984; Richard & Johnson, 2001; Youndt, Scott, Dean, & Lepak, 1996). However, it is conceivable that too much integration could have negative effects such as suppressing the climate for innovation or creating overly interdependent systems (i.e., over engineering).

Herrera and Miller 453

Candel and Biesbroek (2016) have offered important additional considerations for policy integration. In addition to the impacts on collaboration and coordination, they raise the critically important issue of the process of moving toward integrated policy. In their discussion of the process, they critique existing theory and research that neglects to focus on the process of involving subsystems (e.g., subunits, departments, stakeholders) in the progression toward policy integration. This consideration relates back to the first construct of participation by HR managers in the strategic policy- making process.

Table 2 summarizes how the dynamics of high and low levels of each of the three dimensions are related to theory discussed previously. The second column in Table 2 broadly associates each dimension with theoretical frameworks from existing

Table 2. HR Managers Situated in Theory.

Dimension Frameworks Related constructs Role of manager

1. Participation in strategic policy making Low Bureaucracy,

Universalistic, Rational Theory

Top down, centralized, prescriptive, divisional, one size fits all, noblesse oblige, closed system.

Recipient of policy, monitor, positional power, enforcer, reactor.

High SHRM, Systems Theory, New Public Management, New Public Service

Inclusive, collaborative, systems approach, buy-in, cross-functional, dialogue, synergistic.

Collaborator, prospector, empowered/valued, input, contributor, expert.

2. Policy implementation Rigid Bureaucratic, Rational,

Theory X Static, role/rule bound,

administrative, predictable environment, dependency, centralized responsiveness

Prescriber, controller, monitor, reactor, administrator.

Flexible New Public Management, Adaptive/Agile Systems, Complex Adaptive Systems, Professionalism, Theory Y

Empowered professional, responsive, management/ administrative discretion, trust, autonomy, frontline responsiveness.

Interpret policy, assessor of task environment, problem solver, prospector, professional.

3. Policy integration Low Ad hoc policy framework,

loosely coupled, arbitrary

Loosely coupled, divisionalized, suboptimization, potential for policy conflict.

Navigator, conflict resolver, interpreter

High Configurational, Contingency, SHRM

Matrix, system-wide awareness, embedded communication systems, coordinated policy and workflow.

Engineer, negotiator, analyzer.

Note. SHRM = strategic human resource management.

454 Public Personnel Management 47(4)

literature; the third column identifies some general theoretical constructs associated with each dimension; and the fourth column presents implications for the role of the HR manager.

In summary, the theoretical framework for this study is built upon three salient themes that, according to previous research, have important implications for public personnel management. Together, these themes create a task environment that is used (a) to explore whether multiple configurations (profiles) emerge for public personnel management, and if so, (b) to present and interpret any distinctive characteristics among these forms of HRM. These areas of the manager task environment are not meant to be exhaustive, but instead capture themes and constructs that continue to inform funda- mental understandings of HRM research. Given the robust presence of these themes in HRM research, it is expected that by using these themes to classify and describe differ- ent approaches to HRM, a resulting taxonomy will be more generalizable.

Methods and Procedures

This section contains the methods and procedures for developing the taxonomy. The study used data collected from human resource managers in Spanish local govern- ments. Although there is great variation in the management of public employees among local governments in Spain, all local governments are situated within the broader Spanish government. Given the setting, a brief description of the context of the Spanish public followed by the specific methods and procedures are used for the study.

Context of Spanish Municipalities

The public sector in Spain involves three tiers of government: General Administration of the State (national), Autonomous Communities (regional), and Local (cities, towns, and villages). The national government has power over the entirety of the country, including the authority to delegate tasks to the other two levels. The State has legal authority to be involved in regulations at the lower tiers of government, but the State also has exclusive responsibilities and authorities in matters such as national defense, the justice system, international relations, public finance, labor legislation, civil, mer- cantile, and penal.

The second tier of government in Spain includes each of the 17 Autonomous Communities in which the State is divided. At this level, the Communities assume responsibility for matters of public works, agriculture, education, and health. In some instances, Communities are delegated authority and act as extensions of the State and allowed to generate specific policy and implement duties of some State-level functions consistent with State policy.

The third tier of Spanish government is local municipalities. The focus of this study is on human resource managers at this level. Municipalities are responsible for activi- ties such as urban planning, potable water supply, culture and sports, parks and gar- dens, policing, and social care for local citizens. Similar to the extension of responsibilities of the State to the Autonomous Communities, local-level governments

Herrera and Miller 455

can be delegated responsibilities from both the State and Community tiers. An impor- tant difference between the local level and the Community and State levels is that there is no legislative power at the local level; however, local governments can develop regulations and self-organize so long as they fall within the policy framework of the Community and State.

Population

The total number of municipalities in Spain during the data collection (2007-2008) was 8,116. In all, 4,929 of these were small villages with no administrative structure (i.e., no human resource managers). Given that the focus of this study is on human resource managers, these municipalities were not included in the population for study. Thus, the total population for this study includes 3,185 municipalities.

Data Collection

The data used for this exploratory study were gathered for a previous study of Spanish municipalities over the span of 2007-2008. The data set contains variables that resemble and, therefore, had the potential to proxy the theoretical constructs that comprise the proposed theoretical framework. The data were collected prior to the full impact of the global financial crisis in both public and private sectors, which resulted in dramatic changes in public policy in Spain, directly impacting public personnel management (e.g., drastic reductions in public personnel, public agency finance, and restructuring). Thus, the data used for the study were not col- lected under particularly extreme or unusual circumstances that would have made the data anomalous.

Survey Instrument

The data used in this study are a subset of responses to a questionnaire that was distributed as part of a larger research project in 2008. The questionnaire for the original study collected self-reported data from human resource managers on four topics related to the local government: (a) characteristics of municipalities, (b) human resources management practices, (c) systems of evaluation, and (d) per- formance and evaluation. The data used in this study included a single demo- graphic item (size of municipality population) and seven items related to HRM practices.

Of the 61 items from the original questionnaire, seven were identified that appeared to reflect the constructs that inform the underlying theoretical framework of this study. Two items reflect the involvement of managers in strategic-level policy making; three items reflect the range between strict adherence versus the autonomy of human resource personnel to interpret and implement human resource policy; and two items reflect the level of integration of human resource policy with other governmental pol- icy. The questionnaire asked the respondents to rate each item on a 5-point Likert-type

456 Public Personnel Management 47(4)

scale with responses ranging from strongly disagree to strongly agree for each state- ment (see Table 3).

The size of municipalities was among the data available to the researchers. It was of particular interest due to the relationship often found in research that connects orga- nization size with the structure and dynamics of organizations (e.g., decision making, divisional/departmental structures, executive layers, hierarchy, etc.). However, the item on the questionnaire that indicates the size of the municipalities is a categorical measure that is not a continuous nor evenly distributed variable. The questionnaire was designed for government reporting and, therefore, used the legal criterion set forth by FEMP (Spanish Federation of Municipalities and Provinces) to group municipali- ties. The result is a measure of municipality size based on the number of citizens: 1,000 to 5,000; 5,000 to 20,000; 20,000 to 50,000; >50,000. However, in spite of these shortcomings, the variable is examined using descriptive analyses.

Sampling Strategy

The sampling strategy for the original survey targeted local public human resource managers across Spain. Given the large number of municipalities in Spain and the skewed number of municipal governments relative to their respective number of citi- zens (i.e., small municipalities in Spain greatly outnumber large municipalities), a random sample of every municipality was not used for data collection. Due to cost constraints, reaching out all of the “small” municipalities (1,000-5,000 citizens) was not possible. In addition, to insure the inclusion of large municipalities, a more pur- poseful approach was used in an attempt to include large municipalities, which would

Table 3. Proxies for Participation, Autonomy, and Integration.

Construct Questionnaire items

1. Participation in Strategic Policy Making

Item 1. The head of human resources is involved in the strategic-level policy-making process of the municipality.

Item 2. When the head of human resources participates in strategic-level policy-making, they provide input on how the policies impact human resource issues.

2. Autonomy of HR Policy Implementation

Item 3. Human resource policies are established as a part of overall strategic-level governmental policies.

Item 4. General human resource policies are used to establish policies that address specific issues.

3. Vertical and Horizontal Policy Integration

Item 5. Remuneration is flexible and used to motivate employee performance.

Item 6. Human resource policies are established as a part of overall strategic-level governmental policies.

Item 7. General human resource policies are used to establish policies that address specific issues.

Herrera and Miller 457

be underrepresented in the sample had it been a purely randomized sampling approach. With these considerations in mind, a stratified sampling strategy was used. For munic- ipalities with 1,000 to 5,000 residents, half of the nearly 2,000 municipalities were invited to participate. The procedure for selecting these municipalities involved obtaining an alphabetized list of these municipalities and selecting every other munici- pality for inclusion in the study. The questionnaire was distributed to all municipalities having a population greater than 5,000 (1,214 localities). Given these two conditions, the sampling pool consisted of 2,293 residents.

Data Analyses: The Process of Looking for an Emergent Taxonomy

There were two phases for developing the taxonomy of data analysis for the study. The first phase examined the construct validity of the items used from the question- naire to represent the three theoretical constructs of participation, autonomy, and integration. A confirmatory factor analysis was performed to analyze whether there was support that the items from the questionnaire were measuring separate and dis- tinct constructs.

The second phase looked for statistical clusters of managers when all seven items were considered simultaneously. This part of the analysis involved performing a k-means cluster analysis to observe whether distinct combinations of the three con- structs emerged as clusters and, therefore, representing unique, yet emergent profiles of approaches to public personnel management. In other words, this phase of analysis did not assume an a priori set of categories/typologies of public personnel manage- ment. Instead, this phase focused on grouping managers into statistically distinct groups (profiles) that would later serve as profiles for constructing a general taxonomy of public personnel management.

The decision to use a k-means cluster analysis was largely based on the purpose of the study, which was to have groupings of management practice emerge from the data, rather than imposing a priori categories and constructs. K-means clustering techniques typically use Euclidean distance as the means to identify a predetermined number (i.e., k) of centroids from the data set. After the centroids are identified, additional data are added to the analysis by grouping observations with its nearest centroid. As data are added, centroids are recalculated through this iterative process. Ultimately, the analy- sis reaches a point of “data convergence” where the data centroids are distinct (math- ematically distant) from each other and the added data have been clustered into groups mathematically close to the finally established centroids (Bahr, Bielby, & House, 2011; Rupp, 2013).

After the groups were established through statistical clustering, weighted mean scores on the three dimensions of the task environment were then calculated for each distinct grouping of managers. This allowed for the analysis and description of each “profile” using constructs from the literature and the theoretical framework undergird- ing this study. The resulting profiles of public personnel management (PPM) were then incorporated into a larger taxonomic scheme. The development of the larger PPM taxonomy relied on plotting the weighted mean scores for each profile on a two-axis

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grid of manager behavior, where x is participation in policy making and y is autonomy to adapt policy.

As mentioned above, the primary analysis was followed by examining how the various profiles might look vis-à-vis the size of municipalities. Given that the population data were not continuous or normally distributed, the method of exploring municipality size was limited to observing of the frequency/percentage of each type of cluster (profile) in each of the different size categories of municipalities.

Results

Response Rate

Of the 2,293 questionnaires that were distributed, 366 questionnaires were returned, 328 of those had complete data for the seven items used in this study, which resulted in overall response rate of 15.9% and 14.3%, after removing cases with missing data. The response rate of 14.3% has a confidence interval of .051 at 95% confidence level with a relative standard error of 5.01. The implications for the low response rate on the findings are discussed in a later section of this article.

Of the total sample, 98 of the respondent were from small municipalities. One hun- dred eighty-five were from medium size municipalities and 45 were from large munic- ipalities. Again, these size categories do not represent continuous or ordinal variable.

Construct Validity: Confirmatory Factor Analysis

Our theoretical model suggests that there are three latent factors (constructs)—Factor 1 (F1): Participation in Strategic Policy Making (Questionnaire Items 1 and 2); Factor 2 (F2): Integration of Policy (Questionnaire Items 3 and 4); and Factor (F3): Autonomy of Policy Implementation (Questionnaire Items 5, 6, and 7). The model was estimated

Table 4. Confirmatory Factor Analysis for Participation, Autonomy, and Integration.

Item

Factor loadings of potential constructs

Participation (PRT) Autonomy (AUTO) Integration (INT)

1 0.718 2 0.741 3 0.402 4 0.552 5 0.387 6 0.585 7 0.741

Note. Factor loadings <.30 suppressed. Using Maximum Likelihood Estimation (N = 325)

Herrera and Miller 459

using a maximum likelihood method. Table 4 shows the factor loadings (from the stan- dardized values). Table 5 shows the estimated covariance among the three factors.

The overall goodness of fit of the model was tested by the observing the correlation matrix between the items, the goodness of fit index (comparative fit index [CFI]), and the square root of the average of the squared residuals (root mean square error of approximation [RMSEA]). The value χ2 = 18.27 indicates that the model should not be rejected at a significance level of ⩽5%. Furthermore, the CFI index (.980) and RMSEA (.045) reveal that the degree of fit is high. Based on the results of factor analy- sis and the goodness of fit tests, there is support for the model that includes three dis- tinct constructs.

Grouping Managers Using Cluster Analysis

Recall that the purpose of the cluster analysis is to group managers into statistically distinct groups. This process of grouping the managers is not based on theoretical assumptions or themes from HRM research; instead, it is an approach that relies on a statistical “sorting” of managers into groups based on the statistical similarity of their responses to all seven survey items. These statistically distinctive groups are then ana- lyzed and described as “profiles” that compose an emergent taxonomy. It is during the analysis phase when the three dimensions of the task environment are unpacked to describe and situate the profiles into the larger taxonomy.

In our analysis, we explored using different k values (3, 4, 5, 6, and 7). After review- ing the results of each iteration of cluster analysis (i.e., k = 3, 4, 5, 6, and 7), the results of the analysis where k = 5 were determined to be of particular interest. At k = 5, the results appeared to provide the best way to avoid an oversimplified (too few clusters) or overcomplicated (too many clusters) taxonomy. In other words, at k = 5, the taxonomy has a greater number of categories than the three constructs (factors) of our conceptual building blocks, yet at k = 5, the number of possible clusters remains low enough to be used as advanced organizers for interpreting distinct (statistically) profiles of manager practice.

The n of managers in Clusters 1, 2, 3, 4, and 5 are 94, 67, 50, 69, and 48, respectively. The n for Cluster 1 is notably larger than the other groups. The 94 managers included in this cluster make up nearly 29% of the total number of participants in the study. Cluster 1 has, on average, 62% more managers than any other clusters and nearly double the num- ber of Cluster 5. However, there is a relative even distribution of managers among the

Table 5. Estimated Covariance Between the Three Latent Factors.

Covariance of factors Estimated value

F1 (PRT) and F2 (AUTO) 0.786 F1 (PRT) and F3 (INT) 0.684 F2 (AUTO) and F3 (INT) 0.618

Note. PRT = participation. AUTO = autonomy. INT = policy integration.

460 Public Personnel Management 47(4)

remaining four clusters. When k = 6 and k = 7 were used, the n for Cluster 1 was similar when using the value of k = 5; however, the remaining clusters became much smaller. Given that n was a consistent value when using k = 5, 6, or 7, we decided to follow the principle of parsimony and settle on the value of k = 5 to further the analysis.

In the previous phases of the analysis, the presence of three distinct constructs were supported through factor analysis and the k-means cluster analysis resulted in five distinct groups of managers. Each of these groups manifest the three constructs in a unique way; thus, each group provides a unique profile for the human resource manag- ers in this study. In the following sections, mean scores for strategic participation, policy integration, and autonomy are examined to interpret and describe each of the five emergent profiles.

Making Sense of Profiles

Manager Behavior: Policy Making and Autonomy

The participation in strategic-level activities and autonomy in implementing policy focus on behavioral aspects of human resource professionals. This section is a starting point for describing the profiles based on the mean of the measures of participation in policy making and autonomy from each of the emergent manager clusters. Figure 2 plots the mean scores for managers’ role: (a) participation in strategic policy making and (b) level of autonomy in carrying out their work.

On the dimension of participation, Profiles 1 and 2 fell below the standard devia- tion of mean responses. Profiles 3, 4, and 5 are above the mean; however, only Profile 5 is greater than one standard deviation (1.36) beyond the mean on the dimension of participation in strategic-level policy making. With respect to the dimension of auton- omy, Profiles 1 and 3 fall below the mean, which means that in these profiles, manag- ers tend to adhere to policy. Profiles 2, 4, and 5 are above the mean. However, Profile

2.0

2.5

3.0

3.5

4.0

4.5

1.5 2.0 2.5 3.0 3.5 4.0 4.5

Profile 2

Profile 1

Profile 3

Profile 5

Profile 4

Participation

A u

to n

o m

Mean

Standard Deviation

Figure 2. Plotted managerial profiles (Autonomy × Participation).

Herrera and Miller 461

5 mean is above one standard deviation above the larger sample mean, suggesting that managers in Profile 5 are more autonomous in their application of policy.

Profile Descriptors

Each profile was assigned a descriptor to reflect characteristic manager behavior in strategic-level policy making and autonomy. The descriptor for the profiles rely on terms that are drawn from the literature that reflect the associated behavior. The term “technical” characterizes low levels of participation in strategic policy-making pro- cesses. The terms “managerial” and “strategic,” respectively, represent increasing lev- els of participation in strategic-level policy making. On the dimension of adaptation, the term “administrative” characterizes strict applications of policy that is conceptu- ally consistent with behavior in a highly bureaucratic environment (e.g., Old Public Administration), while the terms “functional” and “executive” reflect increasing lev- els of adaptive behavior, respectively (e.g., New Public Management). The profiles

descriptors are Technical Administrative (TA: Profile 1); Technical Functional (TF: Profile 2); Managerial Administrative (MA: Profile 3); Managerial Functional (MF: Profile 4); and Strategic Executive (SE: Profile 5). Table 6 summarizes the profiles with respect to participation and autonomy.

To further the analysis of the profiles, policy integration is added to the analysis of each of the profiles below.

Profile 1: TA. Managers in this group report relatively low levels of participation in strategic policy-making processes. The TA group seems to reflect the exclusion of managers from the strategic apex of the policy-making process. Thus, these groups of managers reflect a middle management role. Policy making is not the responsibility

Table 6. Summary of Profiles Based on Policy Making and Autonomy Descriptors.

1. Technical Administrative Managers oversee mandatory routine functions that stabilize the organization and are not subject to frequent change in their roles.

2. Technical Functional Managers are conduits for information between upper level and foundational management. They are able to make policy suggestions upward and pass on policy decisions to staff.

3. Managerial Administrative Managers are present during strategic policy but have limited input in creating policy; instead their function is to oversee the implementation of formalized policy.

4. Managerial Functional Managers may have department-level control with the ability to create policy as well as distribute resources that both reflect policy changes and implementation.

5. Strategic Executive Managers have maximum input and ability to create policy and shape how policy is implemented.

462 Public Personnel Management 47(4)

of the managers. Instead, policy is generated at the strategic apex (Mintzberg, 1989) of the organization, which excludes the participation of HR managers. The policy- making process in the traditional bureaucratic form of organization that is often iso- lated (i.e., not integrated into the overall organizational policy framework) and the role/behavior of managers are relatively constrained.

TA managers would most likely oversee routine tasks or processes. These manag- ers would oversee personnel whose functions change relatively infrequently; how- ever, they are responsible for the important mandatory routines that keep a department stable.

Profile 2: TF. Managers in this group report modest levels of participation in strategic- level policy-making processes. However, the level of policy integration reported by managers is quite high relative to the other groups. The high level of self-reported integration does not appear to come from managers being involved, but rather from another source in the organization. Yet, in this group, managers’ report a relatively high level of adaptive behavior suggesting that they have the autonomy to adapt poli- cies to specific needs as they arise.

Profile 3: MA. Mangers in the MA group report a higher level of participation in policy-making processes than the previous groups. In addition, the level of policy integration is quite high. However, managers report the lowest level of adaptive behavior of all five profiles. This does not conform with the pattern of the other profiles, where level of adaptation increases when participation and integration increases. A further analysis of this anomalous result is discussing in more detail following the profile summaries.

Profile 4: MF. In the MF group, there is a relatively high level of strategic participation, though policy integration is the second lowest among the five profiles. The level of autonomy is moderately high. Even though policy integration is relatively low, these

Technical Administrative

Technical Functional

Managerial Administrative

Managerial Functional

Strategic Executive

Participation Autonomy Integration

Figure 3. Profiles of manager behaviors and policy integration.

Herrera and Miller 463

managers have knowledge and participate in strategic levels of the organization and have the flexibility to adapt policy to that strategic vision.

Profile 5: SE. SE managers report high levels of participation, policy integration, and adaptive implementation of policy. When looking at Figure 3, the SE approach appears to represent an idealized form of SHRM. Managers are highly involved in strategic policy making; they report very high levels of both vertical and horizontal policy inte- gration, and managers indicate that they adapt the implementation of personnel man- agement policies.

Unpacking the Nonlinearity of Profiles

A casual look at Figures 2 and 3 reveals that the profiles do not progress in a linear fashion. The mean scores for participation, autonomy, and integration do not rise or fall in any obvi- ous or predictable manner. The MA management profile stands out in particular. It seems to mark a point of departure from the first two profiles and the two that follow. TA and Technical Function, the two profiles that precede MA, indicate levels of strategic involve- ment that are lower than their respective levels of autonomy. However, the MA group shows a dramatic reversal where the level of participation is quite high, yet autonomy is very low. In fact, MA has the lowest level of reported autonomy among all of the profiles. The flip in participation being reported higher than autonomy continues in the MF and SE profiles, but the difference is much less pronounced.

One approach to examining this outlier is to look more closely at responses to indi- vidual items that make up the constructs of strategic participation. Two items from the questionnaire observe participation in strategic-level policy making; however, each rep- resents a different form of participation. The first item simply asks whether the manager is present during strategic policy making. However, the second item asks managers to assess the level of their input related to human resources during this policy-making pro- cess. Figure 4 illustrates that across all of the profiles, both types of participation (i.e., Item 1 [presence] and Item 2 [input]) are reported at similar levels, except for the MA approach.

In the MA approach, people report a high level of being present during the policy-making processes; however, they also report less input in the concerns of human resources in policy-making process. Although the level of input in the MA approach is higher than in the Technical Administration and TF approaches, the MA approach shows a greater difference between the presence (Item 1) and input (Item 2) in the policy-making process. So, the disparity between “being present” and “having input” at the strategic level could be impact autonomy. If the form of participation impacts behavior, there are different ways to interpret such a dynamic. Although purely speculative, it is reasonable to conclude that even though the manager may be in the mid of strategic processes, the role of the manager in the MA group is “to be seen, not heard,” or perhaps does not possess the expertise or capacity.

464 Public Personnel Management 47(4)

Table 7. Number of Managers Grouped by Profile and Size of Locality.

Profile Small Medium Large

Technical Administrative (n = 94) 22 55 17 Technical Functional (n = 50) 5 36 9 Managerial Administrative (n = 67) 15 38 14 Managerial Functional (n = 69) 26 38 5 Strategic Executive (n = 48) 30 18 0

Analysis of Profiles by Size of Municipality (Population)

This phase of the analysis looked at the size of the population of municipalities in relation to the five profiles. As noted in the “Methods and Procedures” section, the data on the size of municipalities are categorical and originated from FEMP. Thus, the analysis relating to size is limited to basic descriptive statistics. Even so, there are some interesting results when looking at the frequencies and percentages of each profile when the sample is grouped by the Spanish government categories of municipality size.

One such result is that the raw number of SE managers in the small municipality

category (30) is greater than any of the other four profiles. Another interesting result is that there are no (zero) managers from the SE group represented in the large munici- pality category (see Table 7).

When comparing the distributions of the histograms from one size category to another, it is noteworthy that the small group has a low number of managers in the TF group, the medium group is relatively flat (relatively evenly distributed among

Technical Administrative

Technical Functional

Managerial Administrative

Managerial Functional

Strategic Executive

Presence Input

Figure 4. Strategic policy making participation: Presence and input.

Herrera and Miller 465

profiles), and the large grouping appears to have a downward trend (see Figure 5). As these categories are not available for inferential or correlational analyses, there is no way to conclude or make claims about the impact of size on the form of person- nel management.

Discussion

In this section, aspects of the profiles that emerged from the study are discussed vis-à- vis previous descriptions of HRM research.

Of the emerging profiles, Technical Administration is most closely associated with traditional ways of thinking about organizations and their employees reflected by the Old Public Management paradigm (i.e., universalistic, administrative, and mechanis- tic). The TA approach implies that there is uniformity among all organizations and suggests a “one size fits all” solution to HRM. In addition, given the lack of participa- tion by HR managers in strategic policy making and limited autonomy, this perspec- tive does not appear to embrace the notion that the various functional units are interdependent and mutually influential that need to be coordinated through involving managers as strategic partners and professionals.

The TF profile goes a bit further toward the contingency category in that there is the implied notion that policy may need to be adapted to fit with conditions as they emerge. This profile moves away from the Old Public Administration view toward elements of New Public Management. That is, managers are considered professionals who are operationally competent and capable of adapting policy when needed, but not neces- sarily considered capable of generating policy.

The MA profile seems to represent a retreat back toward Old Public Management. Even though the participation in strategic policy making is high, the level of input is

10%

20%

30%

40%

Small (n = 98) Medium (n = 185) Large (n = 45)

TA TF MA MF SE

Figure 5. Percentage of profile types by municipality size. Note. TA = Technical Administrative; TF = Technical Functional; MA = Managerial Administrative; MF = Managerial Functional; SE = Strategic Executive.

466 Public Personnel Management 47(4)

low, and the low level of autonomy makes this profile seem like a display (window dressing) of SHRM and New Public Management without managers playing a sub- stantive role at the strategic level. The function of manager is more administrative than professional in this profile.

The MF profile captures the SHRM and New Public Management approach than the MA profile. The manager participates in strategic-level decisions, (strate- gic) the manager has autonomy to adjust (contingency, operational), and the human resource policy is integrated into the overall policy framework of the municipality.

The final profile, SE, has the highest level of strategic participation, autonomy, and policy integration. This profile suggests that the human resource manager is fully inte- grated into the strategic and operational aspects of the municipality. As stated above, this profile represents an idealized version of New Public Management.

Conclusion

This study yielded five profiles that provide useful ways to conceptualize, describe, and further investigate the nature of HRM in the public sector. In its pursuit of devel- oping a taxonomy, the study led with the assumption that approaches to HRM vary in their form and function. While some efforts classify human resource practices along a developmental or evolutionary trajectory (e.g., historical or organizational growth), this taxonomy does not explicitly demonstrate such progressions. Instead, it acknowl- edges traditional and newer concepts of organizational and human behavior and incor- porates them into a framework that is integrated along central themes from research.

Although continuous data on the size of municipalities were not available for this study, there are provocative questions that arise when considering how the structure of agencies can have influence on the role and behavior of human resource managers. For example, it is interesting to consider that none of the managers in large municipalities identified characteristics of SE approaches. Instead, the smaller municipalities had the largest proportion of managers in the SE profile.

Literature in organizational behavior suggests that the size of organizations impacts the formalization of roles, responsibilities, and tasks (i.e., structure) within organiza- tions. As organizations increase in size, structures often become more divisionalized by separating specialized function areas of the organization. As the number of divisions increase, coordination and collaboration in policy making and operations become more challenging and complex (Greiner, 1972). This has implications for manager participa- tion in strategic policy making, integration and consistency of policy, and the flexibility of managers to adapt. If divisions are not cohesive and focused on the same set of stra- tegic goals, different interests can create political struggles for power and resources.

It is not unreasonable to conclude that governance structures that serve smaller pop- ulations have more intimate relations among the various actors in government resulting in more integration of government functions and, therefore, closer involvement with strategic levels of decision making, policy making, and governing functions. In

Herrera and Miller 467

addition, human resource managers’ roles in the overall government varies (i.e., elected, appointed, or professional) and may also impact HRM. Given this, it could be con- cluded that managers’ approaches to HRM is influenced by the size and/or nature of governance structures as well as the role of the HR manager.

Limitations

Three main limitations of the study are related to the data. First, the data used for this study were not collected with the purpose of precisely measuring the three constructs that compose the theoretical framework of this study. Second, the response rate to the survey was very low, which raises the issue of external validity. Third, the data regard- ing the size of municipalities were not in a form that would allow for correlational or other inferential statistical analyses.

While the data analysis supported the presence of three distinct constructs, a more precise and intentional effort to measure these constructs would enhance the validity of the findings. Related to the measurement of the three constructs, the primary source of data is self-reports of human resource managers; thus, there this no ability to trian- gulate their perceptions with the perceptions of their peer colleagues, supervisors, and/ or subordinates. In addition, a confirmatory factor analysis was used for the first part of the analysis based on the sense of robustness of the three constructs in theory and research. In hindsight, however, it makes sense to conduct an exploratory factor analy- sis to see if the constructs would emerge on their own.

Another limitation is the lack of clarity on the locus of control or authority for managerial participation and flexibility. There is an absence of a measure that indicates if managers were in the position to make a decision to opt into or opt out of strategic policy making. The presence of such a measure may yield more useful insight whether managers have the authority to participate in policy making or modify the implementation of policy. It is possible that the personality or charac- teristic of the manager, the nature/characteristic of the organization, the organiza- tional leadership (power structure), or some combination of each could impact participation and flexibility. Additional items could help shed light on these questions.

Implication for Further Research

Many of the limitations of this study can be addressed in future research by developing a more robust strategy for data collection. This would include efforts to improve the sampling strategy to increase the response rate, incorporate random sampling, which would ideally yield a more normally distributed data set. With respect to the survey instrument itself, a new questionnaire that specifically targets the theoretical con- structs could improve the precision of measuring the three constructs. The form of the items of the new questionnaire should focus on collecting data that is in a form (e.g., continuous) that allows for more sophisticated statistical analysis, and additional items

468 Public Personnel Management 47(4)

should be added to the questionnaire to measure contextual variables that could be related to different profiles (e.g., antecedent, outcomes, mediating and moderating variables, etc.).

In the case of contextual variables (e.g., antecedents), additional variables could be included such as the number of public personnel, variation among public personnel func- tions (e.g., administrative, professional, executive), variation among governmental func- tions (e.g., health, safety, finance, education, etc.), population density, and HRM leadership (e.g., elected, appointed, etc.).

In the case of outcomes, further research could focus on developing an understand- ing of the relationship between different profiles and variables such as psychosocial aspects of personnel (e.g., satisfaction, motivation, skill development, teamwork, etc.) and measures of productivity (i.e., efficiency and effectiveness) at the level of indi- viduals, departments, agencies, and municipalities in general (Guest, 1997; Poister, 2003; Posthuma, Campion, & Masimova, 2013).

The addition of specific variables should be intentional in an effort to advance and build upon existing theoretical frameworks and empirical research. For exam- ple, an intentional approach to expanding social cognitive theory could involve exploring possible relationships among variable of participation in strategic policy making, discretion in policy implementation, and manager self-efficacy.

As noted in the introduction of this article, human resource managers are at the nexus of dynamic changes occurring in the public sector. Policy-making, policy imple- mentation, and policy alignment are critical factors that create the context for manag- ers to perform their duties. The ability of managers to participate and provide input in strategic activities of the government likely impacts the quality and consistency of human resource policies and the effectiveness and efficiency of managers and employ- ees and the organization as a whole.

The results of this exploratory study provide a basis for furthering research in approaches to public personnel management. The constructs of participation, autonomy, and integration appear to be robust and informative ways to character- ize and observe dynamics of the task environment of a human resource manager. The five profiles that emerged from this study offer distinct, yet related forms of HRM that are grounded on existing theory and research in this area of study. The five profiles offer an enhanced level of complexity for examining public personnel management by building on central themes of existing HRM models.

Although we offer a taxonomy, it is not likely for a human resource manager or an agency to be exclusively oriented and/or operating within a single framework in prac- tice. It is also not evident that one model of practice is superior to another in compar- ing practice and productivity. This taxonomy simply offers another vantage point from which to continue research and practice in public personnel management.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Herrera and Miller 469

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

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Selden, S. (2005). Human resource management in American counties, 2002. Public Personnel Management, 34, 59-84.

Sheehan, C. (2005). A model for HRM strategic integration. Personnel Review, 34, 192-209. Van Thiel, S., & Leeuw, F. L. (2002). The performance paradox in the public sector. Public

Performance & Management Review, 25, 267-281. Verheijen, T. (1998). Aims, structure and methodology of the study. In T. Verheijen & D.

Coombes (Eds.), Innovations in public management: Perspectives from East and West Europe (pp. 3-38). Cheltenham, UK: Edward Elgar.

Walker, R. M. (2013). Strategic management and performance in public organizations: Findings from the Miles and Snow framework. Public Administration Review, 73, 675-685.

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Author Biographies

Justo Herrera is a professor of the Department of Management at the University of Valencia (Spain). His research and teaching interest are HRM in Public Administration and Non-profit organizations. Dr. Herrera is the General Manager of Human and Economic Resources of the Health Department of the Community of Valencian Government.

Daniel M. Miller is a principal consultant for Changing Systems, LLC. He has held academic positions and conducted research in the areas of leadership, organizational behavior and human resource management. He continues to work in the field as an academic, trainer and consultant.

Copyright of Public Personnel Management is the property of Sage Publications Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.

Chapter 3 The Death and Life of Productivity Management in Government

Albert Hyde San Francisco State University Frederik Uys University of Stellenbosch, South Africa

Introduction: Why Doesn’t Productivity Matter to Public Sector Human Resource Management?

“As society makes demands beyond the private sector’s ability to fulfill, government responds with two tools—regulation or money. But both approaches are incurring greater frustrations. We are coming to realize that we have a more finite resource base than previously suspected. Public expenditure may simply bid up the price rather than improve the results.

Thus we understand why it is that as government grows more expensive, not only public sector, but also total national productivity may decline. This effect is not inevitable; government is not necessarily less productive than other sectors of the economy. In fact, government often plays a catalytic role, enhancing the productivity of business. But unless government incorporates a productivity consciousness in all of its activity, it will tend to grow stagnant as it grows larger.”

—George Gilder, National Commission on Productivity and Work Quality, 1975, Public Productivity (1), 6.Review, 1

Writing for the inaugural issue of a new public sector journal in 1975 devoted to government productivity management, George Gilder warned of an impending era where the economy of the United States could be significantly threatened in terms of its competitiveness, growth, and ultimately its standard of living. Gilder was greatly concerned, as were many economists, business executives, and political leaders at that time, with the emergence of a new period of stagnation in productivity in the U.S. Coming out of the Second World War with minimal damages to its industrial infrastructure, the U.S. would become the dominant economy of the world. This was fueled by average annual rates of national productivity growth of 2.8% from the late 1940s to early 1970s. So when productivity rates fell by more than half to 1.1% in the 1970s (and, more significantly, the U.S. lagged behind emerging reindustrialized competitors Japan and Germany), and despite much national consternation could still improve to only 1.4% in the 1980s, various commissions were formed to find solutions to the “productivity crises.”

In the center of all this was the public sector. The post–World War II period in the United States is historically regarded as a new plateau for the public sector because government was bigger at all levels. Federal, state, and local governments would account for 25% of national gross domestic product and government organizations were larger; employing some 2.4 million federal, 1.5 million state, and 4.8 million local government workers1 (Shafritz and Hyde 2012: 80). Those levels beginning in the 1970s were now being seen in the context of larger U.S. economic change and global competiveness.

Victor Fuchs in his definitive economic assessment of the post–World War II era noted that this period marked the emergence of the world’s first service economy. U.S. employment would increase from 57 million jobs to nearly 75 million jobs by 1967, and the vast majority of the new jobs added to the economy would be in the service industry. Government’s now nearly 9 million workers were a significant part of a now larger American workforce where more than half provided services as opposed to producing things.

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Among many implications, Fuchs noted two other key points: First, he noted that unlike the industrial production sector where quality of labor inputs was at best stable or declining, the quality of the labor inputs (education and skill levels) was increasing. Second, he pointed to several service industry examples and noted that while overall productivity levels showed modest annual increases, measurements of productivity, quality, and technology demanded more analysis to understand service sector differences and would require more robust measurement techniques (Fuchs 1968: 3–4). In a truly classic case, he compared beauty shops to barbershops (sorry, that is what they were called in the 1960s) and found beauty shops a benchmark of service growth, high quality and variety of services offered, and high productivity (and low idle time) while the barbershop was at best a hold-over place of stable technology, minimal range of service, and low productivity (Fuchs 1968: 6).

The student of public sector human resource management (HRM) in the modern era may well wonder what this old historical crisis about economic growth and productivity, barbershops, and the rising services industry has to do with current HRM theory and practice. After all, not many HRM books devote much attention to productivity or how it is defined and measured, much less how it can be applied to sustain performance or drive innovation. But the larger point is that for over 25 years—from 1967 to 1994—productivity was systematically measured in most of the federal government agencies and test measured across a good sample of state and local governments. Public management in the last third of the 20th century expended some credible effort in gauging labor inputs, output, and costs while grappling with how to measure the quality and value of government effort.

An understanding of the basics of productivity management (i.e., goals, objectives, metrics, and applications), why productivity programs were abandoned, and how productivity management integrates technology and information resources goes beyond simple lessons learned. This chapter has three learning objectives for public sector human resource managers and students:

First, how government organizations work is still important. In a current era where high performance and outcomes-focus dominate, the tendency is to just look at results and ignore the means. But government agencies and their partners and contractors need to focus on the means the ends—inand part because they are also high-reliability organizations and because resources are going to be more limited as government budgets tighten to meet rising debt limitations. If government is to be “competitive” in an all but certain era of growing resource scarcity and chronic fiscal stress, it must be able to demonstrate some sense of “productivity consciousness.” Further, if government expenditure is going to come under increased scrutiny and fiscal pressure, it would help to have “productivity growth” re-established in public management so that it can demonstrate the return on investment for both its workforce and the intermediate outputs it uses through contractors and suppliers. Second, in this new century an increasingly loud and polarizing political debate about the role, size, debt levels, and effectiveness of government programs now includes questions and challenges about the compensation levels, work value, and performance levels of public sector workers. The latter is the essence of productivity, which might contribute essential information and objective analysis to balance the often overheated rhetoric dominating current discussions. Third, the development of much more sophisticated productivity methodologies that include capital intensity, labor composition, R&D levels, and multifactor productivity that show the effects of technology, efficiency, resource reallocation, and other capital-labor interactions. This offers public sector human resource managers new perspectives on innovations, quality, and service growth. A better understanding and potential application of current productivity metrics offer an opportunity to reassess the value proposition of government effort and its service work ethic. They also can shed light on the value of different strategies for workforce composition and work disposition; for example, are part-time or contract employees as productive as full-time employees, and are employees who telework as productive as employees who come to offices every day?

For a beginning, this chapter returns to the 1960s, a period in the United States where confidence in government was high and government agencies were expanding their roles and tackling a range of new socialCo

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and economic problems. Overlapping interests of congressional members and political and business leaders about slowing national productivity rates and economic anxieties over rising inflation and unemployment rates would ultimately result in the establishment of a productivity measurement program for the federal government. By the early 1970s the newly reformed Office of Management Budget would take the lead in establishing a statistical reporting system that began with data that would cover about half of the federal civilian workforce for a base year in 1967 and reach almost nearly 70% by 1994 (Fisk and Forte 1997: 19–20).

How to Measure Productivity in Government and Why?

Measuring productivity is essential to any serious economy. Any nation that desires to be competitive, provide an adequate standard of living for its citizens, and generate some level of wealth transfer for its future generations begins with a goal of meeting a level of productivity growth that will cover its birth and immigration rates and provide for its elderly citizens—conventionally about 2%. Productivity growth is also traditionally correlated with compensation and employment. Throughout most of the 20th century, rates of productivity change were “procyclical”—meaning productivity rates increased during periods of economic growth and expansion but tended to contract during business downturns (McGratten and Prescott 2012).

Following the Second World War, productivity growth in the U.S. was solid and substantial, outstripping most of the international competition. When the great productivity slowdown hit the U.S. in the 1970s, the discussion of what government should do to foster productivity largely focused on what were perceived failings in government economic and regulatory policies that were seen as hampering private sector productivity growth. Critics of government pointed to deficit spending, byzantine tax systems, regulatory interventions in markets, and lack of effective public investment in research & development (R&D) and education. Some of these criticisms—or “unnecessary burdens” as they were called in a 1984 White House Conference—are “the usual suspects,” so to speak (White House Conference 1984: 4). However, underlying this reexamination of private and public sector poor performance was the recognition that the United States was in the midst of a major transition to a new economy—one based primarily on services and information—and that the old industrial management and workforce control systems and strategies were no longer adequate.

In the early 1970s, congressional interest led directly to creating a formal productivity measurement program in the federal government (Fisk and Forte 1997: 19). While the politics and institutional arrangements that surrounded the program to be launched by the Office of Management Budget, the Office of Personnel Management (then the Civil Service Commission), and the Government Accountability Office (then named the General Accounting Office) with measurement via the Bureau of Labor Statistics is interesting, the focus here is on the who, what, and how of measurement.

Once baselines were created with the measurement system, the program (usually acronymed FPMP for the Federal Productivity Measurement Program) would include about half of the civilian federal workforce at the start and reach about two-thirds of the workforce by the mid-1970s (Fisk and Forte 1997: 20). There were some major missing agencies, such as the intelligence agencies, the State Department, and large portions of the Defense Department. But even among these excepted agencies, some support functions were included for measurement (logistics and administrative support for Defense, contractors for NASA, etc.).

Determining what would be measured was seen as the real challenge. Agencies had to designate some form of final output. The primary focus was on some form of physical count—such as volume of mail for the Post Office, or number of inspections, claims or invoices paid, student days taught, licenses processed, health care visits, and so on. To be fair, this challenge to identify outputs was neither a formidable nor a new phenomenon for government. The prevailing budgeting system for the federal (and many state governments) coming out of the midcentury was performance budgeting, which included extensive program work output measurements both as efficiency indicators and the basis for using work measurement to establish staffing levels for programs. Performance budgeting was a precursor for productivity management; as one earlyC

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budgeting textbook noted, “The contentions for the new productivity field in the 1970s are very reminiscent of the earlier claims for performance budgeting. Performance budgeting sought to establish management’s right and responsibility to ascertain how much work was being accomplished, at what cost, and for what results as measured against specified performance standards. In the 1970s the questions are still the same, only it seems they are being asked by different people” (Hyde 1978: 78).

Under the FPMP, agencies established different program output measurements and integrated them into a final organizational output index. Box 3.1 outlines the calculation elements that are part of conventional productivity measurement.

Source: Federal Productivity Measurement Program (FPMP) (1972–1994).

Labor was measured by counting the total number of employee years, compensation levels for each employee year, and a unit labor cost. The resulting calculation is then indexed at 100 for the first measurement year for the FPMP, as illustrated in which shows changing rates of federal productivity versus the privateFigure 3.1 sector over the period. Federal productivity actually rose by a respectable rate of 1.5% annually from 1967 to 1982 before slowing to a.6% annual rate during the “productivity slowdown” era from 1982 to 1994. The 1.5% rate slightly exceeded private sector productivity of 1.4% but trailed the private sector rate of 1.3% in the next period.

In commenting on what this quarter century of productivity output data shows, some major qualifications must be noted. First, the labor input in the federal productivity calculation (shown in ) was anTable 3.1 aggregate workforce input number. It did not include submeasures of capital, equipment, technology, or other factors that could affect outputs. Second, while the cost of labor input numbers did include full wage numbers (salary, benefits, incentives, etc.), qualitative submeasures of skill levels or qualifications were not included. Third, labor functions were measured in the FPMP but with an aim of showing productivity comparisons across different functions. FPMP provided average annual productivity rates for 24 federal occupational groups, with two functions showing negative productivity index rates: electric power utility personnel and medical services. These are also the two functions with the highest unit labor costs compared with the function (Finance) with the highest productivity, which had the lowest unit labor costs; this points to the sensitivity of the FPMP to wage factors.

Figure 3.1 FPMP Annual Rates of Change—Labor Productivity in Federal Government vs. U.S. Private Sector Rates, 1967–1994

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Source: U.S. Monthly Labor Review, May 1997, and U.S. Bureau of Labor Statistics, Labor Productivity Database (data.bls.gov/time series/PRS85006092).

In productivity management terms, this effort by the FPMP certainly qualified as a good start. It demonstrated that federal productivity levels were certainly in line with the national experience and in the same league as the private sector. While the data qualifications weren’t trivial, there was a decent foundation to make assessments about federal productivity contributions in macroeconomic terms and solid trend data for agencies to review unit productivity performance levels.

However, in 1994, the FPMP was a victim of a major round of federal budget cuts and the Bureau of Labor Statistics suspended the measurement side of the program. Thereafter, no systematic productivity measurement would be undertaken at the federal level except for the U.S. Postal Service. It is certainly safe to say that few managerial tears were shed on the loss of the federal productivity program. And, as will be noted, the dismantling of the FPMP did not leave a vacuum. Following the National Performance Review at the outset of the Clinton-Gore administration in 1993, total quality management2 was essentially the successor to productivity management. Quality management was a better or perhaps more comfortable fit for most federal agencies, with its blend of participatory management groups and measurement methodologies that appealed to a predominantly white collar workforce and to labor groups that championed labor-management partnerships.

Before assessing the federal productivity management effort, productivity efforts at the state and local level should also be mentioned. While no systematic effort was made to report on subnational public productivity levels, there was interest in testing measurement strategies and methodologies. BLS—as their exemplary 1998 final study attests—selected ten different state and local services to develop and report productivity statistics on. While the big three (police, fire, and education) were excluded from the study—the range of services studied made quite clear that calculating productivity was both feasible and methodologically defensible. These early investigations grappled with how to determine output measurements for services ranging from more blue collar–oriented activities in enterprises (utilities and transit services) to mostly white collar (parole and corrections to employment and social services). BLS also chose three services where numerous private sector systems existed for comparison. —taken from the 1998 study—highlightsTable 3.1 the comparisons.

In the three state and local services in which public and private sector comparisons were made, public sector

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productivity tracked and compared favorably. But it should be noted that these three services were among the least personnel intensive. The service area with the lowest productivity rates was local jails, although the longer-term counterpart of state prisons had better productivity rates even though labor inputs were about the same. BLS’s assessment of the corrections area (jails and prisons) is all the more interesting because it developed means to account for overcrowding. Further they pointed to the recidivism issue—which they weren’t able to factor in a meaningful way—which would clearly alter the output measurement. Another interesting distinction drawn in this productivity study was how mass transit productivity rates showed improvement when the output metric was vehicle revenue miles as opposed to number of trips.

One final contribution—worth further reflection—was BLS’s estimates of rates of labor intensity for government services. Although this was soon to change with the full arrival of the computer and Internet technology era starting around 1995, (which calculated for one baseline year, 1992) shows laborFigure 3.2 compensation as the percentage of total operating expenditures for different government functions. Human resource managers, of course, would appropriately point to functions like police, fire, and education and conclude that when over 80% of the operating budget is human resources, the quality and skill levels of those resources are paramount. Productivity management advocates would certainly concur but add that tracking the labor productivity rates of these invaluable assets is also critical.

Table 3.1 Source: U.S. Bureau of Labor Statistics, 1998, Measuring State and Local Government Productivity: 9.

While the agency productivity output and labor costs measurements were the primary quantitative emphasis, BLS also attempted more qualitative evaluations. Agency managers were surveyed about their explanation for shifts in productivity that perhaps foretold of the perceived value of FPMP as an important human resources managerial tool. Fisk and Forte in their closing assessment of the FPMP note that most agencies explained major shifts in productivity levels as driven by workload volatility and technology. In the 1970s unforeseen political, financial, or environmental events were identified as the primary driving forces that

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would cause an agency to ramp up or scale down work efforts and staffing levels, which would then shifted productivity levels. Later, in the 1980s agency comments pointed to major changes in office automation and computing as major driving forces (Fisk and Forte 1997: 27). In other words, productivity measurement wasn’t seen as having much of an effect other than to register the impacts of external factors.

Figure 3.2 Personnel Compensation as Percentage of Total Operating Expenditures for Select State and Local Government Functions, 1991–1992

Source: U.S. Bureau of Labor Statistics, 1998, Measuring State and Local Government Productivity: 23.

Another political development may have also shaped this managerial disinclination toward productivity measurement. In 1985 the Reagan administration promulgated an executive order as part of his newly re-elected administration’s federal management improvement program. Entitled the President’s Productivity Improvement Program, the 23 designated primary federal agencies under OMB’s direct purview were to institute formal programs that would establish a productivity office and publish a productivity improvement plan with a formal measurement system. On the first page on the executive order draft, OMB announced that a 20% improvement goal by 1992 for all agencies would be set. Further in the document, OMB proclaimed that these implemented productivity goals would “be translated into projected cost savings” (Wright 1984).

Federal agency managers certainly understood and both resented and resisted this type of “productivity math”—where productivity gains were “pre-ordered” to be used to decrease agency budgets as opposed to increasing service quality, investing in agency capabilities, or supporting innovation efforts. NASA, having launched a major contractor and agency effort around productivity improvement a year earlier, was typical of agency response—notifying OMB that under this program they were essentially being penalized for their efforts and therefore were disinclined to participate (NASA-JSC 1985). As the Reagan administration’s political capital was diverted to other more pressing matters (the Iran-Contra affair, etc.), the OMB initiative was set aside and quietly left to expire at the end of Reagan’s second term.

There is a long history of “lapsed” public sector management efforts driven by executive mandate to reduce agency budget levels whether at the federal or state government level. Politically, programs launched from auspices of one executive are almost always let go when a new administration takes over. However, thisCo

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instance entails the additional peril of using productivity measurement primarily as a budget tool for cost-cutting as opposed to a management reinvestment tool for service quality improvement, upgrading infrastructure or technology, or enhancing public service commitment. The latter is what makes productivity management an important management tool—its use in ensuring that economies and industries innovate and grow, and don’t stagnate.

Old Lessons Learned—New Questions Needed

As mentioned, budget cutbacks in the first two years of the Clinton administration would result in termination of the federal productivity measurement effort. In addition to changing budget priorities, new management initiatives (some call them fads) like total quality management, and lack of political support from agency managers with long memories about the ill-fated OMB 1985 productivity program, the productivity environment itself was changing. For the student of human resources management to make sense out of the change in the 1990s and in order to draw appropriate lessons for the future, five factors need to be examined.

First and foremost, national productivity improved dramatically, emerging out of its two-decade slumber. Driven primarily by new technology and capital investment, private sector productivity annual growth rates reached 2.1% in the mid-1990s and over 2.5% by 2000, as illustrates. Debates among economistsFigure 3.3 about Robert Solow’s famous query in 1987—“You can see the computer age everywhere but in the productivity statistics”—now shifted from what the problem was to what was now driving the solution and whether it would last (Brynjolfsson 1993). In the late 1990s, after productivity soared nationally and federal government budgets reached surplus levels for the first time in seemingly decades, interest in productivity plummeted.

It also should be noted that productivity measurement also changed in an effort to capture the increasing complexity of the now ascendant digital revolution. Coming out of the productivity slowdown period, there remained great concern that a services-dominated economy would hamper productivity and economic growth (Baumol, Batey Blackman, and Wolff 1989). Remarkably, economists looking at productivity trends in a so-called stagnant sector found—as a Brookings symposium of leading economists noted—“services now lead the way.” The consensus estimate was that service industries contributed over 73% of labor productivity growth in the 1990–2000 period and 76% of U.S. total productivity growth (Triplett and Bosworth 2004: 2).

Obviously U.S. productivity growth improved dramatically, as shows. Not quite as obvious wasFigure 3.2 why, given the new domination of services in the U.S. economy. During the 1990s the American economy added more than 19 million jobs while manufacturing goods production sectors were basically flat. This doesn’t mean that manufacturing productivity decreased. Quite the opposite: Since 2000, U.S. manufacturing jobs have declined by over 30% while manufacturing output has increased by almost 50% (de Rugy 2011). Basically, the U.S. manufacturing labor force has dropped to under 12 million workers who are now producing the equivalent total output as the previous 17 million workforce.

Figure 3.3 U.S. National Rates of Average Productivity Growth, 1947–2011, Private Sector Nonfarm business (excludes all levels of government)

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Source: Bureau of Labor Statistics (2011).

U.S. Manufacturing: Output vs. Jobs Since 1975

To many economists and management analysts, it was clear that something else was in play. It became increasingly obvious that the impact of “other dimensions” of productivity had not been adequately measured before. To be fair, organizational purchases of capital—even computers and other technology investments—were part of the productivity equation that included the total costs of labor and capital equipment. As economists debated both if and when the investments made by the U.S. in both the private and public sector would materialize up to the mid-1990s productivity turnaround, pressure mounted to augment the methodology for measuring productivity. The resulting metric called stillmulti-factor productivity produced an output ratio per labor hour, but it was expanded to include labor-capital interactions to estimate what contributions were made by technology, other efficiency actions, and resource reallocations.

Currently—if one looks at the 2011 multifactor productivity trends from the U.S. Bureau of Labor Statistics of U.S. national averages (excluding government services)—the following larger view is possible (Figure 3.4 ). The introduction of multifactor productivity not only enlarged the organization view of capital and labor resources, it also provided a means for assessing different strategies for human resource investments. Capital intensity also included a separate breakout for the contribution of information processing equipment and software. So, for example, a state government’s motor vehicle registration and licensing department could reassess how to align its technology support, capital equipment ratios, workforce mix of service employees and contractors, and Internet services provision to achieve the most optimal productivity levels.

Figure 3.4 National Productivity Growth Rates for Private Nonfarm Business Sector, 1987–2011

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Source: Bureau of Labor Statistics, May 9, 2012 Office of Productivity and Technology.

A second factor entailed internal shifts in public sector workforces. The movement towards a super-majority white collar workforce had been underway for some time. Government agencies at all levels contracted out support functions and blue collar jobs, accelerating this trend. By the mid-1990s, the federal workforce was below 15% blue-collar positions; by 2010 the percentage went below 10%. But much more importantly, government workforces were becoming more highly compensated as average grade levels increased. Productivity measurements capture this of course when labor costs are attached to labor hours. So when viewing the FPMP statistics in , both the effects of annual salary increases given across the board toTable 3.1 the workforce and rising costs from promotions and labor compositions are in play.

Figure 3.5 shows a 50-year decadal perspective of how the federal workforce has shifted from a 50%–25% split between the lowest six grades and the highest five grades, By the end of the FPMP, the split was 30% for lowest grades and 45% for the top five for white collar workers. In 2014, the top five grades accounted for just under 62% of the federal workforce. Of course, those grade increases reflect higher education levels, greater skill qualifications, longer tenure, and an older force. But similarly, productivity measurement using today’s methodologies are capable of measuring impacts of labor composition and if in place might have been useful in assessing the impacts of these shifts. For example, one factor often mentioned in looking at current workforce dynamics in government is contract management. Instead of framing the question in terms of staffing—that is, aligning employee grade levels with the level and award amounts of contracting—the productivity question might produce a different assessment of the optimal mix of organizational and contractual staffing.

Figure 3.5 Grade Level Change in the Federal Government in the Civilian White Collar Workforce by Decade, 1962–2014

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Source: Compiled by the authors using federal employment data from (2002, 2012,www.fedscope.opm 2014), the 1962, 1972 Civil Service Commission Federal Civilian Workforce Statistics Report, and the 1982 and1992 Office of Personnel Management Federal Civilian Workforce Statistics Reports.

So externally the national productivity picture brightened, and internally the labor structure of many government organizations shifted toward a high quality in terms of human factors workforce. Two other factors emerged in the 1990s that pushed the demise of productivity management. The advent of quality management, already mentioned, in effect superseded productivity. Quality management in the public sector also got some help from a major effort in the American service industry to embrace the principles of quality management. Telecommunications, banking, insurance, and even health care organizations began to develop their own versions of quality with a distinct service focus. These industries all had major counterparts in the public sector at federal, state, and local levels (along with being suppliers, contractors, and partners), and they strongly encouraged benchmarking and sharing of best practices with government agencies. Many of these service industry corporations helped fund studies on quality practices among state and local governments and set up advisory committees to help launch government-wide efforts.

At the federal level, when the September 1993 National Performance Review report was issued, quality management was not a primary reference point. However the report’s second chapter—“Putting Customers First”—was quality management 101 from top to bottom. The administration issued Executive Order 12862 embedding all of these quality expectations into agency management requirements. All federal agencies dealing with the public were required to identify their customers, set quality standards for service, survey their customers, and act to make government services “equal to the best in business.” Unlike the aforementioned formal productivity programs where improvements might be translated into cost savings and staffing reductions, quality improvements were reinvestments in the agency’s performance.

Quality management also was highly compatible with the aims and natural interests of a highly skilled workforce. Quality management called for very high levels of workforce participation or what was generally called “empowerment.” Workers at all levels were expected (and trained) to join together in any number of variations of quality groups or project efforts to analyze quality problems (improvement teams) or to devise new solutions (process redesign teams). Most of these teams operated outside of the classic formal hierarchical and representation structures of government bureaucracy. Many of the efforts included contractors, partners, and even client and customer groups.

Essentially, the core dimensions of quality management—internal process measurements, external customer focus, employee participation, and contractor involvement—were all highly compatible with the public management premises and goals embodied in the Reinventing Government movement. For much of the

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decade, quality management was seen as a preferred framework for organizational change that emphasizes work groups and processes with a customer focus that was superior to more formal organizations focused on work through functional specializations. But formal quality management would face a similar fate as productivity with the presidential election change in 2000. One of the first acts of the Bush administration was to issue an executive order ending labor-management partnerships. While the executive order neither prevented government agencies from labor consultations nor promoting quality program aspects, the management emphasis at the federal level shifted to competitive government, technology innovations, new personnel systems, and new budget priorities.

A fourth factor—the emergence of performance results management—also played a pivotal role in productivity’s demise as both management change strategy and methodology for assessing performance. Following passage of the Government Performance Results Act in 1993, federal agencies went through a five-year trial period putting in a budgeting system that asked agencies to prepare five-year strategic plans with performance goals based on outcomes. Indeed, reliance on outputs—the core numerator in productivity metrics—was seen as a problem with underperformance. Both the Office of Management and Budget and the GAO (then the General Accounting Office—soon to be renamed the Government Accountability Office) championed this new direction.

There were few dissenters. It was difficult to argue with the strong current of performance management—or, as an assessment of the demise of FPMN by the research staff at the Minneapolis Federal Reserve Bank quoted one Beltway expert, “I don’t care how fast a government worker goes through a pile of paper until I know whether the pile of paper needs going through in the first place . . . . productivity numbers tell me nothing until I have a measure of the benefit” (Wirtz 2000: 6). So the federal emphasis (and many state governments likewise pursued performance results budgeting variations) was on measuring the effects—or social outcomes—of government programs. Productivity was equated with more simplistic efficiency while performance was to be best understood in terms of measuring effectiveness.

This is a pivotal issue that productivity management has always recognized but been unable to reconcile. One of the most influential early management theorists in productivity—Michael Packer3—addressed this in an MIT white paper in 1982 aptly titled “What’s Wrong with Organizational Productivity Analysis?” Packer sorted through the different measurement issues highlighting the degrees of difficulty and reliability in various service industry and government organizations, especially those with substantial R&D efforts, intelligence roles, or those that produce more intangible outputs. He also noted all the objections that managers would have about measurement and data analysis methods, especially if the numbers were going to be used to make comparisons to other private sector entities. But his point was that managers weren’t going to be impressed by simply knowing how the organization’s current productivity rates were trending. Packer urged that organizational productivity data be used to interpret the range management flexibilities and potential scale of improvement and innovation in the same vein that business enterprises use market research and economics (Packer 1982: 9–10).

Packer’s concerns are still valid today. If human resource managers want to understand how much progress is being made in pursuit of organizational goals and concurrently how effective the use of human, capital, technology, and information resources is, they will need analytical tools for measuring productivity. Productivity analytical tools go beyond simply adopting a vocabulary of management efficiency used to proclaim that new initiatives (the movement to cloud computing in government comes readily to mind) will make the workforce more productive.

But perhaps a case example is needed to illustrate this point. Federal agencies today are striving to comply with requirements to allow teleworking in their agencies. Most use surveys of workers in their teleworking programs that show higher job satisfaction, more time spent doing task work, and less time doing administrative work. A study at the Patent and Trademarks Office found teleworking employees processed more patent applications per year than their in-office counterparts, according to the Commerce Department Office of Inspector General. That makes them more or equally productive, except that the Inspector General noted that teleworkers didn’t process applications at a greater rate; they simply reviewed patents for more

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hours than their office-bound counterparts (U.S. Dept. of Commerce 2012). Of course, the program is successful on a number of other fronts, but in terms of Packer’s organizational productivity analysis framework challenge, the questions still remain: How productive is teleworking and how do you know?

This basic human resource management question deserves more than subjective answers. In another detailed assessment of teleworking using national government employee survey data, Mahler provides a sterling examination of the benefits of teleworking programs and questions whether there may be a rift between those who are and those who are not allowed to participate. The survey results point to strong agreement that those who telework report higher levels of job satisfaction and improved personnel productivity (Mahler 2012: 413). But how do they know, since there are no basic quantitative measurements of organizational, unit, or much less individual productivity in place? No disparagement of teleworking or any other form of flexible work arrangements using new technologies is intended; the point is simply to reinforce the need for organizational productivity measurement, especially in government services.

There remains an unranked fifth factor that, despite a great amount of activity that occurred and continues to be made, is of less certain significance. This would include organizational change management strategies based on participatory management in the workplace. When these “change strategies” have been charted in the private sector, results in terms of productivity management are mixed.

Some change management strategies have pursued linking compensation to productivity. Results here have generally followed Blinder’s conclusion that changing the way workers are treated increases productivity more than changing compensation practices (Blinder 1990: 13). A 1999 NBER–MIT metastudy on productivity improvement concluded that progressive human resource policies and practices produced little net organizational productivity benefits, as increased labor costs tended to offset increases in productivity improvements, where they were measured (Lester 1999) or even resulted in lower performance and diminished organizational reputation (Keating et al. 1999).

Other multiple organizational case reviews are more positive, as Black and Lynch have noted in a 2004 Federal Reserve Bank of San Francisco research note. They found that those organizations supporting workplace innovations—specifically work teams, more flexible job definitions, and up-skilling of the workforce—tended to be more productive than traditional organizations (Black and Lynch 2004: 2), These efforts also have multiple objectives—to support workforce retention, enhance morale, and promote engagement and commitment to organizational values. Of course, in government agencies where productivity is no longer measured, these are the only managerial objectives that remain.

A Concluding Note and a Postscript

This chapter, despite its odd title, began with three objectives and a hope. The objectives were to recast productivity measurement methods and management strategies to promote better understanding of several key debates about whether governments are competitive, workforces are compensated appropriately, and organizations are using their resources optimally.

It’s already clear that the national debate about the size and role of government is most likely to be argued on political grounds. Whatever the shape of the 2016 federal budget, discretionary program spending or the remaining programs after entitlements and interest requirements are destined to be further crowded in the coming decade. This was apparent back in 2006 when McKinsey published a study calling for a renewal of the federal productivity program so that federal productivity could be part of what they called “performance transparency” (Danker et al. 2006). That the study was basically ignored, even by the largely pro-business Bush administration, proves once again that sector productivity comparisons are neither compelling nor convincing.

However, the organizational productivity challenge is going to be of increasing interest. As the public-private pay comparability debate continues, human resource managers are going to face increasing pressure (andC

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media scrutiny) to explain how staffing, productivity, and compensation levels are linked. Debates about the necessary numbers of police, teachers, nurses, and other public work functions are going to go deeper than arguing trends in crime rates, test scores, and health care outcomes. Many government functions are already on the defensive about why well-intentioned efforts are not always translating into improved outcomes. Governments may find that to obtain additional resources to achieve better results, they will have to demonstrate that their good intentions are matched by high productivity levels and optimal use of resources. This will become even more apparent as technology alters every aspect of work from content to methods to work skill competencies.

Public managers may well want to revisit the current quality of performance paradigm in which being responsive and delivering services that meet citizen preferences seems to be all that matters. The means (i.e., productivity) in which organizations determine that the right things are being done using the right mix of resources most efficiently is also essential. Again, this is going to be even more critical as technology and connectivity transform the production and service processes. Public services, especially those that are human interaction intensive, are not going away. However, productivity measurement can provide human resource managers with critical information about how to use technology shifts in support of the next stages of public service innovation. Hopefully, the need for organizational productivity metrics and opportunity for using multifactor productivity analysis in the public sector will bring productivity management back to the forefront of human resources management.

Finally, it is altogether fitting and indeed ironic, that there is a renewed debate about national productivity levels. In this new decade since 2010, U.S. productivity growth rates have slumped dramatically, to dismal levels, even below the terrible 1970s (Blinder 2014):

While economists have been somewhat surprised by this and there is disagreement about the causes, this time there is consensus about the long-term consequences and potential negative effects. Governments will also find that they are part of the debate about what to do. Robert Solow, of the “computers and productivity” linkage mentioned earlier, noted in a recent interview that what is most different now is the recognition that what drives productivity growth most is management differences. Paraphrasing Solow, it’s not how capital intensive or technological advances that matter most. It’s “failure in management decisions”—the inability or unwillingness to rethink and reallocate tasks within organizations to compete successfully (Solow 2014). Of course, that reallocation of tasks to an organization’s workforce is the essence of human resources management and a reminder of why productivity measurement matters.

Notes

1. The 9 million total government workers in the 1970s compares with 14 million total full-time government workers (there are also over 5 million part-time employees) according to the last available census of government in 2012. About 90% of that growth has been in state and local government (U.S. Census 2014).

2. Although the literature on quality management in the public sector is extensive—beginning with quality circles in the 1980s merging into full blown total quality management programs in the 1990s, an Executive Order mandating customer service quality standards and reviews—that goes beyond the scope and space allotted for this review.

3. Michael Packer died in the World Trade Center in New York City during the September 11 terrorist

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attacks; he was delivering a keynote address at a conference there.

References , , and . . , Baumol William J. Sue Anne Batey Blackman Edward Wolff 1989 Productivity and American

. : .Leadership Cambridge, MA MIT Press

, and . . , Black Sandra A. Lisa M. Lynch 2004 Workplace Practices and the New Economy. Federal Reserve , .Bank of San Francisco, CSIP Notes Number 2-4-10 April

. . : ., Blinder Alan S. 1990 Paying for Productivity Washington, DC Brookings Institution Press, 13

. . , ., Blinder Alan S. 2014 The Unsettling Mystery of Productivity Wall Street Journal November 24

. . . , Brynjolfsson Erik 1993 The Productivity Paradox of Information Technology: Review and Assessment , .Communications of the ACM December

, , , and , . , Danker Tony Thomas Dohrmann Nancy Killefer Lenny Mendonca L. 2006 How Can American , .Government Meet Its Productivity Challenge? McKinsey & Company July

, , and . . , Dertouzos Michael L. Richard K. Lester Robert M. Solow 1989 Made in America: Regaining the . : .Productive Edge (MIT Commission on Industrial Economy) Cambridge, MA MIT Press

. . . , De Rugy Veronique 2011 U.S. Manufacturing: Outputs vs. Jobs since 1975 Mercatus Center White Paper, , .George Mason University January

. . , Fisk Donald M. 1985 The Federal Productivity Measurement System: The Process and Selected Statistics , ( ).Management Science and Policy Analysis Journal-Letter 2 3

, and . . . , Fisk Donald Darlene Forte 1997 The Federal Productivity Measurement Program: Final Results , .Monthly Labor Review , May 19–28

. . : , Fuchs Victor. 1968 The Service Economy New York National Bureau of Economic Research/Columbia , .University Press 1968

. . . , Gilder George 1975 Public Sector Productivity National Commission on Productivity and Work Quality , ( ), – , .Public Productivity Review 1 1 4 8 6

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. . In . , Hyde Albert C. 1978 Performance Budgeting Government Budgeting: Theory, Process, Politics Oak : , – .Park, IL Moore Publishing 77 81

, et al. . , , Keating Elizabeth K. 1999 Overcoming the Improvement Paradox.” European Management Journal ( ), – .17 2 120 134

. . : ., Lester Richard K. 1999 The Productive Edge New York Norton

. . . , Mahler Julianne 2012 The Telework Divide: Managerial and Personnel Challenges of Telework Review of , ( ), – .Public Personnel Administration 32 4 407 418

, and . . , McGratten Ellen R. Edward C. Prescott 2012 The Labor Productivity Puzzle. Federal Reserve Bank of , Working Paper 694, .Minneapolis May

. . NASA-JSC 1985 An Assessment of NASA’s Productivity Management Program—Johnson Space Center. , .University of Houston Clear City Consulting Report, ed. Albert C. Hyde July

. . . : National Academy of Sciences 1979 Measurement and Interpretation of Productivity Washington, DC .NAS

. , Packer Michael B. 1982 What’s Wrong with Organizational Productivity Analysis? MIT Laboratory for , .Manufacturing and Productivity, Paper LMP-MRP-81–15 July

, and . . , ed. : ., Shafritz Jay M. Albert C. Hyde 2012 Classics of public administration 7th Boston Wadsworth

. . . , ., Solow Robert 2014 Prospects for Growth: An Interview McKinsey Quarterly September

, and (Eds.). . , Triplett Jack E. Barry Bosworth 2004 Productivity in the U.S. Services Sector: New Sources of . : .Economic Growth Washington, DC Brookings Institution Press

. . U.S. Census 2014 2012 Census of Governments: Employment Summary Report, G12-CG-EMP, edited by , .Lisa Jessie and Mary Tarleton March 6

. . U.S. Department of Commerce, Office of Inspector General 2012 The Patent Hoteling Program Is . . .Succeeding as a Business Strategy Report OIG-12-018-A February

. U.S. Department of Labor, Bureau of Labor Statistics Measuring State and Local Government Productivity:C op yr ig ht ©

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. Bulletin 2495. .Examples from Eleven Studies June

. . .White House Conference on Productivity Productivity Growth: A Better Life for America April

. . . ., Wirtz Ronald 2000 Icebergs and Government Productivity. Minneapolis Federal Reserve Bank June Available at https://www.minneapolisfed.org/publications/the-region/icebergs-and-government

. Accessed on .-productivity , November 7 2012

. . , Wright Joseph R. Jr. 1984 Memorandum on Productivity Improvement Program Office of Management and , .Budget September 27

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https://www.minneapolisfed.org/publications/the-region/icebergs-and-government-productivity

Week 5 – Assignment: Recommend an Employee-Friendly Policy

Instructions

Length: 4-6 pages, not including title and reference pages

If you choose to record your lecture, upload it to your professor using CaptureSpace. An average speech tends to be 100 to 150 words per minute.

Your assignment should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards where appropriate. Be sure to adhere to Northcentral University's Academic Integrity Policy.

Baskar, S. (2016). The influence of HR policy dimensions on the job satisfaction of employees of public sector banks: A study on Indian Overseas

Jacobson, W. S., & Lambright, K. T. (2018). The Development of County HR Policies: The Perspectives of Counties in Two States. Public Personnel

Kearney, R. C., & Coggburn, J. D. (2016). Public human resource management: Problems and prospects. Los Angeles: CQ Press

https://doi.org/10.1177/0091026017704440

Public Personnel Management 2017, Vol. 46(2) 91 –117

sagepub.com/journalsPermissions.nav DOI: 10.1177/0091026017704440

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Article

Shedding New Light on Strategic Human Resource Management: The Impact of Human Resource Management Practices and Human Resources on the Perception of Federal Agency Mission Accomplishment

Seunghoo Lim1, Tae Kyu Wang2, and Soo-Young Lee3

Abstract We assess the resource-based view in the study of strategic human resource management in public agencies. We mainly examine the impact of both human resource management (HRM) practices and actual human resources on the perception of federal agency mission accomplishment. We show that all types of goal- aligned and performance-based HRM practices (including rewards, training, appraisal, and recruitment) positively affect perceived agency mission accomplishment. In addition, certain types of human resources (including the percentage of career senior executive service members and organizational size) contribute to perceived agency mission accomplishment although others (including the percentage of professionals and noncareer senior executive service members) make negative contributions. Strategic knowledge, regarding an organization’s valuable, rare, inimitable, and nontradable resources—in both HRM practices and human resources—can help improve perceived federal agency mission accomplishment.

1International University of Japan, Minamiuonuma, Japan 2Catholic Kwandong University, Korea 3Seoul National University, Korea

Corresponding Author: Soo-Young Lee, Graduate School of Public Administration, Seoul National University, 599 Gwanakro, Gwanak-gu, Seoul 08826, Korea. Email: [email protected]

704440PPMXXX10.1177/0091026017704440Public Personnel ManagementLim et al. research-article2017

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92 Public Personnel Management 46(2)

Keywords strategic human resource management (SHRM), resource-based view (RBV), federal agency mission accomplishment

Introduction

Public service agencies have attempted to respond to challenges posed in the informa- tion age by aggregating professional workers with knowledge and expertise. Thus, the U.S. federal agencies have tried to introduce a variety of governmental reform policies including human resources reform policies; however, it is not easy to conclude that these reforms achieved their purpose in terms of the citizens’ expectations about high performance in government. In these circumstances, one possible alternative is to strengthen strategic human resource management (SHRM), which helps public agen- cies maintain their competitive advantage by emphasizing human capital and enhanc- ing organizational performance. The SHRM model differs significantly from the traditional model, which is more likely to neglect human resources embedded in pub- lic agencies and focus on specific personnel administration practices without consider- ing strategic interests (Daley, 2002). The shift to SHRM has been accelerated in public agencies to exploit sustained competitive advantages and to enhance performance through the contribution of both valuable, rare, inimitable, and nontradable (VRIN) human resources and goal-aligned and performance-based human resources manage- ment (HRM) practices.

An extensive body of literature in the public sector has investigated public person- nel management issues in SHRM perspectives. For example, Mesch, Perry, and Wise (1995) compared the influences of bureaucratic HRM and SHRM on federal employ- ees’ job satisfaction and organizational effectiveness. Daley, Vasu, and Weinstein (2002) analyzed the perception of North Carolina county public officers on SHRM. In a similar vein, Daley and Vasu (2005) investigated the impacts of SHRM practices on the county’s social welfare reform performance in North Carolina. In addition, Kim (2010) examined the relationship between SHRM practices and perceived organiza- tional performance using data from public servants in Georgia and Illinois. Recently, Jacobson and Sowa (2015) studied the degree to which municipal governments have implemented SHRM practices in Colorado and North Carolina.

However, most previous studies have addressed SHRM issues in state or local gov- ernments, not in the federal government. In addition, the relationship between imple- menting a strategic HRM and organizational performance in the federal agencies has not been systematically and empirically studied. Therefore, we intend to investigate the relationship between SHRM and organizational performance in the federal govern- ment. In addition, this study aims to answer the following research question in that almost all previous studies in the public sector have concentrated on perceptions of SHRM practices rather than the actual human resources1:

Research Question 1: What kinds of differential impacts do distinct HRM prac- tices (e.g., individual perceptions of reward, training, appraisal, and recruitment)

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and actual human resources (e.g., the percentage of professionals, the percentage of career senior executive service [SES], the percentage of noncareer SES, and the total number of employees) have on the perceived mission accomplishment of the federal agencies?

We believe that this research can contribute to the field of SHRM by providing infor- mation about which types of human resources have differential effects on a federal agency’s perceived mission accomplishment.

SHRM

For decades, a serious human resource deficit has challenged the U.S. federal govern- ment. Scholars lament that high-quality employees leave because of inadequate pro- motion opportunities, because they are not provided with the tools necessary for their job, and because compensation is inadequate (Lewis, 1991; Light, 2008). In addition, the federal government has failed not only to retain seasoned employees but also to recruit talented new personnel (Lewis & Cho, 2011). According to Lewis and Cho (2011), the public service workforce has been challenged by aging and retirement. Failure to retain the current workforce and recruit new talent in the federal government has become a serious challenge for federal government HRM.

So far, little attention has been given to how to obtain human resources from outside the government and how to retain them systematically and strategically inside the gov- ernment. In particular, despite the importance of HRM in the knowledge-intensive pub- lic sector, the traditional functions of HRM practices are typically understood in fragmented perspectives rather than in an integrated view that focuses on attaining over- all optimization of each function. Thus, SHRM acts as an alternative to overcome these problems and limitations by building human resources that lead organizations to achieve goals and retain their competitive advantage (Pynes, 2013) because SHRM views an organization’s personnel as a resource that drives organizational performance.

The Significance of SHRM in the Public Sector

SHRM aims to align HRM practices with an organization’s strategy and ultimately with organizational development goals beyond the mere operation of these functions (Pynes, 2013). Therefore, SHRM links HRM and strategic management to better coor- dinate and harmonize HRM practices through multiple human resource planning pro- cesses that aim to efficiently achieve organizational strategies and goals (Anthony, Kacmar, & Perrewe, 2009; Burack, Burack, Miller, & Morgan, 1994; Wright & McMahan, 1992).

There are four important differences between SHRM and traditional HRM or per- sonnel management (see Table 1).2 First, the analytical focus is different. Traditional HRM mainly focuses on individuals’ psychological or motivational characteristics, such as studying how individual changes in job satisfaction and organizational citizen- ship behavior affect organizational performance. Building on this notion, SHRM hones

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in on how linkages between HRM practices and organizational strategies affect organi- zational performance. Second, the scope of analysis is different. Traditional HRM has separate perspectives that aim to enhance the local optimization of each HRM practice without considering other functions. In contrast to this microscopic view, SHRM attempts to achieve more global or comprehensive optimization through vertical and horizontal integration of HRM practices with a macro perspective. Third, the span of time is different. Traditional HRM focuses on short-term problem-solving processes, whereas SHRM attempts to establish organizational strategies and to foster human capital from a long-term perspective. Thus, members of an organization are regarded as its “human capital,” which is a more useful concept than “human resource” because human capital views members of organizations as “assets” rather than “resources.” A perspective that considers personnel as assets naturally recognizes that it is important to invest in and develop these assets. Recruiting competent personnel to the proper posi- tions, investing in resources to sustain them, and developing human resources through appropriate training and incentivization indicates that human resources are not merely the object of cost cutting but are instead a strategic asset whose value can be enhanced. When an organization determines its strategic goals or priorities, human resources should be considered important at higher levels such as the departmental or organiza- tional levels. Fourth, the functions and roles of HRM are different. Traditionally, HRM practices and activities are understood to have no relation to achieving organizational goals and strategies or to have only subordinate, functional, or instrumental roles in contributing to achieving organizational goals. By contrast, SHRM actively intervenes in strategy building and execution and aims to systematically develop and enhance human resources. SHRM also empowers rather than controls organizational members and intends to maximize their autonomy through its activities.

Table 1. A Comparison of Traditional HRM and SHRM.

Traditional HRM Strategic HRM

Focus of analysis

Individuals’ psychological or motivational aspects

Effects of the linkage between HRM practices and organizational strategies on organizational performance

Scope of analysis

Micro and fragmented view (pursuing local optimization of

individual HRM practices)

Macro and comprehensive view (pursuing global optimization through

vertical and horizontal integration of HRM practices)

Span of time Short-term problem-solving processes

Long-term development of human capital

Functions and roles of HRM

No relations with organizational goals and strategies

Control mechanism

Strong relations with the establishment of organizational goals and strategies

Incentives for empowerment and autonomy

Note. HRM = human resource management; SHRM = strategic human resource management.

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The SHRM characteristic most developed in the private sector involves harmonizing organizational strategy with best HRM practices and policies to improve the organiza- tion’s efficiency and productivity (Mello, 2011). Thus, SHRM should be considered important in both the public and private sectors. However, the public sector has certain distinct features that should lead it to adopt SHRM with care. Public organizations are less exposed to market competition, have higher legal and official constraints, and are subject to political influences (Rainey, Backoff, & Levine, 1976). They are also under distinct social controls that involve ownership, financing, and other political and eco- nomic factors (Perry & Rainey, 1988; Wamsley & Zald, 1973). Moreover, the public sector tends to have more ambiguous, complicated, and multidimensional goals than the private sector (Chun & Rainey, 2005). The performance (or budgetary) office and the human resources office in the public sector do not coordinate to align employee performance with organizational goals for enhancing organizational performance (Ayers, 2013, 2015; Ban & Gossett, 2010). Given that the focus and locus in strategic planning have been conceived in various manners, a one-size-fits-all approach to how public agencies develop and implement substantive strategic management practices does not work (Poister, Pitts, & Edwards, 2010; Poister & Streib, 2005).

Nevertheless, SHRM is now emphasized in the public sector for the following reasons (Jacobson & Sowa, 2015; Klingner, 1993; Klingner, Nalbandian, & Llorens, 2010): There is a contemporary public management movement that focuses on increasing responsibility and efficiency; public agencies have greater legal obliga- tions regarding issues such as safety management in the workplace, affirmative action, and due process; the public sector labor force is increasingly diverse; and alternative instruments have emerged for the provision of public services. Furthermore, a growing recognition of the importance of human resources, the transition from position management to task management, innovation, cost control, organizational members’ participation, and the diversity of human resource have been emphasized in the public sector.

In the history of HRM or personnel administration, the HRM paradigm has been transformed from traditional HRM to SHRM in both the public and private sectors. Thus, HRM is used strategically more often in the public sector, and innovative HRM change is increasing in many fields (Hays & Kearney, 2001). Reports from the U.S. Office of Personnel Management (U.S. OPM, 1998, 1999a, 1999b, 2005) and the U.S. General Accounting Office (2002) show that the strategic aspects of HRM policies were already being strengthened in the public sector in the 1990s and 2000s (Cascio, 2015; Dessler, 2014); accordingly, those in charge of HRM became aware of the fact that HRM may affect their organizational performance and that SHRM is closely linked to reinforcing human capital. These transitions resulted from the Government Performance and Results Act of 1993 (GPRA), which forced the federal government to integrate HR planning into organizational strategic planning processes (Tompkins, 2002). It was emphasized again in 2001, when Strategic Management of Human Capital, which focused on improving the management and performance of the federal government, was chosen as part of the Bush Administration agenda (Executive Office of the President of the U.S., 2001).

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SHRM and the Resource-Based View (RBV)

Traditional studies on HRM have typically addressed individual HRM practices (including recruitment, education, training, evaluation, and compensation) separately from a micro perspective, without providing the theoretical framework for each func- tion (Mahoney & Deckop, 1986). This lack of theoretical foundation limits organiza- tions’ strategic use of human resources. However, SHRM is a macro-perspective approach that attempts to comprehend the various activities and practices of HRM and even to integrate them. For these purposes, SHRM scholars rely on various organiza- tional theories to overcome the limitations of traditional HRM and to develop more advanced and sophisticated approaches (Wright & McMahan, 1992).

Among the various theoretical perspectives, the RBV has received increasing atten- tion and has been helpful in elucidating and developing SHRM (Barney, 1991; Boxall, 1996; Delery & Doty, 1996, Wernerfelt, 1984; Wright & McMahan, 1992). One advantage of the RBV is that it searches for methods to develop human resources as the basis of an organization’s competitive advantage, which allows the analysis to focus on aspects inside organizations. Thus, the RBV posits that an organization’s resources and capabilities are determined not only by its external environment but also by its strategic internal decisions and that organizations obtain competitive advantage by deploying or acquiring resources (Mello, 2011).

Since Penrose (1959), RBV theorists have emphasized the scarcity and uniqueness of resources as a critical determinant of competitive advantage (Barney, 1991, 2010; Newbert, 2007). Wernerfelt (1984) used the term “resource-based view of the firm” for the first time, and this concept was developed throughout the 1980s and 1990s (Conner, 1991; Peteraf, 1993). Barney (1991) stressed securing VRIN resources and capabilities, that is, increasing an organization’s positive resources that are valuable, unique, or rare, largely inimitable by current and future potential competitors, and nonsubstitutable with other resources that competing organizations own. Thus, VRIN resources or capa- bilities are different from resources that other organizations are able to obtain and are not easily imitated by or transferrable to competitors for the following reasons.

First, because scarcity itself makes it difficult for other organizations to seek the resource in question, a perfectly competitive market is unlikely to form for this resource. In addition, unique historical conditions, ambiguous causality, and social complexity make organizational phenomena—including human behaviors, interper- sonal relationships, and organizational cultures—difficult to control or manage, creat- ing the uniqueness of an organization’s resources that are not easily imitable (Barney & Clark, 2007). As there is no scarce and unique resource with equivalent strategic value, these resources are nonsubstitutable (Wright, McMahan, & McWilliams, 1994) and become fundamental resources and core capabilities of the organization (Hamel & Prahalad, 1990). Furthermore, valuable resources offer the opportunity to build and implement strategies that help organizations improve their organizational efficiency or effectiveness.

Competitive advantage and sustained competitive advantage are core concepts for understanding the RBV. Organizations are said to have achieved “competitive

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advantage” when they have implemented a value-creating strategy that current and future competitors cannot use (Barney, 2010). When other organizations cannot ben- efit from such a strategy, the organization using the strategy has a “sustained competi- tive advantage.” This perspective is distinguished from that of traditional studies, which argued that the friendliness of the environment determines an organization’s success and focused on whether the external environment an organization faces con- sists of opportunities or threats (Bain, 1956; Caves & Porter, 1977; Stigler, 1968). However, increasing competition and rapidly changing technologies make it difficult for organizations to understand and predict the environment in which they are situated. Furthermore, despite the premise that organizations in similar environments should achieve parallel outcomes, traditional studies cannot explain many real cases of orga- nizations that experience continuous success. Thus, the RBV shifts the focus from the outside to the inside of organizations in seeking the source of competitive advantage.

Traditionally, under the RBV, a firm’s typical resources such as the natural resources, technology, and financial resources have been thought to determine the organization’s competitive advantage, but these resources are easily imitable, transfer- rable, and substitutable by competitors, which severely limits their value (Barney, 1991, 2010; Newbert, 2007). In contrast, SHRM implies that human resources can be the organization’s competitive advantage with VRIN characteristics (Daley & Vasu, 2005). In other words, human resources can be the pivotal source for enhancing an organization’s performance, particularly in the public sector (Daley, 2002; Daley et al., 2002; Mesch et al., 1995; Perry, 1993; Perry & Mesch, 1997; Perry & Miller, 1991). Wright and McMahan (1992) detailed the process by which human resources lead to organizations’ sustained competitive advantages as follows. First, human resources actively add distinctive values to their organizations, and each organization expects human resources to make different contributions. Second, because talented individuals are scarce, an organization develops management practices such as recruiting pro- grams, compensation, and inducement plans to secure those competent individuals. Third, an organization’s unique human resources are impossible for competitors to imitate. Human resources can be the source of competitive advantage because of their unique relationships with policies, traditions, and culture inside of organizations; it is difficult to comprehend the exact causes of competitive advantage, as competitive advantage is difficult to imitate because of social complexity. Fourth, if an organiza- tion once secures a valuable human resource, it may sustain competitive advantage by adopting new technologies even if competitors also hire talented people. Based on competitive advantage, SHRM focuses on the planning function of human resources, pursues strategic changes to counter organizations’ environments, and emphasizes aligning human resources with an organization’s circumstances or strategies. As men- tioned above, this study intends to divide human resources into two categories: SHRM practices (e.g., rewards, training, appraisal, and recruitment) and actual human resources (e.g., the number of total employees and the number of SES).

As mentioned above, Daley and Vasu (2005) investigated the impact of SHRM practices such as career development, training, job security, participation, merit pay, and result-based evaluation on social welfare reform performance in North Carolina

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counties. In that study, they provided a general hypothesis that “each practice does indeed matter and individually (and collectively) contributes to organizational suc- cess” (Daley & Vasu, 2005, p. 159).3 In addition, Kim (2010) showed there were posi- tive relationships between SHRM practices such as training and merit rewards and public employees’ perceived performance in Georgia and Illinois. Based on the per- spective of the RBV and the results of previous research, we assumed that goal-aligned and performance-based HRM practices are positively associated with the perception of mission accomplishment by federal employees.

Hypothesis 1: There is a positive relationship between reward practices aligned with an agency’s goal and the federal agency’s perceived mission accomplishment. Hypothesis 2: There is a positive relationship between training practices aligned with an agency’s goal and the federal agency’s perceived mission accomplishment. Hypothesis 3: There is a positive relationship between appraisal practices aligned with an agency’s goal and the federal agency’s perceived mission accomplishment. Hypothesis 4: There is a positive relationship between recruitment practices aligned with an agency’s goal and the federal agency’s perceived mission accomplishment.

Based on the RBV, it is logical that more resources help a public agency accomplish its missions. There are various types of resources in a public organization. Public man- agement scholars have devised several classifications of organizational resources, such as organizational structure and financial, human, and technological resources (Bozeman & Straussman, 1990; Rainey & Steinbauer, 1999). Recently, Lee and Whitford (2013) developed a more sophisticated framework that takes a holistic view on public agen- cies’ core organizational resources. These authors offered six types of organizational resources: administrative, human, financial, physical, political, and reputation resources. In line with Lee and Whitford (2013), we focus on four types of actual human resources: professionals, career SES, noncareer SES, and the total number of employees.

First, an agency’s level of professionalization is a crucial human resource. Scholars argue that agency performance can be enhanced by professionalization because pro- fessionals provide important expertise and knowledge (Lee & Whitford, 2013; Rainey & Steinbauer, 1999; Stillman, 1999). Based on their professional and ethical stan- dards, professionals offer policy knowledge and can help an agency respond to com- plex social issues and problems. Furthermore, as indirect public service delivery through grants and contracts becomes more and more common, contract and network management scholars emphasize the importance of a professional workforce with policy expertise (Brown & Potoski, 2003; Heinrich, Lynn, & Milward, 2010; Kettl, 1988; Milward & Provan, 2003). Therefore, we assume that having professionals helps an agency accomplish its mission.

The second actual human resource is the SES members in an organization.4 SES consists of two types of members: career and noncareer members. Career SES mem- bers are bureaucrats who lead and manage complex organizations for public service delivery and act as the interface between political appointees in the top management in public agencies and the career civil servants who actually deliver public services

Lim et al. 99

and goods (Sanders, 1994). With a great deal of authority and seasoned knowledge, career SESs are deeply involved in the internal management and policy implementa- tion of their agencies (Colby & Ingraham, 1981; Dolan, 2000; Rourke, 1984). However, noncareer SESs are often politically appointed. They tend to be generalists and play a political role in successfully implementing policies (Lee & Whitford, 2013; Maranto, 1998). Although noncareer SESs may allow their agencies to enjoy more political sup- port in implementing policies, public agencies often perform better when they are uninterrupted by external political influence (Lee & Whitford, 2013). Consequently, we assume that there is a positive relationship between career SESs and mission accomplishment. We also hypothesize that noncareer SESs are positively associated with mission accomplishment for purposes of consistency.

The final human resource at the organizational level is the number of total employ- ees. A number of scholars maintained that agencies with a large number of employees have better capabilities to solve problems (Hill, 1982; Jackson, 1992) because they can obtain or remember more information about tasks, more critical judgments for fixing errors, and more promising solution strategies (Harrison, 1975; Shaw, 1981). These capacities may help explain the higher quality decisions reported in groups with a large number of employees (Cummings, Huber, & Arendt, 1974). Enhanced capabili- ties for problem solving offer competitive advantages for an organization that lead to better performance. Based on these arguments, we posit that a large number of employ- ees may help an agency achieve its mission.

Hypothesis 5: There is a positive relationship between an agency’s professional- ization level and the federal agency’s perceived mission accomplishment. Hypothesis 6: There is a positive relationship between the proportion of career SESs in an agency and the federal agency’s perceived mission accomplishment. Hypothesis 7: There is a positive relationship between the proportion of noncareer SESs in an agency and the federal agency’s perceived mission accomplishment. Hypothesis 8: There is a positive relationship between an agency’s total number of employees and the federal agency’s perceived mission accomplishment.

Model Specification

Data Description

This study employs multiple data sources to cover both organizational- and individual- level aspects related to SHRM. At the individual level, this study uses the 2010 Federal Employee Viewpoint Survey (FEVS), which is conducted by the U.S. (OPM). The FEVS (formerly the Federal Human Capital Survey) is an annual survey that captures employees’ perceptions of how HRM systems are functioning in the federal govern- ment and which evaluates the progress of SHRM (U.S. OPM, 2010). Thus, a wide range of management features in the federal government can be drawn from the FEVS. Furthermore, the FEVS provides leaders with valuable information to improve agency performance (U.S. OPM, 2012).

100 Public Personnel Management 46(2)

The 2010 FEVS was administered via both the Internet and paper. It was presented to full-time, permanent employees not only in the major agencies but also in small and independent agencies. The FEVS represents more than 95% of the entire executive branch’s workforce, including the cabinet and small/independent agencies, with 504,609 employees receiving the survey and 263,475 responding, yielding a response rate of 52%.

In addition, this study includes organizational aspects of federal agencies, such as professionalization level, two types of SESs, organizational age and size, and regulatory status. We employ data drawn from FedScope to illustrate the impact of human resources in terms of professionalization level, senior career services, and organizational size. FedScope, an online HRM database of the U.S. federal government, provides substantial information on topics such as employment, employment trends, diversity, occupational categories, and types of appointment.5 Organizational age and regulatory status were drawn from the U.S. Government Manual and the Federal Regulatory Directory, respec- tively. The final samples for this study include 187,900 federal employees covering 32 federal agencies,6 after eliminating cases with missing data.

Variable Measurement

The main variables at the individual level are measured using 5-point ordinal-scaled questions (see the appendix). The dependent variable for mission accomplishment was measured by a single question: “My agency is successful at accomplishing its mis- sion.” The concept of performance often has multiple understandings. According to Rainey and Steinbauer (1999), performance can be defined in various ways, such as whether the agency performs its mission as it is supposed to, whether organizational members of the agency work hard and well, whether the actions and procedures of the agency and its members are well suited to attaining its mission, and whether the agency actually achieves its mission. In fact, Nicholson-Crotty, Nicholson-Crotty, and Fernandez (2016) used the same single item to measure mission accomplishment as performance. In addition, Fernandez and Moldogaziev (2013) included the same item as one of their two performance measures.

Concerning the four independent variables at the individual level, SHRM practices,7 excluding recruitment, are captured by several questions. Reward practice is measured by two questions on promotions and pay raises (Cronbach’s α = .75). Training practice consists of two questions that assess training needs and satisfaction with training (Cronbach’s α = .81). Appraisal practice is captured by two questions regarding overall performance appraisal systems (Cronbach’s α = .81). Finally, recruitment practice is measured by a single question on the ability to recruit the right people.

On the side of human resources at the organizational level, this study focuses on the level of professionalization and two types of SES. A federal agency’s level of profes- sionalization is measured by the proportion of professional staff to its total number of employees. Professionalization level measure is consistent with policy problem com- plexity in the current literature (Chun & Rainey, 2005). Both types of SES are captured by the proportion of career and noncareer SESs over the total number of employees

Lim et al. 101

(Lee & Whitford, 2013). Organizational size is measured by the logarithm of the total number of employees of the 32 federal agencies.

To more precisely test the relationship between SHRM and perceptions of mission accomplishment in government, we included control variables at both the organiza- tional and individual levels. At the organizational level, we employed the organiza- tional age and the regulatory status of the federal agencies because these factors can represent the nature of the tasks of the agency, which is significant for that agency’s performance (Chun & Rainey, 2005). With regard to the individual-level control vari- ables, we included transformative leadership (van Wart, 2013) and goal clarity (Ko & Hur, 2014; Whitford, Lee, Yun, & Jung, 2010). Furthermore, job and individual char- acteristics including the workplace (headquarters or field offices), supervisory status, gender, minority, age group, pay category, and years of service were considered (Pitts, 2009). Table 2 shows the descriptive statistics for all the variables used in this study.

In Table 3, the correlation matrix shows that there are statistically significant rela- tionships among the variables. In terms of mission accomplishment, four independent variables showed statistically positive relationships. Among the control variables, minority, noncareer SES, and regulatory status had statistically significant and nega- tive relationships with mission accomplishment, whereas other variables were posi- tively related. In particular, transformative leadership showed moderate relationships with mission accomplishment (r = .67), reward (r = .69), training (r = .65), appraisal (r = .057), and recruitment (r = .55). In addition, organizational size was negatively related with the percentage of career SESs (r = −.64) and noncareer SESs (r = −.63).

Model Estimation and Results

Prior to testing the hypotheses, common source bias should be addressed. Common source bias typically occurs when a study relies on a single survey (Favero & Bullock, 2015). However, our study collected data from multiple sources such as the FEVS 2010, FedScope for human resource characteristics at the organizational level, the U.S. Government Manual for organizational age, and agencies’ regulatory status from the Federal Regulatory Directory. Thus, common source bias was not a concern in this study.

To estimate the effects of SHRM, we employed a stereotype logistic regression (SLR) model, which accounts for a dependent variable with ordered values (Anderson, 1984). The dependent variable in this study—perceived mission accomplishment—is a single survey item, measured by a 5-point Likert-type scale (strongly agree, agree, neither agree nor disagree, disagree, and strongly disagree). We adopted the SLR model for the following three reasons (Whitford et al., 2010): (a) to assess respon- dents’ distinguishability in the nonmonotonic order of the Likert-type categories; (b) to address the violated parallel regression assumption, which was found using a Brant test; and (c) to allow for nonlinear relationships. Our model tested the eight hypotheses listed above together, including control variables at the individual and agency levels. The results of the SLR model are shown in Table 4. The model fits the data well, Wald χ2(19) = 24,013.50, p < .01. We find evidence of ordinality inherent in the mission accomplishment score variable from 1 through 5, as φ2 = .816 (p < .01), φ3 = .681 (p <

102 Public Personnel Management 46(2)

.01), and φ4 = .400 (p < .01), where φ5 = 0 as mission accomplishment and 5 is the reference category and φ1 = 1 for identification (Long & Freese, 2006).

Our results show that all four goal-aligned and performance-based HRM practices positively affect mission accomplishment and are statistically significant: Reward (p < .01), Training (p < .01), Appraisal (p < .01), and Recruitment (p < .01). The SLR model shows positive relationships between the proportion of career SES and mission accomplishment (p < .01) and between organizational size (measured by the number of total employees) and mission accomplishment (p < .01), and negative relationships between the professional level and mission accomplishment (p < .01) and between the proportion of noncareer SES and mission accomplishment (p < .01).

Given that the coefficients of an SLR model cannot directly indicate the effects of a one-unit change in the independent variables (Long & Freese, 2006), Table 5 represents the marginal effects for each type of the four goal-aligned and performance-based HRM practices and the four human resources. The effects for all eight are close to zero for the strongly disagree response. Of the four HRM practices, the marginal effects of

Table 2. Descriptive Statistics.

Variable N M SD Minimum Maximum

Mission accomplishment (DV) 187,900 3.98 0.86 1 5 Rewarda 187,900 5.99 2.10 2 10 Trainingb 187,900 6.90 2.03 2 10 Appraisalc 187,900 7.43 2.12 2 10 Recruitment 187,900 3.27 1.11 1 5 Transformational leadershipd 187,900 13.82 3.81 4 20 Goal clarity 187,900 4.14 0.83 1 5 Workplace (headquarters = 1) 187,900 0.41 0.49 0 1 Supervisory status (supervisory = 1) 187,900 0.32 0.46 0 1 Gender (male = 1) 187,900 0.54 0.50 0 1 Minority (minority = 1) 187,900 0.32 0.47 0 1 Age group 187,900 3.40 1.03 1 5 Pay category 187,900 2.58 0.71 1 4 Years of service 187,900 4.41 1.47 1 6 % of professionals 187,900 28.03 15.41 3.95 69.98 % of career SES 187,900 0.59 0.70 0 5.06 % of noncareer SES 187,900 0.05 0.06 0 .59 Organizational age 187,900 2.17 1.08 1 4 Organizational size (log) 187,900 11.37 1.52 6.89 13.55 Regulatory agency 187,900 0.92 0.27 0 1

Note. DV = dependent variable; SES = senior executive service. aCronbach’s α = .75. bCronbach’s α = .81. cCronbach’s α = .81. dCronbach’s α = .86.

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104 Public Personnel Management 46(2)

recruitment are slightly greater than those for reward, training, and appraisal, which indicates that recruitment has a greater impact on perceived mission accomplishment than the other practices. Of the four human resources, the marginal effects of noncareer SESs, even when negative, are greater than those for professionals, career SESs, and the organizational size, which indicates that noncareer SESs have a stronger impact on mission accomplishment than the other resources. As Lee and Whitford (2013) pointed out, noncareer SESs may allow their agencies to enjoy more political support than other resources, but interruption by external political influence may not be of great help. In addition, the effects of professionals and noncareer SESs on mission accomplishment are negative only for the strongly agree category. Holding all other variables constant, the odds of a more positive perception of mission accomplishment increased for the

Table 4. Stereotype Logistic Regression Model for Mission Accomplishment.

Variables Coefficient Robust SE

Reward 0.117*** .009 Training 0.186*** .009 Appraisal 0.039*** .008 Recruitment 0.608*** .015 Transformational leadership 0.728*** .007 Goal clarity 1.684*** .021 Workplace (headquarters = 1) 0.011 .024 Supervisory status (supervisory = 1) 0.181*** .028 Gender (male = 1) −0.094*** .024 Minority (minority = 1) −0.593*** .026 Age group −0.042*** .013 Pay category 0.069*** .018 Years of service 0.023** .009 % of professionals −0.016*** .000 % of career SES 0.733*** .026 % of noncareer SES −2.159*** .297 Organizational size (log) 0.286*** .013 Organizational age −0.042*** .011 Regulatory agency −0.024 .060 φ1 1 — φ2 .816*** .004 φ3 .681*** .003 φ4 .400*** .002 φ5 0 — Log pseudolikelihood −165,212.58 Wald χ2(df) 24,013.50 (19)*** N 187,900

Note. SES = senior executive service. *p < .10. **p < .05. ***p < .01.

Lim et al. 105

cases with the positive statistically significant predictors of perceived mission accom- plishment (i.e., reward, training, appraisal, recruitment, career SESs, and organizational size) and decreased for the cases with the negative statistically significant predictors of perceived mission accomplishment (i.e., professionals and noncareer SESs; see Table 6). That is, controlling for all other variables constant, the odds of strongly agree versus strongly disagree increased by a factor of 1.124, 1.205, 1.041, 1.838, 2.160, and 1.369 for a one-unit increase in Reward, Training, Appraisal, Recruitment, the proportion of career SESs, and organizational size, respectively, and decreased by a factor of .984 and .158 for a one-unit increase in the professional level and the proportion of noncareer SESs, respectively.

To show how perceptions of mission accomplishment change in a nonlinear pat- tern with respect to each independent variable, we graphed the estimated effects of all eight goal-aligned and performance-based HRM practices and human resources on the five response categories of the mission accomplishment variable (see Figures 1 and 2). The curves represent the changes in the probabilities of the average respon- dent’s answers—strongly agree, agree, neither agree nor disagree, disagree, and strongly disagree—as each measurement of human resource practice and human

Table 5. Marginal Effects.

Variables Strongly agree Agree

Neither agree nor disagree Disagree

Strongly disagree

Reward .007 −.002 −.004 −.001 .000 Training .011 −.003 −.006 −.001 .000 Appraisal .002 −.001 −.001 .000 .000 Recruitment .036 −.010 −.020 −.004 .001 Transformational leadership .043 −.012 −.024 −.005 .001 Goal clarity .099 −.029 −.056 −.012 .002 Workplace (headquarters = 1) .001 .000 .000 .000 .000 Supervisory status

(supervisory = 1) .011 −.003 −.006 −.001 .000

Gender (male = 1) −.006 .002 .003 .001 .000 Minority (minority = 1) −.034 .008 .020 .004 .001 Age group −.002 .001 .001 .000 .000 Pay category .004 −.001 −.002 .000 .000 Years of service .001 .000 −.001 .000 .000 % of professionals −.001 .000 .001 .000 .000 % of career SES .043 −.012 −.025 −.005 .001 % of noncareer SES −.126 .037 .072 .015 .002 Organizational size (log) .017 −.005 −.010 −.002 .000 Organizational age −.002 .001 .001 .000 .000 Regulatory agency −.001 .000 .001 .000 .000

Note. The marginal effects are measured only at the means of the independent variables. SES = senior executive service.

106 Public Personnel Management 46(2)

resource proceeds from its minimum to maximum in specific increments, given that all other variables are at their average. The probabilities assessing mission accom- plishment for disagree and strongly disagree are below .01. For the cases of the posi- tive statistically significant predictors of perceived mission accomplishment (i.e., reward, training, appraisal, recruitment, career SES, and organizational size), we note from the graphical patterns that the estimated probabilities for strongly agree increases as the measured level of each predictor increases, but those for neither agree nor disagree and agree decrease (see a, b, c, and d in Figure 1 and b and d in Figure 2). Compared with these predictors, the respondents shifted from strongly agree to neither agree nor disagree for the cases of the negative statistically signifi- cant predictors of perceived mission accomplishment (i.e., professionals and nonca- reer SESs; see a and c in Figure 2).

Conclusion

In this analysis, we assessed the RBV for studying SHRM in public agencies. We mainly examined the impact of HRM practices and actual human resources on the perception of federal agency mission accomplishment where we considered both HRM practices and actual human resources to be organizational resources in the broad sense. Our results showed that all types of goal-aligned and performance-based HRM practices (including reward, training, appraisal, and recruitment) have positive impacts on an agency’s perceived mission accomplishment. In addition, certain types of actual human resources (such as the percentage of career SESs and the organizational size) contribute to accomplishing an agency’s mission; however, other types (such as the

Table 6. Odds Ratios for the Four Goal-Aligned and Performance-Based HRM Practices and the Four Human Resources Variables Across the Four Comparisons for Perceived Mission Accomplishment.

Category comparisons for perceived mission accomplishment

Strongly agree vs. strongly disagree

Strongly agree vs. disagree

Strongly agree vs. neither agree nor disagree

Strongly agree vs.

agree

Variables OR OR OR OR

Reward 1.124 1.100 1.083 1.048 Training 1.205 1.164 1.135 1.077 Appraisal 1.041 1.033 1.027 1.016 Recruitment 1.838 1.644 1.515 1.276 % of professionals 0.984 0.986 0.989 0.993 % of career SES 2.160 1.876 1.691 1.362 % of noncareer SES 0.158 0.222 0.285 0.478 Organizational size (log) 1.369 1.293 1.239 1.134

Note. OR = odds ratio; SES = senior executive service.

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Lim et al. 109

percentage of professionals and noncareer SESs) make negative contributions to an agency’s perceived mission accomplishment.

As expected, all HRM practices and human resources examined in this study have statistically significant effects on an agency’s perceived mission accomplishment, but the directions of their influences are somewhat different. Specifically, all HRM prac- tices and actual human resources except for noncareer SESs and professionals posi- tively affect the dependent variable. The SES is a corps of federal managers who serve in management positions between Senate-confirmed political appointees and the traditional civil service, consisting of a mixture of career managers and political appointees (Lewis, 2007). The SES aims at improving the quality of individual com- petence and agency performance by allowing experienced senior managers in gov- ernment to be more flexible and mobile within and among agencies (Stillman, 2004), by providing them with separate rewards and punishment systems for achievements, and by providing them with enhanced chances for personal development and profes- sional certification (Perry & Miller, 1991). The SES’s considerable knowledge, expe- rience, ability, and skill can lead to sustainable competitive advantage and better performance. Nonetheless, contrary to our expectations, the percentage of noncareer SESs has a negative impact on an agency’s perceived mission accomplishment. One possible explanation for this result is that even when noncareer SESs have sufficient experience and expertise, agencies with politically appointed SES members often experience greater turnover, and this higher turnover can lead to ambiguous agency goals, leadership vacuums, difficulties committing to reform, and poorer performance (Heclo, 1977; Lewis, 2007). Therefore, if noncareer SES members are appointed to certain government agencies, the length of their terms should be long enough to avoid such turnover. In addition to turnover, the negative effect of noncareer SESs may reflect overseers who are put into place to actually prevent success. In the case of professionalization, which was measured by the proportion of professional staff to each federal agency’s total number of employees, the negative relationship between the professionals and the agency’s managerial effectiveness may result from the pos- sibility that professional accountability cannot be fully demonstrated due to bureau- cratic accountability even if professionals have autonomy, intellectual authority, and independence, as we have learned from the space shuttle Challenger disaster. Another possibility is that the complexity of wicked policy problems that public agencies should address is much higher than expected and requires more professional compe- tency and skills than expected.

We intended to investigate the differential effects of a variety of human resources on the perceived mission accomplishment and expected that both the SHRM practices and actual human resources would have positive impacts on perceived mission accomplish- ment, based on the RBV. However, unlike the RBV, the results showed that some human resource variables such as the percentage of professionals and noncareer SESs are not contributive factors to mission accomplishment, whereas others have positive impacts. We believe that this finding suggests two practical implications. First, various human resources variables may have relatively differential effects on perceived mission accom- plishment and SHRM practices have more positive impacts on perceived mission

110 Public Personnel Management 46(2)

accomplishment than actual human resources. In particular, public organizations need to advance further their current performance-related practices like reward and appraisal as well as personnel practices such as recruitment and training. It would imply that the mat- ter is not about how to acquire resources, but about how to use them. Second, the finding on noncareer SESs may refute general belief that political support is a critical resource that enhances the performance of public organizations. Rather, it indicates that interven- tions by political appointees hinder public agencies from accomplishing their mission. Future studies need to investigate the reasons and find the answers to the question why and how political support would be a threat to the performance.

Finally, we would like to note the limitation of this study. We used the 2010 FEVS data for the analysis. As you may guess, this data set is a kind of secondary data that are not customized for our study. Therefore, we want to be clear that our measures may not be perfect even though we conducted factor analysis and reliabil- ity check. In addition, we note that the external recession forces that may affect public agencies’ performance during 2007-2010 cannot be controlled in this study even if they are overlapped with the time of the 2010 FEVS as we do not use the time series or panel data.

Appendix

Measurement for All Variables.

Dependent variable Mission accomplishment My agency is successful at accomplishing its mission. Independent variables Reward Promotions in my work unit are based on merit.

Pay raises depend on how well employees perform their jobs.

Training My training needs are assessed. How satisfied are you with the training you receive for your

present job? Recruitment My work unit is able to recruit people with the right skills. Appraisal My performance appraisal is a fair reflection of my

performance. In my most recent performance appraisal, I understood

what I had to do to be rated at different performance levels (e.g., Fully Successful, Outstanding).

Professionals (%) The percentage of professional staff over the total number of employees of an agency.

Career SES (%) The percentage of career SES members over the total number of employees of an agency.

Noncareer SES (%) The percentage of noncareer SES members over the total number of employees of an agency.

Total employees The logarithm of the total employees of an agency.

(continued)

Lim et al. 111

Control variables Transformational

leadership I feel encouraged to come up with new and better ways of

doing things. Employees have a feeling of personal empowerment with

respect to work processes. In my organization, leaders generate high levels of

motivation and commitment in the workforce. My organization’s leaders maintain high standards of honesty

and integrity. Goal clarity I know how my work relates to the agency’s goals and

priorities. Workplace Where do you work?

0 = field 1 = headquarters

Supervisory status What is your supervisory status? 0 = nonsupervisor/team leader 1 = supervisor and manager/executive

Gender Are you: 0 = female 1 = male

Minority Are you: 0 = nonminority 1 = minority

Age group What is your age group? 1 = 29 and younger 2 = 30-39 3 = 40-49 4 = 50-59 5 = 60 or older

Pay category What is your pay category/grade? 1 = Federal wage system 2 = GS 1-12 3 = GS 13-15 4 = SES/SL/ST/Other

Years of service How long have you been with your current agency (e.g., Department of Justice, Environmental Protection Agency)?

1 = less than 1 year 2 = 1 to 3 years 3 = 4 to 5 years 4 = 6 to 10 years 5 = 11 to 20 years 6 = more than 20 years

Regulatory status 0 = nonregulatory agency, 1 = regulatory agency Organizational age 1 = 1 to 49 years, 2 = 51 to 99 years,

3 = 100 to 149 years, 4 = more than 150 years

Note. SES = senior executive service; GS = general schedule; SL = senior level; ST = scientific and technical.

Appendix (continued)

112 Public Personnel Management 46(2)

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, author- ship, and/or publication of this article: This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2015S1A5A8010552).

Notes

1. Grant (1991) regarded human resources as intangible resources; however, we would like to take a step forward to divide human resources into human resource management (HRM) practices and actual human resources. In addition, we think that HRM practices, which are related to the organizational culture, may be much less observable than the actual human resources.

2. This paragraph is based on articles such as Daley (2002); Klingner, Nalbandian, and Llorens (2010); Mello (2011); and Pynes (2013).

3. One may note that there is a variety of training programs and some of them (e.g., training for ethical issues and moral behaviors) may not be directly related to an organization’s mission. This may make sense, but we think that programs related to ethical issues or moral behaviors may have indirect effects on public employees’ perceptions and behaviors, which may result in better mission accomplishment.

4. Law (5 U.S.C. 3133) requires the Office of Personnel Management (OPM) to allocate spaces to agency heads on a biennial cycle. Therefore, this may cause limited variation in number of senior executive service members (SESs). However, we used the concept of currently employed SESs, rather than the quota concept. In addition, we used the percent- age of career SESs and the percentage of noncareer SESs in the total number of full-time employees to mitigate the limited variation problem.

5. See http://www.fedscope.opm.gov 6. Department of Agriculture, Department of Commerce, Department of Defense, Department

of Education, Department of Energy, Department of Health and Human Services, Department of Homeland Security, Department of Housing and Urban Development, Department of the Interior, Department of Justice, Department of Labor, Department of State, Department of Transportation, Department of the Treasury, Department of Veterans Affairs, Agency for International Development, Broadcasting Board of Governors, Environmental Protection Agency, Equal Employment Opportunity Commission, Federal Communication Commission, Federal Trade Commission, General Services Administration, National Aeronautics and Space Administration, National Archives Records Administration, National Labor Relations Board, National Science Foundation, Nuclear Regulatory Commission, OPM, Small Business Administration, Social Security Administration, Court Service and Offender Supervision Agency, Securities and Exchange Commission.

7. We conducted a confirmatory factor analysis for these seven survey items and confirmed that four strategic human resource management (SHRM) practices variables have validity.

http://www.fedscope.opm.gov

Lim et al. 113

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Lim et al. 117

Author Biographies

Seunghoo Lim is an assistant professor in the Public Management and Policy Analysis Program at the International University of Japan. His specializations are policy process and analysis. His research has appeared or is forthcoming in refereed journals, including Journal of Public Administration Research & Theory (JPART), VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, and Public Administration & Development.

Tae Kyu Wang is a research professor in Department of Social Welfare and research fellow for Institute for Healthcare and Life Science at Catholic Kwandong University. He received his PhD in public administration from Florida State University. His research interests include pub- lic and nonprofit management, performance management, and organizational theory and behavior.

Soo-Young Lee is an associate professor in the Graduate School of Public Administration and research fellow of Korea Institute of Public Affairs at Seoul National University. Among his main research interests are public personnel administration, organization theory, and organiza- tional behavior. His recent research can be found in journals such as JPART and Administration & Society.

Chapter 2 What Every Public Sector Human Resource Manager Should Know About the Constitution

David H. Rosenbloom American University Joshua Chanin San Diego State University

Constitutional law is central to public human resource management (PHRM) at all levels of American government. Judicial branch interpretation of constitutional law regulates in one way or another merit examinations, recruitment, selection, training, promotions, affirmative action and diversity efforts, drug testing, and disciplinary procedures. These court decisions are not just another concern to be balanced among the many competing pressures that public managers face; they form the basis of our public administration and are central to its operation. Because public administrators take an oath to support the Constitution, the values embodied in constitutional law decisions are ethical and normative guides for the exercise of administrative discretion (Rohr 1978, 1986). If individual administrators or local governmental agencies violate the constitutional rights of applicants or employees, they are subject to legal action and may be held liable for monetary damages. Consequently, public human resource managers are expected to maintain a sophisticated knowledge of constitutional law. This chapter explains the basic structure underlying current constitutional doctrine and reviews the leading cases in the areas of greatest concern to today’s PHRM. The following eight sections will rely on an up-to-date survey of relevant case law to familiarize those interested in PHRM with the application of the U.S. Constitution’s First, Fourth, Fifth, and Fourteenth Amendments to public employment; as well as with the structure of public administrators’ potential liability for constitutional torts arising out of breaches of their subordinates’ or others’ constitutional rights. The chapter concludes with a brief summary of these constitutional concepts and a few examples of the critical role constitutional law plays in maintaining the integrity of our public administration.

Constitutional Doctrine

Constitutional law has not always been central to the operation of our public administrative agencies. As surprising as it may seem, prior to the 1950s public employees in the United States had very few federally protected constitutional rights, and even less of an ability to assert these rights effectively within the framework of their employment. These public positions were governed by the “doctrine of privilege,” a constitutional reasoning that held that because public employment was a privilege rather than a right, it could be offered on almost any terms the governmental employer saw fit, no matter how arbitrary. Not having a right to a position in the public service, the employee, upon dismissal, lost nothing to which he or she was entitled. As Justice Oliver Wendell Holmes made clear in an early case establishing the constitutionality of disciplining public employees for the content of their speech, “The petitioner may have a constitutional right to talk politics, but he has no constitutional right to be a policeman” ( 1892: 220).McAuliffe v. New Bedford Under this approach, the Constitution failed to provide public employees and applicants with the very basic protections enjoyed by private citizens.

Although the doctrine of privilege had a certain logic, it also ignored the realities of citizens’ interactions with government in the modern administrative state. If the Constitution did not protect public employees and applicants fired or denied jobs for virtually any reason, would not the same principle apply to other kinds of privileges, such as welfare benefits, government contracts, passports, public housing, drivers’ licenses, and so forth? Could those be denied, as public employment sometimes was, partly because the individual favored racial integration, read Tom Paine or , failed to attend church services, or engaged in aThe New York Times host of nonconformist and unconventional activities (Rosenbloom 2014: 119–122)? To the extent that “big government” creates a dependency of the people on government benefits, which were considered privileges, strict adherence to the doctrine of privilege would enable government to attach conditions to their receipt that

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could undermine recipients’ constitutional rights. For instance, eligibility for unemployment benefits could require one to be willing to work on Saturday in violation of her constitutional right to free exercise of religion ( 1963).Sherbert v. Verner

Notwithstanding a variety of twists and turns in the development of case law since the 1950s, the courts eventually developed an alternative method for analyzing the constitutional rights of public employees. The fundamental underlying premise is that “the government’s interest in achieving its goals as effectively and efficiently as possible is elevated from a relatively subordinate interest when it acts as sovereign [dealing with citizens] to a significant one when it acts as employer. The government cannot restrict the speech of the public at large just in the name of efficiency. But where the government is employing someone for the very purpose of effectively achieving its goals, such restrictions may well be appropriate” (Waters v. Churchill 1994: 675). The contemporary approach, generally termed the “public service model,” calls on judges to balance four often competing concerns: (1) the public employee’s or applicant’s interests as a member of the political community in exercising constitutional rights and enjoying constitutional protection from arbitrary, discriminatory, or repressive treatment by the governmental employer; (2) the government’s interest as an employer in having an efficient and effective workforce; (3) the public’s interest in the operation of public administration and government more generally; and (4) the judiciary’s interest in avoiding undue involvement in day-to-day PHRM decisions ( 1984; 2006;Harvard Law Review Garcetti v. Ceballos Rosenbloom 2014: 149–152).

Importantly, depending on the specific circumstances, the public’s interest can coincide with either that of the employee or the government. For instance, the public shares a strong interest in robust First Amendment protection of whistle-blowers who alert the media to gross governmental mismanagement or government-created or -abetted dangers to the community’s health or safety. Conversely, the government and the public share an interest in having very limited constitutional constraints on the dismissal of inefficient, dishonest, or unreliable civil servants. It is important to note that under the public service model all public employees can assert some of the rights they have as citizens or legal residents against their governmental employers. Consequently, the term is a misnomer in the public sector. It refers toat-will employment employees who lack a property right or interest in their positions (e.g., those who lack civil service protections against arbitrary treatment). Such employees have no constitutional procedural due process protections against dismissals or other adverse actions for ordinary work-related causes, such as inefficiency or insubordination. However, due process also applies to liberty interests and public employees retain First, Fourth, Fifth, and Fourteenth Amendment rights to some degree of freedom of speech, association, and exercise of religion, privacy, and equal protection of the laws.

Despite its imperfections, the public service model is certainly an advance over less complicated approaches such as the doctrine of privilege. However, because this approach requires a subjective and often elaborate balancing of the interest of employees, government, and the public, reasonable judges and human resource managers will often disagree on what the Constitution requires in specific circumstances. Judicial decision making under the public service model not only has the potential to cause disagreement; it can also generate constitutional decisions that are difficult to follow and apply to specific personnel decisions. As then Supreme Court Justice, and later Chief Justice, William Rehnquist noted:

This customary “balancing” inquiry conducted by the Court . . . reaches a result that is quite unobjectionable, but it seems to me that it is devoid of any principles which will either instruct or endure. The balance is simply an ad hoc weighing which depends to a great extent upon how the Court subjectively views the underlying interests at stake. ( 1985:Cleveland Board of Education v. Loudermill 562)

Rehnquist was specifically addressing procedural due process issues involved in the dismissal of a municipal employee. Much the same can be said of judicial decision making regarding free speech and other areas under the public service model, as is demonstrated by the following review of the contemporaryC

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constitutional law of public personnel.

Freedom of Speech

Rankin v. McPherson (1987) outlines the current approach for analyzing public employees’ constitutional rights to nonpartisan free speech. Ardith McPherson was a nineteen-year-old probationary clerk in the office of Constable Rankin in Texas. While talking with a coworker (who was apparently also her boyfriend) shortly after the assassination attempt on President Ronald Reagan, she remarked, “Shoot, if they go for him again, I hope they get him” (322). Another office employee overheard her remark and reported it to Constable Rankin, who fired McPherson after she admitted making the comment. Believing that the dismissal violated her right to free speech under the First and Fourteenth Amendments,1 McPherson sued for reinstatement, back pay, and other relief. In analyzing the case, the Supreme Court’s majority noted that “even though McPherson was merely a probationary employee, and even if she could have been discharged for any reason or for no reason at all, she may nonetheless be entitled to reinstatement if she was discharged for exercising her constitutional right to freedom of expression” (324). This is an example of why so-called at-will employment is an inapt term in contemporary PHRM.

The Court went on to explain the logical structure of public employees’ right to free speech, beginning with whether the employee’s remark touched on a matter of public concern (that is, of potential interest to the public). If a remark relates to a matter of public concern, it is considered of value to the public’s informed discussion of government and public policy. Such comments are part of the free marketplace of ideas that is vital to the operation of our constitutional democracy. By contrast, statements of purely private concern, such as what one employee thinks of another’s personality, intelligence, or clothes, are afforded minimal (if any) protection when they interfere with the proper functioning of government offices.

In , a 5–4 majority concluded that McPherson’s remark touched upon a matter of public concern. ItRankin had been made in the context of a discussion of Reagan’s policies, and McPherson, an African American, apparently offered it as a way of punctuating her disdain for the administration’s approach to minorities.2 Next, upon determining that McPherson’s comment touched on a matter of public concern, the Court proceeded with the balancing required by the public service model. When weighing the government’s interest in discharging an employee for statements that somehow undermine the mission of the public employer, courts must consider the responsibilities of the employee within the agency. An employee’s burden of caution and responsibility for the words he or she speaks will vary with the extent of authority and interaction with and accountability to the public that the employee’s role entails. Where, as in McPherson’s case, “an employee serves no confidential, policymaking, or public contact role,” the potential harm to the public office due to that employee’s private speech is minimal and is outweighed by the employee’s First Amendment rights (328).

Public employees’ free speech protections include a right to “whistle-blow,” which generally involves alerting elected officials or the public to gross waste, fraud, abuse, mismanagement, or specific government-created or abetted dangers to the health, security, or safety of the community. The Supreme Court has reasoned that due to their positions inside government, public employees are sometimes uniquely able to contribute to the “free and open debate, which is vital to informed decision-making by the electorate” and “accordingly it is essential that they be able to speak out freely without fear of retaliatory dismissal” (

1968: 571–572).Pickering v. Board of Education

A public employee’s First Amendment protection for whistle-blowing and speaking out about their agencies’ decision making and performance was narrowed by the Court’s decision in (2006).Garcetti v. Ceballos There, the Court held that the First Amendment does not protect public employees’ speech made pursuant to their professional duties, regardless of whether the content of the remarks is deemed a matter of public concern. In the 5–4 holding, the Court’s conservative majority conjured up the doctrine of privilegeGarcetti in determining that “Restricting speech that owes its existence to a public employee’s professional responsibilities does not infringe any liberties the employee might have enjoyed as a private citizen. It simplyC

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reflects the exercise of employer control over what the employer itself has commissioned or created” ( 2006: 421–422). In short, a public employee’s expression as part of his or her Garcetti v. Ceballos work

does not enjoy First Amendment protection.3product

The Court’s majority opinion in drew a confusing distinction between the rights of individuals asGarcetti public employees and as citizens: “refusing to recognize First Amendment claims based on government employees’ work product does not prevent them from participating in public debate. The employees retain the prospect of constitutional protection for their contributions to the civic discourse. This prospect of protection, however, does not invest them with a right to perform their jobs however they see fit” (Garcetti v.

2006: 422). This seems to suggest that whistle-blowers have more constitutional protection in theirCeballos role as private citizens than they do as public employees. In other words, an employee garners more First Amendment protection if he or she raises a concern through external channels such as the media rather than through the professional chain of command or other internal channels established to protect whistle-blowers. Furthermore, rather than relying on the First Amendment to shield them from retaliatory action, the Court urged public employees who whistle-blow to familiarize themselves with and rely on protective statutes, such as the federal Civil Service Reform Act of 1978, as well as relevant state and local statutory provisions. If a statement is covered by the terms of such statutes, it is automatically considered a matter of public concern and the government is prohibited from retaliating, regardless of how disruptive the comments may be.

In (2014: 2), the Court attempted to further clarify the holding by drawing aLane v. Franks Garcetti distinction between work product speech and “speech [on a matter of public concern] that simply relates to public employment or concerns information learned in the course of public employment,” which continues to enjoy constitutional protection. In practice, however, distinguishing between speech that is part of a work assignment and speech resulting from something learned on the job is sometimes likely to be difficult. Consequently, public sector human resource managers should be cautious in applying the and Garcetti

rulings.Franks

Public employees’ constitutional right to free speech does not extend to partisan management or campaigning. In the Supreme Court’s view, the governmental interests in workplace efficiency and the appearance of partisan neutrality outweigh the damage that governmental restrictions on political activity do to public employees’ rights. Such measures also protect civil servants from being coerced by elected and politically appointed officials to support parties and candidates ( 1947; United Public Workers v. Mitchell

1973). The Court has given wide berthCivil Service Commission v. National Association of Letter Carriers to governmental employers in this policy area by allowing considerable flexibility in the drafting of restrictions ( 1973).Broadrick v. Oklahoma

Of course, the fact that political neutrality regulations are apt to be constitutional does not mean that governments will choose to impose them. The trend has been away from comprehensive restrictions on public employees’ participation in partisan activities. For example, the 1993 Federal Hatch Act reform modified a variety of restrictions, some of which reached back to the early 1900s (see Rosenbloom 1971: 94–110). The Hatch Act reforms allow most federal employees to distribute partisan campaign literature, make speeches, hold offices in political organizations, stuff envelopes with campaign literature, make phone calls as part of a partisan political campaign, and solicit votes (though not funds). The amended law does not extend to members of the Senior Executive Service, however, and exempts some agencies, including the Merit Systems Protection Board, and positions, such as Administrative Law Judge, on grounds that overt partisanship would undermine their missions or functions. The Hatch Act Modernization Act of 2012 reduced restrictions on state and local employees’ right to run for partisan office and exempted District of Columbia employees from many of the Hatch Act restrictions previously applying to them. The federal Office of Special Counsel receives complaints of violations of the Hatch Act and provides advisory opinions on its application.

Can whistle-blowing and related speech on matters of public concern always be distinguished from partisan expression? The answer is clearly no, but the Supreme Court has yet to be confronted with the need to create a legal distinction between them. In terms of PHRM, therefore, some uncertainty remains in this area,

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especially during electoral campaign periods.

Applying the public service model to employees’ speech can sometimes be further complicated by disputes over the exact content of the remarks at issue. In cases where the interpretations of speakers and bystanders differ, the public employer is permitted to act on what it reasonably believes was said, even in the absence of substantial evidence. The Supreme Court case law requires merely that the employer take reasonable steps to find out what the employee may actually have said. However, the Court’s guidance in this area has been exceptionally vague: “only procedures outside the range of what a reasonable manager would use may be condemned as unreasonable” ( 1994: 678).Waters v. Churchill

It is clear that the Supreme Court has given public human resource administrators much to think about regarding the scope of public employees’ constitutionally protected speech. In sum, the following must be considered: What did the employee actually say? Were the remarks on a matter of public concern? Were they made pursuant to an employee’s official duties as opposed to being based on something that he or she may have learned on the job? What was the specific context in which they were uttered? What is the nature of the employee’s position with reference to confidentiality, policy making, and public contact? What is the relative value of the remarks to the public discourse? How great are the remarks’ potential for disruption? To these factors must be added others from earlier case law, including whether the speech involves prohibited political partisanship, suggests disloyalty to the United States, or is so without foundation that the employee’s basic competence is called into question. Under the circumstances, it is not surprising that the Supreme Court admits, “competent decision-makers may reasonably disagree about the merits of a public employee’s First Amendment claim” ( 1983: note 7).Bush v. Lucas

Freedom of Association

The contemporary constitutional law regarding public employees’ First Amendment right of freedom of association is also central to some aspects of PHRM. In general, public employees’ right to join organizations voluntarily (including political parties, labor unions, and even extremist racist and other antisocial groups) is well established, as is their right to refrain from associating with or supporting organizations (AFSCME v.

1969; 1966; 1960 1976; Woodward Elfbrandt v. Russell Shelton v. Tucker ; Elrod v. Burns Abood v. Detroit 1977). However, two areas of PHRM that have been specifically “constitutionalized” inBoard of Education

this context should be noted.

First, it is possible for union security agreements to violate public employees’ constitutionally protected freedom not to associate; no public employee can be required to join a union as a condition of holding his or her job. However, an agency shop is permitted: This arrangement requires nonunion members to pay a “counterpart” or “fair share” fee to the union that represents their collective bargaining unit. In Abood v.

(1977) the Supreme Court “rejected the claim that it was unconstitutional for aDetroit Board of Education public employer to designate a union as the exclusive collective-bargaining representative of its employees, and to require nonunion employees . . . to pay a fair share of the union’s cost of negotiating and administering a collective bargaining agreement” ( 1986: 243–244). But the Court alsoChicago Teachers Union v. Hudson held that “nonunion employees do have a constitutional right to ‘prevent the Union’s spending a part of their required service fees to contribute to political candidates and to express political views unrelated to its duties as an exclusive bargaining representative’” ( 1986: 244).Chicago Teachers Union v. Hudson

Certain procedural safeguards accompany a public employee’s First Amendment protection against being compelled to underwrite a union’s political agenda. In the Supreme Court’s words, “the constitutional requirements for the Union’s collection of agency fees include an adequate explanation of the basis for the fee, a reasonably prompt opportunity to challenge the amount of the fee before an impartial decision maker, and an escrow account for the amounts reasonably in dispute while such challenges are pending” (Chicago

1986: 249). In (2012), theTeachers Union v. Hudson Knox v. Service Employees International Union Supreme Court added the requirement that “when a public-sector union imposes a special assessment or dues increase,” as opposed to annual dues, “the union must provide a fresh . . . notice [to nonmembers in theC

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bargaining unit] and may not exact any funds from nonmembers without affirmative consent” (Knox v. 2012: 22). In other words, with special assessments and increases, theService Employees International Union

nonmember employees must have the opportunity to before the union can deduct funds from theiropt in paychecks rather than to opt out afterward. strengthens public employees’ First Amendment right not toKnox be compelled to support causes that they oppose. Undoubtedly, though, it will make it more difficult for unions to raise funds to oppose unforeseen political initiatives, such as efforts to reduce public employees’ compensation to limit state or local governmental budgetary shortfalls.

Second, beginning with its holding in (1976), the Court began to establish substantialElrod v. Burns constitutional barriers to the use of political partisanship in public personnel decisions. was triggeredElrod when the newly elected sheriff of Cook County, Illinois, fired or threatened to dismiss sheriff’s office employees who were not members of or sponsored by the Democratic Party. The employees bringing the suit were all Republicans holding non-civil service positions and had no statutory or administrative protection against arbitrary discharge. The Court held for the first time that patronage dismissals could violate public employees’ freedom of association and belief. However, it was divided and unable to form a majority opinion on the standard that the government must meet when dismissing someone based on partisan affiliation.

Four years later, in (1980), the Court revisited the issue of patronage dismissals. TwoBranti v. Finkel employees of the Rockland County, New York, Public Defenders Office were dismissed solely due to their affiliation with the Republican Party. The Court’s majority now agreed that “the ultimate inquiry is not whether the label ‘policy maker’ or ‘confidential’ fits a particular position; rather, the question is whether hiring authority can demonstrate that party affiliation is an appropriate requirement for the effective performance of the public office involved” (518). This standard places a heavy burden of persuasion on elected officials and political appointees who would dismiss employees based on their partisan affiliation.

The next patronage case to reach the Supreme Court was (1990). TheRutan v. Republican Party of Illinois governor of Illinois ordered a hiring freeze prohibiting state officials from filling vacancies, creating new positions, or recalling furloughed employees without his “express permission.” About 5,000 positions became open annually and several employees who were denied promotions, transfers, or recalls charged that the governor was “operating a political patronage system” by granting permission to fill openings only with employees having “Republican credentials” (62, 67). The Court held that “the rule of and Elrod Branti extends to promotion, transfer, recall, and hiring decisions based on party affiliation and support” (79). Accordingly, for most intents and purposes, partisanship is an unconstitutional justification for taking public personnel actions.

In reaching these decisions regarding public employees’ freedom of association, the Supreme Court considered the various claims that union security arrangements strengthen labor-management relations and that patronage promotes democracy and loyalty to elected officials, as well as governmental efficiency. However, using the public service model, the Court concluded that these interests could be secured by means that were less invasive of public employees’ First Amendment rights. The patronage cases illustrate that constitutional law is forever changing and that even “a practice as old as the Republic” may eventually succumb to new constitutional thinking ( 1976: 376).Elrod v. Burns

Privacy

The Fourth Amendment affords protection to private individuals against “unreasonable” government searches and seizures. Traditionally, courts have addressed Fourth Amendment issues in the criminal justice context. During the 1980s, however, as drug testing became common practice, the scope of the amendment’s application to public employees emerged as an important issue in PHRM. In law enforcement cases, the amendment requires that searches and seizures be pursuant to warrants, or, where these are impracticable, probable cause (reasonable suspicion that an individual is engaged in criminal wrongdoing). In applying the public service model, courts have construed the Fourth Amendment to permit government employers to meet a much lower standard to justify administrative (non-law enforcement) searches. Consistent with the publicC

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service model, this lower threshold both manifests and facilitates the government’s significant interest in the performance of its employees and the efficiency of its agencies.

In (1987), a divided Supreme Court held that “individuals do not lose FourthO’Connor v. Ortega Amendment rights [against unreasonable government searches and seizures] merely because they work for the government instead of a private employer” (723). The justices also agreed that the relevant threshold question is whether the employee has a reasonable expectation of privacy in the workplace. Such an expectation is defined as one that, according to the courts, society is prepared to share. If there is no reasonable expectation of privacy, then the search will not violate the Fourth Amendment. If there is such an expectation, then the search must be reasonable in its inception and scope. In practice, this approach often requires that judges analyze cases individually on their own merits rather than according to broad principles.

requires that workplace searches of offices, desks, files, and so forth be based on a reasonable O’Connor suspicion that an employee may have engaged in behavior for which discipline would be appropriate.

In (2010), the Supreme Court extended ’s logic to the “electronic sphere”City of Ontario v. Quon O’Connor (760). The extent to which a governmental employer can obviate its employees’ Fourth Amendment protections against administrative searches through policy statements regarding expectations of privacy remains uncertain. In , Ontario’s “Computer Policy stated that ‘[u]sers should have no expectation ofQuon privacy or confidentiality when using’ City computers” (758). Whether that policy extended to Quon’s text messaging was in dispute. However, the Court held that even if Quon had a reasonable expectation in his texting, the City’s search of his messages was reasonable in its inception and scope because “a reasonable employee would be aware that sound management principles might require the audit of messages to determine whether . . . pager[s] [were] being appropriately used” (762). While ruling against based onQuon the specific facts of the case, the Court left open the issue of when, if ever, public employees might have a reasonable expectation of privacy in their use of government owned computers, pagers, and other electronic devices because “[a] broad holding concerning employees’ privacy expectations vis-à-vis employer-provided technological equipment might have implications for future cases that cannot be predicted” (760).

The Supreme Court has also held that in certain cases where the “special needs” of the government outweigh the privacy rights of individuals, public employers may conduct warrantless searches, even in the absence of a reasonable suspicion that an employee has engaged in wrongdoing. In most of these situations, the government’s interests (as well as the public’s) are asserted through suspicionless drug-testing programs, which randomly test certain public employees, regardless of whether there is a reasonable basis for believing that any of these employees use illegal drugs. For example, in Skinner v. Railway Labor Executives

(1989), the Court held that the Federal Railroad Administration (FRA) may subject certainAssociation railroad employees, although working for private corporations, to random, suspicionless blood and urine tests for the presence of drugs or alcohol. The Court reasoned that the government’s legitimate interest in protecting its citizens from railroad employees under the influence of alcohol or drugs significantly outweighed the Fourth Amendment privacy interests of the employees. In National Treasury Employees

(1989), the Court extended this rationale to those public employees who carry firearms orUnion v. Von Raab are engaged in drug interdiction. Accordingly, the Court noted that such employees have a reduced expectation of privacy “by virtue of the special, and obvious, physical and ethical demands of those positions” (711). HIV and other health-related testing programs present similar legal issues. In this context, blood- and urine-testing regimes must be reasonable in terms of purpose and procedure. However, as such practices become more common it is increasingly difficult for employees and applicants to claim that they violate a reasonable expectation of privacy (see, e.g., 1989).Fowler v. New York

Further, anyone engaged in law enforcement, public safety, and national security positions can be subjected to a reasonably designed suspicionless drug-testing program. Public human resource managers should remember that such testing programs are only for administrative objectives, such as greater cost-effectiveness, safety, health, and productivity. Searches for potential criminal punishment require warrants or probable cause, without which evidence generated by them usually may not be used as a basis for prosecution.

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Liberty

The broad issue of public employees’ constitutional liberty has also been the subject of significant litigation. This area of jurisprudence, called , focuses on the meaning of the word in thesubstantive due process liberty Fifth and Fourteenth Amendments, which respectively prohibit the federal government and states (and their political subunits) from depriving anyone within their jurisdictions of life, liberty, or property without due process of law. Courts have interpreted the due process clause to include those fundamental rights that are “implicit in ordered liberty” and are “deeply rooted” in our society’s history and traditions. Many of these rights, including, for example, the right to use contraception or the right to travel, are not mentioned explicitly in the text of the Constitution.

It is common, even natural, for government employers to exercise control over public employees, particularly where matters of public policy, workplace efficiency, and employee morale are concerned. To this end, Senator Sam Ervin found that in the 1960s public employees were requested “to lobby in local city councils for fair housing ordinances, to go out and make speeches on any number of subjects, to supply flower and grass seed for beautification projects, and to paint other people’s houses” (United States Senate 1967: 9). Today, it is more common for federal employers to pressure employees to participate in blood drives, charitable campaigns, and similar programs. A court will deem such conditions unconstitutional only if they are found to violate an employee’s fundamental rights, or if the court determines the conditions to be nothing more than tenuously connected to the interests of the government (see United States v. National Treasury

1995). The liberty interests of public employees have the potential to affect governmentEmployees Union employment practices, but to date have not done so significantly. Public employees’ reproductive decisions are an exception; their grooming preferences and residency requirements illustrate the general tendency.

Cleveland Board of Education v. LaFleur (1974) focused on the constitutionality of a policy requiring mandatory, unpaid maternity leave for public school teachers. The Court found the mandatory leave policy unconstitutionally restrictive, but used language broad enough to provide protection for public employees’ reproductive choices. The Court stated that it “has long recognized that freedom of personal choice in matters of marriage and family life is one of the liberties protected by the Due Process Clause of the Fourteenth Amendment” and that “there is a right ‘to be free from unwarranted governmental intrusion into matters so fundamentally affecting a person as the decision whether to bear or beget a child’” (639).

In the Court’s view, the liberty to bear children must remain free of undue or purposeless governmental interference. Choices with regard to grooming and residence have been given lesser protection. In Kelley v.

(1976) the Court found no constitutional barrier to grooming regulations applying to male policeJohnson officers. Although a lower court held that “choice of personal appearance is an ingredient of an individual’s personal liberty” (241), the Supreme Court placed the burden of persuasion on the employee challenging the regulation to “demonstrate that there is no rational connection between the regulation . . . and the promotion of safety of persons and property” (247). The challengers were unable to do this despite the government’s questionable rationale: The government claimed that the grooming standards would make the police more readily identifiable to the public (ignoring, apparently, that police officers wear uniforms) and that they would promote esprit de corps, despite the police union’s vehement opposition to them.

Finally, in (1976), the Court upheld the constitutionalityMcCarthy v. Philadelphia Civil Service Commission of residency requirements for firefighters. It did so without much discussion and in the face of petitioner McCarthy’s rather compelling concern for the well-being of his family. The decision remains good law and, consequently, public employees can be required to live within the jurisdictions in which they work or a specified distance from it. Though these issues are not frequently litigated and are no longer capturing headlines, the principles are still very much alive in current constitutional jurisprudence; public sector human resource managers should understand and follow the law established in this line of cases.

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1. 2.

Contemporary equal protection analysis under the Fourteenth and Fifth Amendments is of critical importance to PHRM. Equal protection doctrine regulates government affirmative action policies, procedures having a disparate impact on different social groups, and overt discrimination against individuals based on race, ethnicity, citizenship, gender, age, and other factors. The threshold question in an equal protection inquiry is whether a law, policy, decision, custom, or practice classifies individuals according to some characteristic such as race, gender, wealth, residency, or education. Such categorizations—either explicit or implicit—must be present in order to justify an equal protection challenge.

What distinguishes an actual classification, such as one created by law, from practices that are ostensibly neutral but have a disparate impact on different categories of people, such as racial groups or males and females? The Court addressed that difference in (1976), a case in which unsuccessfulWashington v. Davis candidates for the Washington, DC, police academy sued on grounds that the department’s use of an exam testing verbal skills, which African Americans failed disproportionally, amounted to a racially discriminatory hiring practice. In finding for the police department, the Supreme Court made clear that public human resource practices that appear neutral on their face but bear more harshly on one racial group than another, as has often been the case with merit examinations, will not be unconstitutional simply because of their disparate impact. To violate the equal protection clause, public practices must manifest a discriminatory purpose of some kind. The Court emphasized that such a purpose need not be “express or appear on the face of the statute” and made clear that it could be “inferred from the totality of the relevant facts” (Washington v.

1976: 241–242). Such implicit classifications are treated identically to explicit ones. Once they haveDavis determined that a classification exists, courts rely on a three-tiered structure to determine its constitutionality. What follows is a brief description of this framework, with a particular focus on the application of each tier in the context of PHRM.

Suspect Classifications

Courts consider legal classifications based on race or ethnicity as “suspect,” or highly likely to violate equal protection principles. These suspect classifications, historically employed to disadvantage members of minority groups, can be very difficult for governments to justify. Reviewing courts subject laws that create suspect classifications to “strict scrutiny,” the most intense and exacting form of judicial review. In these cases, the government will bear a heavy burden of persuasion and receive little if any deference. Courts deem suspect classifications constitutional only if they are found to serve a compelling governmental interest and are “narrowly tailored” to achieve that purpose. To date, workforce diversity has not been considered a compelling governmental interest by the Supreme Court.4 Affirmative action for members of minority groups may be viable if its purpose is to remedy past, proven discrimination against racial or ethnic groups. The leading case in this area is (1987), in which a federal judge imposed hiring andUnited States v. Paradise promotion quotas for African Americans in the Alabama Department of Public Safety. The case so divided the Supreme Court that it was unable to form a majority opinion. Nevertheless, most of the justices agreed that the remedy was a constitutional means to overcoming decades of discrimination and resistance to equal protection in the Alabama state patrol. A majority also agreed that the relief was adequately narrowly tailored.

In the public personnel context, narrow tailoring requires that five conditions be met:

Less drastic and equally efficacious remedies, such as fines, are impractical or unavailable. There must be a fixed stopping point at which use of the classification ends. This may be based on time, for example, three to five years, or successful remediation of the previous violation of equal protection, such as minorities having gained 25 % of the positions the governmental workforce involved. The quotas, goals, or targets must be proportionate to the racial and/or ethnic composition of the relevant population or workforce base. For example, a 25 % quota for African Americans would be disproportionate in Vermont, but not in Alabama. Waivers must be available so that if the agency is unable to find qualified candidates then it will not be

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5. forced to hire or promote incompetents, on the one hand, or remain understaffed, on the other. The approach cannot place a harsh burden on “innocent third parties.” The general principle is that those employees to whom the classification does not apply (e.g., non-minorities) should not be made objectively worse off by the government’s efforts to promote inclusion and diversity, as in affirmative action. Consequently, firing or furloughing nonminorities to free up positions for minorities is considered a harsh burden, whereas not providing training to nonminorities, which reduces their opportunities for advancement but does change their rank, pay, or other working conditions, is not (see

1986; 1979).Wygant v. Jackson Board of Education United Steel Workers of America v. Weber

In (2003), dealing with affirmative action for applicants to the University of MichiganGrutter v. Bollinger Law School, the Court added a sixth condition that logically applies in the public personnel context as well: that each candidate be afforded an individualized assessment of his or her qualifications.

It is important to note that racial and ethnic classifications are considered suspect even if their purpose is to enhance minority employment opportunities. At various times since the 1970s, when the Supreme Court began hearing affirmative action cases, efforts have been made to distinguish between classifications based on “invidious discrimination” and those that are deemed “benign,” or intended to promote the employment interests of minorities and women. In (1995), a 5–4 majority of the SupremeAdarand Constructors v. Pena Court deviated from previous Court jurisprudence and defied considerable academic and pundit commentary suggesting that benign racial or ethnic classifications pose little threat to equal protection because they lack a discriminatory purpose. The Court held that “all racial classifications, imposed by whatever federal, state, or local governmental actor, must be analyzed by a reviewing court under strict scrutiny” (227). In the majority’s view, requiring such scrutiny is the only way to ensure that there is no intent to discriminate, or if there is one, it is somehow justified by a compelling governmental interest and is narrowly tailored.5 In a concurring opinion, Justice Clarence Thomas took pains to explain that, in his view, the entire distinction between invidious and benign was untenable and irrelevant: “government-sponsored racial discrimination based on benign prejudice is just as noxious as discrimination inspired by malicious prejudice. In each instance, it is racial discrimination, plain and simple” (241). In (2005), a case involvingJohnson v. California prison administration, the Supreme Court held that racial classifications purported to be neutral rather than invidious or benign are also subject to strict scrutiny.

Quasi-Suspect Classifications

Classifications based on biological sex are “quasi-suspect” and subject to an intermediate level of scrutiny. In these cases, the burden of proof is on the government to show that the classification is substantially related to the achievement of important governmental objectives. Originally, courts considered these classifications nonsuspect and evaluated them using a much less rigorous standard of review. As society and the judiciary became more conscious of the discriminatory effects of efforts to “protect” women from long working hours, physically demanding jobs, participating on juries in cases involving depravity, and so on, these classifications were raised to an intermediate level. In practice, courts evaluate sex-based classifications using a standard comparable to that of a strict scrutiny review, requiring governments to provide an “exceedingly persuasive justification” for their use ( 1996: 533). Intermediate scrutiny poses aUnited States v. Virginia challenge to government employment practices based on traditional thinking about “male” and “female” jobs, workplace behavior, physical strength, and other capacities. Practices based on outdated perceptions of gender roles may be vulnerable to constitutional challenge. Although it is currently easier in a technical sense to justify affirmative action for women than for racial or ethnic minorities because classifications based on biological sex do not receive strict scrutiny, public sector human resource managers should be alert to the likelihood that such programs will be unconstitutional in the absence of a very strong governmental interest.

Nonsuspect Classifications

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be nonsuspect. Public policies use such classifications frequently and for a variety of reasons—eligibility for benefits of some kind such as social security, voting, drivers’ licenses, and so forth. Judges subject these classifications to a lower level of scrutiny through what has become known as the “rational basis” test. The burden of persuasion is generally on the challenger to show that such classifications are not rationally related to the achievement of a legitimate governmental purpose. Courts typically grant a great amount of deference to the judgment of lawmakers and governmental employers in such cases. For instance, the Supreme Court found a rational connection between the state’s interest in public safety and its policy requiring police officers to retire at age fifty. No equal protection violation was found, despite the fact that many officers would be physically and mentally fit to continue in their jobs well beyond age fifty (Massachusetts Board of

1976). At present, classifications based on sexual orientation are nonsuspect. However,Retirement v. Murgia as with other nonsuspect classifications, they must serve a legitimate governmental purpose.

Procedural Due Process

In addition to their substantive aspects, the due process clauses of the Fifth and Fourteenth Amendments guarantee certain procedural rights to individuals being deprived of life, liberty, or property by the federal or a state or local government. In determining the extent of procedural due process to be afforded in administrative matters, courts balance three factors: (1) the individual’s interests at stake; (2) the risk that the procedures used, if any, will result in an erroneous decision, and the probable value of additional procedures in reducing the likelihood of error; and (3) the government’s interests, including administrative burdens and financial costs, in using the procedures in place. The underlying assumption in this formula is that although additional procedures will generally reduce mistakes, they also add costs. For example, the high cost of guaranteeing a full-fledged adjudicatory hearing, which includes the right to witness confrontation, cross-examination, and legal representation, might be considered necessary in cases where the interest at stake is substantial enough to require a very low error rate. Conversely, where an individual’s interest is minimal, the government may be required to provide nothing more than notice of the decision-maker’s rationale and an opportunity to challenge the decision in writing. Cases involving the rights of public employees illustrate that procedural due process balancing takes place within the framework of the public service model.

In (1972), the Supreme Court identified four individual interests that would giveBoard of Regents v. Roth public employees a right to a full hearing in dismissals: (1) where the dismissal was in retaliation for the exercise of constitutionally protected rights, such as freedom of speech; (2) “where a person’s good name, reputation, honor or integrity is at stake because of what the government is doing to him” (573); (3) where the dismissal diminishes a public employee’s future employability; and (4) where the employee has a property right or property interest in the position, such as tenure or a contract.

The public service model is important in determining both the timing and the nature of the hearing. In (1985), the Supreme Court held that a security guard whoCleveland Board of Education v. Loudermill

allegedly lied on his application was entitled to notice of the allegations, an explanation of the employer’s evidence, and an opportunity to respond—all prior to being terminated. The Court noted that hadLoudermill a property right in his job by virtue of being a “classified civil servant.” The pretermination requirement is an “initial check against mistaken decisions—essentially, a determination of whether there are reasonable grounds to believe that the charges against the employee are true and support the proposed action” (545–546). This serves the interests of the employee as well as those of the public and the government. In cases involving employment terminations, such as those at issue in and , a preterminationRoth Loudermill hearing frequently helps the state avoid additional personnel costs caused by unnecessary turnover and complex posttermination litigation.

A court’s procedural due process balancing changes when employee suspensions are at issue. In Gilbert v. (1997), the Supreme Court reasoned that no due process was required prior to suspending a lawHomar

enforcement officer who had been charged with a felony. In this case, the governmental and public interests in an effective workforce outweighed those of the employee. As the Court explained, “So long as a

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suspended employee receives a sufficiently prompt post-suspension hearing, the lost income is relatively insubstantial, and fringe benefits such as health and life insurance are often not affected at all” (932). The Court also noted that the government has reasonable grounds for suspending an employee who has been formally charged with criminal behavior.

An adverse action triggering procedural due process protections may be based on a mix of factors, some of which involve constitutional rights and others that do not. For instance, an employer may also consider an employee who has engaged in controversial speech to be incompetent or disruptive for reasons unrelated to his or her remarks. In such a case, the employer will have the opportunity to demonstrate “by a preponderance of the evidence that it would have reached the same decision . . . even in the absence of the protected conduct” ( 1977: 287).Mount Healthy School District Board of Education v. Doyle

Because procedural due process analysis considers the probability that the government is acting in error, the public employer will often investigate an employee before taking disciplinary action. In LaChance v.

(1998), the Supreme Court held that employees suspected of lying to or attempting to misleadErickson investigators in an effort to defend themselves may be disciplined for their falsehoods without any violation of their due process rights. Courts have determined that the due process “right to be heard” does not protect an employee from sanctions resulting from lying. However, where an investigation may lead to criminal charges, the public employee does maintain the right to remain silent under the Fifth Amendment.

As in other areas, the public service model’s balancing approach in procedural due process cases provides public sector human resource managers with a rough set of guidelines, but it may not prove sufficient to inform particular administrative decisions. Individual facts and circumstances may ultimately determine close legal questions. For example, it is difficult in the abstract to know how quickly after suspending an employee an employer must provide a hearing in order to meet the current “prompt post-suspension hearing” requirement. As always, the best way to keep track of answers to such questions is to follow the case law in one’s jurisdiction, including rulings by the federal district courts and courts of appeals in one’s judicial circuit.

Liability

It cannot be overemphasized that a public manager’s need for knowledge and understanding of relevant constitutional doctrine is much more than academic. As a result of several Supreme Court decisions over the past three decades, such knowledge has become a positive job requirement (Rosenbloom, O’Leary, and Chanin 2010: 271–287). Today, a public sector manager occupying a position at any level of government may well be personally liable for compensatory and even punitive damages, if found to have violated “clearly established . . . constitutional rights of which a reasonable person would have known” (Harlow v. Fitzgerald 1982: 818; see also 1983; 1991). “Clearly established” in this context itself isSmith v. Wade Hafer v. Melo not altogether clearly established. In (2002) the Court held that “clearly established” does notHope v. Pelzer require a judicial precedent in a case with materially similar facts, only that the public employee has “fair warning” from constitutional law and values that his or her behavior will violate someone’s rights. However, in (2012), “clearly established” was defined as such “that every ‘reasonable officialReichle v. Howards would [have understood] that what he is doing violates’” a right ( 2012: 2093; brackets inReichle v. Howards the original text). The Supreme Court essentially reiterated this standard with reference to police in Plumhoff

(2014): “a defendant cannot be said to have violated a clearly established right unless the right’sv. Rickard contours were sufficiently definite that any reasonable official in the defendant’s shoes would have understood that he was violating it” (2023).

An exception to personal liability exists for federal personnel in some cases where the individual whose rights have been violated is able to obtain a remedy in alternative fashion established by legislation or, presumably, executive order, such as through appeal to the Merit Systems Protection Board (Bush v. Lucas 1983). Moreover, public employees have absolute immunity from civil suits for damages for violations of individuals’ constitutional rights when they are performing adjudicatory functions, such as hearing examinersC

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or “prosecuting” adverse actions ( 1978; 1988; 1991).Butz v. Economou Forrester v. White Burns v. Reed Nevertheless, it must be emphasized that absolute immunity attaches to the specific function rather than the job title. Thus, a hearing examiner has absolute immunity when engaged in adjudication, but not when hiring or firing his or her secretary.

In addition to the federal constitutional principles outlined in this chapter, public sector human resource experts must be aware of state constitutional law, which may also affect public sector human resource matters. Where a state’s protection of public employees’ rights such as privacy or substantive due process exceeds that of the federal Constitution, state and local governments must meet the higher state standard. Public managers at all levels of government may avoid liability by exercising their constitutional “right to disobey” any order requesting implementation of an unconstitutional law or policy so as to prevent infringement of others’ protected rights ( 1979). This ability, of course, isHarley v. Schuylkill County premised on an understanding of the constitutional rights at issue and a facility with the public service model for balancing all the interests at stake. Gaining reasonable knowledge of the constitutional law—both state and federal—that governs one’s actions is the best way to avoid violating rights. Public managers need not be lawyers, but they must develop the ability to recognize if and when decisions, actions, procedures, or policies run afoul of the law.

Conclusion

Contemporary efforts to improve public sector performance serve two components of the public service model—the governmental and public interests. However, the interests and rights of employees may receive limited attention. The tools of contemporary public administration—downsizing, performance measurement and management, newer electronic communication technologies and social media, outsourcing, competitive sourcing, and collaborative governance arrangements—can increase the immediacy of the Constitution in dealing with human resources. For instance, downsizing and competitive sourcing can bump up against procedural due process and equal protection rights. Where civil service status or other property interests in employment are involved, dismissals cannot constitutionally be arbitrary, capricious, discriminatory, or unauthorized by law. If individual employees are picked as targets for reductions in force, they will almost certainly have substantial due process rights. Depending on the circumstances, and especially in cases where agencies have been under court order to increase diversity (as in ), downsizing thatUnited States v. Paradise has a harmful impact on the employment interests of minorities or women will be subject to challenge under the equal protection clause.

In an age in which employers can monitor employees’ computer usage, including key strokes, email, and use of pagers and other communication devices, new Fourth Amendment privacy questions are certain to arise, as in .Quon

Outsourcing and collaborative governance present a special set of constitutional issues when they involve a public function (such as incarceration) or so entwine the government and a private organization that it is impossible to tell where one begins and the other ends (e.g., public-private partnerships). In those circumstances, under current “state (i.e., governmental) action” doctrine, at the state and local levels, the private organization and its employees may well become liable for violating individuals’ constitutional rights. A private individual working directly for a state or local government is likely to have the same qualified immunity as public employees ( 2012). Yet one working for a private organization underFilarsky v. Delia contract with a government may not. For example, in (1997), a prison guardRichardson v. McKnight employed by a private prison management firm was held to a higher liability standard. Unlike a public employee, he was subject to liability for violating prisoners’ constitutional rights regardless of whether they were clearly established or a reasonable person would have known of them. Private organizations that become state actors by virtue of their contractual or other cooperative arrangements with the federal government are not liable for money damages in constitutional tort suits (Correctional Services Corporation

2001). Neither are their employees, at least in so far as state tort law offers an alternative throughv. Malesko which the injured party may be compensated ( 2012).Minneci v. Pollard

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A human resource expert aware of constitutional principles and current doctrine could bring this constitutional dimension to bear on organizational decisions concerning outsourcing and collaborating with private entities. Will the private organizations, whether for profit or nonprofit, seeking government contracts be working in policy or program areas in which constitutional rights are relevant? Will their organizational cultures and staffing levels ensure that such rights will be protected? Could they and their employees withstand liability suits? Would it be better public policy to keep the function within a government agency in order to make sure that the employees are properly trained with respect to their constitutional responsibilities?

By taking a proactive role in alerting decision-makers to constitutional issues, particularly those presented in First, Fourth, Fifth, and Fourteenth Amendment jurisprudence, public sector human resource experts will not only protect individual rights but also reduce susceptibility to lawsuits. Incorporating a constitutional dimension into public administration will give managers better and more consistent information and skills to protect employees’ rights as well as to achieve organizational goals within the framework of our democratic-constitutional government.

Notes

1. The first ten amendments to the Constitution, known as the Bill of Rights, apply directly to the federal government. The Fourteenth Amendment, which was ratified in 1868, prohibits the states (and their political subunits) from violating many of these rights as well. The due process clause of the Fourteenth Amendment protects individuals from the deprivation of life, liberty, or property by sub-national governments. Over the years, the term has been read by the Supreme Court to “incorporate” much of the Bill of Rights,liberty including the First and Fourth Amendments, which are of particular importance to PHRM. This is why McPherson can argue that her First Amendment rights, which are incorporated into the Fourteenth Amendment, have been violated. Because the Fourteenth Amendment is what applies the First Amendment to state and local governments, she argues that it has been violated as well. As is discussed later in the chapter, the Fourteenth Amendment also prohibits the states and their subunits from depriving any person within their jurisdiction “equal protection of the laws.” Known as the equal protection clause, this provision is interpreted to apply to the federal government through the word in the Fifth Amendment, a processliberty called “reverse incorporation.”

2. , 461 U.S. 138 (1983), establishes that courts must consider a public employee’sConnick v. Myers comment in its original context when evaluating whether the comment touches on a matter of public concern.

3. The Court noted that an exception might be made for faculty at public universities and colleges, whose work product involves teaching and writing.

4. In (2003), the Supreme Court held that diversity in higher education can constitute aGrutter v. Bollinger compelling governmental interest. The Court’s reasoning would seem to apply to diversity in public sector human resource management as well: “In order to cultivate a set of leaders with legitimacy in the eyes of the citizenry, it is necessary that the path to leadership be visibly open to talented and qualified individuals of every race and ethnicity” (332).

5. As an interesting and relevant aside, courts may also hold local governments and agencies liable for monetary damages when their policies are closely connected to violations of individuals’ constitutional rights, regardless of whether those rights can be said to be clearly established or should be reasonably known ( 1978; 1986).Monell v. New York City Department of Social Services Pembaur v. Cincinnati

References ( ).Abood v. Detroit Board of Education, 431 U.S. 209 1977Co

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( ).Adarand Constructors v. Pena, 515 U.S. 200 1995

.AFSCME v. Woodward, 406 F.2d 137 (8th Cir. 1969)

( ).Board of Regents v. Roth, 408 U.S. 564 1972

( ).Branti v. Finkel, 445 U.S. 507 1980

( ).Broadrick v. Oklahoma, 413 U.S. 601 1973

( ).Burns v. Reed, 500 U.S. 478 1991

( ).Bush v. Lucas, 462 U.S. 367 1983

( ).Butz v. Economou, 438 U.S. 478 1978

( ).Chicago Teachers Union v. Hudson, 475 U.S. 292 1986

( ).City of Ontario v. Quon, 560 U.S. 746 2010

( ).Civil Service Commission v. National Association of Letter Carriers, 413 U.S. 548 1973

( ).Cleveland Board of Education v. LaFleur, 414 U.S. 632 1974

( ).Cleveland Board of Education v. Loudermill, 470 U.S. 532 1985

( ).Connick v. Myers, 461 U.S. 138 1983

( ).Correctional Services Corporation v. Malesko, 534 U.S. 61 2001

. . , ( ), – .Developments in the Law—Public Employment 1984 Harvard Law Review 97 7 1611 1800

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( ).Elfbrandt v. Russell, 384 U.S. 11 1966

( ).Elrod v. Burns, 427 U.S. 347 1976

( ).Filarsky v. Delia, 132 S.Ct. 1657 2012

( ).Forrester v. White, 484 U.S. 219 1988

.Fowler v. New York, 704 F. Supp. 1264 (S.D.N.Y. 1989)

( ).Garcetti v. Ceballos, 547 U.S. 410 2006

( ).Gilbert v. Homar, 520 U.S. 924 1997

( ).Grutter v. Bollinger, 539 U.S. 306 2003

( ).Hafer v. Melo, 502 U.S. 21 1991

(E.D. Penn 1979).Harley v. Schuylkill County, 476 F. Supp. 191

( ).Harlow v. Fitzgerald, 457 U.S. 800 1982

( ).Hope v. Pelzer, 536 U.S. 730 2002

( ).Johnson v. California, 543 U.S. 499 2005

( ).Kelley v. Johnson, 425 U.S. 238 1976

( ).Knox v. Service Employees International Union Local 1000, 132 S.Ct. 2277 2012

( ).LaChance v. Erickson, 522 U.S. 262 1998

( ).Lane v. Franks, U.S. 134 S.Ct. 2369 2014Co py ri gh t © 2 01 6. C Q

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( ).Massachusetts Board of Retirement v. Murgia, 427 U.S. 304 1976

( ).McAuliffe v. New Bedford, 155 Mass. 216 1892

( ).McCarthy v. Philadelphia Civil Service Commission, 424 U.S. 645 1976

( ).Minneci v. Pollard, 132 S.Ct. 617 2012

( ).Monell v. New York City Department of Social Services, 436 U.S. 658 1978

( ).Mount Healthy School District Board of Education v. Doyle, 429 U.S. 274 1977

( ).National Treasury Employees Union v. Von Raab, 489 U.S. 656 1989

( ).O’Connor v. Ortega, 480 U.S. 709 1987

( ).Pembaur v. Cincinnati, 475 U.S. 469 1986

( ).Pickering v. Board of Education, 391 U.S. 563 1968

( ).Plumhoff v. Rickard, 134 S. Ct. 2012 2014

( ).Rankin v. McPherson, 483 U.S. 378 1987

( ).Reichle v. Howards, 132 S.Ct. 2088 2012

( ).Richardson v. McKnight, 521 U.S. 399 1997

. . . : ., Rohr John 1978 Ethics for Bureaucrats New York, NY Marcel Dekker

. . : ., Rosenbloom David H. 1971 Federal Service and the Constitution Ithaca, NY Cornell University Press

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. . ( ed.). : , Rosenbloom David H. 2014 Federal Service and the Constitution 2nd Washington, DC Georgetown .University Press

, , and . . (, Rosenbloom David H. Rosemary O’Leary Joshua Chanin 2010 Public Administration and Law 3rd ed.). : .Boca Raton, FL CRC/Taylor & Francis

( ).Rutan v. Republican Party of Illinois, 497 U.S. 62 1990

( ).Shelton v. Tucker, 364 U.S. 479 1960

( ).Sherbert v. Verner, 374 U.S. 398 1963

( ).Skinner v. Railway Labor Executives Association, 489 U.S. 602 1989

( ).Smith v. Wade, 461 U.S. 30 1983

( ).United Public Workers v. Mitchell, 330 U.S. 75 1947

( ).United Steel Workers of America v. Weber, 443 U.S. 193 1979

. . United States Senate 1967 “Protecting Privacy and the Rights of Federal Employees” S. Rept. 519. 90th . .Cong., 1st Sess August 21

( ).United States v. National Treasury Employees Union, 513 U.S. 454 1995

( ).United States v. Paradise, 480 U.S. 149 1987

( ).United States v. Virginia, 518 U.S. 515 1996

( ).Washington v. Davis, 426 U.S. 229 1976

( ).Waters v. Churchill, 511 U.S. 661 1994

( ).Wygant v. Jackson Board of Education, 476 U.S. 267 1986

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Week 5

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Public Personnel Policy Development

Work/life balance is certainly not a new concept, but because of advancements in areas

like civil rights and technology, work/life balance looks different now, compared to 20

years ago– at least in the United States. Interestingly, since 1976, with the passage of the

Social Assistance Act, all families in Denmark have the right to public childcare. Denmark’s

public childcare system also gives expectant mothers the 4 weeks before birth, in addition

to 14 weeks of maternity leave after birth. Additionally, fathers receive 2 weeks of

maternity leave, while both parents are given 32 weeks after the first 14 to split, with

50% pay (Berman, Bowman, West, & Van Wart, 2016).

Also, as health becomes a higher priority, companies have implemented wellness

programs and policies. In some public organizations, full-scale stress reduction programs

linked to measurable outcomes have been launched. For example, some organizations

incorporate screening devices into the recruitment process to assess person-environment

fit. Another example is incorporating job expectations into the orientation process. This

way, an employee knows exactly what is required by the time training ends, and the job

begins. Mandatory workshops and courses are other methods of incorporating wellness

into the workplace.

Additionally, as a more recent development, public organizations are jumping on the

telecommuting bandwagon. When the demand for flexibility on the job first arose, many

organizations adopted the flex work week. For some organizations, this means working a

variable work schedule, which might include four 10-hour days, for example. For others, it

means being present during pre-set core working hours such as in the office on certain

days or times. As demands for even more flexibility have grown, many organizations are

allowing employees the ability to work remotely from home at least one day a week.

As you digest this week’s readings, think about ways in which you, as Director of

Personnel Administration for Organization X, could begin to create a more employee-

friendly workplace while also maintaining order.

Be sure to review this week's resources carefully. You are expected to apply the

information from these resources when you prepare your assignments.

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Books and Resources for this Week

Baskar, S. (2016). The influence of HR

policy dimensions on the job

satisfaction of employees of public

sector banks: A study on Indian

Overseas… Link

Jacobson, W. S., & Lambright, K. T.

(2018). The Development of County

HR Policies: The Perspectives of

Counties in Two States. Public

Personnel… Link

Kearney, R. C., & Coggburn, J. D.

(2016). Public human resource

management: Problems and prospects.

Los Angeles: CQ Press. Link

Week 5 – Assignment: Recommend an Employee-

Friendly Policy Assignment

References:

Berman, E. M., Bowman, J. S., West, J. P., & Van Wart, M. R. (2016). Human resource

management in public service: Paradoxes, processes, and problems (5th ed.). Los Angeles:

Sage Publishing.

75 % 3 of 4 topics complete

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Due March 6 at 11:59 PM

This week, you learned all about employee-friendly policies. Now, it is time to practice

your public speaking skills in delivering the message that Organization X is implementing a

new employee friendly policy/program.

First, select one of the programs discussed in the readings and conduct an online search

for additional information on the subject. Then, reflect on your findings and how the

implementation of the program you chose might relate to a more stable work/life balance

or just a healthier work environment in general. Then, citing a combination of the readings

and your outside research, give a speech to employees of Organization X outlining the

new program/policy and how it will impact them moving forward.

Length: 4-6 pages, not including title and reference pages

For grading purposes, you will submit a transcript of the speech you would present, along

with any visual aids (chart, graphs) that you would use to enhance the presentation. Also,

you may present a recording of your speech using CaptureSpace so that your professor

can give you ungraded feedback on your lecture style. This audio submission is optional.

If you choose to record your lecture, upload it to your professor using CaptureSpace. An

average speech tends to be 100 to 150 words per minute.

References: Support your speech with at least five references, three of which must be

scholarly and published within the last five (5) years. In addition to these specified

resources, other appropriate professional or scholarly resources, including older articles,

may be included.

Your speech should be scholarly, yet engaging. In making your speech engaging, you may

depart from usual writing form an organization and choose to use anecdotes, humor, or

other speaking tools; be sure, however, to cite your sources appropriately in the print

version of the speech that you submit.

Your assignment should demonstrate thoughtful consideration of the ideas and concepts

presented in the course by providing new thoughts and insights relating directly to this

topic. Your response should reflect scholarly writing and current APA standards where

appropriate. Be sure to adhere to Northcentral University's Academic Integrity Policy.

Upload your document, and then click the Submit to Dropbox button.

https://doi.org/10.1177/0091026018770233

Public Personnel Management 2018, Vol. 47(4) 398 –418

sagepub.com/journals-permissions DOI: 10.1177/0091026018770233

journals.sagepub.com/home/ppm

Article

The Development of County HR Policies: The Perspectives of Counties in Two States

Willow S. Jacobson1 and Kristina T. Lambright2

Abstract We conducted 40 semi-structured interviews with county HR directors (20 in New York, 20 in North Carolina) to learn more about the development of internal HR policies. Key resources used by directors in both states include other jurisdictions, colleagues in other county departments, state and federal agencies, laws and statutes, professional associations, and information gathered from general Internet searches. More than half of the HR directors reported using internal working groups, and almost two-thirds indicated that they systematically reviewed the implications of policies for specific departments. Yet, only a handful of HR directors reported utilizing other promising practices such as engaging rank-and-file employees in the policy process, reviewing a new or revised policy’s consistency with existing policy, and using evidence-based decision making to develop policies. Although there was little difference by state, our findings indicate the characteristics of HR directors can shape how a jurisdiction approaches policymaking.

Keywords HRM, local government, policymaking

Organizations continue to face a range of challenges including changing demograph- ics, economic concerns, and political pressures. Chief among these is having a work- force with the skills and expertise needed to perform core organizational functions. Growing research speaks to the critical role human resource management (HRM) can play in ensuring short-term and long-term organizational effectiveness (Becker &

1The University of North Carolina at Chapel Hill, NC, USA 2Binghamton University, NY, USA

Corresponding Author: Willow S. Jacobson, The University of North Carolina at Chapel Hill, Campus Box 3330, Chapel Hill, NC 27599-3330, USA. Email: [email protected]

770233PPMXXX10.1177/0091026018770233Public Personnel ManagementJacobson and Lambright research-article2018

https://us.sagepub.com/en-us/journals-permissions

https://journals.sagepub.com/home/ppm

mailto:[email protected]

Jacobson and Lambright 399

Gerhart, 1996; Jacobson & Sowa, 2015; Kellough, 2017; Ulrich & Brockbank, 2005). Crafting an appropriate job posting, ensuring the selection process is rigorous and meets all legal requirements, and hiring a qualified candidate are simply the first steps in the employment life cycle. Once hired, employees need to be oriented, trained, motivated, and at times disciplined. Human resource (HR) departments and policies influence each step of this process. HR policy formation if done correctly serves as a crucial strategic tool for managing an organization’s workforce. Internal organiza- tional policies influence those working within public organizations as well as the results those organizations are able to produce.

Despite considerable scholarly interest in specific HR policies and their impact on employees and organizations, there has been surprisingly little empirical investigation of the process practitioners use to develop these policies. Specifically, we do not know the type of resources HR managers consult, which stakeholders are involved in the process and the extent to which policies are evaluated prior to implementation. Are managers going beyond simple information gathering and utilizing practices that make the process more inclusive and assess the potential policy impact on their organization? Learning about the policymaking strategies HR departments use may be particularly helpful for current practitioners when they are deciding how to structure their own pro- cesses and make them more aware of possible practices they may want to adopt.

To better understand how HR policies are developed, we conducted 40 semi-struc- tured interviews with county HR directors in two states: 20 interviews in New York and 20 interviews in North Carolina. We examined both the information resources and strategies HR directors utilized when developing policy. We also created an index based on use of promising practices and assessed whether respondent or jurisdictional characteristics help explain policy process choices. Our research provides important insights into HR practices of county government, a level of government which several scholars have noted is understudied (Benton, 2005; Streib et al., 2007; Svara, 1996). We begin by summarizing past research on HR policies as well as discussing several strategies scholars identify as promising. Next, we present our methods and key find- ings. Finally, we explore the implications of our study and highlight several areas for future research.

Approaches to HR Policymaking and Promising Practices

HR scholars often recommend formalizing or codifying practices or desired behaviors into a policy. However, they do not typically specify the resources that should be con- sulted when creating the policy or how the process of writing it should be approached. For example, Bradbury and Facer (2010) note when talking about workplace ethics that “the overarching practical recommendation for managing an ethically robust at- will employment relationship is to implement a policy and set of behaviors that exceed legal obligation” (p. 281). There are a variety of resources and strategies managers could potentially utilize when developing ethics policies, but still little is known about how they approach this process in practice. Similarly, while HR scholarship has focused on constitutional and legal requirements in the public sector (Hartman, Homer,

400 Public Personnel Management 47(4)

& Reff, 2010; Hoyman & McCall, 2010; Ledvinka, 2010; Riccucci, 2010; Rosenbloom & Chanin, 2016), it does not explore how these constitutional and legal issues impact the development of jurisdictional policies. Rather than examining the policy develop- ment process, research on HR policy has focused on the impact of specific policies or practices on outcomes (Bae & Yang, 2017; Battaglio & French, 2016; Caillier, 2016; Facer & Wadsworth, 2008; Facer, Wadworth, & Arbon, 2010; Galinsky & Stein, 1990; Grover & Crooker, 1995; Honeycutt & Rosen, 1997; Huselid, 1995; Otenyo & Smith, 2017; Selden & Moynihan, 2000; Wadsworth & Facer, 2016), policy and innovative behaviors (Searle & Ball, 2003), and comparative policies and practices (Kopp, 1994).

Although past scholarship does not directly address the HR policy formation pro- cess, it does provide insights into possible ways this process may be approached. Two important decisions HR managers must make are what information resources they should consult and how many resources will be adequate. Although ideally decision makers would gather as much relevant information as possible to make the best deci- sion, humans in the real world have cognitive limits and ultimately must “satisfice” in their information search (Simon, 1947). Drawing on seminal work by DiMaggio and Powell (1982), isomorphic pressures may at least partially influence the information managers seek as part of their search. According to DiMaggio and Powell (1982), organizations within a field are often quite similar due to three key processes. These processes involve organizations’ (a) acting in response to formal or informal pressure from external constituencies that oversee or regulate them, referred to as coercive isomorphism; (b) imitating “best practices” used by comparable entities, referred to as mimetic isomorphism; and (c) adopting policies consistent with professional norms and values, referred to as normative isomorphism. Considering DiMaggio and Powell’s framework in this context, one would expect local HR managers to gather information about state and federal agencies’ expectations and other counties’ practices and profes- sional norms when developing policy. These resources may or may not be used in conjunction with information from other sources.

Past scholarship while not investigating the HR policymaking process specifically also identities a number of strategies that are suggested as promising practices which HR managers may want to use in policy development. These strategies involve more than information gathering. For example, a key consideration when developing poli- cies is the extent to which the process is inclusive. When designing policy, receiving feedback from varied perspectives may increase its efficacy. Research on diverse teams has demonstrated that inclusive teams that are more heterogeneous in composi- tion are more likely to be successful in accomplishing their tasks and identifying new ideas (Phillips, Liljenquist, & Neale, 2009). Consistent with this, Stewart and Brown (2011) stress the importance of encouraging diversity in ideas and thoughts in HR decision making and note that “making sure that the team of decision makers includes people with different backgrounds can help” (p. 45).

In addition, scholars have highlighted the benefits of engaging employees in policy- making processes (Adler & Borys, 1996; DeHart-Davis, 2009, 2017; Fernandez, Resh, Moldogaziev, & Oberfield, 2015; Sabharwal, 2014; Stivers, 2008; Whitener, Brodt, Korsgaard, & Werner, 1998). The inclusion of those who will need to comply with a

Jacobson and Lambright 401

policy or enforce it is important in order for a policy to be effective. Employees can offer valuable insights into the reality of day-to-day operations critical for policy design (Stivers, 2008). Including stakeholders in the policy development process can also increase compliance once a policy is implemented and make it more likely that the policy will be perceived as fair (Adler & Borys, 1996; Kim & Mauborgne, 1998; Rubin, 2007). Research on the design of effective performance appraisal systems offers empir- ical support for the importance of seeking feedback from the workforce and has found these complex and often controversial processes are improved through greater and more diverse stakeholder involvement, including input from employees (Mohrman, Resnick-West, & Lawler, 1989; Roberts, 2003; Rubin, 2007).

While seeking feedback from a variety of stakeholders is beneficial, it is critical to ensure that policies align with organizational needs. Over the past two decades, sev- eral scholars have argued that HR managers should not just focus on compliance and regulation as they traditionally have but also move to be strategic partners on the executive team allowing HRM to better help organizations align their workforce to achieve their strategic and organizational goals (D. M. Daley, 2006; Jacobson & Sowa, 2015; Lim, Wang, & Lee, 2017; Pynes, 2009; Selden, 2009). Advocates of Strategic Human Capital Management (SHCM) emphasize the importance of aligning person- nel policies and practices with an organization’s strategic objectives and its other ini- tiatives and policies (Jacobson, Sowa, & Lambright, 2013; Pynes, 2009; Selden, 2009). In addition to considering consistency with existing policy, HR managers should review policy implications for individual departments within an organization. As an illustration, J. L. Daley (2012) notes when discussing work–life policies: “HR specialists must consider the circumstances of offering work-life policies across work units. For example, flexible working hours may be easily implemented in a city’s utili- ties unit but might create chaos within the police or fire units” (p. 70).

Another central tenet of SHCM is that HR decisions should be evidence-based (Pfeffer & Sutton, 2006; Rousseau & Barends, 2011; Selden, 2009). As explained by Selden (2009), HR professionals should collect data using relevant and reliable mea- sures and utilize this information to make decisions. Consistent with arguments made by SHCM scholars, Roberts (2010) advocates for the use of research methods and evaluation in the HR decision-making process. Furthermore, Clardy (1997) asserts that HR policy and practices are improved when practitioners gather information from formal data collection methods and use it as part of their decision-making process. While SHCM proponents have promoted the benefits of evidence-based decision making, the use of analytics may be difficult in practice as other scholars have demon- strated the challenges of actually using performance information in public organiza- tions (Ammons & Rivenbark, 2008; Arnaboldi, Lapsley, & Steccolini, 2015; Hall, 2017; Poister, Pasha, & Edwards, 2013). Despite scholars recognizing the importance of HR policy as a managerial tool, there has been little systematic empirical investiga- tion of how HR professionals approach policymaking. Our research aims to address this gap by examining the information resources and process county government HR managers utilize when developing internal HR policies, including their use of the promising practices identified in this literature review.

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Research Design

We conducted semi-structured phone interviews with 40 county HR directors: 20 from New York and 20 from North Carolina. We used a “diverse” case approach when selecting these two states (Seawright & Gerring, 2008). Our goal was to examine the HR policymaking process in two very different contexts so we could explore how, if at all, environmental differences influence internal county HR policymaking pro- cesses. New York and North Carolina were good choices for this comparative case study design because they are from different regions and vary in terms of their political culture, county civil service laws, and the role of collective bargaining and union activity in the public sector.

Counties in these two states were randomly selected from jurisdictions with work- forces of 500 employees or greater. We excluded counties located in New York City. These counties were omitted from the sampling frame because the size and function of government in New York City is on a different scale compared to the other counties in New York and North Carolina and could introduce confounding factors into our analy- sis. We limited our sampling frame to counties with workforces greater than 500 employees to ensure a county’s workforce would be of sufficient size to warrant a need for a county-level HR director. We also felt it was important to have a minimum work- force size to increase the probability that our respondents would be involved in poli- cymaking decisions that were sophisticated enough to enable them to answer our interview questions.

Our sample represents 41% and 45% of the counties eligible to be included in our study from New York and North Carolina, respectively. While collecting our data, we observed a high level of data saturation. Based on a review of the data conducted after approximately 30 interviews, we found respondents were consistently identifying the same key themes. After completing an additional 10 interviews, we reviewed the responses and found no new patterns emerging from the data. At this point, we had achieved the intended coverage of our sampling frame (more than 40% of eligible counties were included from both states) and were confident that we had reached data saturation. The counties included in our sample had populations ranging from 29,967 to 1,419,369 with a median of 117,154 and workforce sizes ranging from 500 to 11,735 with a median of 974. The smallest HR department had two employees, whereas the largest had 120 employees; 68% had 10 or fewer employees. Table 1 compares our sample and counties that were eligible to be included but were not selected in terms of population, workforce size, poverty rate, and median household income. As this table indicates, the medians for these two groups are generally similar for each of these demographic characteristics.

At the start of each interview, we guaranteed confidentiality. The average interview lasted 45 min. We asked respondents to first think of the most recent policy they had helped to develop or revise.1 The types of policies respondents discussed varied con- siderably. Examples included policies related to workplace violence, the Family Medical Leave Act, harassment and discrimination, substance abuse, and ethics. In addition, the impetus for creating or revising the policies varied. Several directors

Jacobson and Lambright 403

indicated that they were responding to mandates from either the state or federal gov- ernment. Others described policy changes that were internally driven.

Respondents were asked to describe the process used to develop the policy they identified, including what information they had used and what individuals were involved. As part of this discussion, we asked respondents what information resources they felt were the most helpful. Next, we asked respondents to describe the typical process that they used to develop policies if it was different from the process they had used for the specific policy example. In addition, respondents were asked to describe any situations in which their approach to policy development might be different. We asked the questions about the typical policymaking process and about unusual situa- tions to ensure we had a comprehensive understanding of the variety of practices each county used to develop HR policies. For this research, we were interested in learning about a county’s overall policy process. Our unit of analysis is not the approach a jurisdiction took with one specific policy but rather the full range of activities, resources, and strategies they employed when developing HR policies. Finally, we collected information about the jurisdictions and the respondents’ professional back- grounds. Slightly less than half of our respondents (45%) had worked in the private sector previously, and 60% were members of national professional associations. Tables 2 and 3 provide further background information about respondents.

All interviews were recorded and transcribed, and data were analyzed using the qualitative data analysis software QSR NVivo. We developed coding definitions to ensure consistent code usage and utilized both pattern-matching (Yin, 1994) and memoing (Miles & Huberman, 1994) in our data analysis. Both researchers indepen- dently coded all of the interview data and then reviewed this information together to resolve any coding discrepancies. In addition to qualitatively analyzing the data, we developed an index to measure the extent to which counties were using strategies that were consistent with the practices identified as promising in the literature review. We describe the components of this index in detail in our findings. We ran several t tests and basic correlations to assess whether there were any patterns involving the index scores and the characteristics of the respondents or the county for which they worked.

Table 1. Comparison of Demographics for Sample and Counties Eligible to be Included but Not Selected (All Medians).

Population

Number of county employees

Poverty rate (2009-2013; %)

Median household

income

Eligible NY counties not in the sample 73,966 951 14 51,393 NY sample 117,154 1,071 14 49,969 Eligible NC counties not in the sample 115,778 977 20 41,895 NC sample 107,557 734 17 45,441 All eligible counties not in the sample 95,745 928 16 46,484 Entire sample 117,154 974 15 48,653

Note. NY = New York, NC = North Carolina.

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This study’s research design enabled us to collect rich qualitative data and examine the HR policymaking process in two states with very different political, social, and economic characteristics. However, there are some limitations to the research design. This study is exploratory as there is little empirical research on this paper’s topic. With 40 interviews, we are not able to provide definitive answers to our research questions. The power of the inferential statistical tests we ran was also low due to the small size of our sample. Another limitation is that county HR directors’ utilization of information resources in New York and North Carolina may not be representative of the resources used by other types of public managers or county HR directors in other states. Finally, we have no outcome measures on policy efficacy. As a result, we are unable to assess if using promising prac- tices identified in the literature review actually makes policies more effective.

Findings

We begin by describing the information resources HR directors used to develop poli- cies. Next, we provide an overview of the extent to which counties employed

Table 2. Respondent Experience.

Years of HR experience Count (%; n = 38) Years in position Count (%; n = 39)

5 or less 3 (8) 5 or less 22 (56) 6 to 10 7 (18) 6 to 10 10 (26) 11 to 15 5 (13) 11 to 15 3 (8) 16 to 20 6 (16) 16 to 20 3 (8) 21 to 30 11 (29) 21 to 30 1 (3) 31 and greater 6 (16) 31 and greater 0 (0)

Note. HR = human resource.

Table 3. Respondent Formal and Continuing Education.

Highest degree Count (%; n = 40) Certification Count (%; n = 40)

High school diploma 2 (5) No certification 25 (63) Associates 1 (3) Certification (community

college, state, other) 5 (13)

Bachelors 20 (50) SHRM Certification (PHR, SPHR)

10 (25)

Bachelors, some graduate

6 (15)

Graduate degree (JD, MPA, MBA, etc.)

11 (28)

Note. SHRM: Society for Human Resource Management, PHR = Professional in Human Resources, SPHR = Senior Professional in Human Resources, JD = Juris Doctor, MPA = Master of Public Administration, MBA = Master of Business Administration.

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strategies consistent with the promising practices identified in the literature review. We conclude this section by developing an index based on the use of these promising practices and examining whether there are any relationships between the county’s policymaking process and respondent or jurisdictional characteristics.

Information Resources

Respondents used a wide array of resources when creating or revising policies. Table 4 details, by state, the frequency with which various information resources were used in the policymaking process. Counties were recorded as utilizing a resource if respon- dents mentioned ever consulting it in the policy development process, not just if they mentioned using it in the specific policy example they described at the beginning of the interview. On average when working on policy, HR directors drew on six different resources, ranging from a low of three resources to a high of 10 resources. Besides indicating that they personally helped create policies and relied on their own internal HR staff, directors reported other county staff and officials were often involved in policymaking (see Table 4). Of the 40 HR directors, 24 (60%) received feedback from county attorneys or retained council, 22 (55%) from the county executive or executive staff, 34 (85%) from other county staff subject matter experts (including department heads, union representatives,2 and specific county employees with specialized knowl- edge in the policy area being explored), and 11 (28%) from boards or legislatures.3 North Carolina HR directors were more likely to consult the county executive or

Table 4. Information Resource Use For Policy Development.

Count (%) North Carolina

(n = 20)

Count (%) New York (n = 20)

Count (%) entire sample

(n = 40)

Internal resources County attorney or retained council 12 (60) 12 (60) 24 (60) Executive or executive staff 14 (70) 8 (40) 22 (55) Other county staff subject matter experts 17 (85) 17 (85) 34 (85) Members of board or legislature 5 (25) 6 (30) 11 (28) External resources Personnel or policies from other jurisdictions 20 (100) 16 (80) 36 (90) State or federal agencies 10 (50) 12 (60) 22 (55) Professional associations 11 (55) 7 (35) 18 (45) General Internet search 9 (45) 10 (50) 19 (48) Laws or general statutes 9 (45) 10 (50) 19 (48) Academic publications or personnel 12 (60) 0 (0) 12 (30) Consultants 3 (15) 6 (30) 9 (23) Vendors 3 (15) 3 (15) 6 (15) Private sector examples 3 (15) 1 (5) 4 (10) Books 1 (5) 0 (0) 1 (3)

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executive staff, but use of other internal resources was comparable by state. Several respondents indicated the information they received from internal sources was extremely helpful. As an example, one respondent reported,

You learn there are people [internally] who have been doing this kind of stuff for years. They are good at it and know a lot more than some others, and they are a tremendous asset to the process. They are able to analyze documents provided by the consultant or challenge with real life experiences that may say maybe it worked somewhere else but we’ll tell you why it didn’t work here and what we did to counteract why it didn’t work here. I find the department people are the experts and are invaluable to developing any kind of policy.

In addition, respondents utilized a variety of external information resources when developing or revising policy. The most common was personnel and policies from other jurisdictions: 36 respondents (90%) reported consulting other jurisdictions in the policy development process. Respondents emphasized they wanted to learn from other coun- ties’ experiences. Reflecting the sentiments of many, one respondent commented, “We try to seek out similarly situated governments and see what they do and we’ll learn from their experiences. We try to find a template so we don’t have to reinvent the wheel.” While many directors relied heavily on their colleagues from other jurisdictions in the policymaking process, some recognized limitations with this approach and noted that strategies which work in one jurisdiction may not necessarily work in another if there are considerable differences in the characteristics of the counties. These directors indi- cated they were careful to modify policies when necessary to meet the needs of their jurisdiction before adopting them. As one of these respondents explained, “I realize what works for some counties won’t always work for us so I like to have samples of policies from other counties and just kind of tailor them to our needs.”

Consistent with the fact that directors frequently reported they created or revised policy because of an external mandate, many respondents used state and federal gov- ernments as key resources in the policymaking process. More than half of the directors (55%) mentioned either calling representatives from state or federal agencies or con- sulting their websites. Respondents thought the guidelines and policy templates pro- vided by these agencies were particularly useful. According to one respondent,

They [the state] had a template in place. They had already documented the process so it made the research easier. We had a template to use as a guide so the rest was based on our own particular needs. It was a good starting point.

In addition, 19 respondents (48%) reported reviewing laws and general statutes from both the state and federal government to develop policy. Respondents used these legal documents as references to clarify what they could and could not do when creating a policy as well as what they had to do.

Another key resource was the Internet with 19 directors reporting they routinely conducted general Internet searches as part of the policy development process. In fact, many of these respondents indicated this was the first thing they did. In the words of

Jacobson and Lambright 407

one respondent, “No, I wish I could say there was a particular site but normally I just Google the area. For example, social media, I’ll Google that.” Others did more tailored searches. For instance, one respondent commented, “What I generally do is if I can’t find links through the appropriate website on the Internet, I will Google search a topic and look for a site I trust based on what I used in the past.” While generally viewed as an important information resource for many, some respondents noted that the useful- ness of the Internet did vary depending on the policy. As an example, one respondent reported, “When we did our Family Medical Leave, there was a lot of material on the net, where something like nepotism is not really out there.”

Professional associations were also important resources with 18 respondents (45%) indicating they had used information from these organizations when developing or revising policy. Directors were most commonly utilizing resources from national pro- fessional associations such as the Society for Human Resource Management and the International Personnel Management Association. Some respondents reported profes- sional associations provided helpful policy templates, whereas others described using professional associations as more general sources of information in the policymaking process.

While the frequency with which different external information resources were used was quite similar across the two states, there was one important exception. None of the respondents from New York mentioned consulting academic personnel or publications when developing policy. However, 12 North Carolina HR directors (60% of the North Carolina sample) reported using academic resources although all of these respondents had received information from the same academic institution: the School of Government at the University of North Carolina at Chapel Hill.4 Several respondents reported the assistance they had received from this resource was helpful. For example, one North Carolina HR director commented, “We use [the School of Government] all the time. [School of Government faculty X] is on my speed dial.” None of the New York or North Carolina HR directors reported using academic resources from any other institutions in the policy development process.

Respondents reported that they typically used the same process to develop policies regardless of a policy’s content. However, a handful of directors said they did tend to consult fewer resources when developing policies that were straightforward, such as when it is in response to a specific state mandate, compared to policies where there was more discretion. For example, one respondent commented,

Unless something is spelled out so clearly in law that you don’t have to expand on it, then I wouldn’t go through this process. Most of the time you have to adopt what the legal requirements are to your actual setting.

Generally, directors reported that they had access to all of the information sources that they wanted.

When asked which resource was most useful, the following were the most fre- quently identified: other jurisdictions (13 counties), state or federal resources includ- ing laws and policy templates (11 counties), and internal resources such as input from

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other department heads and county employees (six counties). Other respondents com- mented that the value of different resources varied depending on the policy. As one respondent noted, “I think in my experience in some cases the benchmarks are more helpful and then in other cases the stakeholder feedback.”

Some of the external resources that managers mentioned using frequently as well as the resources that were identified as the most useful suggest isomorphic processes may be influencing county HR policymaking. Managers’ use of state and federal agen- cies as well as laws and statutes as key information resources aligns with coercive isomorphism. Similarly, managers’ reliance on personnel and policies from other counties is consistent with mimetic isomorphism. It is also possible that managers’ utilization of the Internet may reflect mimetic isomorphism if the primary purpose of their searchers was to find policy templates from similar organizations. Finally, man- agers often consulted professional associations when developing policy, which could imply normative isomorphism. All 40 managers reported utilizing resources associ- ated with at least one isomorphic process, with 80% using resources consistent with two or more isomorphic processes.

Use of Promising Practices in the Policymaking Process

Are managers primarily focused on being expedient when designing policy, focusing on gathering information they think they need from a mix of internal and external sources and then writing policy? Or are they also using more sophisticated strategies that may help them tailor policies to their jurisdictions’ needs and go beyond simple information gathering? According to our interviews, counties varied in the extent to which they used strategies consistent with promising practices described in our literature review. For instance, the degree to which counties’ policymaking processes were inclusive differed. Directors in 21 counties (53%) indicated that at least sometimes, internal work groups composed of individuals from multiple departments were responsible for developing and writing HR policies (10 in North Carolina and 11 in New York). In the remaining counties, the policy development process was less inclusive, and the HR department was the primary policy author. Four of the counties with internal working groups had stand- ing policy committees. As described by one of these directors,

We have a personnel committee . . . It is made up of the County Manager, one of the Commissioners and I will create the policy, meet with them, talk to them about the issues leading to the needs for a creation or revision and they will give input and decide if it’s ready to take to the Board of Commissioners.

In the other 17 counties, committees were specifically assembled based on the nature of the policy. As one of these directors explained,

There’s not a big broad brush that can say we’re going to pull together the same six departments to write every policy that we’re doing. It really depends on the situation and what you’re trying to resolve by creating the policy.

Jacobson and Lambright 409

Both standing policy groups and ad hoc committees provided counties with a mecha- nism for systematically involving other voices in the policy-writing process beyond just the HR department and increasing the diversity of the decision-making team. The members of these internal working groups were generally senior management and department heads.

Another strategy counties used to ensure that the policymaking process was inclu- sive and a variety of concerns were considered was to give rank-and-file employees opportunities to provide feedback. Seven directors (18%) described employee engage- ment efforts (four from North Carolina and three from New York). Some counties had open comment periods during which any employee could offer input. Others indicated they specifically sought guidance from line staff potentially affected. As an example, one respondent explained the role staff play in the policy development process as “first just fact gathering, what has occurred and then what would they like to see occur.”

In addition to trying to involve a variety of voices in policymaking, several counties mentioned strategies they used to ensure policies were thoroughly evaluated. The most common was to systematically review policy implications for departments with 26 counties (65%) specifically mentioning they consider this when creating and revising policies (13 from both states). According to one of these respondents: “We have such a variety of employees. Talking to them [department heads] on how they would fit into such a policy and how it would affect them is beneficial.” In some cases, departments were asked for their feedback to evaluate the feasibility of the policy once the policy had been developed: “After we research it and draft a policy, we send it to the depart- ment heads and ask for their feedback.” In others, input from the department was the impetus for the policy: “Maybe the way we do things internally doesn’t meet the needs of the department . . . so we look to make changes based on feedback from department heads.” Less common than reviewing departmental implications, six directors reported that their counties (15%) considered the new or revised policy’s consistency with other existing policies (four in North Carolina and two in New York). As an example, one director commented when describing the development of his county’s technology use policy, “We [also] have an external communications policy so there’s back and forth to make sure things aren’t contradictory and are consistent.” Finally, 10 counties (25%) reported systematically reviewing data and using evidence-based analysis to inform the policymaking process (six in North Carolina and four in New York). Typically, these counties were benchmarking their policies with those from other juris- dictions and private employers to ensure county policies were consistent and competitive.

Policy Process Sophistication Index

As part of our analysis, we developed an index to assess how counties structured their policy formation processes and measured the extent to which counties were using strategies consistent with the practices identified as promising in the literature review. These practices are more sophisticated as they go beyond simple information gather- ing. Our index has five components. Counties were given a point for each of the

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following policymaking strategies they utilized (these are not the same as the resources they draw on referenced in Table 4, but reflect process choices): (a) use (at least some- times) of an internal working group to help develop policy (as a measure of team diversity), (b) engagement of rank-and-file employees in the policy process, (c) review of policy implications for individual departments, (d) review of the new or revised policy’s consistency with existing policy, and (e) use (at least sometimes) of evidence- based decision making to develop policies. The maximum potential score a county could receive on the index was a 5. Table 5 provides descriptive statistics for the index and its components. As Table 5 illustrates, counties’ scores ranged from zero to four with a mean score of 1.75, indicating the average county is using approximately two out of five promising practices. All four of the counties that received a zero on our index (i.e., those that had not adopted any of the promising practices) appear to be particularly reliant on resources aligned with isomorphic processes. At least half of the resources each of these counties were consulting fit this classification.

We examined whether there were any patterns between a county’s sophistication index score and a variety of respondent characteristics including education, certifi- cations, membership in a national professional association, time in position, private sector work experience in HR, and status as strategic partners. As Table 6 shows, the average index score was higher for respondents who had more education, had some type of certification, were members in a national professional association, had been in their positions for 5 or fewer years, had no private sector experience and were strategic partners (they were actively engaged in the county strategic planning pro- cess and their input was viewed as critical by executive county leadership).5 We also explored whether a county’s sophistication score was related to the following juris- dictional characteristics: state and HR department size. Counties in North Carolina and those with HR departments that had 11 or more staff had higher average index scores as Table 6 illustrates. According to a two-sample t test, the difference between the index scores for respondents with and without private sector experience was significant (p < .05). In addition, there was a significant negative correlation between the respondent’s time in their position and the county’s score on the sophistication index (p < .05). None of the other respondent or jurisdictional characteristics were significant.

Table 5. Descriptive Statistics for the Policymaking Sophistication Index Score and Its Components.

Minimum Maximum M SD

Policy Index Score (n = 40) .00 4.00 1.75 1.05612 Use of internal working groups (n = 40) .00 1.00 0.5250 0.50574 Engagement of employees (n = 40) .00 1.00 0.175 0.3848 Review of departmental implications (n = 40) .00 1.00 0.650 0.4830 Review of consistency with other policies (n = 40) .00 1.00 0.150 0.3616 Evidence-based decision making (n = 40) .00 1.00 0.250 0.4385

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Discussion and Conclusion

This article provides important insights into the process county government HR pro- fessionals use to develop internal HR policies for their workforces. Our findings indi- cate county HR directors collect information from a combination of internal and external resources. Some key resources frequently used by directors in both states align with isomorphic processes, including other jurisdictions, state and federal agen- cies, laws and statutes from the state and federal government, and professional asso- ciations. Managers’ reliance on these resources suggest they may at least in part be responding to pressure from oversight bodies, copying “best practices” of similar organizations and adopting current professional norms when developing policies. HR directors in both states also commonly consulted colleagues in other departments and the Internet for information.

Table 6. Policy Sophistication Index by Respondent and Jurisdictional Characteristics.

n M

Respondent characteristics Education (n = 40) High school or associates degree 3 0.6667 Bachelor’s 26 1.6923 Master’s or JD 11 2.1818 Certificate (n = 40) No certifications 25 1.5600 Has a certification 15 2.0667 National professional association membership (n = 40) Not a member of national professional association 16 1.5000 Member of national professional association 24 1.9167 Time in position (n = 39) 0-5years 22 2.0455 6 or more years 17 1.2353 Private sector experience (n = 40) No 22 2.0455 Yes 18 1.3889 Role in county strategic planning (n = 40) Not a strategic partner 24 1.5414 Strategic partner (self-reported) 16 2.0625 County characteristics State (n = 40) North Carolina 20 1.9000 New York 20 1.6000 HR Department size (n = 40) 1-10 employees 27 1.6296 11 or more employees 13 2.0000

Note. HR = human resource.

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All but four of the counties included in our sample went beyond simple information gathering and utilized strategies consistent with at least one of the promising practices identified although there was considerable variation in the number different counties had adopted. Utilization of some strategies was common. For instance, more than half of the HR directors reported relying on internal working groups. This approach gives individuals from different departments an opportunity to influence policies, increasing the diversity of the decision-making team. In addition, almost two-thirds of the HR directors indicated that they systematically reviewed the implications of policies for specific departments. Implicit in the use of internal work groups and review of depart- mental implications is the recognition that different departments are likely to have different perspectives on the same policy and its impact.

However, other strategies were less commonly employed. Only a handful of HR directors reported utilizing each of the following strategies: (a) engaging rank-and-file employees in the policy process (18%), (b) reviewing a new or revised policy’s con- sistency with existing policy (15%), and (c) using (at least sometimes) evidence-based decision making to develop policies (25%). These findings suggest that the directors could ask for more feedback from rank-and-file employees and policies could be more thoroughly evaluated in many of the counties studied. While internal working groups provide feedback from a variety of perspectives and composition of these groups var- ies, typically upper level managers serve on these committees. As a result, policy issues that are important to rank-and-file employees may receive less attention or be overlooked. Offering more opportunities for rank-and-file employees to give input may increase organizational buy-in and increase the likelihood that a policy is effec- tive (DeHart-Davis, 2009; Stivers, 2008). Moreover, considering a policy’s consis- tency with existing policies and using evidence-based decision making can help counties tailor policies to match their specific needs and strategic goals.

Overall, the frequency with which different information resources were used was consistent across the two states with a few exceptions. The most notable was that only the North Carolina directors reported consulting academic publications or personnel in the policy formation process. The approach to policymaking and extent to which HR directors utilized different practices was also similar across states. The average score on the sophistication index was slightly higher for the North Carolina counties. However, this difference was not significant. The similarities in the information resources and practices used in the two states are quite interesting given unions play a much more prominent role in New York and the two states are very different in terms of their political, social, and economic characteristics. Our results may indicate that environmental factors such as these have minimal influence on internal county HR policymaking processes.

While there was little difference by state, our findings suggest certain characteris- tics of HR directors matter and shape how a jurisdiction approaches the policy process. HR directors with private sector experience were significantly less likely to be using strategies included in our sophistication index. We often think of the private sector being ahead of the public sector in terms of more strategic behavior, making this an interesting and unexpected result (Lawler & Boudreau, 2009; Ulrich, Brockbank,

Jacobson and Lambright 413

Johnson, Sandholtz, & Younger, 2008). Two of our measures look at practices that are more inclusive in nature, and private sector organizations may place less emphasis on this value. Moreover, there is often less variation in the activities and outputs within private sector organizations compared to public sector ones. As a result, there may be less need to consider policy implications or use analytical tools to examine policy fit. In addition, HR directors who had been in their positions longer used significantly fewer strategies. More experienced HR directors may have greater confidence that they have a good sense of how various policies will impact their workforce and assume they do not need to seek feedback from a wide variety of stakeholders and closely examine policy implications. However, it is possible these directors are resistant to change or the use of new practices. The individual leading the HR department appears to play an important role in how a county approaches developing internal policies for its workforce. The results of this research are consistent with work by Jacobson et al. (2013) that finds HR leadership is critical in SHCM implementation. Both studies underscore the importance of the leadership HR directors can provide.

In this research, we assess the overall sophistication of counties’ HR policymaking process. Although we classify some counties as more “sophisticated” in their approach than others, even the counties that have adopted some of the more advanced strategies are unlikely to use them for every policy. In fact, uniform use of these practices would not necessarily be recommended. For instance, if a county is mandated by the state to implement a policy prohibiting smoking within 100 feet of a public building, there may be little need for the HR director to thoroughly vet the policy. It may be sufficient for the HR director to develop the policy primarily based on advice from colleagues in other county departments and using template policy documents from the state. However, HR directors may want to use a more deliberate approach in situations where HR directors have greater discretion such as with the development of a social media use policy. In this example, it may be helpful to (a) seek information from many different sources (such as the IT and legal departments) and use an internal working group because this is a relatively new challenge for county governments with many potential implications, (b) consider employee buy-in early in the process, (c) collect data on job-related social media usage, (d) systematically assess policy impact on dif- ferent departments, and (d) carefully evaluate the fit with existing policies (such as those related to IT and public information) prior to implementation. The most appro- priate approach for developing a particular policy depends on the characteristics of the jurisdiction, a jurisdiction’s needs, and strategic goals as well as the policy itself.

Our findings suggest several areas for future research. Building on this exploratory study, scholars should consider how the policy formation process impacts HR policy results. As noted previously, we did not collect data on policy outcomes and were unable to explore whether the use of the promising practices identified actually made HR policies more effective. Researchers could also compare the efficacy of the vari- ous strategies we discussed and investigate whether some strategies are more effective than others.

Another limitation of our study is its small sample size. The average index scores were considerably higher in counties where respondents had more education, had

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some type of certification, and were strategic partners. Even though the differences in these means were quite large, none were statistically significant, perhaps due to the low power of our statistical tests. Our results suggest that the preparation and philo- sophical approach of HR directors may matter in the policy formation process too. It would be interesting to examine in future research whether the same basic patterns we found could be replicated and whether the results would be statistically significant with a larger sample. Such results would provide further evidence that HR directors play an important role in the policymaking process. In particular, researchers may want to more closely examine the association between the sophistication of a coun- ty’s policymaking process and the training HR directors receive. Findings of a rela- tionship between these two variables would further suggest normative isomorphism is influencing HR policy formation as universities and other professional training institutions are critical in fostering shared norms and values within fields (DiMaggio & Powell, 1982).

In addition, researchers may wish to explore some of the strategies we highlight in greater depth as this research looked at them as part of a broad overview of the policy- making process. For instance, collecting information from other jurisdictions was a very common practice and could be consistent with mimetic isomorphism. We are curious to what extent counties are really seeking feedback on best practices as opposed to just gathering information about any policy. We also wonder how, if at all, they are tailoring these policies. As another example, it would be interesting to find out more about the specific ways counties try to engage rank-and-file employees in the HR policymaking process. Are these efforts perfunctory or is county leadership actively seeking feedback and shaping HR policy based on employee input?

The answers to these questions will provide a greater understanding of the process used to develop internal HR policies and will help local government HR professionals identify promising practices they may opt to utilize. These policies have an important and long-lasting impact on the culture and morale of the workforce. Learning more about how managers can strategically approach policymaking has the potential to improve the performance of public organizations.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

1. Pugh, Hickson, and Hinings (1969) define formalization as “the extent to which rules, pro- cedures, instructions and communication are written” (p. 116). This is important to note as in this research we are explicitly examining policies that have been formalized in a written process and adopted by a governing board.

Jacobson and Lambright 415

2. Only respondents from New York reported union representatives participated in the poli- cymaking process. All state and local governments in North Carolina are prohibited from engaging in collective bargaining.

3. In these cases, the board or legislature was involved in the policy design phases. This is not a reference to the formal adoption of a policy by the board or legislature.

4. According to the school’s website, it is “the largest university-based local government training, advisory, and research organization in the United States,” offering courses, semi- nars, and specialized conferences for public officials. There is no comparable system of support for local governments available through higher education institutions in New York.

5. As part of our interviews, we talked with respondents about their counties’ strategic plan- ning processes. We specifically asked human resource (HR) directors about their involve- ment in strategic planning in their county and the extent to which their county manager viewed HR as a strategic function, a support function, or some combination of both.

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Author Biographies

Willow S. Jacobson is an associate professor of Public Administration and Government at the School of Government at the University of North Carolina at Chapel Hill. Her work is published in such outlets as Journal of Public Administration Research and Theory, Public Administration Review, and the Review of Public Personnel Administration. Her research interest include Strategic Human Capital Management, leadership, and organizational theory and behavior.

Kristina T. Lambright is an associate professor in the Department of Public Administration in the College of Community and Public Affairs at Binghamton University. Her research interests include contracting, citizen participation, organizational performance, and engaged scholarship. She has published in a cross-section of public administration and nonprofit management journals.

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

The Influence of HR Policy Dimensions on the Job Satisfaction

of Employees of Public Sector Banks: A Study on Indian Overseas Bank†

S Baskar*

* Chief Manager (Rtd.), Indian Overseas Bank, Chennai, Tamil Nadu, India. E-mail: [email protected]

The HR policies in the Public Sector Banks (PSBs) relating to Compensation, Benefits, Promotion, Mobility, Transfer, Contingent Rewards, Training, Staff Accountability, Incentives, etc. have been framed in terms of guidelines issued by the Government of India (GOI), which is the promoter and major shareholder of the PSBs. These policies have a direct bearing on the job satisfaction of employees and cascading effect on the performance of the bank. The research study in Indian Overseas Bank (IOB) revealed that the overall level of job satisfaction of employees in terms of established job factors was found to be at an ambivalent level. While factors like Fringe Benefits (FB) and Operating Conditions (OPC) showed a level of dissatisfaction, factors like Promotion, Contingent Rewards and Pay showed an ambivalent level. Regression analysis on the data showed Performance Management System (PMS) factor as the significant factor among the six factors of bank policy dimensions considered for the study. Conversely, Pearson Correlation Coefficient analysis showed that PMS factor was positively related to factors like Communication, Contingent Rewards and also Pay. However, factors like Trade Union and Communication were found to be negatively related to each other. The research findings not only support the existing literature on job satisfaction but also add to the deficit literature by exploring the influence and relationship of Bank Policy Dimensions for the Job Satisfaction of employees in the Indian context in Public Sector Banks.

Introduction India had a fairly developed commercial banking system in existence at the time of independence in 1947, with 637 commercial banks operating in the country (RBI, 1947). The Reserve Bank of India (RBI) was established in 1935 and became a state-owned institution to serve as a central bank of the country from January 1, 1949. The Government of India (GOI) simultaneously enacted the Banking Regulation Act in 1949 providing a framework for regulation and supervision of commercial banking activity by RBI.

The GOI perceived that loans extended by colonial commercial banks were biased toward working capital for trade and large firms (Joshi and Little, 1996). Hence, “GOI took the view

† The paper is a part of author’s thesis submitted for the award of Ph.D.

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that the banking system has had to serve the goals of economic policies of the country’ particularly concerning equitable income distribution, balanced regional growth, elimination of poverty, employment generation and the control of private sector monopolies in trade and industry.”

As a corollary of the state policy, and at the behest of a report (under the aegis of RBI) by the Committee of Direction of All India Rural Credit Survey (1951), the Imperial Bank of India was taken over by the government and renamed as State Bank of India (SBI) on July 1, 1955 with the RBI acquiring substantial holding of shares. A number of erstwhile banks owned by princely states were made associates of SBI in 1959 (7 banks), like State Bank of Travancore (SBT), State Bank of Hyderabad (SBH), etc. Thus, the beginning of the plan era in 1952 (Five-Year Planning Process) also saw the emergence of public ownership of one of the most prominent of the commercial banks.

There was a feeling that though the Indian banking system had made considerable progress in the 1950s and 1960s, the credit deployment to agriculture, small industries and other plan priorities is negligible with overriding influence of private banks to serve commercial and industry houses including the state-owned SBI and its associate banks.

To meet these concerns, the government introduced the concept of social control in the banking industry in 1969, aimed with an objective to serve with a focus for the development of the economy in conformity with national plan priorities and objectives. In tune with the concept of social control, the Indian banking industry was subjected to nationalization in two phases (1969 and 1980). It was led to the birth of Public Sector Banks (PSBs).

The adverse developments in the banking sectors coupled with ‘current account crisis’ (3% of GDP) in early 1991 and poor macroeconomic performance characterized by a public deficit of 10% of GDP, and an inflation rate of 10% necessitated the GOI and RBI for introduction of financial sector reforms from 1991-92 which has been one of the central issues facing emerging markets and developing economies.

Hence, to improve the operational efficiency and profitability of the banks, particularly PSBs, which had long been characterized as highly regulated and financially repressed, financial sector reforms based on international financial standard were introduced progressively from 1992 and 1998 in two phases in terms of Narashimham Committee recommendations.

These measures paved the way for accelerated performance of the Indian banking sectors, and the PSBs have been playing a dominant role in improving the country’s economy from 1992 to today (Chandrasekhar and Ghosh, 2013) in an environment of competition from private and foreign banks. India’s banking industry is well set to reach US$4 tn by 2020, from the current level of 77 tn (US$1.30 tn) in synchronizing with global financial standards and norms with a dominant role for PSBs (Jagirdar, 2011).

In spite of the impressive growth and massive contribution to nation building after Independence, the stakeholders of PSBs (GOI, RBI and PSBs) have systematically neglected this very workforce during the journey period, on the pretext of overstaffing, low productivity and profitability, by totally overlooking their social contribution to the nation. PSBs have

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

increased their manpower by a meager Compound Annual Growth Rate (CAGR) of around 0.5% to achieve a balance sheet growth of 22% during the period of 2007-10 (McKinsey Report, 2010).

McKinsey had made some revealing observations that PSBs would have dearth of talented manpower by way of losing experienced senior executive and middle management at an unprecedented rate due to retirement in the current decade (2010-20). The PSBs suffered further by high levels of attrition too, which is around 20%, especially at junior scales.

There is a leadership capacity gap of at least 12,000-15,000 people in branches, regions, businesses and functions in each bank as leadership pipelines are extremely thin which adversely affects the succession planning. As such, PSBs today are seriously handicapped vis-à-vis their competitors in the marketplace in terms of huge human capital deficit. Overall, the people processes in PSBs appear to be inadequate and HR has become a new risk as diagnosed by the Khandelwal Committee on HR issues of PSBs (2010).

The bankers have to take note of HR problems: inducting talent in large numbers to retain their market shares, yawning generation gaps, thin leadership pipeline impacting succession planning, escalation of per employee costs in PSBs (which is currently 62% as against 50% globally for most banks), lack of clear role definition, massive re-skilling to unlearn and relearn, proactive feedback on employee performance in place of confidential performance appraisal systems, staff accountability syndrome, dilution of norms for selection of EDs, CMDs and influence of GOI on major HR policy issues of PSBs, as a promoter and major shareholder.

Livelihood was not the only reason for working in any organization. As Henry Ford famously said, “Why is it every time I ask for a pair of hands, they come with a brain attached?”. The people then understood that apart from livelihood, there is something else required, and the something else was termed ‘Job Satisfaction’. Industries are now in the knowledge age and hence people work for ‘Empowerment’ in general, and transformation of HR system in this direction is the key to success of the PSBs.

Jack Welch, Chief Executive of General Electric, said that too often, it is common that we measure everything and understand nothing. The three most important things we need to measure in a business are “customer satisfaction, employee satisfaction and the cash flow”. The customer satisfaction at higher level would increase your market share. The employee satisfaction gets you productivity, quality, pride, creativity and the cash flow which is a vital key of a company. Hence, job satisfaction of employees contributes positively to leverage productivity and customer satisfaction to enhance profitability of a company.

Majumdar (2013), in “A Deloitte Study on Why HR Leaders Need to Think Like Economists”, revealed that it is possible to establish a clear numerical relationship between good human capital management (employees) and enhanced financial results (performance) such as cash flow, profitability and margins, and customer value-added by business levels.

These research reviews provided strong evidence through successive studies over the decades that people work for purpose other than pay, i.e., job factors like fringe benefits, nature of job,

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relationship with co-worker, contingent rewards, supervision, promotion, etc. Conversely, Annual Bankers Conference (BANCON) reports of 2010-2013, RBI study reports, and Khandelwal committee on HR issues of PSBs (2010) are very vocal about “banks policy dimensions on HR areas such as Performance Management System (PMS), Transfer, Training, Government Policies, Staff Accountability and Trade Unions.” These factors have also implicated critical influence on the job satisfaction of employees’ in public sector banks.

A majority of research studies on job satisfaction of bank employees have been focused mainly on traditional job satisfaction factors in the banks, mostly neglecting these critical factors. The research in banking industry would be in an entirety, only when those job factors relevant to the organization of study, i.e., bank policy dimensions on transfer, training, performance management, government policy guidelines, staff accountability, etc. are also studied along with the traditional established job factors of compensation, fringe benefits, supervision, co-worker relations, etc. (Bhattacharya, 2007). Hence, the researcher factored in these variables of bank policy dimensions as identified research gap items.

The present study was carried out in Indian Overseas Bank (IOB), one of the large category public sector banks in India. HR policy of the banks are common to all the PSBs which are framed by the GOI and being implemented by the PSBs in letter and spirit with slight medications based on the ecology and negotiation capacity of trade unions of the individual banks. Hence, the study results would be true reflections on the job satisfaction of employees of all the PSBs.

Literature Review The purpose of literature review is to identify problems, past and current trends, potential relationships between theories and empirical findings and the influence of factors to formulate researchable hypotheses to address the objectives of intended research.

In an interesting perspective, in the Indian context where unions are strong and influential, to think of job satisfaction without unionism would be very unrealistic (Sinha and Sharma, 1962). Virmani (1995) found from a review of in-depth study of eight organizations for “redefining industrial relations” that the principles of collective bargaining need different attitude and it must give way to participation in the development of institutions with various changes in the role of management and its unions, and hence cannot coexist.

Annamalai and Vijayakumar (2002) reported that salary structure, relations with co-workers and superiors, supervision, bank policies and practices as dissatisfied job factors from a study on “job satisfaction among bank employees-cadre-wise”. Job descriptions and objective measurement of individual performance were not drawn in greater details in the banks. Consequently, linkages of performance and incentives were not framed in PSBs (Deshmukh, 2004).

Kavitha (2009) in her doctoral thesis found that PSB bank employees were dissatisfied with pay and pay rise compared to their peers in the private sector. Their satisfaction level was higher for the job factors like relationship with superiors, co-workers, fringe benefits, compared to private bank employees. PSB employees were more dissatisfied with “operating conditions, communication and nature of work”, compared to private bank employees.

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

Saiyadain (2009) summarized the findings of several research studies conducted between 1951-1998 and 1965-1997 in various industries including banks/public sector units: the hygiene factors would enhance workers’/clerks’ satisfaction, and the motivators contribute to managers’/ supervisors’ job satisfaction which seem to match with those factors envisioned by Herzberg and others way back in 1957. There was a positive relationship between job satisfaction components towards employee job performance (Anuar Bin Hussin, 2011).

Blessing White studies from 2010 to 2012 revealed that career development opportunities and training, opportunities to apply their talents, and more challenging work were the top influencing factors of job satisfaction of employees in manufacturing, banking/financial services in India.

Payal Chanania (2012) reported that the new generation craves for constant feedback and praises that too in highly visible format as against the traditional reward schemes and pay-for- performance incentives, quoting the findings from international strategic group, ‘Recognition Council’. Social recognition steps in as “the new currency” that fosters employee engagement, motivation and retention.

Chakrabarty (2012) opined that the most important area of HRM in the PSBs was the PMS which in current form was unable to discriminate, and differentiate between performers and non-performers. In any organization, naturally there would be 10-15% of people would be high performers. Banks should focus on the remaining 85%, as any improvement in their performance would have a significant impact on the organization’s performance, as “banking is a team game”, the RBI deputy governor lamented.

Goyal and Joshi (2012) forecasted that “diminishing employee satisfaction results in decreased revenue.” Due to deteriorated compensation structures for bank officers, and staff accountability policies, job satisfaction, motivation and willingness to accept higher assignments, risk-taking and mobility of employees have been significantly impacted (Sharma, 2012).

Meena and Dangayach (2012) reported that employee satisfaction in banks has been recognized to cause major impact on economy and social phenomenon of growth and standard of living. Hence, banks must continuously strive for employee satisfaction in order to stay profitable, and the benefits of employee satisfaction are: organization would benefit in the long run, caring about the quality of their work, delivering superior value to the customer, more employee productivity and profitability.

Indian employees attach a premium to pleasant colleagues in preference to the pay factor as revealed in the global work monitor survey of Ranstad Work Monitor Survey of 2012.

Shiva Kumar (2013) Senior Vice-President, Nokia, gives an interesting perspective on the ‘New-Gen employees’ as a Concorde generation, equating with arrive before they leave, and they are loyal to their careers and not institutions. They thrive on praise and are sensitive to criticism. Attrition is one of the biggest challenges in India which ranges between 15-20%, and “by 2020, 66% of companies would be having new employees.”

The IUP Journal of Bank Management, Vol. XV, No. 4, 201650

The British Media (2013) reported that “Money can buy happiness”, and the core theme was confirmed in a study by a dozen academics by analyzing an array of robust data from 126 countries, which disclosed that “Money is still a universal motivator and adds to happiness”.

The term ‘employee engagement’ has assumed significance as a variable to job satisfaction since the 2000s and it means different things to different organizations. Some equate it with ‘Job Satisfaction’ (SHRM 2007-2013).

The Towers Watson study (2013) showed that employee benefits have gradually emerged as a powerful tool to attract and retain key talent and are increasingly being leveraged to enhance the employee value proposition.

Nayar (2013), Joint MD of IT major HCL, experimented a concept of “employees first, customers second” over 6 years, which helped to increase the revenues fivefold as the level of ‘employee engagement’ reached a new pinnacle of satisfaction”. He further added that recognizing the centrality of the frontline employees is a challenge which is ignored across the world’ in the businesses.

Mahalingam (2013), an executive coach, seconded the above view as ‘value people first’. This made many in the business circles to wonder why there is so much disconnect between what we know (effective people management makes very good business sense and business cents) and what we do (ignore people management) in our organization. In some organizations, the problem is not with the first line or middle managers; “the bottleneck is always at the top of the bottle”, suggesting that CEO and senior managers demonstrate poor people management day in and day out, simply ingrained as a silent chronic HR culture in the companies.

Objectives The following objectives were framed to evaluate the influence of various aspects of HRM policies and practices on the Job Satisfaction (JS) of employees in IOB:

• To examine the impact of established job factors on the JS of employees viz. Pay, Fringe Benefits (FB), Contingent Rewards (CR), Promotion (PR), Nature of Work (NW), Co-Worker (CW), Operating Conditions (OPC), Supervision and Communication.

• To study the influence of bank policy dimensions identified for the study such as PMS, Transfer, Training, Government Policies on HR Areas, Staff Accountability and Trade Unions.

• To study the relationship between the established job factors and perceived Bank Policy dimensions to ascertain their impact on the JS of employees.

• To make an attempt to understand the performance of the bank with reference to employee job satisfaction in terms of the performance factors of the bank.

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

Hypotheses Null hypotheses (H001-H003) were framed to drive the course of research to test the influence of job satisfaction factors, bank policy dimensions, and the relationship between these two factors.

Methodology

Job Satisfaction Concept and Framework Job satisfaction is one of the most widely discussed and enthusiastically studied subjects. However, job satisfaction is among the most difficult constructs to define. Wood (1973) describes job satisfaction as “the condition of contentment with one’s work and it’s in his mind, denoting a positive attitude”. Locke (1973) stated that job satisfaction could be viewed as “a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experience”.

One of the most cited definitions on job satisfaction is that of Spector (1997): “Job satisfaction has to do with the way how people feel about their job and its various aspects”. It has to do with the extent to which people like or dislike their job. Even though several different definitions have been proposed, they all travel in the same direction: the attitude an employee has towards her/his job.

In human services, there is evidence that satisfaction is associated with employee performance and client outcomes (Wiggins and Moody, 1983). Maslow’s Hierarchy of needs (1954) and Herzberg’s two factor theory (1966) of motivation still wield influence on job satisfaction of employees.

Motivation theory is one of the widely accepted and studied theories used to explain human performances in organization. The performance of a worker is directly dependent of motivation and hence increased job performance and in turn upbeat job satisfaction, and vice versa.

Selladurai (1991) and Judge and Bono (2001) suggested that the relationship between job satisfaction and performance is of a cyclic nature, indicating that increased job satisfaction leads to increased job performance and vice versa.

Bhattacharayya (2007) empirically concluded that “Most of the studies in India have attempted to find out the job-satisfaction variables, which have been construed as the motivational variables”, an important practicable thought for the researchers.

Job satisfaction has been positively correlated to both job performance and motivation factors in terms of job satisfaction and engagement that ultimately affect the effectiveness of an organization (Ellickson and Logsdon, 2002; Timmer, 2004, and SHRM JS Surveys, 2007- 2013).

Hence, it is concluded that “motivation influences engagement, leads to productivity of individual to collective performance, in turn job satisfaction, and that motivation, Job Performance (JP) and Job Satisfaction (JS) have a circular cyclic relationship”, mediated by job factors (see Figure 1). These are the guiding concepts for the researcher for the entire gamut of this research.

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Data Collection The primary data was collected by means of a standardized/designed questionnaire survey instrument. The researcher had discussed with senior executives, some senior and junior staff officers, branch managers, clerical and trade unions of IOB in ample measure in person about the study. Besides, mobile phones and e-mails were utilized to inform the purpose of the survey to the respondents, union representatives and other colleagues in various states as the survey focus was Pan-India.

Annual reports of IOB, reports of Bankers Annual Conferences (BANCON), committee reports of RBI, IBA, Strategic HR Consultants, Business magazines, financial dailies and other literature reviews of articles and research paper from journals, besides websites, were the sources for collecting secondary data.

Questionnaire The first part of the questionnaire (see Appendix) contains demographics and general information about the respondents. The second part includes the standardized questionnaire of Spector (1992 and 2007), which contained nine aspects of job satisfaction factors, namely, Pay, Fringe Benefits, Contingent Rewards, Promotion, Co-Worker, Operating Conditions, Nature of Work, Communication and Supervision. Each factor includes 4-items/statements, with a 7-point rating scale (ranging from strongly agree to strongly disagree) to enable the respondents to cast their perception on the influence of JS factors.

The third part was a questionnaire designed for banks’ policy dimensions based on the review of literature, in consultation with three experts in banking/HR-related areas and the research supervisor. Based on their opinions and suggestions, six factors, namely, Training, Transfer, Government Policy Guidelines, Performance Management, Staff Accountability and Role of Trade Unions were identified and finalized with 27 statements. Responses to all items in the survey instrument were on a 7-point Likert scale.

Figure 1: Concept of Job Satisfaction Framework

PERFORMANCE

JOB SATISFACTION

MOTIVATION

ENGAGEMENT

JOB FACTORS

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

The interval scale is a standard survey rating scale best suited for opinion or attitude measurement. This kind of Likert-scale is selected based on the recommendation of Kronsnick and Fabrigar (as cited in Maiyaki et al., 2011). They clarified that the range of scale between 5 and 7 is set up to be more reliable than five-point Likert scale and appears to be optimal when measuring a bipolar. This is due to the reason that the scale with more points allows the respondents to articulate their viewpoint more precisely and comfortably.

In addition, Likert scale allows the researcher to make a more subtle distinction among the various respondents’ attitudes regarding a particular item, and the perception level was computed based on normative mean scores. The questionnaire was pretested with 30 employees in IOB and a few changes were incorporated in consultation with the experts and research supervisor.

Sample Frame and Size In the sampling process, within any organization in order to use aggregated psychological climate to predict job satisfaction level, there is a need to ensure that all members of the organization, or a convenient stratified sub-sample of individuals covering all positions, are represented. Without such sampling procedures in place, James et al. (1984) concluded that the use of aggregation is not justified.

The population universe of 28,128 employees for our study in IOB is large (March 2013) (Table 1). Based on the model table of Bartlett et al. (2001), the appropriate sample size for the population of above 20,000 and up to 30,000 was arrived at >379 at 95% confidence level with 5% margin of error. Out of 600 questionnaires mailed, 400 completed questionnaires were used for the analysis.

Table 1: Total Number of Employees in IOB as on March 2013

Officers Clerks Messenger/Peon Sweeper Total Staff

11,768 11,928 2,796 1,636 28,128

Source: Bank Annual Report

The researcher had excluded the messenger and sweeper aggregating 4,432 (15.76%) from the purview of current study as they are not part of clerical cadre directly handling any banking transactions and they have very negligible role in the performance of the bank. The sampling response in the study was “66% out of 600 questionnaires” distributed to the respondents by stratified convenient sampling, to cover all the cadres of clerks, junior, middle and senior management from all the age and gender group of employees.

Data Analysis and Tools Raw data collected from the respondents through the questionnaire were analyzed using the software “Statistical Package for Social Sciences (SPSS) version 18”. Appropriate statistical techniques such as descriptive analysis, numerical statistics such as frequencies, means, standard deviations and inferential statistics like factor analysis, Pearson correlation coefficients and

The IUP Journal of Bank Management, Vol. XV, No. 4, 201654

regression analysis were employed to analyze the data collected from 400 employees of IOB across the country.

These are standardized techniques being utilized in the HR research over the years (“Human Resource Research Methods”, Bhattacharayya, 2007). The level of influence of established job satisfaction factors (9) had been analyzed and computed and tabulated by utilizing the standardized Spector (2007) rating scales and numerical statistics.

The factor analysis, a multivariate statistical technique, is utilized in the study with a spectrum of analysis (KMO and Bartlett’s Test of Sphericity, Eigenvalues, PCA, RCM and Scree Plot Criterion) for validating the survey instrument of Bank policy dimensions (6 factors) with 27 questions designed for this research study. This technique is helpful to identify the underlying factors that determine the relationship between the observed variables and also to provide an empirical classification scheme of clustering of statements into groups called factors or dimensions by the process of data reduction, groupings summation and significance. It was performed using rotated factor matrix. Principal Component Analysis (PCA) method was used for extraction because it leads to the derivation of uncorrelated statements/factors.

KMO and Bartlett’s Test of Sphericity was found to be significant to carry out the factor analysis for the data obtained as the items measuring the factors of bank policy form empirically separate dimensions. Eigenvalues of factors plotted in the Scree plot showed six factors that could be taken with confidence which can explain the overall variance. The employee’s perception on the rank order preference of bank policy dimensions was analyzed and presented by utilizing descriptive statistics.

Spearman’s correlation coefficient was utilized to compute the relationship of job satisfaction factors with bank policy dimensions. Multiple regression analysis was used to determine the predictors of job satisfaction related to bank policy dimensions. In all cases, research questions were tested at the 0.05 or 0.01 level of significance.

The author has also made an attempt in the study to understand the performance of the bank in terms of employee job satisfaction, which was one of the objectives of the research. For this purpose, the researcher had utilized the secondary data on the performance of the banks from 2007 to 2013 (study period) on key business and financial parameters: growth of Deposits (D) and Advances (A), Business mix (D+A), Current and Saving Deposits (CASA), Profits, Per Employee Productivity, Asset Quality, Net Interest Margin (NIM), Cost of Funds (COF), Return on Assets (ROA), Capital to Risk Asset Ratio (CRAR) and Net NPA Ratio (NNR) and RBI reviews of the individual bank performances in terms of these key business and financial parameters.

Results and Discussion

Influence of Traditional Established Job Satisfaction Factors Out of the nine factors of JS, employees of IOB have perceived the motivational factors such as Fringe Benefits, Contingent Rewards and Promotion prevailing in the bank as dissatisfied and ambivalent respectively (Table 2).

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

Table 2: Descriptive Statistics and Job Satisfaction Level of Employees

S. No. Variable Mean Std. Deviation Level

1. Pay 15.86 5.62 Ambivalent

2. Promotion 16.39 3.84 Ambivalent

3. Contingent Rewards (CR) 15.77 4.43 Ambivalent

4. Fringe Benefits (FB) 14.85 5.05 Dissatisfied

5. Operating Conditions (OPC) 13.76 3.73 Dissatisfied

6. Supervision 21.02 4.05 Satisfied

7. Co-Worker 20.31 3.65 Satisfied

8. Nature of Work 21.33 3.57 Satisfied

9. Communication 18.25 4.68 Satisfied

Overall Job Satisfaction-(weighted mean) 163.27 26.99 Ambivalent

The reflections of employees on hygiene factors, viz., Pay and OPC, were also in a state of ambivalent (unsure or neither satisfied nor dissatisfied). The Operating Conditions (OPC) in terms of policies and procedures for guiding the employees in the functional areas of banking, including HR areas, besides working conditions and its effects on the perception of employees, were rated as ‘dissatisfied’ in the current study. The reasons attributed for the negative ratings were staff shortage, too much of work load, shoddy working facilities at rural areas and job stress.

These conditions lead to error and mistakes causing operational risks which lead to perpetuation of frauds, noncompliance of system and procedures, and increase in Non-Performing Assets (NPA), as being felt in IOB as well in other public sector banks. According to Indian employees, the top three reasons for stress at workplace include unclear or conflicting job expectations, inadequate staffing (lack of support, uneven workload in group) and lack of work-life balance (Towers Watson Study, 2013).

The employees were satisfied with the human relation aspects prevailing in the bank, i.e., relationship with co-worker, nature of work, supervision and communication. As such, the null hypothesis formulated is rejected as there was significant influence implicated by five aspects of JS factors (S. No. 1-5 of the Table 2) with overall level of JS of employees also in an ambivalent state.

Perceptions of Respondents on the Influence of Bank Policy Dimensions Descriptive Analysis was utilized to rank the importance of bank policy dimensions (Table 3), which had shown that the scores in four factors, namely, PMS, Staff Accountability, Transfer and Training Policies, were below average rating and people were in agreement with the importance of these factors for their satisfaction. Each factor was brought to the level of

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Table 3: Perceptions of Respondents on the Influence of Bank Policy Dimensions

S. No. Factors Factors Ranking Mean Values

Descending

1. Trade Unions 1 4.47

2. Government Policy Guidelines 2 4.36

3. Performance Management System (PMS) 3 3.47

4. Staff Accountability 4 3.46

5. Bank Transfer Policy 5 3.42

6. Training Policy 6 2.64

Perceived Bank Policies Average 3.64

each element taking the average of all the elements in each factor. Thus, it allows us to simplify, in understanding, where employees are in strong agreement, least in agreement, and also where employees are not in agreement. Based on the ratings of the respondents, one could say that overall, the perception of employees towards bank policy dimensions is somewhat agreeable, as the score for overall perception towards perceived bank policies is 3.64. The score is more than 3, and 3 represents neutrality; however, the overall score of 3.64 falls towards the agreeable side.

Trade union/officers association was rated as top ranking factor, followed by Government Policy Guidelines for employees’ satisfaction under bank policy dimensions. Nagarajan (Bancon 2003) reported that HRM policies and practices have been evolved primarily through reactive processes in PSBs between ‘the management and trade unions’. The trade union and officers association wielded undue influence in the execution of transfer policy of clerical and officer’s cadre.

Sharma (1980) studied the relationship between job satisfaction and union involvement which showed that of all the variables, union involvement turned out to be the best predictor of variations in job satisfaction. It was due to prevailing environment in the PSBs that employees are in the habit of approaching the trade union and officers association for majority of the HR issues rather than the management including vigilance and disciplinary cases where union people are appearing for employees as defense representatives.

Further, Government Policy Guidelines, which were ranked at No. 2, have impacted recruitment, promotions, placement, mobility, performance evaluation, incentives and staff accountability in the PSBs. It is clear that the undue influence of the government in the HR portfolio through bank board’s has not gone down well with the employees/senior management who have larger stakes in overall HR management strategies of the PSBs.

The agenda for HR management has been dictated and influenced by GOI, and trade unions/associations as per the observations of Khandelwal Committee (2010) and Chakrabarty (2012) on HR issues of PSBs.

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

PMS was construed as a crucial ‘motivating factor’ in addressing the major HR issues in promotion, transfer, training, placement, incentives, career, and leadership development was ranked third in this study. It was in conformity with its significance for employee’s satisfaction as revealed from various studies.

Staff accountability was perceived as a distress factor affecting the employee morale, work- life balance and decision making. No bank anywhere in the world, other than PSBs in India, has a policy that every loan loss should be scrutinized with a view to fixing accountability on all the officials who had been associated with the loan and other transactions. The perceptions that bonafide actions of officers and other employees enjoy the protection in PSBs from accountability are only on paper (Viswanathan, 2002).

The present staff accountability policies are also visibly associated with risk aversion tendencies on the part of the officers due to the fear psychosis of an external and internal vigilance mechanism prevailing with a Damocles’ sword, which acted as an antithesis to the motivation in the PSBs (Krishnamurthy, 2012; and Sharma, 2012).

Bank transfer policy was rated at 4, construed as a factor of distress (mean 3.42) due to the fact that its implementation is highly non-transparent, ad hoc and annualized with post promotion negotiation with trade unions. Employees appearing for promotions would be under cloud on transfer policy before appearing for promotion.

Training policies were relegated to last position as the most dissatisfied job aspect as competency mapping, appropriate training, methodology and the level of competency acquired and its utility in the field after training have not been evaluated (Gopal and Radhakrishnan, BANCON, 2011; and Shilpi Singh, 2013). Therefore, the null hypothesis is rejected, as the employees in IOB perceived that the bank policy dimensions would significantly impact their satisfaction levels.

Bank Policy Dimensions and Their Relationship with Job Satisfaction Factors The regression analysis indicated that the beta coefficient of the component of PMS had revealed positive value of 0.162 (Table 4), which means Performance Management Policy alone had the ability to predict the level of job satisfaction and impact the satisfaction of employees. It was due to PMS which embodied the Government Policy Guidelines on promotions, placement, mobility, transfer, training, incentives and staff accountability policies and followed in letter and spirit annually (applicable to all PSBs). As such, it was implied that the respondents have not considered other factors, i.e., accountability, training, transfer and government policy, as significant factors.

Conversely, Pearson Correlation Coefficient analysis employed in the study revealed that PMS and communication were related positively (r = 0.129; p > 0.05) with each other. PMS and communication might reciprocate each other with PMS promoting the employees for better communication in the organization and vice versa, with employees’ perception on communication as one of the JS factors also satisfactory (Table 2). PMS was related positively

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Table 4: Beta Values and Significance Level of Predictive Variables

Coefficientsa

Unstandardized Standardized Model Coefficients Coefficients t Sig.

B Std. Error Beta

1 (Constant) 163.410 16.051 – 10.181 0.000

Accountability 0.709 1.333 0.039 0.532 0.595

Training –0.259 0.659 –0.036 –0.393 0.695

Govt. Policy 0.094 0.862 0.008 0.109 0.913

PMS 1.465 0.660 0.162 2.220 0.027*

Trade Union –1.281 0.927 –0.096 –1.382 0.168

Perceived Bank –0.251 0.378 –0.079 –0.662 0.508 Policy Dimensions

Note: a Dependent Variable: Overall Job Satisfaction; and Significant at 0.05 level.

with contingent rewards (r = 0.108; p > 0.05) and also with pay (r = 0.112; p > 0.05) which were not held in good stead (Table 2) in the bank.

Similarly, trade union and communication were found to be negatively related (r = –0.136; p > 0.05) to each other. Higher scores on trade union related to low communication, which indicated people showing less communication with the organization when there is increased proximity with the trade union and vice versa. Incidentally, trade union scored first rank among the respondents under bank policy dimensions, suggesting that “the greater the job satisfaction, the less favorable was the attitude towards the union”. The null hypothesis had been ‘retained’ as there was no significant relationship between a majority of the job satisfaction factors and perceived bank policy dimensions among the employees of IOB.

Impact of Job Satisfaction on the Performance of IOB The secondary data of business and financial parameters of IOB from 2008 to 2013 revealed that the growth of CASA deposits (SB plus Current Account) came down from 29.4% as at the end of March 2009 to 27.1% as at the end of March 2013. The overall growth in current deposits (CA) was insignificant during this period. The disbursement trend in credit has shown that there was near stagnancy in agriculture at 15.8% during this period, where it was 45% and 27% for industry and services sectors respectively as of March 2013.

The business per employee which was at 5.83 cr in 2008 rose to 14.17 cr as on March 2013 (Table 5). With alarming increase in credit growth, flow of credit to various sectors rose from 2011 to 2013, but keeping the staff component at around 26,000 as constant, in real terms, the workload of the employees increased manifold.

The net NPA ratio which was at 0.60% as of March 2008 rose to reach a level of 2.50% in 2013. It was due to higher slippages of loan accounts amounting to 5,601 cr, and it touched

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the level of 8,914 cr as of March 2013, from the level of 1,616.90 cr in 2007, affecting the profitability and image of the bank among the stakeholders as well as in the market. Business growth and profitability indicators showed rapid increase during the year-ended March 2011, and declining trend was witnessed in the later years, the notable being negative growth in profit (–5.66%) as of March 2013.

The soundness indicators, namely, CRAR had shown a mixed trend during this period, and it declined to 11.85% as of March 2013. Conversely, Cost of Funds (COF) had shown an increasing trend.

Though the overall performance of the bank depends on various factors such as economy slowdown, government policy guidelines, global meltdown, and customer service, employee’s satisfaction level would also notably influence the performance of the bank as evidenced from the reflections of performance data in the current study.

Further, certain secondary data forms a benchmark reading to confirm/ensure the relevance of statistical study. The concept of research is to develop contextual knowledge (how this field draws on and connect to others), the methods (the tools of enquiry), and the ability to tie it to the big picture. Finally, ways were found to link the specific item of interest to larger issues, by looking across subjects from diverse fields for an answer or combine ideas from different lessons in the indented project.

In the present study also, based on a review of various literatures, it has been interpreted that the level of job satisfaction may be one of the reasons influencing the performance factors of the bank. This rationale was supported by the studies on Khandelwal Committee Report on “HR Issues of Public Sector Banks”, 2010, Conference Papers presented in BANCON Conferences – 2011-2013, RBI Deputy Governors’ speeches on HR Conferences on PSBs from 2010-2015, etc. and reflections from corporate leaders on HR policy implications on the performance of their industries progressively over the years as revealed from the review of literature cited.

Incidentally, a majority of HR policy prescriptions for PSBs are based on these reports/ BANCON Conferences, by the Government of India who is the major shareholder and promoter of these banks. Thus, the answer for one of the objectives of the study is that job satisfaction level of employees does influence the performance factors in Indian Overseas Bank.

Conclusion Based on the findings, the following conclusions are drawn:

• The research revealed that overall job satisfaction level of employees in IOB in terms of traditional JS factors has been in an ‘ambivalent level’ and bank policy dimensions were at an ‘average level’.

• The happier and positive side of the studies is that employees of IOB are satisfied with human aspects in their banks which were due to satisfied co-worker relations, supervision, and communications flow in the bank.

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

• The declining trend in growth of CASA deposits (SB plus Current Account) during the study period has been a reflection of deficient customer service in the bank.

• The employees perceived fringe benefits, OPC as dissatisfactory factors, besides pay, promotion and contingent rewards at an ambivalent level.

• Staff accountability was perceived to be a high distress factor affecting the employee morale, work-life balance and decision making on the part of junior, middle and senior management in the bank—a cause for concern to the top management of the PSBs, RBI and GOI.

• PMS would predictably drive employee engagement to performance which leads to satisfaction as perceived by the employees. The study revealed the emergence of PMS as a crucial ‘motivating factor’ to address the major HR issues in promotion, transfer, training, placement, skill mapping and leadership development.

• The research findings indicated that job satisfaction level does influence the performance growth indicators in IOB.

• The study findings could be well replicated in other PSBs, as the prevailing HR policies are more or similar in all the PSBs.

The research findings of the study “not only support the existing literature on job satisfaction but also add to the deficit literature by exploring the influence and relationship of Bank Policy Dimensions for the Job Satisfaction of employees in the Indian context in Public Sector Banks”.

The study findings also supported the model of job satisfaction umbrella which is an offshoot of B2B International Ltd., “White Paper on Employee Satisfaction at Work” (2010). The model stems from the theories of both Maslow’s Hierarchy of needs, and Herzberg’s two factor theory, with ‘Hygiene’ factors at the base of the pyramid and ‘satisfiers’ (motivators) at the top (see Figure 2).

Figure 2: Job Satisfaction Pyramid

Satisfiers (Motivators)

To p

M an

ag em

en t Policy D

im ensions

Hygiene Factors

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The researcher declares that an organization successfully meets each of these engagement factors, mediated by policy dimensions, and top management becomes more attractive to new budding employees and becomes more engaging to its existing staff.

PSBs have been recognized to cause major impact on economy and social phenomenon of growth and standard of living in the country. Hence, “banks should concentrate continuously on employee satisfaction in order to stay profitable for the benefits of all the stakeholders” and in the process, would be benefitted by employee retention, customer satisfaction and greater employee positive contributions to the organizational effectiveness and performance.

Limitations of the Study

• The researcher strongly believes that the results generated from the study will be highly generalizable to the whole population.

• An instrument was designed to include identified bank-specific factors in the current study and the same was standardized through a careful review by a panel of experts.

• The regional bias may also have influence on answering the questionnaires on some factors.

• The individuals in the population may have chosen not to respond to the survey at all or may not have responded to all of the questions, which is inherent in such type of all-India surveys using questionnaires.

• The focus of the research was only on IOB (Public Sector Bank), where the researcher, as an officer holding various positions up to the level of senior executive (1977 to 2010), has had a good amount of learning exposure to HR dimensions and other related issues.H

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The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

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18. Kavitha D (2009), “Job Satisfaction of Employees in Select Commercial Banks”, Ph.D. Thesis, Sri Venkateswara University, Tirupati, January.

19. Khandelwal Committee Reports on “HR Issues of Public Sector Banks”, 2010.

20. Krishnamoorthy T S (2012), “Take Public Sector Banks Out of the CVC Purview”, The Hindu, November 25, Chennai.

21. Locke E S (1973), “Satisfiers and Dissatisfies Among White Collared and Blue Collared Employees”, Journal of Applied Psychology, Vol. 58, p. 67ff.

22. Mahalingam C (2013), “Employees Valued, Yet Ignored”, Business Line Daily, January 1.

23. Majumdar Shyamal (2013), “Why HR Leaders Need to Think Like Economists”, Business Standard, April 25, Deloitte Study.

24. Meena M L and Dangayach G S (2012), “Analysis of Employee Satisfaction in Banking Sector”, International Journal of Humanities and Applied Sciences (IJHAS), Vol. 1, No. 2, ISSN. 2277-4386.

25. Nayar Vineet (2013), “Employees First, Customers Second”, Times of India – Ascent, May 22.

The IUP Journal of Bank Management, Vol. XV, No. 4, 201664

26. Payal Chanania (2012), “The Power of Social Recognition”, The Hindu, July 18.

27. Saiyadain Mirza S (2009), Human Resource Management, Tata McGraw-Hill Publishing Company Ltd., New Delhi.

28. Selladurai (1991), “Factors Affecting Job Satisfaction and Job Performance Relationship”, American Business Review, pp. 16-21.

29. Sharma J D (2012), “Pilot Study on Globalization, Technology and HR in Banks”, The Management Account Journal, October, pp. 1204-1209.

30. Shilpi Singh (2013), “Face of HR Practices in Today’s Scenario in Indian Banks”, International Journal of Application and Innovation in Engineering and Management, Vol. 2, No. 1.

31. Shiva Kumar D (2013), “New Gen Employees”, Business Line, October 12.

32. SHRM Global Study Reports on “Job Satisfaction and Engagement Surveys”, from 2007 to 2012.

33. Sinha D and Sharma K C (1962), “Union Attitude and Job Satisfaction in Indian Workers”, Journal of Applied Psychology, Vol. 46, pp. 247-251.

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36. Spector Paul E (2007), “Instructions for Scoring the Job Satisfaction Survey”, pp. 56-60.

37. Viswanathan R (2002), “What Ails Public Sector Banks”, The Hindu, Chennai, January 25.

38. Wiggins J D and Moody A (1983), “Identifying Effective Counsellors Through Client Supervisor Ratings and Personality-Environment Variables”, Vocational Guidance Quarterly, Vol. 31, pp. 259-269.

39. Wood O R (1973), “An analysis of Faculty Motivation to Work in North Carolina Community College System”, North Carolina State University, Raleigh.

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

Appendix

Questionnaire

Please fill up the following with a tick mark in the box.

Name of the employee: (optional):

1. Gender:

Male Female

2. Age (in yrs):

20-30 31-40 41-50 51-60

3. Marital Status: Married Unmarried

4. Qualification: Not a Graduate Graduate Postgraduate

MBA/ MCA JAIIB CAIIB

5. Designation Mother Tongue:

6. Branch Manager: Yes No

7. Present Scale: Sub-Staff Clerical JMG I

MMG II MMG III SMG IV

AGM DGM GM

8. Native State:

Name of Present Workplace:

9. Workplace and Category:

Metropolitan

Administrative Office Branch Urban

Semi urban

Rural

Part I: Personal Information

The IUP Journal of Bank Management, Vol. XV, No. 4, 201666

Appendix (Cont.)

10. Experience:

Less than 5 years 6-10 years

11-15 years 16-20 years

21-25 years 26-30 years

Above 30 years

11. Workplace and Place of Residence:

Same Less than 100 KMs

More than 100 KMs

12. Salary per Month ( ):

Less than 20,000 20,000 to 30,000 30,000 to 40,000

40,000 to 50,000 Above 50,000

13. Family Status: Number of dependents

14. Spouse Employed:

Yes No

15. Living Status:

Living with Family Living Alone

16. Property Status:

Own a House/Flat Do not have own house anywhere

17. Other Assets:

Do not own any vehicle Own a 2-wheeler

Own a 4-wheeler Computer

18. Economic Condition of Your Family:

Surplus Adequate

Balanced Deficit

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

1. I feel I am being paid a fair amount for the work I do.

2. Chances for promotion are less on my job.

3. My supervisor is quite competent in doing his/her job.

4. I am not satisfied with the benefits I receive.

5. When I do a good job, I receive the recognition for it that I should receive.

6. Many of our rules and procedures make doing a good job difficult.

7. I like the people I work with.

8. I sometimes find my job meaningless.

9. Communications seem good within this organization.

10. Raises in the pay are too few and far between.

11. Those who perform well on the job stand fair chance of being promoted.

12. My supervisor is

unfair to me.

13. The benefits we receive are as good as most other banks offer.

S. No.

Statement Strongly Agree

Agree Slightly Agree

Don’t Know

Slightly Disagree

Disagree Strongly Disagree

Appendix (Cont.)

Part II: Job Satisfaction

The IUP Journal of Bank Management, Vol. XV, No. 4, 201668

Appendix (Cont.)

S. No.

Statement Strongly Agree

Agree Slightly Agree

Don’t Know

Slightly Disagree

Disagree Strongly Disagree

14. I feel that the work I do is not appreciated.

15. Very rarely my efforts to do a good job is blocked by redtapism.

16. I have to work harder and harder at my job because people who work with me are not competent.

17. I like doing the things I do at work.

18. The goals of this organization are not clear to me.

19. I feel unappreciated by the organization when I think about what they pay me.

20. People get promotions as fast as in other banks.

21. My supervisor shows too little interest in the feelings of subordinates.

22. The benefit package we have is equitable.

23. There are few rewards for those who work here.

24. I have too much to do at work.

25. I enjoy being with my co-workers.

26. I often feel that I do not know what is going on in the organization.

27. I feel a sense of pride in doing my job.

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

Appendix (Cont.)

S. No.

Statement Strongly Agree

Agree Slightly Agree

Don’t Know

Slightly Disagree

Disagree Strongly Disagree

28. I feel satisfied with my chances for salary increases.

29. There are benefits we do not have which we should have.

30. I like my supervisor.

31. I have too much paperwork.

32. I don’t feel my efforts are rewarded the way they should be.

33. I am satisfied with my chances for promotion.

34. There is too much commotion and fighting at work.

35. My job is enjoyable.

36. Work assignments are not fully explained.

Part III: Bank Policy Dimensions

1. Training is given to employees who do their job well.

2. Training given to employees is not adequate.

3. Training programs offered are motivating.

4. Training given to employees is effective.

5. Feedback from superiors and top management.

6. PMS is linked to rewards and recognition.

7. Overall satisfaction

of PMS.

The IUP Journal of Bank Management, Vol. XV, No. 4, 201670

S. No.

Statement Strongly Agree

Agree Slightly Agree

Don’t Know

Slightly Disagree

Disagree Strongly Disagree

Appendix (Cont.)

8. Qualification is recognized for promotion.

9. Taking risk and responsibility is recognized in the promotion policy.

10. The policy of transfer and posting is satisfactory.

11. The policy of transfer and posting is transparent.

12. Transfers take place at fixed intervals.

13. Job performance is recognized for promotion.

14. Transfer of an employee above 55 years of age is not acceptable.

15. Transfer of an employee to a far off/ other language area is not acceptable.

16. All employees are fully aware of Ghosh Committee recommendations on transfer.

17. The activities of Trade Union/Officers’ Association are satisfactory and focused on individual’s growth.

18. The functioning of Trade Union/Officers’ Association parties is a hindrance to the growth of organization.

The Influence of HR Policy Dimensions on the Job Satisfaction of Employees of Public Sector Banks: A Study on Indian Overseas Bank

Appendix (Cont.)

S. No.

Statement Strongly Agree

Agree Slightly Agree

Don’t know

Slightly Disagree

Disagree Strongly Disagree

19. I will be motivated to improve my productivity if trade unions do not interfere in my transfer and promotion.

20. Trade Unions only can get me transfer to my preferred place.

21. Government policies on promotion and transfer hamper my career growth.

22. Government policies on promotion and transfers shape an employee into a full- fledged banker.

23. Individual banks should be allowed to frame promotion/ transfer policies.

24. Interference/Influence are curtailed when there is a common government policy on promotion and transfers.

25. Staff Accountability Policy of the bank is a demotivating factor for employees.

26. Staff Accountability Policy of the bank is satisfactory.

27. Banks need not have Staff Accountability Policy as there is comprehensive ‘Conduct and Disciplinary Rules’.

Reference # 10J-2016-11-04-01

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Chapter 1: Introduction: Public Human Resource Management in the 21st Century

By:

In: Public Human Resource Management: Strategies and Practices in the 21st Century

Chapter DOI: https://dx.doi.org/10.4135/9781483395784.n1

Subject: Human Resource Management (general), Human Resources, Public Management

Introduction: Public Human Resource Management in

the 21st Century Human resource management is an essential part of any organization, encompassing a wide

range of activities and functions, including sta�ng and recruiting, administration of bene�ts

and payroll, workforce planning, training and development, performance appraisal,

discipline, labor-management relations, and overall employee well-being. In fact, most

employer-employee relations in any organization involve some aspect of human resources.

This is true regardless of whether the organization is in the public sector (government), the

private sector (for-pro�t companies), or the nonpro�t sector. However, public human

resource management (PHRM)—human resource activities at the federal, state, and local

R. Paul Battaglio Jr.

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Summary

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Subject index

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levels of government—can be particularly challenging, as it often entails complex legal

guidelines that apply exclusively to public sector employees and public organizations;

guidelines that human resource managers must understand, abide by, and enforce. It is the

policies, regulations, and practices of PHRM that are the focus of this book.

Furthermore, this text takes a contemporary approach in its coverage of PHRM, recognizing

that over the last few decades, traditional PHRM has given way to quite a di�erent

landscape, one that looks increasingly like the private sector. Beginning in the late 1970s, a

series of reforms has aimed at improving the e�ciency of public services. The impetus for

these reforms has been a critical view of traditional public management practices, especially

of human resource practices. These have often been depicted as archaic and rule bound and

as epitomizing the convoluted practices typical of bureaucracy. Traditional PHRM espoused

democratic ideals and values, emphasized fair and equitable treatment of all public

employees, and protected public employees’ rights. However, traditional PHRM also

conformed rigidly to rules and regulations and was based on a hierarchical structure,

wherein a central personnel o�ce set policy and made decisions that then �ltered down to

divisions or subordinate o�ces. Thus, making hiring and termination decisions in the public

sector was widely viewed as unnecessarily time-consuming. A classic example of the

byzantine human resource process was the rules and procedures governing federal

government hiring outlined in the ten-thousand-plus page Federal Personnel Manual

(Mesch, Perry, and Wise 1995).

The reforms that have been implemented over the last few decades have been referred to

as “managerialist” in their focus or as “new public management.” The in�uence of private

sector practices aimed at improving productivity is a persistent theme throughout these

public sector reform e�orts. These reforms were meant to increase e�ciency and

productivity, and—in contrast to to traditional PHRM, which was more concerned with rules

and proper bureaucratic process—they were results driven. Reformers advocated adopting

greater �exibility in approaching tasks so as to be more e�cient, using more managerial

discretion, and embracing a “whatever gets the job done” philosophy. Such reformers have

become increasingly commonplace in the public sector.

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Given the extent of reform e�orts over the last few decades, managing human resources in

the public sector has become increasingly di�cult to navigate. Changes to civil service laws

at the local, state, and federal levels of government have also created confusion among

those trying to implement human resource changes in their jurisdictions. Practitioners and

scholars are in need of some clari�cation regarding the current state of PHRM to identify just

what are best practices in public human resource management today.

The aim of this text is to provide readers with a foundational knowledge of how PHRM

operates and functions, while also highlighting the changes that have been proposed and

implemented in PHRM, the scholarly debate surrounding those changes, and the impact

they've had on practice. The hope is that by considering the di�culties of navigating the new

landscape of PHRM at federal, state, and local levels, scholars and practitioners will have a

better road map to guide their work and a toolkit for implementing it.

The chapters that follow will develop a concise analysis of the impact reforms have had on

routine practices, addressing changes to pay, bene�ts, employee rights and labor relations,

diversity planning and a�rmative action, and performance appraisal. To achieve this goal,

the text has distilled these changes down to �ve speci�c types of reform that have been

implemented in some form or another throughout the public sector: (1) decentralization, (2)

deregulation, (3) performance-based pay, (4) declassi�cation, and (5) privatization. We will

use these �ve common reform types, which will each be explained and discussed in turn in

the following section of this chapter, as a framework for appreciating the day-to-day impact

these changes have had on PHRM operations. Each following chapter will then utilize the

framework in light of the topic being reviewed; the �nal section of each chapter will o�er

insight into how these reforms have modi�ed practices in the speci�c human resource area

under discussion.

Each chapter will also provide information applicable to nonpro�t human resource practices

through a “Nonpro�ts in Focus” box. While not a speci�c focus of the text, nonpro�t

organizations are often considered in the broader PHRM discussion, and many readers will

appreciate the challenges that managers in these organizations face—challenges that have

intensi�ed since the economic collapse of 2008. Finally, the book will address the future of

PHRM education in graduate and undergraduate programs in light of recent reforms.

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Llorens and Battaglio's (2010) assessment of PHRM education in master's of public

a�airs/administration programs highlighted the shortcomings of graduate programs, which

do not always teach the skills necessary to manage in a reform environment. A continued

focus on more traditional human resource practices portends a future workforce ill-

equipped for taking on future public service challenges. This text takes on these challenges

head on.

Public HRM Reform: An Overview The civil service system—the regulations, processes, and institutions that govern public

employment—is the foundation of public service. Chapter 2 provides a more detailed

account of the evolution of the American civil service system, but here we brie�y discuss two

landmark pieces of legislation that have been fundamental in shaping our civil service

system—the Pendleton Act of 1883 and the Civil Service Reform Act of 1978. Both of the acts

marked key points in history when civil service was rede�ned.

Historically, civil service systems based on professional merit were considered an essential

element for government performance (Kellough and Nigro 2006b; Selden 2006). This

practice was formally put into law with the Pendleton Act of 1883, which established a civil

service system that separated routine work from policy and administrative process and that

was based on merit, with open recruitment and competitive examinations (as opposed to

the patronage and nepotism that was pervasive at the time) and political neutrality. These

principles, which emulated the British tradition that had emerged in the mid-19th century,

were deemed essential for e�ective governance.

These principles held for roughly the next century. In recent decades, however, the

traditional association of civil service systems with e�ective governance has been challenged

as being too focused on rules and not focused enough on �nding the right person for the

job. The Civil Service Reform Act of 1978 marked the beginning of the current reform era of

PHRM, e�ecting a reorganization of the civil service system and increased managerial

�exibility. Civil service reformers insist that reforming PHRM is crucial for enhancing

government e�ciency (Elling and Thompson 2007; Kettl et al. 1996). Functions such as

planning, hiring, development, and discipline—typically centralized processes common to

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most levels of government— have been challenged by the current wave of reforms; they are

now seen as civil service practices emblematic of bureaucratic in�exibility, ine�ciency, and

ine�ectiveness. Greater managerial latitude has been a�orded politicians and managers

alike over personnel decisions and functions. As mentioned above, �ve distinct reform

themes have emerged over the last three decades: decentralization, performance-based pay,

declassi�cation, deregulation, and privatization, and all have all challenged the traditional

core of PHRM. Table 1.1 provides a summary of the �ve reform themes. In the following

sections, we review the contemporary reform environment and its potential impact on the

traditional core functions of PHRM.

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Table 1.1 Public Human Resource Management Reform Types

Decentralization

Sta�ng and compensation decisions are increasingly being made by agency an

managers.

Termination, transfer, and demotion decisions have also devolved to lower leve

Employment-at-will environments are removing hierarchy-based rules and regu

sta�ng and compensation decisions.

Performance- Based

Compensation is increasingly tied to performance.

Pay There is greater appreciation for e�ective performance appraisal and job analys annual merit increases is being used as a recruitment, retention, and motivation

Salary and bene�ts are increasingly o�ered in nontraditional manners, such as

paybanding.

Classic step-in-grade classi�cation and compensation is eschewed in favor of les

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Decentralization

Traditionally, all sta�ng decisions for a jurisdiction were typically made by a central

personnel o�ce. This process could be time-consuming, as all decisions needed to be sent

up and down the organizational hierarchy for approval. Decentralization entails HR

functions being demoted to the lower agency (i.e., division or department). Turning over

personnel decisions to agency-level HR directors and political appointees is seen as making

government more responsive and e�ective. Decentralization strategies provide managers at

the agency level greater latitude over management issues; they can make decisions more

quickly and independently and do not need to wait for approval. This downward transfer of

responsibility increases managerial �exibility where it is needed most—at the front line.

Decentralization strategies, with their focus on improving innovation and accountability for

personnel decisions at lower agency levels, have been a hallmark of public management

reform in recent decades (Brudney, Hebert, and Wright 1999; Coggburn 2001; Kettl 2000;

Thompson 2001).

At the federal level, decentralization has involved the transition of many programs to lower

levels of government, replacing centralized, rule-bound systems with more agency-speci�c,

manager-centered systems. Decentralization of PHRM functions has been advocated by

reform proponents since the Civil Service Reform Act of 1978. This act abolished the Central

Personnel O�ce, which had previously overseen the civil service, in favor of a streamlined,

management-centered agency—the O�ce of Personnel Management (OPM)—under the

president's purview. Since the creation of OPM, the federal decentralization trend has

continued, with greater authority over sta�ng decisions moving to individual federal

agencies while broader, higher-level planning issues remain with OPM.

In the 1990s, reform was spearheaded by the Clinton administration's e�orts under the

National Performance Review (NPR). Spearheaded by then vice president Al Gore, the NPR

was a task force of intellectuals and practitioners of public management whose purpose was

to o�er recommendations for improving government performance. Initially, the agenda was

ambitious, recommending the delegation of recruitment, examinations, position

classi�cation, salary adjustments, performance management, due process procedure

modi�cations, and changes to the dismissal process to federal agencies (Gore 1993;

Thompson 2001). However, political opposition—led by members of Congress sympathetic

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to civil service and labor—prevented any widespread change and resulted in more modest

changes, coming primarily from reductions in the OPM and the elimination of the Federal

Personnel Manual (Na� and Newman 2004).

During the George W. Bush presidency, initiatives at the federal level continued the push for

decentralization. Legislative exemption from Title V of the US Code— the federal legislation

governing civil service protections for federal employees— provided many agencies with the

ability to develop more �exible systems, which in some instances resemble private sector

practices (Woodard 2005, 113). For instance, the Homeland Security Act of 2002 signi�cantly

increased personnel �exibility within the Departments of Homeland Security (DHS) and

Defense (DOD), giving the secretaries of both agencies greater latitude in managing labor

relations and sta�ng (Brook and King 2008).

A number of state governments have also decentralized HRM decision making, with

variations in which functions (e.g., classi�cation, recruitment, selection, training, labor-

management relations) have been targeted and to what extent (Selden, Ingraham, and

Jacobson 2001). Voter sentiment for improved accountability in government has been a key

component in the demand for greater decentralization, although this force has been

tempered by the political environment and the degree of unionization in the respective

states (Hou et al. 2000).

Decentralization is not without its drawbacks. Hou et al. (2000) asserted that decentralization

at the state level has increased the support, planning, and supervision responsibilities of

state personnel o�ces, overburdening them. Recently, Hays and Sowa (2006) surveyed all

�fty states to determine to what extent the HR function was decentralizing. The authors

found that a majority of states reported some degree of decentralization, often coupled with

additional reform e�orts. Given the extent of decentralization reform, it seems prudent to

take stock of its rami�cations for practice. Each chapter of this book will review the merits of

decentralization in light of the topic under discussion.

Performance-Based Pay

Traditionally, PHRM pay structures were based on longevity or time-in-service, focusing on

career management and advancement instead of employee performance. High-performing

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civil servants were not rewarded, and underperforming employees were not given incentives

to improve. Since the 1980s, the push for greater accountability has resulted in a greater

focus on performance management by rewarding superior performers with pay increases.

Performance-based pay structures have proven to be an attractive alternative to

traditional PHRM practices. Appealing to the logic of market-like mechanisms, proponents of

compensation reform suggest that performance-based pay systems have the potential to

increase employee performance and therefore organizational productivity. A number of

performance-based pay schemes have been implemented by linking individual, team, and/or

organizational performance measurement to �nancial incentives. Financial incentives can be

distributed as increases to base pay (i.e., merit pay), one-time bonuses, or a combination of

the two (Kellough and Nigro 2002, 146). According to Kellough (2006),

Presumably, such a policy would prevent resentment or alienation of the best

employees that could result when their superior contributions are not recognized,

and they receive the same pay as their less-productive colleagues. At the same time,

poorer performers are o�ered an incentive to improve their levels of productivity.

(184)

The federal government tested performance-based pay systems from 1981 to 1993

(Kellough and Nigro 2002). However, government-wide attempts during this period, which

relegated performance-based pay to individual agency-level decisions, proved unsuccessful.

An inability to distinguish poor performance from other levels of performance, inadequate

�nancial support, and insu�cient evidence to con�rm improved performance led to the

demise of federal performance-based pay systems (Perry, Eingbers, and Jun 2009; Perry,

Patrakis, and Miller 1989). More recently, the Homeland Security Act of 2002 granted

authority to DHS and DOD to implement performance-based pay systems. According to

Brook and King (2008), approximately 90,000 of the total 2.7 million federal civilian

employees were covered by performance-based pay systems by 2005 (10).

Despite its problematic history at the federal level, numerous jurisdictions at the state level

have continued to pursue performance-based pay systems (Hays 2004). Hays and Sowa

(2006) noted that more than half of the states they surveyed indicated either implementing

or planning some form of pay reform. GeorgiaGain, the performance-based pay reform in

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the state of Georgia, has garnered signi�cant attention from both practitioners and

academics as a result of implementation problems (Kellough and Nigro 2002, 2006b). Like

pay reform initiatives elsewhere, the Georgia reforms were politically popular, but they failed

to achieve demonstrable evidence of success among state employees. Even though

implementing GeorgiaGain has proven problematic, the state has continued to rely on

performance-based pay for improving employee and agency productivity. In Georgia, as with

in many states, this is often the result of the government's desire to demonstrate legitimacy

to the public—that is, while the evidence for success is sparse, the continued pursuit of

accountability policies in itself is attractive to a public that feels cynical about traditional

government e�ciency (Perry, Engbers, and Jun 2009). Thus, politicians are encouraged to

continue advocating performance-based policies as long as citizens are convinced that

government is broken.

Declassification

Civil service systems have typically employed hierarchical step-in-grade classi�cation

structures as a means for career management. Upon hire, public employees are typically

ranked at a particular grade (and pay) level based on their quali�cations, education, and

experience. Through time-in-service, employees are promoted to higher steps within each

grade, and eventually higher grade levels, receiving better pay as long as they perform

satisfactorily. Grades are classi�ed according to strict job descriptions in a career class

category, and each step, grade, and corresponding pay level is listed in a matrix often called

a “general schedule.”

However, the view of many reformers is that traditional classi�cation structures restrict

hiring authorities’ ability to attract applicants from outside the agency or the broader public

sector. Declassi�cation refers to the easing of the rules that de�ne pay grades in terms of

very speci�c job descriptions. Advocates argue that more open-ended job searches can

exploit a larger, more talented pool of quali�ed applicants whose résumés do not

necessarily match up exactly with the job description.

Broadbanding (or paybanding) classi�cation structures—the collapsing or combining of a

number of traditional grades into a single band—is often employed as a means for

declassi�cation. Managers then hire for jobs with broader descriptions and pay structures

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and have greater �exibility over pay rates both at hire and during the employee's tenure

(Hays 2004; Whalen and Guy 2008). Broadbanding emerged as a result of Title VI of the Civil

Service Reform Act of 1978, which authorized agencies to waive civil service rules in order to

develop innovative new approaches to traditional PHRM functions (Shafritz et al. 2001). It

has its roots in the demonstration projects—that is, limited rollouts of new initiatives on a

small scale before implementing them on a wider basis—commissioned under Title VI, and it

has since been used more widely in government. By compensating employees according to

their unique skills, broadbanding was intended to promote egalitarianism by removing the

distinctions accompanying traditional pay grades and by deemphasizing the centralized

personnel system's insistence on titles and hierarchy.

Classi�cation reform during the Clinton administration was part of NPR's mission to reinvent

OPM and the human resources function (Shafritz et al. 2001). While the Clinton

administration included language in civil service reform legislation that authorized agencies

to pursue broadbanding, labor unions resisted these proposals, viewing declassi�cation

e�orts as encroaching on union authority. As a result, the federal government continued to

rely on authorization for such measures through Title VI (201). However, civil service reform

legislation by the Bush administration post–September 11 included provisions for replacing

the general schedule with pay-banding systems for DHS and DOD (Thompson 2007). As

suggested earlier, these e�orts focus on enhancing manager discretion over compensation

and employee performance, thereby moving away from central personnel authorization.

At the state level, there is a general trend toward fewer job classi�cations (Hays and Sowa

2006; Whalen and Guy 2008). In 2008, Whalen and Guy surveyed all �fty states in an e�ort to

assess the extent of broadbanding. The authors found that civil service systems

implemented broadbanding to reduce job classi�cations as well as promote pay for

performance. While demonstrable evidence of the e�ectiveness of broadbanding is lacking,

Whalen and Guy's work suggests that it is still part of the broader PHRM reform movement

in the states. Among those states utilizing broad-banding, twelve implemented government-

wide broadbanding, and four employed such measures on a limited scale (Whalen and Guy

2008, 1). Additionally, the authors found that eighteen states considered broadbanding but

opted against it.

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Deregulation

Over the last few decades, there has been a general trend in eliminating personnel rules and

regulations—deregulation—in an e�ort to expedite PHRM decisions. Rules akin to the ten-

thousand-page personnel manual regulating federal government sta�ng exist in

jurisdictions throughout the country. Traditionally, civil service systems have a�orded public

employees the right to a hearing (the right to due process of law) as part of the grievance

process. In the spirit of managerial �exibility, reformers have supported severe limitations

to, or outright elimination of, employee procedural due process rights to promote greater

e�ciency and e�ectiveness in public management (Facer 1998). The elimination of the

grievance process is seen as a critical component of streamlining and expediting the

termination of poor-performing employees. The trend toward eliminating such rights

altogether has led to what some have called “radical” civil service reform (Condrey and

Battaglio 2007). These “radical” personnel systems operate under an employment-at-will

(EAW) environment in which employees may be dismissed summarily, for any reason that

does not violate employment law (Muhl 2001). Employees within EAW systems have no

expectation of continued employment, as has traditionally been the case under the

protections provided through civil service systems (Gertz 2007; Kellough and Nigro 2006b;

Lindquist and Condrey 2006). Thus, many public employees now have no guarantee of

procedural due process before discipline or removal (Kuykendall and Facer 2002).

EAW is seen as a means for increasing managerial e�ciency because it removes what some

view as the cumbersome grievance and appeals processes under traditional civil service

systems. Instead of following guidelines that might lead to a lengthy dismissal process—a

process that reform proponents suggest is a waste of taxpayer dollars—managers under

EAW need provide little or no notice before terminating an employee they perceive as

performing poorly.

During the last decade, e�orts at the federal level have sought to curb traditional civil service

system practices, especially through legislation promoted by the George W. Bush

administration in the wake of September 11 (Kellough and Nigro 2005). Federal e�orts have

generally emanated from legislation permitting exemption from Title V, OPM demonstration

projects, and legislative approval of performance-based polices (Woodard 2005, 110). At the

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state level, e�orts to curb employee rights have occurred in Georgia, Florida, and, more

recently, Colorado and Arizona (Hays and Sowa 2006; see also Bowman and West 2007;

Condrey and Maranto 2001; Kellough and Nigro 2006a). EAW reforms in Georgia and Florida

have been the most visible (Battaglio and Condrey 2006; Bowman and West 2006; Condrey

and Battaglio 2007). Georgia has led the “radical” reform trend toward EAW by phasing out

its merit system for all “unclassi�ed” positions (i.e., those not granted protection by the State

Civil Service Board) beginning in 1996. Approximately 80 percent of Georgia's state

employees are now employed at will (Condrey 2002; Condrey and Battaglio 2007; Facer

1998). Florida followed in 2001 with Governor Jeb Bush's Service First initiative, which placed

senior state government managers in at-will status (approximately 13 percent of total

employees; Condrey and Battaglio 2007, 427). As will be detailed in later chapters, some

research suggests that the increased use of EAW policies has had a negative e�ect on

employee motivation and performance.

Privatization

A key component of public management reform, privatization is intended to improve

accountability and quality of service (Kettl 2000; Savas 2000). According to Savas

(2000)privatization entails increased reliance on private sector and nongovernmental (i.e.,

nonpro�t) institutions—rather than government—for the delivery and production of public

sector needs. Indeed, governments at all levels have increasingly looked to the private sector

for the delivery of many HRM functions, such as payroll and bene�ts administration

(Battaglio and Condrey 2006; Fernandez, Rainey, and Lowman 2006; Shafritz, Russell, and

Borick 2007). Proponents of privatization insist that the ine�ciency of rule-bound PHRM

systems presents no alternative but to encourage the increased use of contractors who can

hire new personnel quickly and dismiss poor performers (Maranto 2001, 75).

The rationale for opting out of in-house provision of HRM services mirrors more general

reasons pro�ered for privatization within public management. HR privatization may allow

public agencies to take advantage of larger �rms’ economies of scale or the quality

advantage inherent in specializing in HRM (Fernandez, Rainey, and Lowman 2006, 220).

Moreover, by unburdening current HR employees from more mundane tasks, privatization

has the potential to provide greater �exibility to pursue core functions such as strategic

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planning (Fernandez, Rainey, and Lowman 2006, 220; Rainey 2005). The rationales for

privatization may depend on the degree of di�culty associated with the tasks outsourced

(Coggburn 2007, 317; Rainey 2005). PHRM services associated with more mundane tasks,

such as payroll, are often outsourced as a way of saving money and freeing up personnel to

focus on more strategic functions (Coggburn 2007, 317; Kellough and Nigro 2006a, 320;

Rainey 2005, 706). Looking to the private sector to provide functions such as workforce

planning and performance management, on the other hand, may be oriented not so much

toward saving money as toward tapping expertise not readily available in the public sector

(Coggburn 2007, 317; Rainey 2005, 706). This is especially true when functions are

outsourced to consulting companies (e.g., Deloitte, PricewaterhouseCoopers, The Segal

Company), which have entire divisions dedicated to workforce planning.

While the push for private sector involvement in the delivery of public services has received

considerable attention in recent decades, the demonstrable evidence regarding public HRM

privatization (or outsourcing) is scant. Although the public sector has experimented with

outsourcing HRM functions such as payroll and bene�ts administration, consulting, wage

and salary surveys, job analysis, and job evaluation, little is known about the perceived

e�ciency gains from such activities (Coggburn 2007, 316). More recently, the George W.

Bush administration sought to rely more heavily on the private sector through privatization

programs such as the Competitive Sourcing Initiative (CSI), which encouraged government

agencies to consider outsourcing to private contractors. In fact, in 2004 the Bush

administration outsourced the management of the federal government's workforce

recruitment system, USAJOBS, to a private �rm (Llorens and Kellough 2007; Shafritz, Russell,

and Borick 2007, 423).

Governments have sought to outsource some, if not all, of the HR function as a means to tap

private sector know-how and quality. For states, outsourced activities range from speci�c

functions to agency HRM services to HR functions for the entire state. Indeed, state HR

privatization activities have been much more pervasive than those at the federal level. For

example, the �rm Convergys, based in Cincinnati, Ohio, was awarded lucrative contracts to

provide HR functions to the states of Florida and Texas (see Battaglio and Condrey 2006;

Coggburn 2007; Condrey and Battaglio 2007). In the case of Florida, Convergys was awarded

a $350 million, nine-year contract to perform transaction and process functions related to

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bene�ts, payroll, and sta�ng (Battaglio and Condrey 2006, 122–25). In Texas, Convergys was

awarded an $85 million, �ve-year contract with the state's Health and Human Service

Commission to provide many HR-related functions, such as performance management,

recruitment and selection, bene�ts, payroll, and compensation and classi�cation

administration (Coggburn 2007, 319). Coggburn (2007) suggested that these e�orts in Texas

and Florida have motivated private sector interest in soliciting government business and

public sector interest in outsourcing state functions. In both instances, however, the

expenses associated with misuse of public funds, cost overruns, and monitoring proved

detrimental to overall e�ciency. Given the trend toward outsourcing to the private sector,

there is a critical need for managers in the public sector who can e�ectively coordinate

contractual relationships.

Implications for Public HRM Each of these reforms has to some extent dramatically altered the traditional core functions

of PHRM related to merit and equity (Thompson 2001), and they suggest the need for a

signi�cant reassessment of PHRM education. For example, as governments decentralize HR,

moving it out of central personnel o�ces, HR professionals at the agency level are now

burdened with more responsibilities. Without the expertise of central personnel sta�, HR

professionals need extensive training to cope with these new responsibilities. Moreover,

these tasks may be particularly cumbersome for HR professionals in smaller agencies who

lack the greater resources of larger organizations (Coggburn 2001; Hou et al. 2000). With

performance-based pay systems, HR policy makers face di�culties in creating a government-

wide standard given agency di�erences (Hays and Sowa 2006; Kellough and Nigro 2002). HR

professionals need better training in designing and implementing an e�cient performance

appraisal system that accurately rewards the behaviors that contribute to success in the

absence of clear standards. Criticism related to broadbanding often cites the potential for

decentralized pay decisions to lead to increased costs, legal liability, problems with pay

comparability, and a disconnection with the labor market (Hays and Sowa 2006; Shafritz et

al. 2001; see also Whalen and Guy 2008). Thus, HR professionals need adequate training in

competitive compensation practices, salary negotiations, performance appraisal, budgeting,

and labor market analysis.

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The push to further diminish public sector job security through EAW has the potential to

exacerbate recruitment and retention problems. With job security no longer a viable

incentive for public sector employment, HR professionals need to be skilled in novel

methods for marketing to prospective employees, as well as motivating and retaining

employees. For example, federal agencies have begun to use student loan repayment

incentives to recruit younger employees who carry ever-increasing levels of educational debt

(US O�ce of Personnel Management 2008). Guidelines for the student loan repayment

program state that agencies may o�er up to $10,000 in loan repayments per calendar year

but are not to exceed $60,000 in total payments per employee. However, deciding the extent

of payments to be o�ered and whether or not to pair payments with service requirements

necessitates the use of skill sets not commonly covered in the traditional PHRM curriculum.

Also, given the limited or outright removal of due process rights, HR professionals will also

need to be aware of the legal environment of EAW systems (Kuykendall and Facer 2002;

Lindquist and Condrey 2006). Last, privatization of HR functions requires more extensive

knowledge of cost-bene�t analysis and contract management, and HR professionals charged

with contract management need tools to ensure accountability through monitoring, legal

restrictions, competition, cost accounting, and overall evaluation (Siegel 1999, 2000).

Organization of the Book The book is divided into three parts: Foundations, Functions, and The Future. In Part I of the

text—Foundations—the material reviews the underpinnings of modern PHRM, beginning

with this chapter's review of the trends in public service reform: decentralization,

performance-based pay, declassi�cation, deregulation, and privatization. In Chapter 2,

“Evolution of the Public Service in the United States,” the focus is the development on the

modern civil service system. The chapter argues that public service as we know it in America

would not exist without the foundation of civil service law and employee protections,

buttressed by merit-based employment, neutral competence, an open and competitive

examination process, equal pay, and protection against redress for disclosing malfeasance in

government. Chapter 3, “Employment Law in the Public Sector,” reviews current and

previous precedents in statutory law and case law regulating public employment, as well as

the legal implications of recent reforms at the federal and state levels. Public HR managers

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will need to be knowledgeable in this area if they hope to avoid signi�cant costs associated

with settling disputes in court. The �nal chapter in Foundations, “Equal Employment

Opportunity, A�rmative Action, and Diversity Planning,” details how PHRM functions have

incorporated policies to promote and enforce equal employment opportunity (EEO),

a�rmative action, and diversity management. For many public employers, legal uncertainty

and �scal constraints require practical solutions for implementing diversity policies. The

chapter reviews the research in this area and legal precedents for public employers, o�ering

pragmatic advice for coping with the legal environment of diversity.

Part II—Functions—addresses routine activities of PHRM in light of the current era of reform.

Chapter 5, “Recruitment and Selection,” highlights the di�culties of recruiting and

maintaining quali�ed personnel an in increasingly reform-oriented environment. Recruiting

the future public service will be a challenge for HR directors in a declassi�ed and deregulated

climate. In Chapter 6, “Pay and Bene�ts,” e�orts at reforming public sector compensation

have sought to institutionalize performance-based pay and broadbanding, despite evidence

that these approaches may not be the most e�ective (Perry, Engbers, and Jun 2009). The

chapter reviews these e�orts along with the foundation of modern compensation in the

public sector—job analysis. Chapter 7, “Performance Appraisal,” examines PHRM reforms

that have retooled the performance appraisal process. The chapter o�ers insight into how

HR managers might use such approaches in their workplace. “Managing Motivation in the

Public Service,” Chapter 8, looks at e�orts to get public employees to be more performance

oriented. Performance-based pay and employment-at-will are frequently employed to

improve motivation in the public service. However, recent research suggests that these tools

are not as motivationally oriented as previously proposed. Chapter 9, “Labor Relations in the

Public Sector,” reviews the challenges public sector unions and collective bargaining face at

the state and local levels in the contemporary environment of PHRM reform.

In the third and �nal section of the text—The Future—the chapters focus on those issues

that will in�uence future PHRM practices. Chapter 10, “Privatizing Human Resource

Functions in the Public Sector,” considers the increased reliance on both private and

nonpro�t �rms to provide HR functions in a bid for greater e�ciency. To be sure,

outsourcing has proven to be productive in many instances. However, in a number of

instances, public/private sector arrangements have not proven fruitful, resulting in both

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waste and legal complications. The chapter means to improve upon the best of what

government and business have to o�er the public service. In Chapter 11, “Human Resource

Information Systems,” the impact of information technology on PHRM is considered,

especially in light of the trend toward knowledge management as a key component of

successfully navigating the information age. HRIS has proven to be an important tool for

public HR managers who are tasked with human capital management and workforce

planning. Thus, HRIS has the potential to serve as a vital tool in public sector e�orts to think

strategically—the topic of Chapter 12, “Strategic Public Human Resource Management.”

While the literature on strategic human resource management (SHRM) is broad and

expansive, this chapter seeks to provide an introductory overview of the potential

contribution of a human capital management approach to the public sector. The chapter

considers the merits of strategic planning, improving internal processes and employee

capacity, workforce planning, and accountability—features now considered essential to the

future of PHRM. Chapter 13, “Public Human Resource Management Education,” considers

the reevaluation of those subject areas and competencies that have long been considered

the core of PHRM education. The chapter explores new HRM competencies and the extent to

which contemporary academic and practitioner-based educational programs re�ect the

current landscape of public sector HR management. Finally, Chapter 14, “Conclusion:

Challenges and Opportunities,” assesses the potential challenges and opportunities public

HR managers will face in the 21st century, tying together the analysis of PHRM reforms in

each chapter into an overall assessment.

Often included in the broader discussion of public sector HRM are personnel activities in

nonpro�t organizations. The recurring “Nonpro�ts in Focus” boxes will provide insights into

how the issues raised in each chapter a�ect nonpro�ts. While nonpro�ts are frequently

included in the public a�airs curriculum, they are also governed by a distinct set of legal

guidelines. This is indeed the case for human resources in the nonpro�t sector, where

personnel rules and guidelines do not always mirror those of federal, state, and local PHRM.

References Battaglio R. Paul Jr., and Condrey Stephen E.. 2006. “Civil Service Reform: Examining State and Local Cases.” Review of Public Personnel Administration 26: 118–38.

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Bowman James S., and West Jonathan P.. 2006. “Ending Civil Service Protections in Florida Government: Experiences in State Agencies.” Review of Public Personnel Administration 26: 139–57.

Bowman, James S., and West Jonathan P. eds. 2007. American Public Service: Radical Reform and the Merit System. Boca Raton, FL: Taylor & Francis.

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Coggburn Jerrell D. 2001. “Is Deregulation the Answer for Public Personnel Management? Revisiting a Familiar Question: Introduction.” Review of Public Personnel Administration 20: 5–8.

Coggburn Jerrell D. 2007. “Outsourcing Human Resources: The Case of Texas Health and Human Services Commission.” Review of Public Personnel Administration 27: 315–35.

Condrey Stephen E. 2002. “Reinventing State Civil Service Systems: The Georgia Experience.” Review of Public Personnel Administration 22: 114–24.

Condrey Stephen E., and Battaglio R. Paul Jr. 2007. “A Return to Spoils? Revisiting Radical Civil Service Reform in the United States.” Public Administration Review 67: 424–36.

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Elling Richard C., and Thompson T. Lyke. 2007. “Dissin’ the Deadwood or Coddling the Incompetents? Patterns and Issues in Employee Discipline and Dismissal in the States.” In American Public Service: Radical Reform and the Merit System, edited by Bowman James S., and West Jonathan P. 195–217. Boca Raton, FL: Taylor and Francis.

Facer Rex L. II 1998. “Reinventing Public Administration: Reform in the Georgia Civil Service.” Public Administration Quarterly 22: 58–72.

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Gertz Sally C. 2007. “At-Will Employment: Origins, Applications, Exceptions, and Expansions in Public Service.” In American Public Service: Radical Reform and the Merit System, edited by Bowman James S., and West Jonathan P. 47–74. Boca Raton, FL: Taylor and Francis.

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Kellough J. Edward, and Nigro Lloyd G.. 2005. “Radical Civil Service Reform: Ideology, Politics, and Policy.” In Handbook of Human Resource Management in Government, 2nd ed., edited by Condrey Stephen E. 58–75. San Francisco, CA: Jossey-Bass.

Kellough, J. Edward, and Nigro Lloyd G. eds. 2006a. Civil Service Reform in the States: Personnel Policy and Politics at the Subnational Level. Albany: SUNY Press.

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Mesch Debra J., Perry James L., and Wise Lois Recascino. 1995. “Bureaucratic and Strategic Human Resource Management: An Empirical Comparison in the Federal Government.” Journal of Public Administration Research and Theory 5: 385–402.

Muhl Charles J. 2001. “The Employment-at-Will Doctrine: Three Major Exceptions.” Monthly Labor Review 124: 3–11.

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Perry James L., Engbers Trent A., and Jun So Yun. 2009. “Back to the Future? Performance- Related Pay, Empirical Research, and the Perils of Persistence.” Public Administration Review 69: 39–51.

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Savas, E. S. 2000. Privatization and Public-Private Partnerships. New York: Chatham House.

Selden Sally Coleman. 2006. “The Impact of Discipline on the Use and Rapidity of Dismissal in State Governments.” Review of Public Personnel Administration 26: 335–55.

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