The use of HRM in public sector

This assignment seeks to produce an analysis and critical evaluation of how Human Resource Management has been used as a lever of change in the public sector. It will consider change in its organizational context and the rational for and purpose of the change. It will also look at the involvement of the stakeholders and the approach been followed to bring about the change. The factors that influence the change and its triggers will also b e analyzed. The role of Human Resource Management and how it has been used to bring about change; and resistance to change will also be looked into in the course of this work.

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The first stage of the development of public management, according to McLaughlin, Osborne and Ferlie (2002), was the minimal state. Here, government provision was seen as a necessary evil and the provision of almost if not all the public services were through private provision (Owen 1965). However, it was during that period that that the basic principles of public provision were laid out.

The second stage of the development of public management started in the twentieth century and was characterized by an unequal partnership between the government and the private sector McLaughlin, Osborne and Ferlie (2002). Here, there was an ideological shift from the traditional conservatism which obtained in the first stage towards social reformism and Fabianism as cited by (Prochaska, 1989). This shift according to them contained three elements which are

A recasting of social and economic problems away from a focus on blaming individuals to a recognition of those problems as societal issues which concerned everybody

The recognition that the state did indeed have a legitimate role to at least provide some public services

And thirdly, in a situation where the state did not provide the public services, it needed to enter into a partnership with the private sector to provide such, even though the state would have more to do.

This model according to (Kamerman and Kahn, 1976) is where the state provided the basic minimum and the charitable and private sectors took it up from there.

The third stage is the welfare state which according to (Beveridge, 1948) cited in McLaughlin, Osborne and Ferlie (2002), is based on the belief that charitable and private sectors had failed in there provision because of the duplication and fragmentation of the service provided, because their service was inefficient and ineffective. Consequent upon these, the provision of these services would now be managed by professional public servants.

The final stage, which is what obtains today, is the plural state. This stage came about as a result of the criticisms against the welfare state. The focus of the welfare state was on the provision of a minimum standard of service to the citizens but late on in the twentieth century, the perceived needs of the citizens had moved on to a situation where they expected services to meet their individual needs and to be a part of the process of the service delivery (Mischra, 1982) cited in McLaughlin, Osborne and Ferlie (2002).

However, the debate became more focused in the 1990s because this fourth approach became characterized as the New Public Management. This is because as posited by (Dunleavy, 1991) this approach to public management was based on an incisive critic of bureaucracy as the organizing principle within public administration, ‘a concern with the ability of public administration to secure the economic, efficient and effective provision of public services’ (Hughes, 1997), ‘and a concern for the excesses of professional power within the public services and the consequent disempowerment of service users’ (Falconer and Ross, 1999).

In spite of the fact that lingering debate as to the exact nature of New Public Management, its classic formation according to (Hood, 1991) in McLaughlin, Osborne and Ferlie (2002) is made up of seven doctrines which are:

a hands on and entrepreneurial management in preference to the traditional bureaucratic focus of the public administrator (Clark and Newman, (1993)

explicit standards and measures of performance (Osborns et al, 1995)

an emphasis on output controls (Boyne 1999)

the importance of the aggregation and decentralization of public services (Pollit et al, 1998)

promotion of competition in the promotion of public services (Walsh, 1995)

emphasis on private sector styles of management (Wilcox and Harrow, 1992) and

the promotion of discipline and parsimony in resource allocation (Metcalf and Richards, 1990).

In addition to these seven doctrines is the one posited by (Stewart, 1966) cited in McLaughlin, Osborne and Ferlie (2002) which is of the taking away of political decision making from the direct management of public services.

However, the ‘New Labour’ government has taken it a stage further from the plural stage. This is because it is argued that the view of both the public management and the New Public Management is myopic which according to (Clark and Stewart, 1998) in McLaughlin, Osborne and Ferlie (2002) is from ‘a narrow focus on the marketization of public services and towards an emphasis upon community governance’. In this situation, the public sector is no longer seen only in relation to the government a planner or service provider, but as working together with the government, voluntary and community sectors and the private sector in the planning, management and provision of public services. Here, according to (Rhodes, 1996; Kickert et al, 1997), the main function of the government becomes the management of the intricate system of service provision.

New Public Management according to (Dunleavy and Hood, 1994) is ‘a way reorganizing public sector bodies to bring their management, reporting, and accounting approaches closer to business methods’. This reorganization involves the two main ways that the public sector organization is structured by moving it ‘down-grid’ and ‘down-group as opined by (Douglas, 1982). Down-grid according to him is when there is a reduction of powers by procedural rules over issues like staff. Down- group on the other hand is a situation where ‘the public sector is made less distinctive as a unit from the private sector in relation to personnel, reward structure and in methods of doing business.

This shift resulted in budgets been reworked to become more attractive in accounting terms and organizations became a network of contracts linking incentives to performance (Dunleavy and Hood, 1994). Again, functions were separated by introducing distinctions between the purchaser and provider and opening competition between agencies, firms and not-for-profit bodies. Also, provider roles were deconcentrated to the minimum sized feasible sized agencies, allowing users to exit from one provider to another. These according to (Dunleavy and Hood, 1994), was for the purpose of better service delivery.

According to (Polsby, 1984) in (Dunleavy and Hood, 1994), New Public Management can be influential in at least two modes based on past experience of organizational change. The first is the ‘incubated’ mode when change ideas only come into effect in the long run and the ‘acute’ innovation pattern, in which change programmes reach there peak early and break up soon after. However, New Public Management seems to be a mix of both modes. This may be as a result of New Public Management now been so omnipresent in public sector organizations that it hardly amounts to a distinctive change programme anymore (Dunleavy and Hood, 1994).

As opined by (Dunleavy and Hood, 1994), ‘New Public Management has proved a fairly durable and consistent agenda’ but according to McLaughlin, Osborne and Ferlie (2002), New Public Management may weaken the accountability of public services and the commitment of the community in the pursuit towards marketization. This has brought to the fore, the criticisms of New Public Management which fall into four groups. Though these four broad criticisms of New Public Management contradict themselves, some important lessons can be learnt from them.

The fatalist critique of organizational change going by the position of (Dunleavy and Hood, 1994) is that the basic problems of public sector management which include system failure, human mistakes and corruption cannot be done away with, not even by New Public Management. Fatalists are of the opinion that there is really not much change going on in spite of new acronyms and control frameworks promoted by New Public Management and that the much talked about systems have failed.

From the point of view of the individualist critique, New Public Management is somewhere between the traditional structure of public administration and a fully formed system which is based on enforceable contracts and the legal rights of individuals. Individualists see New Public Management as becoming a kind of replacement for fully individualized contract rights (Dunleavy and Hood, 1994).

The hierarchist critique is that human beings have the ability to manage nature in a defined way but that care should be taken so that the process of change does not get out of hand thereby damaging the public sector. There worry is that as a result of the changes, the ethics of traditional public service will be removed together with the career concept and the redesign of public sector organizations (Dunleavy and Hood, 1994).

The egalitarian critic is centered on the premise that problems could arise if concentration of organizational power and decision making are left with the elite because a large scale ‘marketizing’ reform will increase the risks of corruption in the public service. This is because New Public Management emphasizes a management that is close to the customer, the decentralization of service delivery and giving clients a choice (Dunleavy and Hood, 1994).

HUMAN RESOURCE MANAGEMENT AND CHANGE IN THE NHS:

According to Armstrong (2006), the nature of interaction between Human Resource Management and performance, and in particular the search for a definite and conclusive evidence of the positive impact of Human Resource Management on performance cannot be underestimated. The impact of the NHS Plan on the workforce has been expressed through the Human Resource in the NHS Plan which has formed the basis for the development of a variety of Human Resource Management policies focused on making the NHS a model employer and ensuring that the NHS provides a model career by offering a Skills Escalator, improving the morale of staff, and building people management skills led to the launching of a new workforce strategy by the middle of the decade.

Human Resource Management systems and practices have a laid down framework which involves other organisational factors like structural arrangements. Based on this, Brown (2004) observed that while changes to the public sector over the last twenty have had a significant impact on employees of public sector organizations and the conditions under which employees work, limited thought has been given to the specific field of Human Resource Management research in relation to the public sector. In the UK which is the focus of this study, government has placed a high importance on the value of strategic Human Resource Management in improving the delivery of healthcare reforms. Towards the achievement of this, local trusts of the NHS are encouraged to adopt a “best business practice” approach by, according to (Bach, 1994), engaging all staff through people management processes. This idea of Human Resource Management in the public sector establishes that Human Resource Management is a major influence in public sector change but theoretically, there has to be a scope for the Human Resource function within trusts to adopt a more strategic role within the New Public Management (Stock et al, 1994). According to (Corby, 1996) “it should no longer be consigned to a reactive and administrative role, interpreting and applying national rules, and can be proactive”.

As opined by Barnett et al (1996) the Human Resource function within the NHS is characterised traditionally by low credibility, a narrow operational contribution and a peripheral position. According to (Brown, 2004), the bureaucratic and the management models of public sector operation and activity are compared to discern the ways in which employment and organizational issues are conceptualized in each model. The manner in which the institutional, policy, and organizational changes impact public sector employment and conditions of service are explored. Higher managerial objectives as posited by (Kramar, 1986) are achieved through effective Human Resource practices offered by adopting HRM principles. It can be argued then that the adoption of New Public Management has thrown the possibility of managers acquiring or developing sophisticated Human Resource Management techniques open. This is because New Public Management principles allows a more flexible and responsive approach to questions of recruitment, selection, retention, training and development of NHS employees. This is because according to (Tyson and Fell, 1992; Tyson, 1995; Storey, 1992; Ulrich, 1997), for Human Resource functions to play a strategic as opposed to a “tactical” or “administrative” role, it has to be distinguished by a focus on the long term, linking business and Human Resource strategic objectives and forward planning.

The application of HRM principles within the public sector displaced the traditional model of personnel administration and was argued to have been introduced when the sector experienced a shift from a ‘rule-bound’ culture to a ‘performance-based’ culture (Shim, 2001) and paralleled the extensive public sector managerial restructuring and reform programme with the new models of HRM in the public sector highlighting the notion of human resources having the capacity to achieve performance outcomes in line with the strategic direction of the public sector organization (Gardner and Palmer, 1997). With particular reference to the UK, a number of distinctive features of public sector management include more attention to issues of health, safety and welfare of staff. Another feature is the tendency of public employment practices to be standardized, with workers performing similar tasks and also having the same terms and conditions regardless of their geographical spread, high levels of union density across public sector organizations (Winchester and Bach, 1995) and also the emphasis on staff development and equal opportunities typifies the State as a ‘model employer’ (Farnham and Horton, 1992).

According to (Truss 2003), there are currently some policies and management initiatives that are transforming the structure and organization of the NHS. The current role of Human Resource Management in the NHS, its status within the service, and its success as an effective function have become especially important at this time as opined by (Bach 2001, Clarke 2006).  As a result of these, the growing importance of the Human Resource function is particularly clear in situations where individual NHS trusts are granted greater financial and operational independence within the increasingly competitive, consumer driven market that the government is creating. This is in spite of the argument by some commentators that changes in the role and status of HRM in the public sector merely follow orientations developed in the private sector (Buchan 2000; Thomason 1990).  However, Human Resource practitioners within the NHS see it from a different perspective. According to them, the introduction of more efficient people management is an important and necessary development, one that is very important in an environment where people are not only the service providers, but also the product and customer of healthcare services.

A change in Human Resource functions was one of the reforms that took place in the NHS and its purpose was to cut through bureaucracy and red-tapism and ensure cost-efficiency and effectiveness in the system through a process of decentralization. Decentralization within the NHS was based on the NHS and Community Care Act of 1990. This Act created both the internal market and self governing trusts, and introduced a division and marketization of relations between health care providers and purchasers Lloyd (1997). Decentralization is the transfer of authority or responsibility for decision making, planning, management or resource allocation from government to its field units, administrative units, regional or functional authorities, private entities and non-governmental private or charity organizations. According to (Rondinelli and Cheema, 1983; Rondinelli et al., 1989; Hope, 2000; Sarker, 2003; Elliot and Bender 1997), “decentralization acknowledges that for service provision to be effective, different approaches must be adopted in various area of public sector and the necessity to construct pay structures to reflect these needs. In turn, this has resulted in both more diverse and more flexible pay arrangements. Consequently, the main advantage of decentralization and of delegated responsibility for pay is that it encourages, management to develop a reward strategy that is consistent with an agency’s wider strategic goals. Delegating responsibility for pay to agencies may be viewed as a mechanism for stimulating agencies to develop an explicit and consistent set of strategic goals in order to satisfy their customers. The main aim of the decentralization process was to encourage trusts to determine pay locally. The central theme of the modernization pay reform was that it should be based on performance.

The main thrust of the Agenda for Change within the NHS is the payment of employees based on their performance and as per their skills and knowledge. However, this was not only a new way of paying employees, it was developed to support and enable improvement for patients, employees and the organization. This according to (Department of Health, 2009), allowed for equality of pay, pay re-structuring and transparency. The Human Resource function was used to bring about this change in terms of job evaluation, harmonizing terms and conditions of service and through the knowledge and skills framework.

PLANNED CHANGE:

As a concept, the process of change starts with the awareness of a need for change. An analysis for the need for change and the factors that lead to it will now be an indicator of the direction in which action needs to be taken (Armstrong, 2006). Proponents of change management have proposed two forms of the process which are: planned and emergent. Planned change has dominated the theory and practice of change management over the last 50 years and is significantly based on the work of Kurt Lewin. This approach sees organisational change as a process that moves from one ‘fixed state’ to another through a series of pre-planned steps, and can therefore be analysed by a construct such as Lewin’s (1951) ‘Action Research’ model. Another planned approach to organisational change is Lewin’s (2003)’Three-step model’ which describes the three learning stages of freezing; when one clings to what one knows, unfreezing; when one explores ideas, issues and approaches, and refreezing; the stage of identifying, utilising and integrating values, attitudes and skills with those previously held and currently desired. This approach recognises that, before any new behaviour can be adopted successfully, the old one has to be made away with. Only then can the new behaviour be fully accepted.

The organisational change that was carried out in the NHS embodies some of the characteristics of the planned model, defined by (Iles and Sutherland, 2001) as ‘implementation of some known new state through the management of some form of transitional phase over a controlled period of time’. This came about when politicians and health care professionals recognized some degree of change was necessary in the UK health sector in order to facilitate better healthcare delivery services. In response to the intention, government embarked on series of health program reforms to effect positive changes in the healthcare. Government’s health reforms have concentrated on hospitals, but increasingly shifting their attention to NHS community services. Governments plan is to improve long term healthcare outcomes for individual patients while reducing the cost pressures on the system as a whole. Proposals include more outreach clinics, a regular healthcare checkup, and “joined-up” care plans. This plan of action by the government is based on a model that will make healthcare services affordable and closer to the patients.

The governments proposals on change are aimed at the following:

Bringing some specialties out of the hospital nearer to people, including dermatology, ear, nose and throat, orthopedics and gynecology would be achieved either through outreach clinics run by hospital consultants or specialist services provided for by GPs

Introducing a new generation of community hospitals that will provide diagnostics, minor surgery, outpatient facilities and access to social services in one location

Pilot a new NHS “life check” or “health MoT” from 2007 to assess people’s lifestyle risks, the right steps to take and provide referrals to specialists if needed

The life check will be run on a two-stage basis with patients first filling in a paper-based or online self-assessment.

If the assessments indicate the person is at significant risk of poor health for conditions such as diabetes, cancer or heart disease, the individual would then be given access to a health trainer who could advise about diet and exercise. If problems are more complex, patient would be referred to a GP or nurse

Give patients a guarantee of registration on to a GP practice list in their locality and simplifying the system for doing this

Introducing incentives to GP practices to offer opening times that respond to the needs of patients in their area

Consideration was given to dual registration – allowing patients to register with more than one GP – but was thrown out because it would “undermine the underlying principles” of the family doctor system

New responsibilities placed on local councils and the NHS to work together to provide joined up care plans for those who need them

Supporting people to improve self care by trebling the investment in the Expert Patient Programme, which teaches patients with long-term illnesses, such as asthma and diabetes, how to control their condition

Developing an “information prescription” for people with long-term health and social care needs and for their carers

More support for carers, including improved emergency respite arrangements and the establishment of a national helpline for carers

Extension of direct payments and piloting of individual budgets for social care to allow people to decide what their allocations are spent on

Increasing the quantity and quality of primary care in under-served, deprived areas through a national procurement programme which would open the GP market to the private and voluntary sectors

Encourage nurses and other health professionals, such as physios, to take on more responsibility

Set up pilots to allow patients to self-refer themselves to professionals other than GPs, who currently act as gatekeepers to the NHS (www.news.bbc.co.uk)

REFERNCES:

Armstrong, M. C. (2006) A Handbook of Human Resource Management Practice. 10th Ed, London, Kogan Page.

Bach, S. (2001) “HR and New Approaches to Public Sector Management: Improving HRM Capacity”. Workshop on Global Health Workforce Strategy, World Health Organization, Annecy, France.

Brown, K. (2004) Human Resource Management in the Public Sector. Public Management Review, 6(3), pp 303-309.

Buchanan, J. (2000) “Health Sector Reform and Human Resources: Lessons from the United Kingdom”. Health Policy and Planning, 15(3), pp 70-89.

Clark, N. (2006) “Why HR Policies fail to support workplace learning: The Complexities of Policy Implementation in Healthcare”. International Journal of Human Resource Management, 17(1), pp 190-206.

Department of Health. (2009) Agenda for Change.

Dunleavy, P. and Hood, C. (1994) From Old Public Administration to New Public Administration: Public Money and Management, 14(3), pp 9-16.

Lloyd, C. (1997) Decentralization in the NHS: Prospects for Workplace Unionism, British Journal of Industrial Relations, 35(3), pp 427-446.

McLaughlin, K., Osborne, S. P, and Ferlie, E. (2002) New Public Management- Current Trends and Future Prospects, (EDs) Abingdon, Routledge.

Thomason, G. F. (1990) “Human Resource Strategies in the Health Sector”. International Journal of Human Resource Management, 1(3), pp173-194.

Truss, C. (2003) Strategic HRM: Enablers and Constraints in the NHS: International Journal of Public Sector Management, 16(1), pp 48-60.

http://www.dh.gov.uk/en/Managingyourorganization/Humanresourceandtraining/Modernizingpay/Agendaforchange/DH_424 (Accessed 19 April 2010)

http://www.eurofound.europa.eu/eiro/2002/08/feature/uk/0208103f.htm (Accessed 19 April 2010)

http://www.healthcaresupply.org.uk/pdfs/hrinthenhsplan.pdf (Accessed 21 April 2010)

http://www.lums.lancs.ac.uk/events/owt/10301 (Accessed 3 May 2010)

http://news.bbc.co.uk/1/hi/health/4662024.stm (Accessed 3 May 2010)

KENECHUKWU O. AKABUA

0823583

MA HUMAN RESOURCE MANAGEMENT

HR 4062 – HRM AND CHANGE.