U3D2 - 24 - explain the conflict between privatization and a staff model for the sanitation department...see details

Chapter 3 - Thinking Strategically about HRM

Just a decade ago, the primary focus of personnel systems and human resources professionals shifted from defending merit system principles to a concern for maximizing productivity. Theoretically and historically, merit system principles were seen as instruments of productivity, but implementing merit principles required both a regulatory as well as a facilitative mindset. In actuality, the emphasis on regulation often won out, and personnel departments largely were seen as regulating the discretion of management in human resources areas rather than facilitating human resources practices.

In part, this shift signifies that merit systems are no longer framed exclusively as antidotes to patronage systems. Civil service systems—the instruments of merit values—now are evaluated as a means to an end rather than the ends in themselves they had become. This emphasis is part of a growing realization that organizations must continually align their administrative systems in ways that allow employees to complete their work effectively. This requires designing and managing administrative systems in response to changes in external environments that affect organizational mission and objectives. Effective human resource management is defined by how well employees are completing work that (1) advances existing agency goals, (2) positions the organization to respond to present and future external environmental changes, and (3) protects employees from inappropriate political influences. The third piece of the definition has become far less prominent than it has been historically.

The new focus is seen in many ways: for example, attempts to exempt the recently created Department of Homeland Security from the traditional federal personnel system, creating a Chief Human Capital Officer in federal agencies at least symbolically on par with Chief Financial Officers, and the increasing emphasis on workforce planning at all levels of government and in larger nonprofits as well as private firms. In short, this human resources management renewal emphasizes strategic thinking about human resources issues, highlighting the human resources responsibility of executive level leadership and managerial cadres as well as the evolution in roles of personnel specialists.

For many organizations with civil service systems, the changes have required increased flexibility and experimentation in many areas: with privatization, contracting out, and utilization of part-time and temporary workers; decentralization of the personnel function and rethinking of the role of central personnel offices; rank-in-person versus rank-in-job personnel systems with more flexibility in managing pay; team as well as individual performance evaluation; and experimentation with variable pay based on performance.

Managers find themselves buffeted by demographic statistics that fundamentally alter the supply of labor at the same time they are experiencing the clash between traditional values of civil service systems and the market-based values.

By the end of this chapter, you will be able to:

1. Identify traditional civil service system assumptions.

2. Describe the challenges to these assumptions posed by contemporary work and organizations, demographic trends, market-based values, and new concepts of governance.

3. Identify the consequences of these challenges for twenty-first-century public service systems.

4. Describe the contemporary model of HRM that links these challenges with values, functions, organizational mission, and multiple perspectives.

5. Identify four key recommendations for improving public sector HRM.

6. Relate the concept and practice of workforce planning to strategic HRM.

7. Connect indicators and standards to evaluation of HRM systems and to effective management of human resources.

8. Discuss how a strategic human resource management information system can drive databased human resource management.

THE ASSUMPTIONS OF TRADITIONAL CIVIL SERVICE SYSTEMS

Civil service systems grew up in response to patronage challenges and associated needs for greater efficiency and effectiveness in carrying out government missions. Civil service systems balance the values of efficiency and individual rights and rest on a foundation of assumptions about work that were developed when the roots of these systems were planted decades ago—not coincidentally at a time when the profession of mechanical engineering and its rational/analytical approach to problem solving was finding itself in great demand. Note in the following assumptions about traditional human resources management the influence of the engineer’s thinking:

•Public sector work is organized around the role of government as a deliverer of services.

•This work can be divided into individual packets of duties and responsibilities called jobs.

•Duties and responsibilities remain stable over time because government work is performed in bureaucratic organizations designed to promote stability and routine.

•Worker competencies are valued and assessed in relationship to particular jobs, and personnel functions are oriented around positions rather than the people who occupy those positions.

•The analytical focus on individual jobs and the relationship of one job to another provide a rational system for pay, recruitment, and selection, and appraisal of employee performance.

These assumptions about civil service systems were essential to successful transition from the era of patronage, and they have provided sound guidance for the design and implementation of civil service systems for years. However, many argue strenuously that they seem less appropriate for today’s work environment.

Challenges fall into four categories: the nature of contemporary work and organizations, demographic trends, market-based values, and a new concept of governance.

CHALLENGES TO THESE TRADITIONAL ASSUMPTIONS

Contemporary Work and Organizations

Increasing specialization of work and the rapidity of change characterize contemporary work and organizations. While the knowledge needed to address today’s problems becomes more specialized, the problems themselves remain broad, requiring teams of specialists. The practice of medicine and the continuous development of specializations is a familiar example. Other examples are plentiful. Public responses to gangs involve families, social service agencies, the courts, the police, recreation specialists, teachers and school district personnel, as well as the employment of both volunteers and professional workers. This complexity and specialization requires teams of people working together, often in temporary arrangements with nongovernmental actors, until the particular problem they are dealing with changes and the composition of the team and partners must be revised.

The concept of working in teams of specialists and organizations is very different from the idea that work can be divided discretely into manageable packets of duties and responsibilities. Rather than managing individual workers, many of today’s managers are responsible for teams of workers, where the focus is on the group, and on networks of groups, as well as the members. Effective managers today must be equally adept at working in hierarchy and in teams. In teams, the interpersonal skills that used to be less relevant to individual work become crucial. Good citizenship behaviors and personal attributes like courtesy, friendliness, conflict resolution, effective listening, persuasiveness, and speaking ability become assets to teams even if they are often absent from traditional job descriptions and appraisal instruments. Rather than a job description determining what the employee does, increasingly, the person with specialized knowledge, working in concert with others, heavily influences his or her actual work by helping define what the duties and responsibilities ought to be or at least how the job ought to be carried out.

The rapidity of change largely corresponds to the rate of innovation in the technological software and hardware utilized for work, the degree of dynamism in the marketplace, and the relationship between markets and governing actions. The more competitive the marketplace, the more responsiveness business expects from government. For example, when developers put all the pieces into place: the land, the tenants, the architects and planners, the financing, and so on, they want a responsive city hall that will process a rezoning application and site plan and issue building permits in a timely fashion; and they want the city’s work oriented toward the developers’ needs, not vice versa, so the project can be built on schedule and the developer can get on to the next project. Public personnel systems dominated by procedures focused on fairness rather than timeliness can drive the development community crazy when vacancies in the planning department, for example, cause delays in application reviews and issuance of permits as the hiring process continues at a different pace—focused on a wider range of values than human The pace of change also influences the degree to which today’s knowledge, skills, and abilities are suitable for tomorrow’s work. As we will see in Chapters 5 and 7, recruiting based on a standard job description may secure talent for today but might limit the organization’s ability to respond for tomorrow. A worker’s character, willingness, ability, and aptitude to learn what he or she does not know may be more important than the knowledge, skills, and abilities that person brings to the present job.

Demographic Trends

While the current fiscal crisis challenges longer-term trends, those trends will reassert themselves once the economy resets itself. The single biggest influence on human resources management will be the scarcity of labor, all kinds, but particularly those with specialized knowledge. Whether public or private, the need for labor dominates strategic thinking as well as the day-to-day pressure to fill vacancies and retain valued employees.

The results of an ambitious research project involving thirty major public and private organizations in North America and Europe led to the following observations:

Three powerful forces—increasing longevity, declining fertility, and the disproportionate size of the ‘Baby Boom’ generation—together drive an unprecedented and relentless shift in the age distribution of the population and workforce in industrialized countries. As workforce growth slows, there are not enough young workers to replace the population and skills of Baby Boomers as they reach retirement age, and labor and skills shortages will become chronic.1

While layoffs and furloughs dominate today’s thinking, recruitment, training, and retention of employees will resurface as the ratio of retirees to new workers, reflected in Table 3-1, adds to the scarcity of labor.

The fact that virtually all adults, whether married or not, are working outside the home has made balancing work and family obligations a critical challenge for today’s worker, manager, and employer. Today’s demographic trends show that super pop has joined super mom. Women have become all too familiar with the stressful responsibilities for nurturing a family and working outside of the home, and now their husbands are experiencing similar demands and the stress associated with balancing family needs, work responsibilities, and personal interests. Working too hard in organizations that are downsizing or understaffed, perhaps holding a part-time job as well, shuffling kids around day care, soccer matches, and music lessons change one’s expectations about work and one’s perspective on what it means to be an employee. Increasingly, family responsibilities include taking care of parents. This means giving medical care while they are alive and settling their legal and financial affairs once they pass away. This is complicated by geographic mobility—the one who lives closest to a parent who needs care often ends up in the caregiver role. While these family-friendly organizational characteristics may at one time have been “fringe benefits,” in today’s world, where workers not jobs are the scarce resources, these organizations are now increasingly focusing on recruiting and retaining workers.

Market-Based Values

Now familiar antigovernmental rhetoric is matched by a resurgence of political support for market-based values. If government cannot solve certain problems, then let the marketplace try, advocates argue. Privatization, contracting out, and temporary staffing result from this kind of sentiment, accompanied by and encouraged in an environment where raising taxes is difficult. In this kind of environment, where organizations cannot be depended upon to foster long-term employment, once economic opportunities are plentiful, employees become career entrepreneurs, responsible for managing their own successes, failures, and future.

TABLE 3-1

Full-Time Permanent Age Distributions Federal Government Civilian Workforce, 1985–2006

	1985	2006
Age	Count	Percent	Count	Percent
<20	4,501	.25	593	.00
20–24	74,036	4.04	28,072	1.7
25–29	175,458	9.58	91,465	5.6
30–34	267,219	14.59	116,102	7.1
35–39	326,345	17.81	170,402	10.4
40–44	257,809	14.07	238,027	14.6
45–49	228,517	12.47	286,140	17.5
50–54	225,745	12.32	311,237	19.1
55–59	161,926	8.84	251,750	15.4
60–64	84,731	4.63	102,763	6.3
65–69	20,461	1.12	26,932	1.6
70>	5,164	.28	9,515	.6
Total	1,831,912	100	1,631,000	100
Average age	42.3		47

U.S. Office of Personnel Management, Office of Workforce Information, Central Personnel Data File (CPDF) at www.opm.gov/feddata/html/Age_Dist.asp (2008).

 

At no time in recent memory have the distinctions between public and private sectors seemed less understood or important—a surging economy in the 1990s where fewer and fewer people depended upon government is important in this trend. Moreover, the role the federal government took a decade later during the most recent recession has highlighted the interdependencies. The role of government as a deliverer of services at state and federal levels is yielding to the concept of government as “guarantor” of services, as services are contracted out. Agency managers have had to adjust their thinking from the management of people and services to the management of contracts, knowing that they still are going to be held politically accountable for the quality of service delivery.

The blending of public, private, and nonprofit work is reflected in expectations of citizens who receive public services, regardless of who delivers them. No amount of explanation will satisfy a citizen who has to stand in line at the county treasurer’s office or the department of motor vehicles office and then goes to the bank and receives instant service or better yet, to an ATM. Similarly, the popularity of FedEx or UPS has challenged the Postal Service. These expectations require more funding for personnel and better wages to attract better people, but they also require more delegation of authority to those actually serving the public. At the same time that expectations for rapid, customized responses have increased, the traditional role of government, as arbiter of political values, has not decreased. Working through questions of values takes time, and developing managers who can understand “customer service” values with traditional “community building” values is a challenge for ways an agency thinks about its human resources needs.

New Concepts of Governance

Associated with the emphasis on markets versus government and the employment of private firms and nonprofit organizations in public services delivery, we encounter the term governance. Governance is a concept that broadly encompasses how public values are allocated and services provided. In the past, it was hard to distinguish between governance and government because the legislative, executive, and judicial institutions of government fulfilled “governance” functions. Now, everything is up for grabs. The IRS employs private firms to collect late taxes; prisons are constructed and operated by private firms; private security firms are employed by the defense department in war zones; and nonprofits have become essential partners in the delivery of social services. While these changes importantly affect traditional issues regarding accountability and the values these networks incorporate, they also have an impact on contemporary human resources management.2 For example, it is now widely accepted that government merit systems have incorporated the value of social equity into their HR principles. Can the same be said for the partners in the governance networks designed around service delivery? Can one expect a private company to value social equity and individual rights as much as a government agency? Should one expect it of a company that must compete in the market place where timeliness, risk, and financial imperatives create far more pressure on administrative practices than in government? In short, while the value of networked systems in delivering public services has become more popular in part because of the antigovernment value movement and the need for specialized approaches and skills to specific public problems, have we underplayed the challenges and costs encountered when trying to mesh administrative systems from different sectors, including HR?

THE CHALLENGES OF COORDINATING HRM SYSTEMS-AN EXAMPLE

For several years a local government human services department has provided a grant to a nonprofit organization for an academic program for youth expelled from school. The grant award document includes all the standard government contractual language; some might call it the fine print. Included in the standard language is the requirement for the contracting party to certify staff working under the grant have not been convicted of certain serious criminal offenses. Government staff felt they had a good working relationship with the organization. As part of annual monitoring procedures, the nonprofit staff had verbally indicated they had a process for conducting criminal background checks on all staff and volunteers.

One evening the local news featured a story on an individual who had robbed a bank and led police on a chase through the downtown area during the lunch hour before crashing his car into a building. A key feature of the story was that the individual arrested was a youth worker for the academic program funded by the local government. The news reporter went on to disclose that the individual was on parole for a murder conviction at the time the robbery occurred. When contacted about the incident, the nonprofit indicated it was aware of the individual’s past criminal history but it: (1) did not personally believe the individual had committed the crime, (2) had a mission-driven commitment to giving people a second chance; and (3) felt staff persons with imperfect histories offered youth the opportunity to learn from the mistakes of others. Local government staff, on the other hand, viewed the nonprofit’s stance as untenable and fraught with liability concerns, both for the nonprofit and the local government as the primary provider of funds for the program. Faced with loss of the grant, the nonprofit implemented new personnel policies requiring criminal background checks and disallowing employment of individuals convicted of certain offenses within a set timeframe.3

CONSEQUENCES OF THESE CHALLENGES FOR THE TWENTY-FIRST-CENTURY PUBLIC SERVICE SYSTEMS

Table 3-2 summarizes the shifts taking place in human resources management as organizations move from traditional civil service to merit systems built for the twenty-first century. We have included an exercise at the end of the chapter based on this illustrative chart.

One can see that the shifts noted in the table illustrate the trend away from human resources management as a regulatory function and toward the view that human resources management is a strategic element of organizational goal fulfillment. Of the differences noted in Table 3-2, in this chapter we want to focus on the first—thinking strategically about human resources management.

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TABLE 3-2

Shifting from a Traditional Public Sector System to a System for the Twenty-first Century

Traditional Public Service Systems	Public Service Systems for the Twenty-first Century
1. Single system in theory; in reality multiple systems not developed strategically	1. Recognize multiple systems; be strategic about system development; define and inculcate core values
2. Merit definition that had the outcome of protecting people and equated fairness as sameness	2. Merit definition that has the outcome of encouraging better performance and allows differentiation between different talent
3. Emphasis on process and rules	3. Emphasis on performance and results
4. Hiring/promotion of talent based on technical expertise	4. Hire, nurture, and promote talent to the right places
5. Treating personnel as a cost	5. Treating human resources as an asset and an investment
6. Job for life/lifelong commitment	6. Inners and outers who share core values
7. Protection justifies tenure	7. Employee performance and employer need justifies retention
8. Performance appraisal based on individual activities	8. Performance appraisal based on demonstrated individual contribution to organizational goals
9. Labor–management relationship based on conflicting goals, antagonistic relationship, and ex-post disputes and arbitration on individual cases	9. Labor–management partnership based on mutual goals of successful organization and employee satisfaction, ex-ante involvement in work-design
10. Central agency that fulfilled the personnel functions for agencies	10. Central agency that enables agencies, especially managers, to fulfill the personnel function for themselves

Abramson, Mark A. (ed.). Towards a 21st Century Public Service: Reports from Four Forums. The Pricewaterhouse Coopers Endowment for the Business of Government. January 2001, p. 29.

THE CONTEMPORARY MODEL OF HUMAN RESOURCES MANAGEMENT

Clearly, we need to replace the traditional function- and values-based closed systems model of public service HRM with one that responds to the four fundamental challenges confronting contemporary HRM. This model must incorporate values, functions, organizational mission, and the perspectives of multiple stakeholders. But, it must do so in a manner that reflects organizational learning in response to a changing and uncertain environment. Figure 3-1 describes this model of how contemporary human resources management works when viewed from a strategic perspective. 4

The model shows that at the core are environmental forces like workforce demographics and reductions in staffing and outsourcing of services, the political values we described in the first chapter, and the four perspectives we will describe in the next few paragraphs. Agency mission provides an important overall filter through which the environment, values, and perspectives are understood and engaged. In our case, the human resources functions are the targets for the strategic thinking. The model also shows that consequences—both good and bad—of detail issues at the technical core of human resources management can trigger environmental forces, values, and perspectives.

According to Wilson, 5 an organization’s hierarchy is divided into operators (employees), managers, and executives. Operators are those responsible for completing the core work of the agency. In a small police department, these would be the officers on the street and the detectives and those that support them; in a hospital, these would be the nurses and the physicians and support personnel primarily responsible for treating and caring for patients; in a drug rehabilitation facility, the counselors would fall into this category; for the park service, these would be the rangers and personnel that help with and support the ranger’s work. From the operator’s perspective, wages, working conditions and benefits are important; but operators also are concerned with having the opportunity to do their work well.

 

FIGURE 3-1 Strategic Thinking about Human Resources

But employees are not uniform in their perspective which depends upon their status as full time or part time, permanent or temporary, civil service or contract, unionized or not. The terms of the employment contract—expectations and obligations of employee and employer—changes, depending upon ones’ status. Managers bring a different perspective, according to Wilson. They find themselves positioned between the operators and the executives of an agency. They are responsible for conveying the needs of operators to executives and for translating the policy interests of executives to the operators. Wilson sums up the manager’s perspective by saying that they are responsible for dealing with the constraints that operators have to work under: the sometimes vague or conflicting directives; procurement, personnel, accounting, and budgeting processes that do not always facilitate the operator’s work but make sense from other perspectives.

Agency executives are primarily responsible for maintaining the agency’s legitimacy. This means that they are continually alert for external forces—like legislatures and interest groups—that might place the agency under undue scrutiny and limit its autonomy to do its work. Autonomy is crucial to an agency, enabling it to adapt to changing conditions. For example, it is much different working under a procurement policy that requires hierarchical approval for all purchases over $1,000 than under one that delegates this authority to line departments. Tight procurement rules often result from scrutiny from critics outside the agency. In short, the work of the executive is to build and maintain credibility for the work the operators are performing. The more credibility, the more flexibility the agency will be allowed, which theoretically will promote productivity.

Elected officials bring yet another perspective. Their concerns may or may not be directed at a specific agency or policy area. Inevitably, they will reflect the interests and concerns of their constituents. Political accountability is very important to them; and in addition to their policymaking or legislative role, most take their oversight role very seriously. In the human resources arena, elected officials are largely responsible for the creation of position management through their focus on external control of agency resources (e.g., through line-item budgets, control over appropriations, and control over number of positions and average grade level). Elected officials are responsible for setting agency missions and objectives legislatively and for engaging administrative officials, hopefully in a partnership, to achieve those objectives, and for expecting agency leadership to develop and implement administratively sound and politically sensitive human resources plans that reflect strategic thinking.

How the Model Works

Even though we like to depict strategic thinking in a linear fashion, in actuality it rarely is as rational or orderly a process as the model would have us believe. Mostly, strategic considerations start with the problems an agency faces in the short term. Let’s say that the legislature has voted low wage increases for several years, and agency managers are having difficulty accomplishing their work because they cannot retain quality employees who are moving to lucrative jobs. This would be noticed in the human resources core. The inability to complete work at an acceptable standard is what causes an agency to react, that is, to focus its time and energy. Often, this draws the attention of those outside the agency, including interest groups. Then, the analysis begins, the problem is defined based on the perspectives of those who see the problem as important, alternatives are sought, and larger issues may be recognized and the environmental forces identified as having a more or less direct effect on an agency.

Here is a real example. Some time ago, a gap in revenue needed to provide public transportation in Los Angeles became a collective bargaining issue.6 The Transit authority’s position is to reduce overtime, hire more part-time drivers, and to create more transit districts, which will have the effect of creating a partially nonunionized work force. The efficiency and rights issues abound here, affecting both the sanction and planning functions. Driving some of this is the profound emphasis that the embrace of the marketplace has given to the Transit Authority’s alternatives. In the midst of this struggle are found people of lower socio-economic status who rely on public transportation to get to work. The political pressures to settle the strike are immense, but financial implications of alternative settlements are significant, and the struggle for power between the union and the Transit Authority underlies it all.

As these immediate issues are faced and dealt with, the environmental forces behind them become more apparent and salient, and they are more likely to enter into broad human resources planning. The key is whether the agency is able to engage in noncrisis strategic planning that in its broadest sense will incorporate environmental forces into the agency’s thinking about its mission. The strategic thinking will link the two—environmental forces and agency mission—through the identification of problems and possible solutions. The problems will reflect more than a short-term reactive perspective; they will be future oriented. The greater potential impact these broad forces have on the core personnel functions of the agency—planning, acquisition, development, and sanction—the more important thinking strategically about human resources issues is.

In summary, strategic human resources management is the purposeful resolution of human resource administration and policy issues to enhance a public agency’s ability to accomplish its mission in an efficient and equitable way. The key to strategic thinking is connecting human resources management with agency goals, cognizant of environmental forces, and without losing sight of public service values like individual rights and social equity. This is not simple! It highlights an age-old debate about the role of staff functions like personnel administration. How independent should personnel administrators be in order to enhance the quality of personnel services? How subservient should they be in order to aid agency managers? Strategic thinking requires an understanding of how organizational human resource management functions relate to one another, to their environmental context, and to agency goals; a vision of the importance of human resources in goal accomplishment and in building a workforce committed to public service values; and a commitment on the part of elected officials, personnel administrators, managers, and employees to work for the kinds of changes that will enhance concern for human resources issues.

FOUR KEY RECOMMENDATIONS FOR IMPROVING STRATEGIC THINKING ABOUT PUBLIC SECTOR HRM

The President’s Management Agenda, announced in 2002 as a comprehensive initiative to improve management and performance of the federal government, recognized the importance of strategic human resources planning. One of the five governmentwide initiatives is “Strategic management of human capital.”7 Annually, agencies are required to submit data assessing progress toward the plans they have development to advance the initiatives. The Office of Management and Budget reviews and grades each department on each initiative.8 Similarly, reflecting on agency transformation, Comptroller General Walker of the Government Accountability Office concluded, “GAO believes that strategic human capital management must be the centerpiece of any serious change management initiative and effort to transform the culture and operations of any large organization, including government organizations.”9

At its fall 2000 meeting, the National Academy of Public Administration (NAPA) set out to establish strategic guidelines for a new presidential administration. Its recommendations illustrate how strategic thinking can be applied to human resources management. We believe that the issues and recommendations are just as relevant today as when they were published. Even though they are targeted to human resource policy and administration in the federal government, there are many recommendations that are applicable at all levels.

According to NAPA, in order to improve fundamentally the future of human resources for the federal government, presidential leadership in cooperation with key stakeholders such as federal employee unions, managers, executives, senior political appointees is essential. The four key recommendations for reforming the people side of government follow along with our comments:

Human Capital Needs to Be a Top Priority: Not Just an HR Issue, but an Executive Priority of the White House and Every Agency

This recommendation conveys the importance of human resources and human resources planning for organizational performance in two ways. First, it includes “capital,” referring to people who work in an agency or organization. Earlier they were called “employees,” then “human resources,” and now we use the term “human capital.” The evolution of the term itself conveys increasing importance of human resources, symbolically elevating human resources to the level of “financial capital.” Second, it places responsibility for human capital planning at the highest government or agency, or organizational levels. The message here is that within the function of human resources planning are found fundamental issues—like those resulting from an analysis of the demand and availability of labor in light of agency mission—that affect an agency’s future effectiveness. This first theme is very consistent with Comptroller General Walker’s lessons learned from the Government Accountability Office’s transformation and with the President’s Management Agenda. This recommendation squarely accentuates the PADS function of planning.

Recruit, Retain, and Develop a Skilled and Diverse Workforce, Including Redefining Public Service Careers and Promoting Public Service

This recommendation focuses directly on workforce planning. What will this agency need from its workforce of the future? What can we count on from today’s workforce? Where are the gaps? We will have more to say about workforce planning later in this chapter. Further, the recommendation emphasizes the need to look at potential employees rather than jobs as scarce resources. Recognizing this, it seeks to promote public service work, not only implying the importance of showing how “government jobs” can tap into a person’s public service motivation, but also suggesting the need for employee and family friendly workplace polices. Note the inclusion of diversity in this recommendation—the absence of the term “social equity” or “affirmative action”—recognizing that in a country with an increasingly diverse citizenship, legitimacy of governing institutions—in part—depends upon how well those serving the public understand them. The recommendation suggests that the traditional path of entering an agency or organization at the bottom level and working one’s way up the career ladder will probably involve moving from one agency to another and/or one sector to another. We see this recommendation primarily encompassing the PADS functions of acquisition and development.

Modernize Performance Management and Training/Development Systems

In part, this recommendation comes closest to looking at human resources management as an internally focused administrative system. There are real nuts and bolts implied in this recommendation from the need for updated Human Resources Management Information Systems, pay systems tied to performance, establishing goals and objectives for employees and positions, and then evaluating based on those guides. Also, and importantly, this recommendation carries through on the human capital theme by focusing on the need for developing human resources through investments in training and development.

Decide How much Standardization is Necessary in the Human Capital System

Of all the recommendations, this may be the most challenging because clearly it raises values questions as well as fundamental questions of organizational design “integration versus differentiation” and “centralization versus decentralization.” The key to successfully providing agency discretion is to be clear about fundamental values, values that then form the framework within which discretion can be exercised. Police departments run into this challenge every day—trying to instill in patrol officers the fundamental values that will guide them as they exercise discretion in the street even in the absence of close supervision.

In the case of human resources management, the fundamental issue regards the importance of equity and rights—fairness in human resources management AND even more importantly how that importance is going to be insured. Decentralizing gives discretion to tailor human resources policies and practices to different environments and needs, but it also runs the risk—just as in the police example, though probably not as serious in potential consequences—that the need for flexibility, speed, and tailoring of practices will strain the fairness value which is more easily captured in uniform rules. Of course, uniform rules that fail to acknowledge different environments and contexts result in a gap between the formal rules and practices that evolve out of necessity. There is no easy response to this recommendation, which is one element of the sanction function in the PADS quartet.

WORKFORCE PLANNING AS A KEY TO STRATEGIC HRM

Throughout this and the following chapters, we refer to workforce planning, providing brief references to its importance. It is a key tool in human resources strategic thinking, and we will describe it in some detail in this section. As we suggest in our model, usually something immediate needs to trigger a strategic view. In the case of workforce planning, recruiting top-notch specialists and managers has become increasingly difficult. This observation draws more attention to demographics of the workforce—demographics that have been around for some time. It is not as if the profile of today’s workforce could not have been predicted—at least in broad brush—twenty years ago. The combination of difficulty in hiring and retaining top-quality employees with demographic analysis suggests a trend that is not going away once the current fiscal crisis is over, leading to the desire to plan and try to anticipate, react, and even control the trend. Workforce planning is one of these deliberate responses.

“DEMOGRAPHY IS DESTINY: MANAGEMENT SUMMARY”10

In a Nutshell

Situation:

•Three powerful forces—increasing longevity, declining fertility, and the disproportionate size of the “Baby Boom” generation—together drive an unprecedented and relentless shift in the age distribution of the population and the workforce in industrialized countries.

•As workforce growth slows, there are not enough young workers to replace the population and skills of Baby Boomers as they reach retirement age, and labor and skills shortages will become chronic. The fasted growing source of “new labor” will be older people, including those already retired.

•The workforce is growing increasingly diverse, in terms of not only age, but also gender, ethnicity, background, education, lifestyle, and other variables.

Challenges:

•Maintain an adequate supply of labor and skills to sustain business operations and growth despite upheavals in the workplace.

•Redefine the terms of “employment” and “retirement” to attract, retain, motivate, and leverage workers of all ages and various backgrounds.

•Act now to adjust workforce management practices before a labor and skills crisis builds. Those who act early will be prepared for a demographically inevitable future and enjoy short-term workforce productivity benefits along the way.

Key techniques:

•Recruiting and retaining young workers.

•Avoiding a brain drain by meeting mid-career challenges.

•Transcending age bias to leverage mature workers.

•Embracing flexible work arrangements.

•Filling skills gaps and mastering training challenges.

•Aligning compensation, benefits, and other attractors.

•Anticipating demographically driven labor shortages.

Googling “workforce planning” turns up so many sites that one would think that every organization everywhere is engaged in this activity. The International Public Management Association for Human Resources permits us to narrow our view. In winter 2004, the Association published a special issue of Public Personnel Management on Workforce and Succession Planning.11 That issue describes the changing workforce, the metrics of workforce planning, and it provides article-length case studies from the City of Virginia Beach, the state of Pennsylvania, and Henrico County in Virginia. Furthermore, in 2002, IPMA-HR published a Workforce Planning Resource Guide.12

Another very credible case is provided by the work of the National Aeronautics and Space Administration (NASA).13 The NASA report is very useful as a learning tool because it shows the place of workforce planning within a greater workforce strategy. Clearly, workforce planning is a key, but the report shows how important it is to be able to project changes in mission and goals as an integrated feature of the planning. In NASA’s case, that analysis reveals areas where the agency would have excess capability and areas where it would have needs. Then, the report addresses management actions necessary to achieve optimal balances between the supply of and demand for labor.

Here are the key elements of NASA’s workforce planning strategy: (p. 8 of the report)

•Guidance from and coordination among management at all levels of the Agency regarding the identification of each Center’s core capabilities and its current and anticipated work demand.

•Coordinated assessment and planning effort at each Center to identify specific workforce requirements based on work demand and funding.

•Identification of workforce requirements for strong, healthy Center capabilities.

•Assessment of how to utilize both internal and external workforce to meet work requirements.

•Assessment of optimal internal workforce to meet work requirements and sustain a healthy Center.

•Identification of management actions necessary to achieve optimal near-term balance between demand and supply and long-term balance between potential demand and projected supply.

Hennepin County, Minnesota’s workforce planning processes is similar to NASA’s, suggesting that the methodology of workforce planning is becoming well known and agreed upon. Their steps are outlined below:

•Review of the current workforce profile of each department within the county.

•Identify key department issues and trends and relate the priorities of each department to its present structure.

•Estimate the workforce needed to provide core services.

•Develop a workforce plan.14

Ann Daly’s summary of the workforce planning effort in Hennepin County reveals that it fits into a broader HRM plan. She writes:

The workforce planning documents and diversity development plans tie to the Hennepin County Balanced Scorecard (BSC) which is a management and measurement tool used to support ongoing results-based decision making, planning and budgeting at all levels of the county. The BSC is an organizing framework that helps us to align our efforts and resources with the county’s overarching goals. We have used customer satisfaction surveys, program progress reviews and placement and development inventories when measuring how workforce planning and demographic data contributes to departmental results. Workforce planning in Hennepin County has supported the overall mission of the county to provide superior service and improve efficiency by maximizing workforce potential. (p. 9)

THE ROLE OF INDICATORS AND STANDARDS IN HRM SYSTEM EVALUATION

These examples of workforce planning and the role it plays in a broader strategy focus on human resources lend credence to the extent to which workforce planning is occurring in innovative organizations and agencies that would endorse Comptroller General Walker’s observation that human capital is at the center of organizational success. Another factor-reinforcing this emphasis is contained in a 2007 report of the Partnership for Public Service issued on the “State of the Public Service.”15 The Partnership is a nonprofit organization whose focus is the revitalization of the federal government and public service. The report calls for a comprehensive indicator system for our federal workforce. It uses a car’s gas gauge to make its point. “Basically, much of the federal government is a car heading out on a long road trip without a working gas gauge. So what does the federal government need to do? That’s easy. Get a gas gauge that works.” (p. 4).

1.The right talent—Is government getting not only the best people, but also the right talent with the skills and abilities to help agencies achieve their goals?

2.An engaged workforce—Is the federal workforce engaged and using its abilities to deliver results?

3.Strong leadership—Are senior government leaders inspiring and empowering workers to perform at their best?

4.Public support—Do the public support our government and do top job candidates view the federal government as an employer of choice?

5.Systems and structures—Is the federal government’s infrastructure enabling or inhibiting workers from doing their jobs well?

6.High performance—How well are federal workers doing their job of delivering services to the American people and promoting and implementing policies that strengthen our nation?

In other words, we might argue that recognition of strategic human resources thinking and planning as a key element in organizational planning is contained not only with notable examples of workforce planning, but also with the realization that “what is measured is important.” In other words, the emphasis on developing indicators that can be used to help assess the condition of HRM in an organization, agency, or level of government suggests that the phrase “people are our most important asset” is becoming more than a platitude. With indicators, we begin to develop systematically gathered information that permits us to assess whether or not people really are an important asset.

Continuing along the line of reasoning that strategic thinking in human resources management is on a noticeable developmental path is a breakthrough model of human resources systems assessment that the National Academy of Public Administration prepared at the invitation and for the use of the University of California.16 The resultant robust assessment model (CAHRS) was developed in response to the sentiment at the university that “A world class educational and scientific institution deserves a world class human resources program to support the acquisition, retention and development of its human talent.” (p. iii)

The cornerstone of the model is validated HR standards—the line of reasoning here parallels the logic of the call from the Partnership for Public Service for “indicators of performance.” These standards were derived from the HR model that the team developed and validated with a group of experts and in several pilot locations. The standards strive to balance both strategic and operational dimensions, and the report states that the model and standards are transferable to organizations other than the University of California. The process of evaluation is set up very much like an accreditation review. The seven standards are derived from the proposed HR model:

•Standard for HR systemwide management

•Standard for HR strategic management

•Standard for HR operations and program assurance

•Standard for employment and talent management

•Standard for total compensation and benefits

•Standard for training and development

•Standard for work environment and employee/labor relations

Each standard is defined with several key contributing elements identified. Success attributes are then attached to each contributing element, and specific indicators of success are developed for each attribute. There are “essential” success indicators that must be met in order for an agency to meet the standard, and there are other supporting indicators. For example, the standard of “employment and talent management” includes “talent acquisition” as one of four contributing elements. There are two success attributes associated with talent acquisition. One of them is, “Acquires a sufficient number of highly skilled, diverse and competent employees when needed to meet priority mission goals.” There are five success indicators associated with this attribute. The essential success indicator for this attribute is, “Recruits talented and diverse candidates based on identified needs and recruitment plans.” The standards with associated contributing elements, attributes, and success indicators provide a systematic framework within which a jurisdiction can assess the results of its HRM commitment.

So far in this chapter, we have seen a significant investment and maturity in the field of human resources management. This is reflected in the evidence that strategic thinking is employed as necessary for human resources to truly been seen as the core of organizational success. Strategic thinking has moved well beyond the idea that “it would be nice to think strategically about human resources management” to the point that we now have models to assess both the strategic and operational success of human resources systems.

THE STRATEGIC HR FUNCTION

In the past, the U.S. Office of Personnel Management (OPM) operated as a centralized personnel agency, primarily responsible for the recruitment and assessment of federal employees and the oversight of agency-level personnel operations. However, in the past decade many of OPM’s prior responsibilities have been decentralized, and, as a result, OPM has been pushed to take on the role of a strategic partner with other federal agencies. One example of OPM’s efforts to be more strategic is the agency’s operation of a reimbursable consulting branch targeted toward other federal agencies in need of assistance due to emerging management challenges, reorganizations, or new agency initiatives. Much like private sector management consulting firms, this branch advertises its services to other federal agencies and relies on fees earned from its services to meet its operating budget.17

ACHIEVING DATA-DRIVEN HRM THROUGH A STRATEGIC HUMAN RESOURCE MANAGEMENT INFORMATION SYSTEM

The ability to think and plan strategically depends in part on access to reliable information about the past, present, and future and the ability to integrate information produced in the past by separate administrative processes and possibly maintained in separate databases. As a simple example, knowing the age breakdown of an organization’s workforce will alert managers to staffing issues associated with retirements and anticipated personnel outlays. The ability to break that information down by skill level and an understanding of the market value of those skills and their availability will enhance human resource planning. Similarly, the movement to develop indicators of success requires a human resources management information systems (HRMIS). Of course, none of this makes any difference if the organization itself does not know where it is headed, which makes a connection with legislative or political intent crucial.

It is possible to design, purchase, or contract out for a management information system that routinely collects information on various factors contributing to organizational effectiveness and to present this information to managers in the form of reports they can use to make necessary changes in policies or procedures. An agency might routinely produce information on equipment costs, personnel costs, overtime, and productivity. HRMIS are routinely integrated with accounting, purchasing, and budgeting software.

Electronic “data marts” are common repositories for information extracted from large databases within an organization but prepared for a single department or group of workers to follow a single HR subject like retirement schedules and workforce planning. Data marts are useful because users can take advantage of available knowledge without having to worry about issues involved with data base construction and management. In addition, “electronic dashboards” can give a visual and timely portrayal of performance indicators—like progress toward workforce diversity goals.18 In addition, they can be constructed to provide personally tailored information for common transactions like applying for jobs, updating, personal profiles, benefits changes, and compensation viewing.

With the portability and accessibility of electronic data and security concerns, human resources managers must be aware of regulations and statutes that govern the privacy and confidentiality of electronic data storage and transmission. With the number of software products that interface with an HRMIS, the human resources manager also is challenged to identify technology options and make choices. Proper planning to align the requirements with the needs and strategic direction of the HR department and the organization will enhance the value of the investment in an HRMIS. Therefore, involvement with the “project management office” and the “information technology department” early in the process will assist in the ultimate success of the system.

Summary

Strategic human resource management requires the purposeful resolution of human resource program and policy issues within agencies and with agency partners, including nonprofit and private sector firms—to enhance legislative and administrative visions and goals and in the process to promote equity and fairness in human resources management. Contemporary work and organizations, demographic trends, and market-based values, and evolving understanding of governance models and practices challenge traditional views of public personnel management.

The most important message in this chapter is that human resources management issues are strategic in nature as long as labor is considered an asset in addition to a cost. However, strategic thinking must go beyond simple workforce planning. It must incorporate as well a critical view to what human resources managers can add to an organization, what personnel functions can be outsourced or decentralized, and how public service values can be reflected in human resources planning. Once seen in this way, human resource concerns transcend what a personnel department can accomplish on its own. The strategic issues outlined in this chapter require top management attention.

Key Terms

assessment model 79

assumptions about civil service systems 66

comprehensive indicator system 79

contemporary work and organizations 67

demographic trends 68

elected officials’ perspective 73

executive perspective 73

governance 67

human capital 75

human resources management information systems (HRMIS) 81

managerial perspective 73

market-based values 68

operator (employee) perspective 72

strategic human resources management 74

workforce planning 76

Discussion Questions

1. What are the assumptions that underpin traditional public personnel management systems?

2. How do contemporary work and organizations, demographic trends, market-based values, and new concepts of governance challenge the assumptions of traditional public personnel systems? Give examples from your own experience.

3. Identify three shifts noted in Table 3-2 that in general you think are most important to effective human resources practices today.

4. Identify the components of the human resources model and how the components interact. After reviewing the examples in the book of how the model works, give an example of your own, either real or hypothetical.

5. Describe and discuss the operator, manager, executive, and political perspectives on human resources management. If you are now working outside of school, which perspective best describes your position? Give one example of how two of the perspectives might coincide and an example of how they might clash.

6. Go online and find the “President’s Management Agenda.” Then, view the scorecard. What do you think about the idea of a scorecard that reports assessments of progress toward administrative goals? Using the four issue areas in the NAPA (2000) report, how would your agency rate itself in these areas?

7. Describe the key elements in workforce planning. For each element, discuss how much progress your agency has made in workforce planning.

8. Using the six elements of the proposed “comprehensive indicator system,” where would your agency score highest and where do you see the need for improvement.

9. If strategic thinking and workforce planning are key elements in achieving organizational transformation and goal accomplishment, why do you think the importance in strategic human resources management was less important in the past than it is today?

10. Put yourself in the place of a public employee, either hypothetical or real. As a public employee or a future public employee, how do you wish to be categorized, as an “asset” or a “cost”? Are you the equivalent of an appreciating piece of property or are you a liability to be minimized? Do you like these categories: assets and costs? The key question is where the heart and soul of employees fits into a picture of strategic human “capital” management—if at all.

Exercise: Evaluating your Human Resources Management System

As an individual or in a team of students, pick an organization with which you are familiar, from your experience as an employee, a community volunteer, or a relative of one of these. Assess that organization.

For each element in the table below, place a circle around the number that best characterizes your organization’s Human Management Resource System. Discuss where your agency is doing well and what area needs improvement. If there was one step your agency could take to improve human resource management (excluding hiring, firing, or transferring someone!), what should it be?

1. Single system in theory; in reality multiple systems not developed strategically	Recognize multiple systems, be strategic about system development, define and inculcate core values development, define and inculcate core values
1	2	3	4	5	6	7	8	9	10
2. Merit definition that has the outcome of protecting people and equates fairness with sameness	Merit definition that has the outcome of encouraging better performance and allows differentiation between different talents
1	2	3	4	5	6	7	8	9	10
3. Emphasis on process and rules	Emphasis on performance and results
1	2	3	4	5	6	7	8	9	10
4. Hiring/promoting of talent based on technical expertise	Hiring, nurturing, and promoting of talent to the right places
1	2	3	4	5	6	7	8	9	10
5. Treating personnel as a cost	Treating human resources as an asset and as an investment
1	2	3	4	5	6	7	8	9	10
6. Providing job for life/lifelong commitment	Involving both inners and outers who share core values
1	2	3	4	5	6	7	8	9	10
7. Protection from political influence and unfair treatment justifies tenure	Employee performance and employer need justifies retention
1	2	3	4	5	6	7	8	9	10
8. Performance appraisal based on individual activities	Performance appraisal based on demonstrated contributions to organizational goals
1	2	3	4	5	6	7	8	9	10
9. Labor–management relationship based on conflicting goals, antagonistic relationship, and ex-post disputes and arbitration of individual cases	Labor–management partnership based on mutual goals of successful organization and employee satisfaction, ex-ante involvement in work design
1	2	3	4	5	6	7	8	9	10
10. Central agency that fulfills the personnel functions for agencies	Central agency that enables agencies, especially managers, to fulfill the personnel function for themselves
1	2	3	4	5	6	7	8	9	10

Notes

1. Concours Group (now nGenera) in pa and Age Wave (2003). Demography is destiny. www.concoursgroup.com/Demography/DD_MgmtSumm.pdf

2. National Academy of Public Administration (Fall 2006). Forum: Managing the Workforce of the Future. GOV.

3. Personal correspondence with John Nalbandian (Summer 2008).

4. The model differs from the previous edition. Created by U.S. Army Major Terence Ray in fall 2006 when he was an MPA graduate student at the University of Kansas.

5. Wilson, J. Q. (1989). Bureaucracy. New York: Basic Books.

6. Rabin, J. L., and N. Riccardi. (October 18, 2000). Strike settled: Bus service to resume today. Los Angeles Times. www.latimes.com.

7. The President’s Management Agenda (2002). www.whitehouse.gov/omb/budget/fy2002/mgmt.pdf

8. http://www.whitehouse.gov/omb/budget/fy2005/managing.html

9. Reported in Walters, J., and C. Thompson (2005). The transformation of the government accountability office: Using human capital to drive change. Washington, DC: IBM Center for the Business of Government, p. 19.

10. Concours Group (now nGenera) in partnership with Ken Dychtwalk and Age Wave (2003). Demography is destiny. www.concoursgroup.com/Demography/DD_MgmtSumm.pdf

11. Kiyonaga, Nancy B., ed. (Winter 2004). Special Issue: Workforce and Succession Planning, 33, No. 4. Public Personnel Management.

12. International Personnel Management Association for Human Resources (2002). Workforce planning resource guide for public sector Human resource professionals. www.ipma-hr.org.

13. National Aeronautics and Space Administration (2006). Workforce strategy. www.nasapeople.nasa.gov/HCM/WorkforceStrategy.pdf.

14. Daly, A. (August 2006). Workforce Planning: Maximizing Workforce Potential. International Public Management Association for Human Resources, p. 7–9.

15. Partnership for Public Service (2007). State of the public service conference: Report of proceedings. http://www.ourpublicservice.org/OPS/publications/viewcontentdetails.php?id=116

16. National Academy of Public Administration (July 2007). A model and process for the certified assessment of human resources systems: A pathway to assurance. NAPA: Washington, DC.

17. http://www.leadership.opm.gov/Custom/index.aspx

18. See examples of electronic dashboards from San Jose State University at http://www.oir.sjsu.edu/Reports/dashboards/