topicive f : strategic human resource managementcdn.nsw.ipaa.org.au/docs/psmp/u4 topic 5.pdf1....

227t o p i c f i v e : s t r a t e g i c h u m a n r e s o u r c e m a n a g e m e n t

topic five: Strategic Human Resource Management

overviewIn assessing the financial, administrative and operational feasibility of any particular strategy, policy proposal, project or program, managers must ‘manage down’, considering the operational capacity of their organisation or work unit to implement current and new initiatives.

Resource management is an integral aspect of operational management. Resources are inputs to a system designed to put strategic plans into practice at the operational level and produce outputs and outcomes. Resource classifications include human, natural, capital and information resources. This topic is exclusively about human resource management (HRM).

Strategic HRM (SHRM) involves integrating HRM with business outcomes; attracting, developing and retaining the requisite numbers and skills; developing shared understanding, performance accountability, budget awareness and continuous learning; and shaping the working environment. As well as long-term, high-level strategic activities, HRM works at an operational level through such functions as recruitment and selection, induction, training and development, retention, performance management, occupational health and safety, industrial relations and diversity.

This topic addresses what is normally a complete unit in other university programs so it is impossible to cover all the significant content areas of HRM. It attempts to touch on overall concepts and some of the current issues, particularly around the ageing workforce, skills shortage and retention.

Learning objectiveson successful completion of this topic, you will be able to:

1. Detail strategic human resource management and its links to strategy

2. List the functions of hrm

3. outline steps in workforce planning

4. analyse issues around ageing, retention and the skills shortage

5. Describe some criticisms of shrm.

228 p S M U n i t 4 : m a n a g i n g D o w n : o p e r a t i o n a L m a n a g e m e n t i n t h e p u b L i c s e c t o r

5.1 SHRM and Links to organisation Strategy

SHRM is about:

• respondingtodynamicfeaturesoftheexternalenvironmentsuchaschangesin industrial relations (example the demise of WorkChoices), and global trends such as skilled immigration

• adaptingtochangingbusinessrequirementssuchasnewagencyprogramsandgovernment initiatives

• integratingallaspectsofHRMintoasetofco-ordinated,logicalfunctions

• effectiveHRMoutcomescontributingtoagencyandgovernmentoutcomes

• alongtermandcyclicalapproach(Nankervisetal.2008).

SHRM involves changing the nature of work using a range of activities and strategies that affect the organisation’s structure, culture, policies, systems and staff.

Required Reading 5.1 brown, K 2008, ‘human resource management in the public sector’, in rs beattie & sp osborne (eds),

Human Resource Management in the Public Sector, routledge, new York, pp. 1-7.

this reading rightly argues that many hrm texts do not pay enough attention to the public sector. this reading partially fills that gap. it argues for hrm’s relevance to the public sector and explores traditional and newer models of public sector hrm. newer models are critiqued and the reading concludes with an argument for hrm that balances old and new public sector values and approaches. hrm has been neglected in terms of application to the public sector, particularly in the context of public sector reform. the paper gives a brief definition of hrm, including the industrial regulatory framework, and then goes on to talk about strategic hrm. it gives a good model of the pubic sector and the appropriateness of hrm to it. it also talks about ‘rights and entitlements’ – terms not commonly used in the private sector. the paper mentions the shift from administration to management (but not the shift from management to leadership which is the latest trend in the private sector and the literature). the reading has been set because it is short, relevant and accurate.

5.1.1 Main Concepts

SHRM is about one aspect of management in private firms, public sector agencies, community organisations, charities and other organisations. Management is about planning, leading, organising and controlling in order to achieve certain goals or objectives(Robbinsetal.2008).Intheorythen,HRMisaboutplanning,leadingorganising and controlling people. In some views, HRM is not necessarily the same as managing people in the way that, say, supervisors or team leaders interact with their subordinates. HRM is concerned with the employment relationship between employer and employee and is usually set within a range of formal organisation processes,policiesandprocedures(Stone2008).


Essentially HRM is concerned with managing human resources in the same way as other resources such as capital, natural, physical or financial ones, though the notion that humans should be treated as equivalent to these can be regarded as objectionable(Inkson2008).HRMisindeedaboutmanagingpeopletoachieveorganisationobjectives(Nankervis,Compton&Baird2008),butpeoplecannotbemanipulated or managed in the same way as machinery and money. In fact some experts question whether it is appropriate at all to consider people as ‘resources’ (Inkson2008).

Initially, when the term ‘personnel’ was used, staff welfare was the principal focus. HR professionals are now strategic partners, charged with adding value to the organisation(Ulrich1998;Garavan2008).Further,linemanagersareexpectedto not only share this load but be the mainstay of HRM, with HR professionals stepping back to advisory or consultative roles.

5.1.2 Functional versus strategic

There are two main aspects to HRM – the strategic and the functional. SHRM is about applying principles from strategic management to an organisation’s human resources. HRM functions are the tasks that managers are familiar with such as recruitment and retention, training, health and safety and so on. Currently, SHRM is particularly concerned with attracting and retaining human resources in the face oftheskillsshortage.Thesituationhaschangedsincethe1990s,whichwasthedecade of downsizing, to one of world wide labour shortage and historically low unemployment rates in Australia. There is a severe shortage of health care and other professionals(Christmas&Hart2007;Hauff2007).Staffretention(orpreventionofturnover) is vital.

The fit between organisational strategy and various HRM functions is illustrated inFigure5.1.Thisfigurealsoshowssomeoftheinter-relationshipsbetweenHRMfunctions such as recruitment which adds to the workforce, retention, which maintains the workforce, or resignation, retirement and so on which deplete it. One outcome of workforce planning and management may be the realisation that further training and development (generally human resource development, HRD) is needed. HRD is an increasingly significant aspect of strategic workforce management(Garavan2007).


figure 5.1 the fit between SHRM and the functions of HRM

Source: Marchant 2001:26.

Activity 5.1 – consider your role review Figure 5.1 and indicate your role, if any, in each function. consider if your role has changed over the years and if so, why?

The contemporary view moves away from the step-by-step, prescriptive and functional or process approach, to a holistic view of human resource planning (HRP). This holistic approach emphasises dynamic features such as organisational learning or continuous learning, and also recognises that organisation structure and culture (as we saw in Topic Two) influence human resource management. An example of this approach is found in Western Australia (WA). The WA government developed aStrategicHumanResourceManagementFrameworkwhichdemonstrateshowHRM can be fully integrated with the business demands of agencies and make a positive contribution to achieving government outputs and outcomes. The framework,showninFigure5.2,outlinesthepracticalitiesofintegratingHRMwithbusiness outcomes and supporting elements. The framework has six key elements:

1. Integrating human resource management with government outcomes

2. Humanresourcing


3. Shared understanding, which is in the culture and vision from earlier topics

4. Performance accountability as seen next in performance management

5. ContinuouslearningasseeninPSMProgramUnitThree

6. Shaping the work environment.

This framework is now quite old but has changed little in the intervening years, suggesting WA was quite ahead of its time. In any case it is useful for illustrating how high level factors influence human performance in organisations.

figure 5.2 elements of a strategic human resource management framework

Source: Government of Western Australia 1997.

The framework recognises the influence of a number of different disciplines traditionally outside of HRM or new to management including the learning organisation (continuous learning or human resource development) and shared understanding, which is another way of discussing organisation culture.

5.2 functions of HRM and Links to HR planning or Workforce planning

We saw above that strategic HRM is aligned with the organisation’s business strategy, which implies a certain degree of strategic or long-term intent in workforce planning. The links between various levels of strategy and planning are showninFigure5.3.


figure 5.3 Relationship between strategy and SHRp

Source: Marchant 2003:2.4.

NowadaysthereissomeargumentthatallthearrowsinFigure5.3shouldbebi-directional since the organisation’s human resources dictate what strategy is possible andachievable.Forexample,whenthegovernmentfundedadditionalplacesfortraining health professionals, the funding was welcomed by universities. However the success of this strategy is constrained by a lack of available clinical places outside the university in hospitals etc, due to the staff shortage. Also, planning informs management. SHRP requires projecting into the future and estimating needs and trends as well as extrapolating from the past.

5.2.1 Context of SHRP: the Industrial Landscape

As we noted in previous topics, organisation strategy does not take place in a vacuum. The environment external to the organisation is a significant influence on an organisation’s strategic choices. This is also true of SHRM. There are many external influences on how an organisation conducts its human resource management policy and practice. These include political, environmental, social, technological,economicandlegalinfluences(Johnson,Scholes&Whittington2008).SpecificallyrelevanttoSHRMisthe‘industriallandscape’ortheparties,ideology and rules of the industrial relations system of the countries or jurisdiction in which organisations operate. The parties include governments, unions, employer associations, tribunals or watchdogs, and others. Ideologies vary from (to put it simply) left-wing to right-wing, and the rules may be complex and varied (Petzall, Abbott&Timo2007).Industrialrelationsisaseparatesubjectinitsownrightandbeyond the scope of this topic, partly because public sector managers do not have a great deal of scope to influence the system. Still it is important to be aware of the outside influences on organisations SHRM.

The industrial landscape of Australia has changed several times over the years due to a number of factors including the actions of the government of the day. Without going into too much history, Australian industrial relations have been through a lengthy period of reform where successive governments of both persuasions have attempted to simplify and unify the system with the aim of achieving higher productivity(Alexander&Lewer2004).TheHowardgovernment’sinterventions,particularly WorkChoices, attracted the most attention and (possibly) opposition (Stone2008).

organisation Strategyorganisational

Strategic planning

SHRpSHRM


5.2.2 SHRP or Workforce planning

Depending on the size of the organisation, workforce planning will be a more or less formal process using anything from simple managerial experience to sophisticated quantitativeanalysis.Figure5.4givesanoverviewoftheprocess.

figure 5.4 Workforce planning process

Source: APSC 2002:1

SHRP has a proactive, long range, ‘big picture’ component and is defined as:

the systematic and continuing process of analysing an organisation’s human resource needs under changing conditions to ensure that the right number of people and the right types (skills, knowledge and behaviours) of people are available at the right time for the organisation (Dessler 2008:41).

In other words, it is not a static process and, in this definition, is organisation driven. The following material gives some idea of the steps in workforce planning.

to gain maximum benefit from workforce planning, the planning process should include all of the following steps:

1. identification and analysis of the current and future business goals and workforce needs of the organisation;

2. environmental scanning of the external environment and an analysis of what that will mean for the organisation;

3. information gathering on the current status of the organisation’s workforce (see section 7.);

4. analysis of the data on the current status of the organisation’s workforce to identify patterns and trends that are impacting, or may impact, on business outcomes;

Capabl

e, a

vaila

ble, adaptive, effective w

orkforce.

Workforce analysisand planning

Integrated strategies tobuild workforce capability

Monitor Finetune

Align Evaluate

Curr

ent E

nvir

onm

ent Targeted Future

Organisationalperformance and

accountability


5. analysis of all the data and information obtained to this point to identify the gaps between “what is” and “what will need to be”. analysis might identify that changes to operating structures and processes are required, flexibilities in work practices need to be introduced, current skill sets will not be needed, different skills will be required, etc;

6. Development of strategies and interventions to address the gaps between “what is” and “what will need to be”;

7. investment and implementation of the strategies in alignment with business direction, and allocation of roles and responsibilities;

8. continual monitoring and evaluation of the effect of the strategies on business outcomes;

9. review progress of strategies against performance measures; and

10. continual monitoring and evaluation of changes to the internal and external environments and revisiting above steps as required.

Source: Qld OPSC 2007:6

5.2.3 Public Sector Middle Managers Need HRM Expertise

Today, managers responsible for overseeing others’ work, or who have ‘line’ management responsibility, are expected to perform many of the functions previously allocated to HR specialists in staff positions. The boundaries have become blurredandlinemanagersarerequiredtoknowmoreaboutHRM(Ulrich1998;Garavan2007).

There is a war for talent to find the elusive individual who is highly skilled and knowledgeable, change adaptive, emotionally intelligent, resilient, empowering, a good coach, and values driven, not to mention capable of maintaining work-life balance. To win this contest, organisations are positioning themselves as attractive workplaces.

Perhaps the reason there is a crisis in employee skills and availability is not the ageing workforceandretiringBoomers,butratheragroundswellofopinionthattheremustbe ‘more to life than this’. This groundswell is documented in media articles such as onebyNieuwenhof(2005)entitledAre we having fun yet? Accepted, traditional ways just aren’t working any more. There is some evidence that this is the case, as Hugh Mackay and others note (The AustralianApril2005).Passmore(2004)reportsthatAustralia is no longer the land of the long weekend and we are working more hours than many of our trading partners.

5.2.4 Generational change

There is an increasing awareness of the unique demands, expectations and needs oftheincomingworkforcebelongingtoGenXandGenYaswellas,attheotherend, of the imperative to retain older workers. The single biggest HRM issue facingorganisationsatpresentisthependingretirementoftheBoomergenerationandthesubsequentwarfortalent(Christmas&Hart2007;Phillips2008).Thisisademographicandsociologicalissuewithwiderangingimplications.Boomers


provide the current pool of talented, experienced and educated workers, some of whom sit in important leadership positions. A lack of both skilled and unskilled workerswillhaveorganisationsracingtofindwaystokeeptheseBoomersatwork,changing retirement plans and tailoring benefits to this ageing cohort.

On the other hand this cohort may become a ‘drag’ on organisations, perhaps blockingtheprogressofyounger,morecreativetypes.Boomersmaybebothhardto live with and hard to live without. This problem isn’t going to go away quickly – we are talking about a twenty-five year window. We have known for some time thatthissituationwaspending,but2006markedawatershedsinceatthispointallboomers were aged 41 or over – ie officially middle aged and in mid- or late-career stage(Callanan&Greenhaus2008).

Here we discuss some simplistic and anecdotal differences between the HRM policiesandproceduresthatworkfordifferentworkforcegenerations(Khoo2008).As you read this material, consider how public sector policies of ‘equity’, or same treatment for all, would work in these examples.

Advertisements for different positions need to emphasise different features that each ofBoomers,GenXandGenYareseeking.GenY,todate,haveexperiencedlittleof hardship, recession or a tight labour market and are therefore very confident of theiropportunitiesandwhattheywant,andofgettingthem.GenYisfocussedon career and development opportunities, high pay and status, work-life balance, wanting to move on and up within a year or two. They are also very enthusiastic andperhapsalittleunrealistic(Khoo2008).

GenXlikestoexploreallsortsofopportunities.Itsmemberslookforrecognition,rewards,fairpayandflexibility.Theyareattheirearningspeak.Boomersaretypically known for looking for a long-term career, which is how they measure success. They usually do not have the same technological know-how as their youngercounterparts;andmotivationandtrainingmaybeanissue(Khoo2008).MaleBoomers’careerexpectationshavebeenforgedintheindustrialageoflife-time, full-time employment. On the other hand, females went through the transition from full-time home based activity to part-time outside employment and eventuallyontosimilarcareerpathstomen(Pillay,Kelly&Tones2007).

5.3 public Sector Application

The Canadian government has worked on building public service capacity, as the following shows:

A key element of the Government’s plan to transform and strengthen public sector management involves the need to build capacity in the public service.

People – Canadians from coast-to-coast – are what make the government work and we need to ensure the federal public service has the right people, properly trained and developed. Like other sectors of the economy, the demographic profile of the federal public service is aging, competition for human resources is increasing, and the


government faces growing challenges in the management of its human resources in areas such as recruiting, retention, learning, professional development, and succession planning. (Canadian Government 2004)

NSWdevelopedaWorkforce Planning Strategic Framework and Action Plan2004–2006(PEO2004).Inthatstate,workforceplanningwasconductedintheformofstrategichuman resource planning for whole-of-government as part of the government’s strategic management, with the intent of identifying gaps in meeting service delivery and community needs. There is a results focus which links to Treasury, thuscombininghumanandfinancialresourcemanagement.InbothNSWandWAworkforce planning has involved a broad, long-term, high level analysis of numbers, age, and qualifications of staff.

It is expected that the skills shortage will turn around short-term thinking and encourage senior managers to take a longer term view and find ways of capitalising on the human resources they do have.

There are numerous HRM strategies in use and competitive individualism is only one of them. This strategy could be seen at a national level with the Howard government’s WorkChoices legislation, which among other things promoted individual contracts between employer and employee rather than collective bargaining through unions. It aimed to address the fact that the private sector did not enjoy unrestrained freedom to hire, fire and set salary levels at will, but was also constrained by employment legislation. WorkChoices removed quite a few of these constraints. WorkChoices proved unpopular with the mainstream population, however,andwasafactorintheRuddLaborvictoryof2007.Asfaraspublicsectoremployment goes, there was anyway always reason to doubt that policies applicable in the private sector could be straightforwardly applied in the public. The changes associated with introducing a performance culture that emphasised efficiency and more individualised employment relationships were not consistent or integrated, and equityemergedasacorollaryoradverseconsequence,asshowninTable5.1.

table 5.1 pros and cons of individualised HRM

Also, an increase in the number of casuals on fixed-term appointments was intended to increase flexibility in response to the ‘marketplace’. However, this idea of competitive individualism and flexibility seems to be a misapprehension, as generally speaking there is no marketplace in the public sector.

Anticipated benefits

a well rewarded, competent and professional service

elite

more diversity, for example focusing on tailored solutions for individual needs such as family-friendlyworkplaces

innovative and rewarding work

potential disadvantages

less favourable work conditions and reduced equity

disadvantaged

less diversity

stressful and pressured work


5.3.1 Workforce Characteristics and Planning

The workforce consists of employees at the all levels of the organisation, with different percentages in certain types of qualifications and classifications or in certain functional areas. At present age and retirement intentions are particularly underinvestigation(Dychtwald&Baxter2007).Mostsourcescommentonthekey workforce characteristics of ageing and skills shortage. Organisations are paying attention to these aspects through workforce analysis as the following example shows:

The Western Australian public sector workforce is ageing like the rest of the community. In 2006, more than half (54%) the fulltime permanent public sector workforce was aged 45-plus and the proportion of that workforce aged 55 years or older grew to almost 20%. The Department of the Premier and Cabinet’s publication, Retirement Intentions 2006, has illuminated challenges the sector faces as a result of these community trends. Like a similar survey conducted in 2000, this report examines the retirement intentions of public sector workers aged 45 and over. It highlights that:

• Almosttwo-thirdsofrespondentsintendtoretirefromthepublicsectorinthenext 10 years.

• Thepeopleintendingtoretireinthenext10yearsareveryexperienced–nearly three-quarters have 15 or more years experience in the sector.

• Flexibleworkarrangementsareofinteresttothevastmajorityofrespondents(93%), however only 13% of people approaching retirement have taken advantage of the flexible work arrangements already on offer.

• Nearly20%ofrespondentsplantocontinueworkingaftertheyretirefromthepublic sector – contract employment back in the public sector after retirement and a reduction in hours worked are preferred options.

• Work-relatedfactorsofteninfluencewhenpeoplechoosetoretireorstopthemwanting to continue in the public sector.

• Responseshighlightedagenerallackofunderstandingaboutsuperannuationwith almost half the respondents not planning seriously for retirement, if at all (WA DPC 2007:1)

In Queensland the new Public Service Act 2008 established a Public Service Commission (PSC) that replaced the Office of the Public Service Commissioner with a view to enhancing the public service’s HRM and HRD capability (Qld PSC2008).

Activity 5.2 – analysis of the workforce

most jurisdictions have some analysis and reporting of the ageing workforce, skills shortage, retention strategies and so on. source the relevant documents for your area. the source agency may vary from offices of public employment, public sector management or premier and cabinet department etc depending on where the locus of this issue is addressed in your jurisdiction. if you are unable to find a relevant document, use the aps state of the service report from the apsc.


ThefiguresinTable5.2ontheNSWgovernmentworkforcearegivenasanillustration.

table 5.2 characteristics of nSW public sector workforce

Source PEO 2004:10.

These figures have a number of implications:

1. TheNSWgovernmentisasignificantemployerintermsofsizeandtherefore would be expected to influence employment conditions and HR practices in the state.

2. Claimsofincreasedcasualisationandinsecuritydonotseemvalidinthefaceof such a large majority of permanent employees.

3. The opportunities for part-time work, family-friendly or flexible employment seem quite limited, with again the vast majority of positions being full-time. This might stand in the way of the federal government’s intention to get more single parents who are currently on income support back into the workforce. It flies in the face of research that consistently shows that ability to balance job and family are useful for attracting and retaining publicsectoremployees(PEO2004).However,thenumberofpart-timepositionsappearstohaveincreasedinrecentyears.TheAPSC2007Stateofthe Service report plots an increase, particularly for women, but with a slight rise in the proportion of part-time men as well.

4. These figures seem to back up anecdotal accounts of limited career opportunities in the regional and rural areas, with a large concentration of positions in Sydney.

5. Thathealthandeducationareamajorproportionofemploymentandperhaps more policy and strategy should be directed into these two areas for maximum gain.

6. Withnearlyhalfoftheworkforceintheir40sandwithperhapsonlytenmore years before retirement, a significant loss of corporate knowledge andexpertiseisimminent.TheNSWpublicsectorisatriskofworkforceshortages that will have a profound impact on services and the economy (PEO2004).SimilarlytheWAgovernmentpredictedashortfallof4to23percentby2022(PEO2004).

number employed in total 343 837

Full-time equivalent numbers 291 264

permanent 82 per cent

temporary 8.5 per cent

casual 7.8 per cent

Full-time 83 per cent

based in sydney metropolitan region 62 per cent

health and education 60 per cent

45 or older 42 per cent

median tenure 7.4 years


7. Themediantenureof7.4yearscouldbeinterpretedinseveralways.First,thistenureisrelativelyshortcomparedtothelifetimecareernotion.Second, it is relatively long compared to the emerging ideas about career mobility and changing jobs every two years or so. This figure does not capture mobility within and between agencies, just in the sector overall. However, given that there is some convergence between sectors and large-scale adoption of private sector ideas in the public sector, more inter-sector mobility may be desirable. It is interesting to compare this tenure with federalfigureswheremedianlengthofserviceincreasedfrom7to10years(Anderson,Griffin&Teicher2002).

TwentyyearsagotheaverageageintheAPSwas35years.In2001theaverageageof Queensland public sector employees was 41 years and, in future, the sector will be competing with both the Australian public sector and the private sector for staff. Lossofcorporatememorywillbeabigissuewithhighturnoverinsomeagenciesand increasingly mobile employees. Agencies may find it more difficult to conduct their core business without a cadre of trained, experienced and committed staff.

TheBoomergenerationisreachingretirementageandthebirthrateofmostOECD countries is falling. Employment methods and strategies are adapting to cope with the difficulty of recruiting skilled labour and also the premium salary that they command. Australian research suggests that Australian organisations have a ‘less than adequate’ focus on retention and development strategies (Holland, Sheehan&DeCieri2007:259).

Older workers make up a significant part of the workforce and, as they approach retirement, they will constitute an important challenge to managers and leaders. As wesawinUnitThree,whenRobsonetal.(2006)investigatedolderworkerstheyfound that what they valued in their careers was:

• adaptabilityandhealth

• positiverelationships

• occupationalgrowth(ieprofessionaldevelopment)

• personalsecurity

• focusonachievinggoals

This list shows three themes that may be different from younger people’s career values.First,that‘results’or‘outcomes’areaverynarrowwayofmeasuringcareersuccess for this cohort. Second, health and adaptability, which would normally be means to career ends for younger people, are for this cohort ends in themselves. Third,Robsonetal.(2006)identifiedthatthisperiodisaboutcontinuityratherthan change.

5.3.3 Engagement strategies

Engaging older employees is vital to avoid the ‘brain drain’ and to foster leadership from the older members of the workforce who may be singular repositories of knowledge about certain aspects of organisation functioning. There are also financial and taxation implications for both older staff and others in terms of the


longer staff are employed and earning income, the shorter the period of time during which they may need income support from government in the form of pensions (Callanan&Greenhaus2008).

Such engagement must overcome stereotypes about older staff, as well as attitudes of those who are simply ‘serving time’ until retirement. Previously there may have been manyorseveralsuitablyqualifiedorexperiencedstafftofillseniorvacancies.NowtheBoomergenerationmaybereluctanttotakeontheaddedresponsibility,pressureand politicking that these posts entail. This may be particularly true of the sandwich generation who are caring for dependants in terms of both offspring (even up to the ageoftwentyfive)andageingparents(Callanan&Greenhaus2008).

With government superannuation funds available some public sector employees (particularly males, who on average have more superannuation than females) may be more free to retire in a time of their own choice, putting them in a strong position ofchoosingtoworkonlywhen,whereandhowtheywant.FeedbackfromPSMProgram participants in Unit Three assessment items suggests that many plan to retire as soon as they can because they have the financial resources to do so. This suggests that the attractions of retirement outweigh the attractions of the workplace. Organisations therefore need to consider how to make the workplace more attractive.

Enlightened employers provide ‘bridging’ options between full time employment and retirement. These might include a negotiable number of hours per week or month, working for three months on and three months off, working in warmer parts of the country during winter, choosing only to work where their wisdom and expertise is recognised and respected, and expecting more time and support to learn newsystemsandworkina‘hasslefree’context(Callanan&Greenhaus2008).Oneof the main reasons people leave their current jobs is because they see limited career prospectsforthemselves.AnAustraliansurveybyDirectioneering(2007)foundthatonlyonethirdofmiddleandseniormanagershadawelldefinedcareerplan.Yetcareer planning has many benefits for employees, including a sense of direction and stability, as well as for employers, particularly in retention. Research into the best workplaces in the country signals fifteen features for an employer of choice (EOC).

Activity 5.3 – evaluate your workplace evaluate your workplace on the fifteen factors and reach an overall conclusion about its attractiveness and likelihood of retaining staff. also consider if there is anything you would add to the list.

fifteen features to create an attractive workplace and retain employees

Your rating and or comments in evaluating your workplace

1. good working relationships

2. positive focus and energy invested in leadership not administration

3. employee participation in decision making

4. clear values


fifteen features to create an attractive workplace and retain employees

Your rating and or comments in evaluating your workplace

5. safety

6. nice offices

7. recruiting the right people

8. pay and conditions that suit

9. feedback

10. autonomy

11. ownership and identity

12. learning

13. passion

14. fun

15. community connection

Source: Hull & Read 2003:4-5

The biggest single issue facing managers today is the availability of human resources,yetaccordingtotheCorporateLeadershipCouncil,intheUnitedStates,‘fewerthantwentypercentoflinemanagersareeffectivetalentmanagers’(CLC2008:1).DoyouthinkthesituationisdifferentinAustralia?

Required Reading 5.2Dainty, p 2008, ‘attracting and retaining staff in an era of skill shortages’, The Melbourne Review,

vol. 4, no. 1, pp. 36–41.

this short and well-illustrated reading touches on many of the subjects covered in this topic from a practical perspective.

Required Reading 5.3holland, p, sheehan, c & De cieri, h 2007, ‘attracting and retaining talent: exploring human

resources development trends in australia’, Human Resource Development International, vol. 10, no. 3, pp. 247–62.

this reading links organisation strategy to the environment of skills shortage and shows how organisation hrm should be cognisant of these issues. it reports on large scale australian research into how organisations are attracting, retaining and developing employees. it complements reading 5.2 in that some of the issues and subjects are the same but here we get the evidence-based,


academic perspective.

5.3.4 Role of human resource development (HRD) in retention and engagement

It has been noted in various places that organisations are becoming more creative in their recruitment strategies to secure good staff in the face of the skills shortage. However, retention is just as important and deserves more attention. In this context the marketing idea that it is easier and costs less to keep a customer than to find a new one applies. Human resource development (HRD) has a significant role in retention. HRD is about training, development and career management, among otherHRMfunctions(Werner&DeSimone2006).Individualsaremorelikelyto stay with organisations where they receive good professional development opportunities and such development is essential for organisations to be able to fulfill theirbasicservicecommitments(Clardy2008).TheroleofHRDinengagingandretaining staff, as well as an overall systems approach to measuring the value of HRD, isshowninFigure5.5

figure 5.5 Maximising the value of HRD

Source: Pritchard 2007:219

The Australian Public Service also needs to lift its game in terms of retention and engagementaccordingtoa2004SenateInquiry:

The Committee also sees staff retention and separation issues as an ongoing challenge that agencies will need to monitor and manage for some time to come. Agencies will need a better understanding of the factors behind retention and separation trends if they are to address these issues actively (APH 2004:vi).

A US study suggests HRM might be better managed by devolving more responsibility and autonomy to manages at lower levels, since ‘respondents working in organisations where line manager involvement in people management had increased over the last five years rated the effectiveness of people management


in their organization more positively than … organizations where line manager involvementhadnotincreased’(Perry&Kulik2008:263).

Required Reading 5.4

case Study

ssa & Demos 2008, Towards Agile Government, melbourne, viewed 28/08/08 <http://www.ssa.vic.gov.au/ca2571410025903D/0/cF2FFD686b58a28bca2573530020c6ce?openDocument>

Towards Agile Government is the result of a nine month international project between the Victorian state services authority (ssa) and Demos, a uK think tank. the project is about ‘agility’ and how it relates to the Victorian government’s aims and outcomes in terms of meeting citizens’ short term needs, responding to medium term trends and issues, and shaping long term public futures (ssa & Demos 2008:1).

in government, agility means understanding and meeting the needs of citizens in the short term, adapting structures and services to address medium term trends, and shaping needs in the long term. in practice, an agile government needs to develop its capacity in the following areas:

• short term responsiveness – responding to the public’s day to day needs through choice, voice and personalisation

• strategic adaptation – learning from and scaling up innovation to improve public service systems over the long run

• outcomes focus – focusing on end results to address cross-cutting issues

• long term shaping – positively intervening in society to affect long term trends (SSA & Demos 2008:1).

clearly Victoria is at the cutting edge in thinking about the issues of improved public value. this document illustrates innovative, and in some cases radical thinking and change to many government processes. Feedback from previous psm program participants suggests that some agencies, units or workplaces have some way to go before achieving similar changes, whereas others are well poised to achieve the same. it is evident from reading this document that many aspects of management have an influence in this process. here we are concerned with the implications of managing down for a paradigm shift as well as the implications of the paradigm for how hrm is currently executed, legislated and regulated in the public sector:

• create accessible spaces for shared understanding

• innovate, learn and implement

• network and collaborate

• foster workforce flexibility and adaptability

• balance short and long term priorities

• engage citizens in decision making (SSA & DEMOS 2008 :21)

the implications are as follows:

• enough funding, time and motivation needs to be available for innovation, learning,


evaluating and reporting such initiatives

• people have to be used to, comfortable with and available to meet and share understanding as well as having the communication, collaboration, negotiation, engagement of citizens and other ‘soft’ skills to make this work

• people need to be flexible enough to overcome existing HRM barriers to work in different ways, including rigid ideas about what their role is, what constitutes ‘my job’, perhaps working outside of set times, place, habits and patterns

• recruitment needs to reconsider the experience criteria − innovation, by definition, means breaking new ground so it is less likely that candidates with suitable experience can be found

• attitudes need to be changed

• perspective need to be changed – eg my title is, I work in part a, of section b, of department c, of agency d, in X jurisdiction

ministerials need to be revisited. many psm program participants report the imperative of responding to ministerials. unless the minister is on board with such innovations as described in the ssa document, they are likely to impede progress and distract from the objectives of the innovation project. this is particularly illustrative of short term thinking which acts as an obstacle to longer term shrm.

Activity 5.4 – review the implications review the implications and consider whether they apply to your organisation or workplace and what, if anything, needs to change. thinking about the many functions of hrm shown in Figure 5.1, choose one or two functions that seem to have the most relevance to achieving innovative ideas in public value.

5.4 critique and challenges for SHRM

A withering and likely inaccurate criticism of HRM comes from an article about ‘airheads’ in The Australian. The criticism comes from a legal academic at the University of Sydney, who says:

HR these days is a legal risk management tool, and we can trace the rise in HR to the rise in the laws on unfair dismissal and discrimination. But you’d have to wonder what came first. HR is a parasite and like any parasite, it starts to modify the host. The first thing any HR manager does is hire other HR people. Then they build walls around their unit and hold meetings. It’s supposed to be about better recruiting and better termination procedures, better handling of issues like bullying, but HR has its own internal logic and discourse. It actually changes the way an organisation does thing to suit HR rather than the other way around.

The article author goes on to conclude:

... like smoke, like airheads, the HR manager also rises (Gare 2005:15-16).


Activity 5.5 – consider the comments on the hr ‘airheads’

this is a rather provocative statement about hrm from one individual who appears to be remarkably uninformed about hrm. on what grounds can it be criticised and what do you think the legal academic’s motives are?

SHRMisaboutattracting,retainingandengagingtalent(CLC2008).Itispositively associated with better organisational performance, especially in US and UK according to research. There is less evidence for its success in Australia, whichmaybeduetolesswidespreadimplementationinthiscountry.Further,many of the research studies investigating SHRM have been small and therefore inconclusive(Nankervisetal.2008).AnothercriticismofSHRMandresearchintoits effectiveness is that it is organisation-centric: it fails to consider the employees’ perspective and its direct impact on them and how they experience various aspects oforganisationstrategyandHRMpolicy(Long2007).

ThesignificantchallengesfacingHRMareconveyedbyUlrich(2007:2):

Customers and clients have become increasingly segmented and persnickety. Investors and donors have become increasingly attuned to and actively concerned about not only financial results but intangibles. Employees represent increasingly diverse demographic backgrounds, including not only race and gender but personal preferences, global or cultural backgrounds, and orientation to work.

These points suggest, among other things, that a one-size-fits-all HRM approach is less likely to be effective today.

Activity 5.6 – ulrich’s views – how relevant today?

David ulrich is one of the leading hr specialists in the world. how do his views accord with your experience? has he made more recent pronouncements (research this)?

5.4.1 Are Humans Resources?

ProfessorKerrInksonfromNewZealandposesthoughtfulquestionsinhisareasof interest and has very good critical ideas. He queries the very foundations of this topic by asking whether it is OK to label people as ‘resources’. He says this ‘renders them as passive commodities or assets rather than as active agents, and thereby potentiallyde-humanizesthem’(Inkson2008:270).

Nomenclatureisindeedimportantbecauseitshapesattitudestowardsandtreatmentofthenamed.Youonlyhavetoconsiderwhywenolongerusecertainderogatory labels for certain groups of people to see that this is a valid observation. The idea of employees as resources developed from the strategic management resource based view of the firm where people, along with money, information and so on should be managed, controlled, developed and deployed to gain competitive advantage. And it is certainly a step forward to see employees as an asset to be invested in than a cost to be reduced. Inkson doesn’t like the idea of employees as resources but argues that they don’t have to accept it, and in fact many individuals


use organisations for their own ends. The PSM Program unit on self-management accords with this view in that it promotes proactivity and self-determination on the part of individuals. In addition, the skills shortage means organisations have to take a much more accommodating and empowering view of employees and may even come to the point of seeing them as partners, relabelling HRM to HPM (human partnershipmanagement)(Inkson2008:277).

In the past unskilled and skilled labour were in plentiful supply compared to the present.Labourisstillplentifulinsomecountriesbutislargelyunskilledandtherefore doesn’t meet today’s need for an innovative, flexible, educated workforce that can produce required services and meet product standards. Indeed, we may be at the point where demanding consumers and employees have more power than management,businessowners,capitalandgovernment.Forthefirsttimeinalongtime it seems that organisations are seriously looking at appeasing and pleasing employeesratherthanpatronisingorpacifyingthem.Whatdoyouthink?

5.5 Summary

In this topic we have discussed the idea that HRM should be tied in to organisational objectives and, in the case of the public sector, government policy agendas as well. That is, HRM should have a strategic, long-term focus along with the day-to-day functions of hiring staff, sending them to training, measuring their performance and so on. Jurisdictions in Australia are paying attention to SHRM or workforce strategy. Due to changing workforce demographics, agencies’ ability to implement government policy and deliver service may be at risk without strategies to attract, retain and develop human capital.

SHRM has been criticised on a number of grounds with one of the most scathing but probably inaccurate critiques being that HR professionals do not add real value to the organisation; however this argument is belied by the increasing attention paid to organisations’ human capital on many fronts.

Reviewhaving completed this topic, you should now be able to:

1. Detail strategic human resource management and its links to strategy

2. List the functions of hrm

3. outline steps in workforce planning

4. analyse issues around ageing, retention and the skills shortage

5. Describe some criticisms of shrm.

Required Reading


Reading 5.1 Brown,K2008,‘Humanresourcemanagementinthepublicsector’,inRSBeattie&SPOsborne(eds),Human Resource Management in the Public Sector,Routledge,NewYork,pp.1–7.

Reading 5.2 Dainty,P2008,‘Attractingandretainingstaffinaneraofskillshortages’, The Melbourne Review, vol. 4, no. 1, pp. 36–41.

Reading 5.3 Holland,P,Sheehan,C&DeCieri,H2007,‘Attractingandretainingtalent: exploring human resources development trends in Australia’, Human Resource Development International,vol.10,no.3,pp.247–62.

Reading 5.4 SSA&DEMOS2008,Towards Agile Government,viewed28/08/08<http://www.ssa.vic.gov.au/CA2571410025903D/0/CF2FFD686B58A28BCA2573530020C6CE?OpenDocument>

further ReadingWADPC2008PSMdivision–useful(non-rulesbound)ideasaboutHRM,

viewed28/08/08<http://www.dpc.wa.gov.au/PSMD/Publications/Pages/Publications.aspx>

GovernmentofWesternAustralia,DepartmentofthePremierandCabinet,2007,Guidelines For Agency Strategic Management, Public Sector Management Division 26February,28/08/08,<http://www.dpc.wa.gov.au/PSMD/Publications/Documents/Non-Current%20-%20Agency%20Strategic%20Management%20Guidelines.pdf>

The above are examples of information available on this topic and to encourage participants to find similar sources in their own jurisdiction.

<http://www.pria.com.au/sitebuilder/resources/knowledge/asset/files/95/4.1reputation&eocforaustralianbusiness.academic.pdf>

This website has a detailed paper about what constitutes an employer of choice (EOC) and thus is very relevant to discussion of retention and skills shortage.

QueenslandPublicServiceCommission2008,AttractionandRetentionSeries:AFocusonPeopleandBusiness,AguidefortheQueenslandPublicService:ManaginganAgeingWorkforce,viewed04/11/09<http://www.psc.qld.gov.au/library/document/catalogue/mature-age/managingan-ageing-workforce.pdf>.

QueenslandPublicServiceCommission2008,AttractionandRetentionSeries:AFocusonPeopleandBusiness,Workforceplanningtoolkit,Resourcedocument1,Brisbane,viewed04/11/09<http://www.psc.qld.gov.au/library/document/catalogue/workforce-planning/workforce-planning-toolkit-one.pdf>.

This website has a range of useful publications including recruitment and retention which have content relevant beyond Queensland.

ACTU2008,BuildingaFairerAustralia:TheRoleofUnionsandWorkers’Rights,Canberra,Available<http://www.actu.asn.au/Media/Mediareleases/AddresstotheNationalPressClubBuildingafairerAustraliatheroleofunion sandworkersrights.aspx>.Accessed26/3/08.


topic 5: Required Reading

Brown,K2008,‘Humanresourcemanagementinthepublicsector’,inRSBeattie&SPOsborne(eds),Human Resource Management in the Public Sector, Routledge,NewYork,pp.1–7.


topic 5: Required Reading

Dainty,P2008,‘Attractingandretainingstaffinaneraofskillshortages’,The Melbourne Review, vol. 4, no. 1, pp. 36–41.


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