Improving Human Resources in the Public Sector – A Key to

Successful Reform?

David GuestProfessor of Organizational

Psychology & Human Resource Management

King’s College, London

What is Human Resource Management?

“All those activities associated with the management of work and people in organisations”

(Boxall and Purcell, 2011)

Why Do Human Resource Matter in the Public Sector?

Usually the major cost factor. Therefore effective management of human resources should:

Reduce costs

Result in more effective utilisation of human capital to provide better, more cost-effective services

Problems/Challenges in Managing Public Sector Human

Resources Sheltered and distorted labour markets Excessive job security/jobs for life Political influences Bureaucratic ineffective HR practices Administrative systems which do not

reward productivity or service quality Strong trade union influence Powerful professional groups/interests Tradition of model employer Poor capacity for change

Pressures for Change in Public Sector HR

Need to become more strategic Need to change from dominance of

bureaucracy focus to performance focus Need to move from standard employment

to flexible employment Need to make full use of, and ensure the

service commitment of staff Need to control staff costs – doing more

and better with less.

A New Approach

A new approach requires : a better model for managing human

resources and a better way of allocating responsibility

“Human resource management is too important to be left to human resource departments”

Some Basic Assumptions About Human Resource Management

Someone has to take personnel decisions Who takes decisions is related to issues

of power, influence and size of organization

There is an identifiable set of core decision areas

We now have considerable evidence about what constitutes “good” human resource management

Some Core Areas of HR Decisions

Recruitment and Selection (and Branding) Training and Development Careers and Internal Labour Markets Job (and organization) design Appraising performance Reward systems Ensuring appropriate treatment of staff Managing employment relations Dealing with problem issues and cases Managing downsizing and exit

The Evidence Base for New Public Sector Model of HRM

Lots of evidence showing an association between more high quality human resource practices and performance in private and public sectors

HRM Organizational Performance

HR and profit per employee in the private sector (FoW study)

Source: FoW (N=297)

Number of HR practices

11+8 to 105 to 70 to 4

Pro

fit p

er

em

plo

yee

(£

)4000

3000

2000

1000

Labour turnover and performance

HR practices (UK)

11+8 to 105 to 70 to 4

Ann

ual e

mpl

oyee

tur

nove

r >

15%

40

30

20

10

A Refined Model

Recruitment & selectionTraining & Development

Opportunity to participate

Employee motivation

Employee competence

Job designInvolvement systems

Communication

Performance appraisalFinancial rewards

Feedback

Employee commitment

Internal promotionSecurity

Fair treatmentMet psych. contract

Enhanced employee

performance

What Do We Mean by “Good” HR Practices?

(examples)

Selection based on quality and attitudes/approach to work Use of psychological tests in selecting all staff Extensive provision of training Deliberate development of a learning organization

Formal appraisal of all staff at least annually High basic pay and organization-based contingent pay Harmonised terms and conditions for all staff

Design of jobs to make full use of skills and abilities Staff/teams responsible for their own quality Extensive two-way communication on work and organization

issues Regular use of attitude surveys

Adoption of HR Practices in the UK

Per

cen

t of w

orkp

lace

s

30

20

10

0

Public sector

Private sector

Number of HR practices in the public (N=546) and private sectors (N=1277)

WERS data

HRM and Performance in the Public Sector

Growing number of studies in healthcare Some studies in local government A few elsewhere Major problem of performance indicators Standard challenge of level of analysis

(division, workplace, organization: e.g. school or local authority)

HRM and Mortality in Acute Hospitals

West et al (JOB, 2006)

52 Acute Trusts in the UK

More high quality HR practices associated with lower death rates

Persists after controlling for other possible influences including past performance

Good appraisals have the strongest influence

HRM and Performance in Local Government (Messersmith et al 2011)

Study of HRM and performance in Welsh local authorities. Each has 8 departments.

Data from 119 departments and 1755 staff. Performance data from Welsh government Explored link between HRM, staff attitudes

and behaviour and department outcomes. Found strong link between HRM and

performance and HRM and attitudes Found strong support for path through

employee attitudes and behaviour

HRM and Performance in Universities (Guest & Clinton, 2007)

Survey of HR managers in all UK universities on HR practices

Independent published performance data

Found no association between HRM and performance

Poor quality HR practices, poor HR departments and poor implementation

Initial Conclusion

There is good evidence of an association between HRM and performance across different parts of the UK public sector

Highlights potential if you can implement high quality HR practices

Raises question of who is responsible for implementation and the role of HR departments

The Implementation Challenge

Khilji and Wang (2006) and others highlighted a gap between intended and implemented HR practices

Implies that it is not enough to have good HR policy and practice

Draws attention to the roles of ‘implementers’ - HR specialists, top management and line managers

Towards a Theory of HR Implementation

(Guest & Bos-Nehles, 2012)

Stage 1: Decide to introduce a practice Stage 2: Determine the quality of the

practice Stage 3: Line managers agree to implement

the practice Stage 4: Line managers implement in a

quality way Stage 5: Staff accept rationale for practice

and respond accordinglyImplementation at Stages 3-5 cannot occur

without Stages 1 & 2

Who is Responsible for Implementation?

Stage 1 HR and top management Stage 2 Primarily HR

Stage 3 Line managers Stage 4 Line managers

So line managers’ views on HR practices and their competences become central issues

The Challenge of Implementation of

HRM in Local Government

In 32 London boroughs very similar HR practices are in place

External audit reveals differences in borough ratings

Research reveals key differences in effectiveness of HR implementation explain much of the variation in ratings

Implementation of Bullying and Harassment Policy in the NHS

UK healthcare has one of the highest levels of reported bullying and harassment of any sector – e.g. much higher than the military

Annual NHS survey question: “ In the last 12 months have you experienced harassment, bullying or abuse from any of the following” (manager/team leader/colleagues/ patients/relatives of patients?

Bullying and Harassment in the UK NHS. Regional Comparisons

16.217.2 17.3 17.7 17.8 17.9 18.0 18.0 18.4

21.6

0.0

5.0

10.0

15.0

20.0

25.0

NorthEast

WestMidlands

NorthWest

Yorkshireand theHumber

East ofEngland

SouthCentral

SouthWest

EastMidlands

SouthEast

Coast

London

% S

atff

re

po

rtin

g B

&H

Bullying and Harassment at a London Acute Hospital 2004-2008

0

5

10

15

20

25

30

35

2004 2005 2006 2007 2008

% r

ep

ort

ing

B&

H

Host organisation

National Acute trust average

Bullying and Harassment by Care Group: 2007

1113

20

2426

2729 29

3335

0

5

10

15

20

25

30

35

40

Corporate &Facilities

SpecialistMedicine

Clinical Services Cardiac &Neurosciences

Finance Women's &Children's

Dental Liver & Renal Critical & Surgery Medical Care

Care Group

% R

ep

ort

ing

B&

H

Evidence on Bullying and Harassment from Staff Surveys and Interviews

Bullying associated with increased stress /reduced job satisfaction/higher intention to quit

Bullying affects patient safety and service quality through reduced motivation and concern to do a good job

Bullying by staff associated with unsupportive work environment and lack of faith in effectiveness of relevant HR systems

How does this relate to HR policy and practice in the hospital?

Best Practice in Management of Bullying and Harassment

Implementation of a Formal Bullying Policy Zero Tolerance Approach Selection of Staff Implementation of Awareness Campaigns Address Environmental Problems Training and Development for Managers and for

Staff Providing Informal Advisory Services Data monitoring Support for Victims of Bullying

All are in place at this hospital

Implications for HRM

The hospital has all the right HR policies and practices in place but bullying still very high. Why?

Reflects the gap between ‘intended’ and ‘implemented’ practice

Reinforces need to focus on implementation

Is this likely to be particularly challenging in public sector professional bureaucracies?

The Role of the Line Managers

Line managers have responsibility for much HR implementation.

However key issue concerns motivation and competence to implement.

UK line managers “are neither capable nor motivated to take on these issues” (Hope Hailey et al, 2005)

Dutch line managers more motivated and capable but hindered by time pressures

Line Managers/Clinicians in Healthcare

Health managers prioritise patient care over care of workforce

Limited reinforcement of relevant policy – e.g. no evidence of zero tolerance

Our evidence suggests some avoid HR issues

But: evidence on bullying shows wide variations between clinical divisions. So how can we understand and explain these variations?

The Nature of a “Strong” HR System

Bowen and Ostroff (2004) argue that the link between HR strategy and HR practices and outcomes will be stronger if there is a ‘strong’ HR system perceived as high in:– Distinctiveness: visible, relevant, understood– Consistency: consistently applied– Consensus: agreed by key stakeholders

Role of top management in embedding and reinforcing ‘strong’ HR is likely to be crucial

HR cannot do HR on its own

Conclusions and Policy Implications

Some indication in the public sector that more high quality HRM is associated with better performance

Need to strengthen focus on factors affecting implementation of policy and practice

HR still mainly an administrative rather than a strategic function

Major challenge of HR implementation in public sector professional bureaucracies

A ‘strong’ HR system is likely to help

Thank you for listening

david.guest@kcl.ac.uk