1

STRATEGIES AND POLICIES OF HUMAN

RESOURCE MANAGEMENT IN THE
PUBLIC SECTOR

STUDENT MANUAL

PRESENTERS:

Professor Bernadine Van Gramberg

Victoria University
Melbourne, Australia

Professor Julian Teicher

Monash University
Melbourne, Australia

TOPICS: PAGE

1. HRM and Strategic HRM 2

2. Motivation and Job Satisfaction 20
3. Change Management 31
4. Leadership in the Public Sector 37
5. Performance Management 48
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TOPIC 1: HRM AND STRATEGIC HRM

DEFINITIONS OF PERSONNEL MANAGEMENT

The different types of definition of HRM demonstrate that it is not only a set of
functions performed in an organisation in order to manage staff but it also represents a
particular way of viewing the nature of work. The normative definition or idealistic
definition sees HRM as a perfect state of optimal work conditions brought about by
empowered, trained workers. The descriptive definition sees HRM as a set of orderly
functions which must be performed and the critical evaluative definition indicates that
HRM operates as a means of controlling employees through the use of power devises.
We consider below three definitions for personnel management (a predecessor of
HRM) to illustrate the different viewpoints of authors:

A Normative Definition
Since management aims to get effective results with people, personnel administration
is a basic management function or activity permeating all levels of management in
any organisation. Personnel administration is...organising and treating individuals at
work so that they will get the greatest possible realisation of their intrinsic abilities,
thus attaining maximum efficiency for themselves and their group, and thereby giving
the enterprise of which they are a part its determining competitive advantage and its
optimum results (Pigors and Myers 1981)

A descriptive functional definition

The term personnel management is used here to describe the policies, processes and
procedures involved in the management of people in work organisations...[this
collection of papers] is primarily concerned with personnel management as a system
of employment regulation: the ways in which people in work organisations are
selected, appraised, trained, paid, disciplined and so on..[it] is concerned with the
regulation for which managers are primarily, if nor exclusively, responsible (Sisson
1989)
A critical evaluative definition
Personnel management is concerned with assisting those who run work organisations
to meet their purposes through the obtaining of the work efforts of human beings, the
exploitation of those efforts and the dispensing with of those efforts when they are no
longer required. Concern may be shown with human welfare, justice or satisfactions
but only insofar as this is necessary for controlling interests to be met and, then,
always at least cost (Watson 1986)

QUESTIONS:
1. Which of these definitions (or combination) best represents HRM in your
organisation?
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2. What features of the definitions made you choose it?

FRAMES OF REFERENCE
Clearly the definitions arise because each of the authors took a particular viewpoint
on HRM. These viewpoints have been described as frames of reference and these
underpin most political systems whether the workplace or the nation. Here we outline
the key frames of reference described by various researchers. It is important to situate
your own viewpoint in these frames as it will inform your predominant management
style.

A. The Unitarist view

The word ‘unitarist’ implies the working of a unit or oneness. It suggests that the
organisation operates according to the dictates of one voice. The key, defining feature
of the unitarist approach to employment relations is the assumption that all staff
within the organisation seek the same goals, and that those goals are corporate rather
than personal. The logical endpoint of striving towards these common organisational
goals is harmony and co-operation between employees and their managers. The
strength of the role of management in the unitarist organisation arises from its
hierarchical structure, which is argued to legitimise the decision making role of those
who occupy positions at the top. The adoption of the unitarist framework in HRM is
linked to the individualistic enterprise ideology of the 1980s. This focus on senior
managers who determine the agenda and strategy of HRM has been referred to as
managerialist in orientation. Indeed, employers’ leaning towards unitarism has been
said to stem from the fact that it both calls for, and legitimises, strong management
authority. The key unitarist organisational values include obedience, trust, mutual
respect, paternalism, discipline, command and control’.

Power is construed negatively in a unitary structure because it is usually associated

with conflict and thus divergent from ‘good’ management practice. Political
behaviour or overt conflict by employees within organisations tends to be viewed as
unacceptable resistance which can threaten business interests and which should be
eradicated. It is seen as a breakdown of authority relationships and organisational
stability. Given the reliance on cooperation, it is not surprising that unitarist
management literature tends to downplay the reality of organisational politics. Labour
unions have little role in the unitarist environment as they are seen to divide employee
loyalty and introduce conflict.

Features of the unitarist approach:

1. That the creation of wealth is a shared goal of employers and& employees
2. Co-operation and harmony is the outcome of working towards shared goals
3. Conflict is seen as abnormal and temporary caused by a few "bad apples"
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4. Conflict can be eliminated through better communication of goals and shared

interests
5. Labour unions are seen as unwelcome intruders who divide employee loyalty

B. The Pluralist view

Alan Fox is generally credited with having distinguished between unitarism and
pluralism within organisational settings. Rather than envisaging the enterprise as a
unitary structure, Fox described workplace actors as a coalition of individuals and
groups with divergent interests who agree to collaborate in such ways as to enable
each to pursue their goals. Pluralism challenged the unfettered terrain of managerial
prerogative envisaged in the unitarist vision by framing management as decision
makers, albeit within a set of constraints including employees, consumers, suppliers,
the law and government. Pluralist decisions represent compromises, forged in a
competitive environment in which the enterprise had to be ‘managed’ so that the
complex web of tensions and conflicts did not threaten the viable, collaborative
structure. Fox portrays conflict as a normal and, indeed, inevitable part of life.
Pluralist accounts of organisational life acknowledge the pursuit of interests, the
development of political behaviour, the reality and ramifications of the imbalance of
power and the struggle over scarce resources.

Fox acknowledged that the role of trade unions as a:

manifestation of one of the basic values of competitive, pressure-
group, democratic societies of the Western model – that ‘interests’
have rights of free association and, within legal limits, of asserting
their claims and aspirations’(Fox, 1974:262).

Through their role of employee representation, Fox maintained that unions play an
important role in readjusting or balancing power in the workplace.
While most writings on pluralism have focused on the competing economic interests
between the organisational actors, more recently pluralism has been associated with
identity, values and concepts and professional subcultures of the various groups
within a workplace. This is a reflection of a series of changes including the rise of
information and communication technologies, the emergence of new professions and
occupations and changing ways in which organisations are structured both internally
and in their relations with external organisations. The latter is sometimes captured in
the term network society though much of this structural change has its origins in
processes of contracting out and privatisation of publicly owned assets.

Features of the PLURALIST Approach:

1. Recognises that society is made up of competing groups seeking their own
interests and goals
2. Conflict is inevitable and due to the conflicting demands needs of employees and
their employers
3. Unions are recognised as a voice of the collective interests of workers
4. Conflict is governed by procedures an& rules and the belief that if we understand
the cause of the conflict, we can control it in the future by the use of Rules
5. Assumes a balance of power exists between these competing groups
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ALTERNATIVE PERSPECTIVES

A. Labour process theory

A large body of literature on non-unitarist perspectives views pluralism’s emphasis on
competing interests as too narrow. From the perspective of labour process theory, an
analytical approach derived from the labour theory of value, the struggle in the
workplace occurs in a context of power and wealth inequality which is structured into
a society where actors attempt to resolve their differences according to rules designed
to maintain existing power and wealth differentials. These labour process perspectives
share the notion that division in society and in the workplace is based on embedded
structures of power and economic distribution which characterises capitalist society.
Thus, labour-management relations are shaped not only by the parties but by broader
societal forces such as industrial relations legislation which sustains the power of
capital, or relations of social dependence in the community which are transferred to
the workplace.

The dialogue of ‘new’ management ideas, particularly those attributed to HRM,

attempts a sleight of hand, by at once offering a vision of intelligent, empowered
employees voluntarily contributing to organisational success, while not providing
those employees with discretionary powers or freedom of action required to bring
about the vision. Critical work in total quality management (TQM) and just in time
(JIT) strategies illustrates this point. Hence, Delbridge, Turnbull and Wilkinson
(1992:105) wrote that JIT/TQM programs:

consolidate and reproduce management control over the labour

process. JIT/TQM factory regimes tilt the balance of power in favour
of the capitalist over the worker such that the surplus labour can, using
Marx’s phrase ‘be pumped out of him.

However, the manner in which this is done is through co-operation and consultation.
Using a labour process analysis, HRM may be viewed as a sophisticated form of
management control. Control need not follow the traditional lines of coercion, but
may be expressed in a more subtle way in the sense that it attempts to secure a
consensus among employees.

B. Radical Perspective
Related to the labour process perspective is the radical perspective, introduced by Fox
(1974) as a critique of pluralism. Fox argued that the radical perspective differs from
pluralism in the sense that the interests of the bourgeoisie are not seen as legitimate:

Any strategy by a class-conscious proletariat to take up the class war

against the bourgeoisie could hardly be reconciled with the pluralist
notion of mutual survival (Fox, 1974: 274).

Indeed, the accommodative ethos of pluralists which views competing groups as a

coalition, each accepting the other as part of the system, is criticised in the radical
perspective as reinforcing the strength and dominance of the ruling classes. This is
because the radical view is underpinned by the belief that a vast disparity of power
exists between those who own the means of production and those who are dependent
on them as a means of livelihood. This power is expressed directly in the workplace
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as control and direction over the production process, and indirectly in the hierarchical
structures of control and the norms and values in the workplace. Further, for the
workplace actors who have been socialised in the particular value system of the
enterprise, there is no awareness that their shared beliefs and assumptions have been
contrived for the benefit of the powerful owners of capital. This acceptance of the
status quo is reinforced outside the workplace where power elites influence the public
opinion through the media, politics and the education system as ‘their very power
affords them the facilities for creating and maintaining social attitudes and values
favourable to that acceptance’ (Fox, 1974:277).

C. Post-modernism
Writers such as Foucault, Lyotard and Baudrillard argued that truth and knowledge
are the creation of power elites, which are both standpoint sensitive and serve to
entrench particular values and beliefs. Post modern accounts of what can be regarded
as the organisation, view relations as multiple, dynamic and occurring across transient
boundaries. Hardy (2001) argued that the workplace is a site of struggle in which
different groups compete to shape the social reality of that organisation in ways which
suit their own interests. This is a highly political process in which, first, not all voices
are heard and, second, not all voices are heard on equal terms. As a result of this
imbalance, the norms and values operating in the workplace are generally those of
management:

One critical focus of political activity in organisations is the creation of

meaning – meaning which justifies the positions of power of some
participants, which justifies and rationalizes decisions and actions and
which discredits the motivation or information of opponents (Pfeiffer,
1981:228).

The production of knowledge is intertwined with the operation of organizational

power. Conformity by workers to organisational norms can be explained using
Foucault’s (1977) concept of the panopticon - an architectural design originating from
Brentham’s model for a prison, which envisaged a supervisor in a tower observing
inmates of the prison. Convicts, subjected to this constant surveillance through a
physical arrangement of glass and mirrors, know they are being observed, but cannot
see the observer. They are constantly aware that they are visible and accountable and,
thus, under control. Foucault noted that the panopticon was one of many devices
which followed the logic of surveillance, encouraging people to exercise self-
discipline whether the disciplinarian was observing them or not. It is a model readily
applied to the workplace. Zuboff’s (1988) observation of the modern organisation
suggests that employee surveillance through modern technology performs the same
role as the panopticon. Employees are recorded and observed in ways which induce
‘compliance without the messy conflict-prone exertions of reciprocal relations’
(1988:323). The techniques of HRM, arguably, form a panopticon, as they categorise
and measure tasks, attitudes and behaviour, which in turn render individuals more
manageable and efficient (Townley, 1994).

Features of the Marxist/radical perspective:

1. Assumes that conflict is ongoing based on the capitalist-labour conflict
2. Workers can only free themselves by overthrowing the capitalist system
through social revolution
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3. There can never be any shared interests between the owners of capital & the
suppliers of labour
4. Doesn't consider that most employers are employees themselves and are not
owners of capital

QUESTIONS

1. What is the predominant perspective in the management of staff in your

organisation or an organisation with which you are familiar?

2. How does this influence the way in which employees are managed?
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MANAGEMENT STYLES

The role of management is to combine, allocate and utilise productive resources in

such a way that will assist the organisation to achieve its objectives. The way this is
done reflects on your own management style. In turn your management style is partly
informed from the particular viewpoint or perspective you hold on employment relations
as we have outlined above and partly chosen by you depending on your personality and
situation. Four key management styles have been identified: Autocratic, Paternal,
Constitutional and Participative styles. Each style has its strengths and weaknesses in a
particular situation. This means that all managers should develop an ability to use these
styles strategically and with skill.
Individualist Styles
These styles (autocratic and paternalistic) are associated with organisational policies
which deal with people as individuals – for instance performance bonuses, individual
training needs.

(1) Autocratic (or authoritarian) managers like to make all the important decisions
and closely supervise and control workers. Managers do not trust workers and simply
give orders (one-way communication) that they expect to be obeyed. This approach
derives from the views of F.W.Taylor as to how to motivate workers and relates to
McGregor’s theory X view of workers. This approach has limitations (as highlighted
by other motivational theorists such as Mayo and Herzberg) but it can be effective in
certain situations. For example:

• When quick decisions are needed in a company; eg in a time of crises

• When controlling large numbers of low skilled workers.

(2) Paternalistic managers give more attention to the social needs and views of their
workers. Managers are interested in how happy workers feel and in many ways they
act as a father figure (pater means father in Latin). They consult employees over
issues and listen to their feedback or opinions. The manager will however make the
actual decisions (in the best interests of the workers) as they believe the staff still need
direction and in this way it is still somewhat of an autocratic approach. The style is
closely linked with Mayo’s Human Relation view of motivation and also the social
needs of Maslow.

Collective Styles
These styles are associated with organisations which deal with people as groups – for
instance employee participation in decision making, negotiated collective agreements
and trade union recognition. These styles comprise the constitutional and participative
ways of managing:

(1) Participatory managers tend to establish and communicate the purpose and
direction of the organization. This is used to help develop a shared vision of what the
organization should be, which is used to develop a set of shared plans for achieving
the vision. The manager’s role is that of a leader. By his or her actions and words,
employees are shown the way. This manager is also a coach, evaluating the results of
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people’s efforts and helping them use the results to improve their processes. These
managers are still very much in control over the work process and even though he or
she may seek worker input the final decision is made by them and not the workers.

(2) Constitutional managers are democratic in style and highly consultative. They
take key matters to their staff and ask for opinions. Typically this manager’s own
opinion is considered no more important than any of the workers’ opinions. They are
inclined to allow a vote to decide the course of action. Whilst outcomes are thus
representative of group opinions, the use of this process means that decisions are
never made quickly.

Alternative Management Style Grid

Another way of looking at management style is to map your concern for the people
you manage against your concern for production or the task at hand.

QUESTIONS AND DISCUSSION TOPIC

1. Each of these styles is important in the management of people but each has
both advantages and disadvantages.

• In your groups, outline the advantages of each style and the disadvantages.

• Next, identify the circumstances in which each style may be more effective
than other styles.
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2. Read this short case study and answer the question below:

A new manager was appointed to a textile mill in the USA. He entered the weave
room the day he arrived and walked directly over to the representative of the union
(Textile Workers Union of America) and said "I am the new manager here. When I
manage a mill, I run it. Do you understand?” The representative nodded and then
waved his hand. The workers, intently watching this gesture, shut down every loom in
the room immediately. The representative turned to the manager and said, "All right,
go ahead and run it."

This story with great clarity makes the point that there is another authority besides the
manager's. The workers' representative has authority and exercised it. (source:
http://www.solhaam.org/articles/clm2.html)

• Where does his right to command come from and how did he use his power to
exact obedience?

A BRIEF HISTORY OF PERSONNEL MANAGEMENT IN THE UNITED

KINGDOM
(source: http://www.cipd.co.uk/subjects/hrpract/hrtrends/pmhist.htm)

The early days: welfare officers

The history of personnel management begins around the end of the 19th century,
when welfare officers (sometimes called 'welfare secretaries') came into being. Their
creation was a reaction to the harshness of industrial conditions, coupled with
pressures arising from the extension of the franchise, the influence of trade unions and
the labour movement, and the campaigning of enlightened employers, often Quakers
(Cadbury, Rowntree and the Lever Brothers), for what was called 'industrial
betterment'. As Edward Cadbury wrote in his 1912 book: Experiments in Industrial
Organisation

the supreme principle has been the belief that business efficiency and
the welfare of employees are but different sides of the same problem.
The first welfare workers were women, and were only concerned with the protection
of women and girls, which was seen as a worthy aim. They would visit sick
employees and help to arrange accommodation for women, often including the
supervision of moral welfare. They were usually employed in the newer industries
where women were engaged in light machine work, packing, assembly or other
routine jobs. In some companies, their duties grew to become concerned with the
recruitment and training of women as well.

There was some ambiguity about their role as it grew; an ambiguity which is often
present in the personnel role and which has not diminished over the years. On the one
hand, there was the assertion of a paternalistic relationship between employers and
(female) employees and the aim of moral protection of women and children. On the
other, there were the economic aims of achieving higher output by control of sickness
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and absence and, by resolving grievances, of making the organisation of women in

trade unions unnecessary. Thus their motives were mixed (and of course their costs
were met by companies), but at a time when there was virtually no state welfare
provision most welfare workers wanted to help improve conditions for working
women. In 1900 there were only a dozen or so welfare workers, but by 1913 their
numbers had grown sufficiently for the Welfare Workers’ Association, a forerunner of
today’s Chartered Institute of Personnel Development (CIPD), to be formed.

The growth in personnel management: 1914-39

The First World War accelerated change in the development of personnel
management, as it did in many other areas of working life. The number of welfare
officers grew to about 1,300, largely because of the Munitions of War Act, 1915,
which sought to control the supply of labour to munitions factories and made welfare
services obligatory in them. Men were recruited to oversee boys' welfare, and the
government encouraged welfare development through the Health of Munitions
Workers' Committee.

During the war, labour relations entered the equation. Women were recruited in large
numbers to fill the gaps left by men going to fight, which in turn meant reaching
agreement with trade unions (often after bitter disputes) about 'dilution'- accepting
unskilled women into craftsmen's jobs and changing manning levels. For the first time
the state had to open up a dialogue with the unions and develop forms of joint
consultation. During the 1920s, jobs with the titles of 'labour manager' or
'employment manager' came into being in the engineering industry and other
industries where there were large factories, to handle absence, recruitment, dismissal
and queries over bonuses and so on. Employers' federations, particularly in
engineering and shipbuilding, negotiated national pay rates with the unions, but there
were local and district variations and there was plenty of scope for disputes. Officials
were employed by the federations to help settle them.

Also between the wars, large companies like ICI, Pilkingtons, and Marks and Spencer
developed through growth and mergers and began to form their own specialist
personnel departments to unify divergent policies from the centre and manage
absence and recruitment with the aim of improving output. But such departments
were mainly concerned with hourly-paid workers, while industrial relations was
frequently the responsibility of senior line managers. Moreover, employment
management, or personnel management as it was beginning to be called in these
firms, was mainly confined to the newer, emergent industries such as plastics,
chemicals, and multiple retail. During the 1930s, with the economy beginning to pick
up, big corporations in these newer sectors saw value in improving employee benefits
- for example, holidays with pay and pensions - as a way of recruiting, retaining and
motivating employees. But older industries such as textiles, mining and shipbuilding
which were hit by the worldwide recession (unemployment nationally through this
period was hardly ever less than 10 per cent, and much higher in the traditional
manufacturing and mining areas) did not adopt new techniques, seeing no need to do
so because they had no difficulty in recruiting labour.

The Second World War: Personnel management grows in importance

The Second World War brought about welfare and personnel work on a full-time
basis at all establishments producing war materials because an expanded Ministry of
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Labour and National Service insisted on it, just as the Government had insisted on
welfare workers in munitions factories in the previous conflict. With more women
again being introduced into the workforce, 'skill dilution' once more on the agenda,
substantial re-training necessary and shift working extended, the government saw
specialist personnel management as part of the drive for greater efficiency and the
number of people in the personnel function grew substantially; there were around
5,300 in 1943.

Industrial relations grew in importance too. Strikes were made illegal. The Minister of
Labour, Ernest Bevin, had been general secretary of the Transport and General
Workers' Union before the war and was able to convince the unions through dialogue
that the suspension of restrictive practices to enable production targets to be met did
not represent “surrender”. Thus productivity improvements came to be linked with
joint consultation or negotiation, which was to become a dominant feature of the post-
war years.

1945 - 1979: collective bargaining and industrial relations have primacy

By 1945, employment management and welfare work had become integrated under
the broad term, 'personnel management', while experience of the war had shown that
output and productivity could be influenced by employment policies. The role of
negotiation with unions had grown in importance. But the role of the personnel
function in wartime had been largely that of implementing the rules demanded by
large-scale, state-governed production, and thus the image of an emerging profession
was very much a bureaucratic one.

Pre-war, most bargaining between employers and unions had been at national level,
conducted on the employer sides by employers' associations or federations. The war
had seen the rise of local negotiations in the engineering industry in particular and the
1950s and '60s witnessed an acceleration of this trend, not only in engineering. There
was an enormous growth in the number and power of shop stewards, and local-level
bargaining gave greater scope for the company-level personnel function. At the same
time, larger companies wanted to develop their own employment policies which fitted
their own plans and corporate strategies, leading to further decentralisation of
bargaining. During the 1960s there was a series of well-publicised productivity
bargains with trade unions to enable both sides of industry to benefit from
improvements brought about by new technology. Personnel managers were involved
in such bargains as were line managers, because they were the people who had to
make these agreements work.

The growth of shop stewards and local bargaining (not always well-managed by
unions nationally) resulted in a large number of official and unofficial strikes which
were damaging to the economy, particularly in the manufacturing industry (and
manufacturing, it should be remembered, played a much larger part in the economy
than it does now, and was extensively unionised). The UK was becoming notorious
for its poor industrial relations, and the number of working days lost through strikes in
the UK compared unfavourably with better-performing European competitors,
notably West Germany. Strikes were even known as 'the British disease'. Ad hoc
responses by personnel managers without too much reference to longer term industrial
relations or business strategies often only served to set precedents which were later
used against them.
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Thus a Royal Commission under Lord Donovan was set up. Reporting in 1968, it was
critical of both employers and unions; personnel managers were criticised for lacking
negotiation skills and failing to plan industrial relations strategies. At least in part,
Donovan suggested, these deficiencies were a consequence of management's failure to
give personnel management sufficiently high priority, and it is tempting to see the
somewhat higher profile that personnel management achieved later in the century as
something of a response to Donovan's criticisms. A common saying amongst trade
union officials in the 60s and 70s was, 'Companies get the industrial relations they
deserve', and there was some truth in that observation..

Meanwhile, by the mid-1960s, organisations outside manufacturing - in the public

sector and services - were beginning to employ personnel specialists. The numbers
covered by collective bargaining widened as white-collar staff associations -
particularly in the public sector - evolved into trade unions. Meanwhile the scope of
bargaining widened to include not just pay but, for example, pensions, training and
safety. The world was opening up too; the growth of multinational companies and
entry into the European Economic Community, the forerunner to the EU, meant that
some personnel managers had an international role in, for example, reconciling
varying national compensation systems, and taking account of different systems of
employment law. Even in purely UK-based organisations, by the seventies personnel
managers had to begin to understand the impact of European law on the UK,
something which was to grow in importance as the century advanced.

Domestic legislation was increasing too. In the mid-1960s new legislation was
introduced on contracts of employment, training, and redundancy payments, followed
in the seventies by laws on equal pay and opportunities, employment protection and
attempts to regulate trade union activity. This was also a period of high inflation, and
voluntary and statutory attempts - mostly unsuccessful - were made to regulate prices
and incomes. Personnel departments were required to understand these new measures,
and to develop policies to implement them; statutory regulation of pay, for example,
helped to lead to greater use of job evaluation.

Finally, in this period, personnel techniques developed using theories from the social
sciences about motivation and organisational behaviour; selection testing became
more widely used, and management training expanded. New management techniques
for improving performance arrived from American academics such as McGregor and
Herzberg to be applied by personnel departments.

Thus, by the end of the seventies, the main features of personnel management as it
appears today were in place, and can be distinguished as:

the collective bargaining role - centred around dealing with trade unions, to which
might be added the development of strategies for handling industrial relations

the implementer of legislation role - implying understanding and implementing a

growing amount of legislation

the bureaucratic role - implementing a series of rules about behaviour at work,

dealing with recruitment, managing absence and so on
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the social conscience of the business role, or 'value champion' - a residue from the
welfare worker function

a growing performance improvement role (in some organisations and sectors) -

about integrating the personnel function with business needs and taking a more
strategic view.

There is no significance in the order of the above list; the relative importance of the
respective features will vary from organisation to organisation, and from time to time.

1979 onwards: the rise of HRM

The 1980s in particular saw substantial changes as a result of legislation, a shift in the
intellectual climate away from post-war collectivism and towards individualism, and
changes in the structure of the economy. In 1979 a Conservative government under
Margaret Thatcher was elected with a radical agenda and, with wide public concern
about perceived abuses of union power, a mandate to reduce it. Legislation was
introduced to outlaw sympathetic and political strikes, remove the closed shop (under
which union membership was compulsory), and generally increase the power of
individual union members. High unemployment (reaching three million in the early
eighties) and structural change in the economy with a move to services from
manufacturing (where union membership was strongest, other than in the public
sector), would in any case have meant a decline in union membership. But the
legislation assisted employers who wanted to reduce the influence of trade unions;
personnel departments played their part in this process, most notably and symbolically
in national newspapers where, after bitter disputes, closed shops were ended and trade
unions removed.

Around the mid-80s, the term 'human resource management' (HRM) arrived from the
USA. To some, HRM was mainly connected with minimising trade union influence
and the titles of some personnel departments were changed to symbolise this. To
others, though, it implied a more strategic role, with the HR department helping to
achieve business objectives and planning (with line managers) how to achieve those
objectives, and ideally with an HR director on the board of the company. With this, in
some cases, came a kind of consultancy role, with the HR department acting as
adviser to line managers. The term 'human resources' remains an interesting one: it
seemed to suggest that employees were an asset or resource like machines (and
capable of being replaced or upgraded like machines?), but at the same time HR also
appeared to emphasise employee commitment and motivation. Certainly it fitted the
ideological climate of the times, and in some organisations there was a hard edge to
HRM, in part a consequence of its perceived role in reducing union influence.

At one point in the early 1990s, the debate on HRM took on almost theological
dimensions, with academics discussing what it represented, and usually reaching no
definitive conclusions. In recent years this debate has declined and it is probably best
to regard HRM (and its offshoot HRD) as merely a part of the development of
personnel management, a kind of labelling of the last point in the list above, and not
as something separate. However, this is not to underrate its importance. In some
organisations HRM has encouraged the devolution of certain operational personnel
tasks from personnel specialists to line managers; more generally, it has helped to
 15

promote the view that personnel has an important role in the development of the
business and of business strategy.

Organisation development (OD), another import from the USA although less
influential than HRM in the UK, also played a part in the development of techniques
used by those in personnel. Another development which became evident from the
seventies, and perhaps more marked during the nineties, is the rise of specialisms:
training was always separate in many organisations, but in larger organisations other
specialisms such as reward, resourcing and diversity now exist within the personnel
function.

One British scholar provided the following comparison of HRM and its forerunner
Personnel management. Whether this remains a relevant comparison in contemporary
society is worth considering.

Personnel Management HRM

Time and Planning Short term: Long term:

Perspective • reactive • proactive
• ad hoc • strategic
• marginal • integrated
Psychological contract Compliance Commitment

Control systems External controls Internal controls

ER perspective Pluralist: Unitarist:

• collective • individual
• low trust • high trust

Preferred structures/system Bureaucratic/ Organic:

mechanistic: • devolved
• centralised • flexible rules
• formal defined rules

Roles Specialist/ Largely integrated into line

Professional management

Evaluation criteria Cost minimisation Maximum utilisation [human

asset accounting]
 16

SOFT AND HARD HRM (source: http://mams.rmit.edu.au/d4lhtsmk45c.pdf)

The various developments in the history of HRM have given rise to ‘soft’ and ‘hard’
versions of the function. On one hand, theorists have drawn on the welfare role of
HRM and the Human Relations school, emphasising communications, team work and
the utilisation of individual talents. On the other hand, the Michigan school takes a
more strategic approach with a unitarist outlook, which endorses management's views
of workplace control.

Hard HRM stresses the "resource" aspect of HRM. Legge refers to this as "Utilitarian
Instrumentalism". This hard model stresses HRM's focus on the crucial importance of
the close integration of human resource policies, systems and activities with business
strategy. From this perspective human resources are largely a factor of production, an
expense of doing business rather than the only resource capable of turning inanimate
factors of production in to wealth. Human Resources are viewed as passive, to be
provided and deployed as numbers and skills at the right price, rather than the source
of creative energy.

Hard HRM is as calculative and tough minded as any other branch of management,
communicating through the tough language of business and economics. This
emphasis on the quantitative, calculative and business-strategic aspects of managing
the "headcount" has been termed human asset accounting . The hard HRM approach
has some kinship with scientific management as people are reduced to passive objects
that are not cherished as a whole people but assessed on whether they posses the
skills/attributes the organisation requires.

In contrast, soft HRM places an emphasis on "human" and is associated with the
human relations school of Herzberg and McGregor. Legge refers to this as
"Developmental Humanism" (Legge, 1995, p.66-67). Whilst emphasising the
importance of integrating HR policies with Business objectives, the soft model
focuses on treating employees as valued assets and a source of competitive advantage
through their commitment, adaptability and high quality skill and performance.
Employees are proactive rather than passive inputs into productive processes, capable
of development, worthy of trust and collaboration which is achieved through
participation (Legge, 1995, pp 66-67).

The soft version is seen as a method of releasing untapped reserves of human

resourcefulness by increasing employee commitment, participation and involvement.
Employee commitment is sought with the expectation that effectiveness will follow as
second-order consequences. Walton (1985, p. 79) suggests that "a model that assumes
low employee commitment and that is designed to produce reliable if not outstanding
performance simply cannot match the standards of excellence set by world-class
competitors" and discusses the choice that managers have between a strategy based on
imposing control and a strategy based on eliciting commitment.

QUESTIONS:
The development of HRM from employee welfare to business partner underpins the
continuing confusion of the HRM role. It is this confusion which makes it difficult to
 17

determine a common definition and which leads to depictions of HRM being either
‘soft’ or ‘hard’.
1. What are the implications of the evolution of the HR role for the
management of employees?

2. How do these changes help to explain the differing emphasis on the

aspects of ‘control’ and ‘caring/consent’ in the management of
employees?
 18

STRATEGIC HUMAN RESOURCE MANAGEMENT

Strategic HRM is the alignment of people related strategies to deliver business related
goals. In this way HR managers work alongside business strategists in order to plan
for the human requirements to ensure that business goals are met across a long time
frame. Such a planning process would also need to take into account external
conditions such as demographic change, technological change and competitive
changes. Guest (1987) identified 3 aspects of integration of HR policy with business
strategy. These were the relative fit of policies with business strategies, policies which
complement each other encouraging employee behaviour which displays commitment
and internalisation of the importance of HRM by department and line managers. This
would mean that planning encompasses all aspects of the HR role including:

• recruitment and selection

• induction
• training and development (or human resource development)
• performance management
• occupational health and safety
• diversity management
• employee relations (or industrial relations)
• compensation and benefi ts
• termination.

STRATEGY ACCORDING TO HENRY MINTZBERG

Henry Mintzberg, in his 1994 book, The Rise and Fall of Strategic Planning points
out that people use "strategy" in several different ways, the most common being these
four:

1. Strategy is a plan, a "how," a means of getting from here to there.

2. Strategy is a pattern in actions over time; for example, a company that
regularly markets very expensive products is using a "high end" strategy.
3. Strategy is position; that is, it reflects decisions to offer particular products or
services in particular markets.
4. Strategy is perspective, that is, vision and direction.

Mintzberg argues that strategy emerges over time as intentions collide with and
accommodate a changing reality. Thus, one might start with a perspective and
conclude that it calls for a certain position, which is to be achieved by way of a
carefully crafted plan, with the eventual outcome and strategy reflected in a pattern
evident in decisions and actions over time. This pattern in decisions and actions
defines what Mintzberg called "realized" or emergent strategy.

Mintzberg’s typology has support in the earlier writings of others concerned with
strategy in the business world, most notably, Kenneth Andrews, a Harvard Business
School professor and for many years editor of the Harvard Business Review.
 19

QUESTIONS:
An environmental scan of the public sector in most countries reveals significant
demographic and other changes which will affect the labour force. Here, some
emerging issues are listed. Your task is to think of some HR strategies which will
assist the organisation develop programs and practices to address some of the
emerging issues.

Emerging Issues HR strategy

Aging workforce

Skills shortage

Increased numbers of women

Increased numbers of migrant workers

Increasing technology

READINGS
Constantin, T., Pop, D & Stoica-Constantin, A. 2006 ‘Romanian managers and human resource
management’ Journal of Organizational Change Management Vol. 19 No. 6, pp. 760-765
Mintzberg, H., The fall and rise of strategic planning. Harvard Business Review, (1994, January-
February), 107-114.
Purcell, J 1987 ‘Mapping management styles in employee relations’ Journal of Mgt Studies 24:5
Nedelcu, C. 2008 ‘The elaboration and implementation of a strategic management model on the
Romanian market, Management & Marketing (2008) Vol. 3, No. 4, pp. 49-72.

REFERENCES:
Delbridge, R., Turnbull, P. and Wilkinson, B. 1992 ‘Pushing Back the Frontiers: Management Control
and Work Intensification under JIT/TQM Systems’ New Technology Work and Employment, 6(4)
Fox, A. 1974 Beyond Contract, Work, Power and Trust Relations, Faber and Faber, London.
Foucault, M. 1980 Truth and Power, Power and Knowledge. Selected Interviews and Other Writings
1972-1977, Gordon, C. ed Pantheon Books, New York.
Legge, K. (1995) Human Resource Management: Rhetorics and Realities, Basingstoke: Macmillan.
Pfeffer, J. 1992 Managing With Power: Politics and Influence in Organisations, Harvard Business
School Press, Boston.
Pigors P & Myers, CA 1981 Personnel Administration, McGraw-Hill Education
Sisson, K. 1989, Personnel Management in Britain, Basil Blackwell, Oxford
Townley, A. 1994 ‘Conflict Resolution, Diversity and Social Justice’, Education and Urban Society,
Vol 27, 11 January:5-9.
Walton, R. E. (1985) 'From control to commitment in the workplace', Harvard
Business Review, 63, 2, 77-84.
Zuboff, S. 1988 In the Age of the Smart Machine, Basic Books, New York.
 20

TOPIC 2: MOTIVATION AND JOB SATISFACTION

In many western nations morale in the public sector was low in the 1980s and 1990s
following a series of reforms including significant downsizing. Many of the reforms
were based on implementing private sector practices into the public sector. However
they failed by large to recognise that many public employees have quite different
motivations to work in the public sector than do private sector employees.
Motivation principles and techniques that work in the private sector
may not work in the public sector because employees are seeking
different rewards, have different needs and respond to different
incentives.

A well functioning public service requires dedicated staff who share

public sector values and who strive for self improvement. As
supervisors of staff public managers need to be acquainted with the
principles of motivating staff and creating satisfying jobs.

Job Satisfaction and Presumed Effect on Performance

Job satisfaction has emerged in the research as a key mitigating factor which
influences motivation and leads to increased productivity. There are 3 measures of
organisational productivity which arise through the effort of individual workers:

1. efficiency
2. absenteeism
3. turnover
A possible fourth factor:
4. citizenship behaviour (volunteerism, gold plating)

Source: adapted from Robbins et al. 2001.

 21

Low job satisfaction is linked to:

Low retention (a problem if we want to retain an aging workforce) and absenteeism

CASE STUDY
An employee has been transferred to a new division as a result of an organisational
restructure. His supervisor is not happy with his performance and has brought the
matter to you for advice about how to deal with the employee. You listen to her side
of the matter and then interview the employee. Their statements are summarised
below.

Read the scenario facing this public sector manager and answer the questions below.

Supervisor report on Max

I am the Manager of the Survey Team. We conduct and analyse all the market and
feasibility surveys for the organisation. It's a small team and we certainly depend on
the good will and hard work from our team members. Three months ago, I was
offered the services of a surplus employee, Max, who had worked for 28 years in the
trades area as a manager. He had good general office skills, some research and
certainly, marketing skills. I was keen to expand the team and was very happy to take
on Max.

Shortly after joining the team, Max developed a very antagonistic attitude towards me
as his manager. I don't know whether he has a problem with working with a woman.
I have counselled him, but he remained sullen and refused to really talk. He has
stirred up a lot of trouble in the team, and I think he's spread a great deal of
discontent. He is also unreliable and he is often away ill. He is simply not working
out, and my advice from senior management is that I cannot dismiss him.

Max’s response
After 28 years with the trades section my whole career was destroyed by an arbitrary
decision by management to close it down and outsource it. I cannot believe after all
I've done for this place and for all the work I've put in, that this is the thanks I get. So,
they told me that I won't be let go - that they had other jobs for people like me who
were surplus to requirements. You know what they've got me doing? Clerical work.
I've been a manager for 15 years and now I'm a clerk. Oh, they pay me the same
money, but it's not the money is it?

I am just so angry. When I go to work, I can hardly think for being so angry and
upset that my section got the boot and other areas, like this stupid survey team can
still keep operating. Look at their budget and the returns they bring in. What a joke!

Questions:
What recommendations can you make on the basis of this information? You should
consider recommendations for the manager and recommendations for the employee.
 22

What do employees want?

At least 13 factors have been identified as key elements that employees look for in a
satisfying job.

In light of the case study, how does this compare with what Max was looking for?
To what extent can good management provide these elements to employees?

1. Meaningful and worthwhile work that provides enjoyment and satisfaction

2. Mentally challenging tasks
3. Being treated as a valuable individual
4. Clear standards and objectives
5. Adequate training and development opportunities
6. Feedback on performance
7. Supportive and ethical managers/leaders
8. Friendly colleagues
9. Promotion
10. Safe and healthy environment
11. Tools, equipment and work systems that support, not hinder, their best efforts
12. Leaders/managers who ‘practice what they preach’ and behave with integrity,
honesty and fairness
13. Equitable remuneration

MASLOW’S THEORY OF MOTIVATION

Motivation is the willingness to exert high levels of effort to reach organisational

goals. One of the main theories of motivation emerges from the work of Abraham
Maslow. Maslow carried out his investigations into human behaviour between 1939
and 1943. He outlined five basic needs which act as building blocks. As people
achieve the first they are motivated to progress to the next. His steps have typically
been represented as a pyramid:
 23

A. Physiological needs
The most basic human need of all is physiological. This is the set of conditions
required for human survival. The body cannot continue to function without these
needs. They include the need to breath, sleep, eat and drink as well as other biological
functions.
.
B. Safety needs
When the physiological needs are satisfied they are replaced by safety needs. This
reflects people’s desire for protection against danger or deprivation. We strive for an
orderly world where we can maintain consistency and familiarity with our
surroundings. This is manifested in our desire to be housed and also to be within a
society with predictable rules. At work it can be manifested by a desire to have job
security and have our grievances resolved in a fair manner. This need encompasses
the motivation to achieve safety, personal security, financial security and good health.

C. Social needs
The next motivational stage is the need to belong to a group, to be accepted and to
love other people and to have friendships. This is the emotionally based set of
incentives in the Maslow hierarchy. It includes the need for support and
communication, the importance of family, the importance of being part of a group and
the ability to overcome loneliness and anxiety.

D. Esteem
Once a person is accepted in a group and has maintained love and friendships he or
she is ready to develop a sense of self worth and value. The positive social
reinforcements gained through meeting their social needs acts to make people feel
important. This is the development of one’s self esteem. With self esteem people
strive to contribute to team efforts and also be recognised for their good work.

E. Self Actualisation
These are the final set of needs for a person and they are driven by an intrinsic desire
to fulfill one’s potential and to the best that person can be. In essence it is to realise
 24

your dreams for yourself. This is not just restricted to a dream of one’s career but it
includes broadening one’s horizons to include spiritual or artistic achievements. It
includes a sense of autonomy, self motivation, humility and respect for others, ethics,
and a great deal of self understanding.

MCGREGOR’S THEORY

McGregor believed that managers have two particular views about people and this
affects how they manage their staff.

Theory X managers believe that their workers:

 inherently dislike work
 Will avoid it
 Must be coerced or controlled

Theory Y managers believe that their workers:

 Think that work is natural as rest or play
 are inherently self directed and committed
 accept responsibility

In terms of Masclow, theory X managers assume lower order needs dominate

individuals and theory Y managers believe that higher order needs dominate. The
management implications for Theory X workers are that, to achieve organisational
objectives, rewards of varying kinds are likely to be the most popular motivator. The
challenge for management with Theory Y workers is to create a working environment
(or culture) where workers can show and develop their creativity. Theory Y is
difficult to put into practice on the shop floor in large mass production operations, but
it can be used initially in the managing of managers and professionals. For
professionals, staff will contribute more to the organization if they are treated as
responsible and valued employees

EQUITY THEORY

Equity theory is a component of justice theory because it informs how decisions are
made and the effect of decisions on humans. John Stacey Adams, a workplace and
behavioural psychologist, developed this job motivation theory in 1963. The
principles of justice theory arise because of these typical human behaviours:

• Human compare themselves with others

• They look at relative rewards and fairness
• Employees will act to correct an inequity (in other words - demotivation)

Employees will assess the relative balance between their inputs and the outputs they
receive for this effort. Inputs typically include:

• Effort
• Loyalty
• Hard Work
• Commitment
 25

• Skill
• Ability
• Adaptability
• Flexibility
• Personal sacrifice, etc.

Outputs typically include:

• Financial rewards (salary, benefits, perks, etc.)

• Intangibles that typically include:

• Recognition and praise
• Reputation
• Responsibility
• Sense of Achievement
• Sense of Advancement/Growth
• Job Security

Decision making and Fairness

Managers make decisions a range of decisions which affect employees’ sense of
fairness and in turn can affect their motivation. In giving reasons for a particular
decision we generally rely on three types of reasons:

Equity reasoning:
Here the decision or outcome has been allocated on the basis of the proportion of
contribution by each staff member. Those who have contributed the most will get the
largest share of the reward.

Equality reasoning: Here, all staff members will receive the same reward regardless
of the effort they put in.

Need reasoning: Here, a decision has been made to provide a particular reward (for
instance training) to those staff who have a shortcoming in an identified area and the
training is seen to meet the staff member’s needs.
 26

MORALE AND MOTIVATION CASE STUDY

Read the case below and answer the following question:

The Canadian situation

Like many other nations, public sector reform in Canada involved the importation of
private sector management practices into the public sector combined with massive
staff reductions. Some years later this has been found to be the cause of morale
problems amongst staff.

According to Savoie, the ‘tendency to borrow from the private sector has hurt morale
in government and shaken the confidence of civil sector employees’. Loss of public
service morale has not only been caused by the confusion about direct exposure, or
the uncertainty about the degree of exposure, to public accountability, but also by the
loss of ‘standing as an objective source of policy advice [to the ministers]’. He adds
‘four out of five public sector employees believe that their clients think of them as
lazy and uncaring’, and that they felt unappreciated and not valued when they saw
their jobs go to private sector contracts or privatization. Savoie is not the only
commentator on public reform who cites a morale problem in the public service. The
‘Fourth Annual Report to the Prime Minister on the Public Service of Canada … a
‘quiet crisis’ - a crisis whose symptoms include reduced morale and stagnating
careers’ (Valuing Our People).
 27

Evert Lindquist is concerned that resulting from the changes that have occurred in the
public service and the attendant stress and destabilization potentially caused by
change, public sector employees have not been valued and have not received the
recognition they deserve. He feels ‘precious little attention has been directed to
exploring the implications for public sector employees who are asked to develop
proposals, elaborate plans, and then implement the decisions of elected leaders’
(Lindquist 430). Low esteem, whether personal or organizational, and poor morale,
whether justified or not, is a major cause of reduced effectiveness and decreased
efficiency. A failure to adequately address the morale and motivation issues goes
against the values accorded human resources in successful private sector business. It
is reasonable to suggest that a major reason for any loss of morale in the public
service is due to the change implementation process itself, the perceived loss of
unique status, and the long overdue requirement to measure results and thus be more
directly accountable. In any event, there has been a loss of morale attributed to the
introduction of public sector practices that ironically can be repaired by using private
sector practices and private sector resources. Not only are private sector practices,
such as organizational development and learning, effective in implementing change
and dealing with morale issues but many private sector businesses have expertise in
successfully managing change. Successful private sector businesses effectively use
delegation and empowerment to build employee confidence, experience and learning,
and to increase motivation and morale. (Coleman 1999:17–19)

Q: From this account what do you think are the key reasons behind the loss of
public sector morale?

Motivation to work in the Public Sector

Public servants often report an interesting in making a difference as their reason for
working in the public sector.

• This means that generic private sector management models may not apply
entirely to a range of public sector workplaces

• There may be a link between a well-written mission/vision which reflect

community well-being that individuals will relate to as a reflection of their
motivation to work in the public sector.
 28

Questions
Consider the reasons that people join the public service from the chart above which
reflects a study in the UK.

1. How would these reasons compare with the reasons in Romania?

2. Do you think that these reasons are different from the sorts of reasons
behind a decision to join the private sector?

3. How does this inform us about staff motivation in the public sector?
 29

JOB CHARACTERISTICS AND MOTIVATION

There is now a body of literature which suggests that the nature of the job can affect
motivation of workers. Is it possible to design a job which provides motivation
built in?

EXERCISE: Consider the characteristics of a good job below and answer the
questions below

1. Do you think lower level employees in your organisation also experience

these job characteristics?

2. How can some of these characteristics be built into public sector jobs?

READINGS:
Wright, B.E. 2001 ‘Public Sector Work Motivation: a review of the current literature
and a revised conceptual model’ Journal of Public Administration Research and
Theory, 11(4): 559-586

Analoui, A. 2000 ‘What motivates senior managers?: The case of Romania’ Journal
of Managerial Psychology, 15 (4): 324 – 340.
 30

Holland, P., A. Pyman, J. Teicher & B. Cooper (2010) ‘Employee Voice and Job
Satisfaction in Australia’, Human Resources (in press)

Wood, S. (2008) ‘Employee Voice, Job Characteristics and Employee Well being in
Britain’, Industrial Relations Journal 39:2: 153–168
 31

TOPIC 3: CHANGE MANAGEMENT

KURT LEWIN
by Ross A. Wirth, Ph.D. (2004) http://www.entarga.com/orgchange/lewinschein.pdf

Kurt Lewin theorized a three-stage model of change that has come to be known as
the unfreezing-change-refreeze model that requires prior learning to be rejected and
replaced. Edgar Schein provided further detail for a more comprehensive model of
change calling this approach “cognitive redefinition.”

Stage 1 – becoming motivated to change (unfreezing)

This phase of change is built on the theory that human behavior is established by
past observational learning and cultural influences. Change requires adding new
forces for change or removal of some of the existing factors that are at play in
perpetuating the behavior. This unfreezing process has three sub-processes that relate
to a readiness and motivation to change.

• Disconfirmation where present conditions lead to dissatisfaction, such as not

meeting personal goals. However, the larger the gap between what is believed
and what needs to be believed for change to occur, the more likely the new
information will be ignored.

• Previous beliefs now being seen as invalid creates “survival anxiety.”

However, this may not be sufficient to prompt change if learning anxiety is
present.

• Learning anxiety triggers defensiveness and resistance due to the pain of

having to unlearn what had been previously accepted. Three stages occur in
response to learning anxiety: denial; scapegoating & passing the buck; and
maneuvering & bargaining.

It is necessary to move past the possible anxieties for change to progress. This can be
accomplished by either having the survival anxiety be greater than the learning
anxiety or, preferably, learning anxiety could be reduced.

Stage 2 – change what needs to be changed (unfrozen and moving to a new state)
Once there is sufficient dissatisfaction with the current conditions and a real desire to
make some change exists, it is necessary to identify exactly what needs to be changed.
Three possible impacts from processing new information are: words take on new or
expanded meaning, concepts are interpreted within a broader context, and there is an
adjustment in the scale used in evaluating new input.

A concise view of the new state is required to clearly identify the gap between the
present state and that being proposed. Activities that aid in making the change include
imitation of role models and looking for personalized solutions through trial-and-error
learning.

Stage 3 – making the change permanent (refreezing)

 32

Refreezing is the final stage where new behavior becomes habitual, which includes
developing a new self-concept & identity and establishing new interpersonal
relationships.

Unfreezing – changing – refreezing

Resistance

Drivers for change

What are the drivers for change?

These encompass management, institutional and external environmental factors which
compel the change. For instance they can include: globalisation, technology, changing
political ideology and shifts in demographics.The stronger these forces the more
likely the change will happen. However, there are a number of points of resistance
which should be addressed:

What are the points of resistance?:

These mostly arise from the reluctance of employees to go along with the change and
the resistance of organisational processes to deal with the change.

Change Management Programs

Change management programs need to take into account the driving and resistance
forces. They can be broken down into four parts which include people, technology,
structure and physical environment as outlined below.
 33

Individual Sources of Resistance:

Habit can cause resistance to change in that individuals may be reluctant to change
long-established patterns of behaviour. For example, if the work unit is moving to a
new location, individuals may have to drive longer take a different route to get to
work. Similarly, if a new computer system is introduced that requires different inputs
from ‘normal’, then habits can stand in the way of smooth accomplishment.

Low tolerance for change – some individuals welcome change, others fear it. Change
fatigue may also build up over time reducing overall levels of tolerance.

Fear of a negative economic impact can also hinder change. For example, if the work
unit or organisation is being restructured, people may fear losing their jobs and
associated income. Lost overtime pay is a common reason employees resist changes
to work hours or shift arrangements.

Fear of the unknown is also a source of resistance because people can not see or
visualise what the new future will be like. This is why communication is so central to
successful change, to create a word picture of the future to make the unknown more
familiar.

Desire not to lose something of value. Threats to individuals’ security can generate
resistance. This source of resistance is similar to financial threats except that it draws
on other forms of security besides money. In some cases it may mean physical
security – such as when barriers between clients and staff are removed in customer
service positions. Security in the form of health may be threatened if new equipment,
chemicals or other potentially dangerous changes are made. It also implies threats to
 34

other factors that make people feel secure, such as their identity as a particular type of
worker.

Selective information processing is a form of filtering in which individuals only ‘hear

what they want to hear’. If they have a negative attitude about change, then when a
change is announced, they only hear the negative side of it and ignore any positives.
For example, a union representative may view all changes as being a ‘management
plot’ to make working life harder for staff.

Belief that the change does not make sense for the organisation – this is a useful
source of resistance as it can signal genuine concerns about things that the change
agent or management may have overlooked

Organisational Sources of Resistance

Structural resistance is particularly true in bureaucracies, which were designed for

stability, uniformity and routine.

Ignoring all factors that can be changed or a limited focus – technology, structure,
people or physical environment can result in blockages, as noted earlier.

Threats to resources, expertise or power are all similar. If one part of the organisation
is more powerful or controls more resources under the current regime, any change that
undermines this power is likely to produce resistance. For example, if budget power
and responsibility is devolved completely to low levels in agencies, then central
agencies and keepers of the purse strings are likely to feel threatened and resist the
devolution.
 35

Group inertia can arise because groups, like individuals, develop habits (or culture
and norms) and change can mean that these habits have to be abandoned or altered.
Dealing with Resistance
1. Education and Communication
• education can provide details and allow for an understanding of the change
• full facts lead to acceptance
• the power of meaningful consultation can lead to acceptance

2. Participation
• Acceptance through being involved in the consultation
• People feel an ownership of the decision when they have participated in the
decision making process
• People become committed to new roles or changed processes when they have
participated in the formulation of these

3. Facilitation and Support

Counselling, coaching, therapy, training can all assist in lowering resistance

4. Negotiation
Sometimes it is necessary to negotiate a compromise or make allowances for certain
circumstances in order to deliver the change

5. Manipulation and Cooption

Whilst these are generally unethical ways of gaining acceptance of the change many
organisations resort to them. Manipulation may influence employee attitudes by
distorting the facts or benefits of the change. Cooption of sceptics in the organisation
or influential employees who can be disruptive or negative can mean that they are
moved out of the area being changed.

6. Coercion
Again, this is an unethical means of gaining acceptance to change. It involves
threatening employees with some punishment if they do not accept the change.

UNDERSTANDING WHAT PEOPLE GO THROUGH IN CHANGE

Past future

Denial exploration
(stress,
heart problems
alcohol and drugs)

Anger (sabotage resistance/bargaining

Violence)
 36

When people are faced with dramatic change such as the loss of their job or worse,
the loss of a family member they experience a set of emotions and experiences which
can be mapped on the grief curve above. The chart is set out in two halves. One
relates to the person’s feelings for the past (when they held the job) and the other
relates to their feelings of the future (getting on without their job).

When the change is announced many people react with disbelief or denial. They feel
that there must be a mistake and that soon the organisation will realise this and correct
the decision. Shortly after the realisation sets in they become very angry. In a
workplace situation this period is marked by severe stress. People can have heart
problems and turn to alcohol and drugs to help them forget the terrible event which
has happened. As their denial turns to anger they can become violent. To some this
will be turned inwards with people becoming depressed or wanting to commit a self-
harm. Others want to lash out at the organisation through sabotage. Some will find
themselves violent to those who are less powerful than them – even their families.
Many organisations dismissing workers will have them escorted from the premises by
security guards in case their anger emerges and to prevent sabotage or other forms of
attacks.

Individuals experiencing the bargaining phase try in vain to have the decision
reversed. This occurs after the fires of anger have ebbed and in a desperate round of
bargaining, seeking ways to avoid having the bad thing happen. Bargaining is thus a
vain expression of hope that the bad news is reversible. In organisations, it includes
offering to work for less money or offering to do alternative work or be demoted
down the hierarchy. One's loyalties, debts and dependants may be paraded as
evidence of the essentiality of being saved.

In the exploration phase the individual starts to see possibilities of a

life ahead without his or her job. This may come in waves while still
experiencing some anger and some bargaining behaviour.
Eventually the bargaining behaviour wanes and the person starts to
focus on the future and what he or she might do next. Typical of this
phase is someone who asks herself ‘what if I…?’ These questions
allow the person to move forward.

Finally comes acceptance. However it is important to realise that

this acceptance my be begrudging rather than joyful. The feelings of
the loss will remain for a long time and maybe forever but there will
be acceptance of the situation and the person will no longer wish to
go back and bargain for his or her job back again.

READINGS:
Ibrahim, G. & Galt, V. (2002) Bye-bye central planning, hello market hiccups:
institutional transition in Romania Cambridge Journal of Economics 26:105-118
Chiaburu, DS. 2004 ‘Managing organizational change in transition economies’
Journal of Organizational Change Management 19(6): 738-746
 37

Haque, MS 2001 ‘The diminishing publicness of public service under the current
mode of government’ Public Administration Review, 61(1): 65-82

TOPIC 4: LEADERSHIP IN THE PUBLIC SECTOR

A recent UN report on public sector performance (UN 2005) noted that: ‘a leadership
style based on command and control is no longer suited for effective public sector
management. Instead, leaders are increasingly judged by their ability to motivate and
bring out the best in staff, by how well they communicate the vision and mission of
the organization, and by their effectiveness in building partnerships and collaborating
with other organizations. Together, the complexity of challenges in the public sector
is requiring new leadership skills of senior civil servants.

Since public sector transformation often involves the reform of values and attitudes
of staff, the role of leadership by example is critical. The term “leading by example”
indicates the transformational power of leadership when employees follow the
example of a leader. An important role of a leader is to champion the shared vision,
values, norms and standards of the organization. This will require high-level skills
combined with strong commitment and determination on the part of the organizational
leadership.’

Managers and Leaders

The shift from public administration to public management in western capitalist
nations demonstrated the importance of people as the key to successful public sector
performance. Administration means ‘to serve’ with the emphasis on following
instructions. Management means ‘to control’ with the emphasis on gaining results.
Leadership is typically defined as ‘to influence’.

By definition managers have some formal control over their staff. This position of
authority vested in them by the company means that they must ensure their
subordinates work for them and largely do as they are told. Managers are paid to get
things done (they are subordinates too), often within tight constraints of time and
money. They thus naturally pass on this work focus to their subordinates.

Leaders do not have subordinates - at least not when they are leading. Many
organizational leaders do have subordinates, but only because they are also managers.
But when they want to lead, they have to give up formal authoritarian control, because
to lead is to have followers, and following is always a voluntary activity.

Telling people what to do does not inspire them to follow you. You have to appeal to
them, showing how following will lead to their ‘heart’s' desire’. They must want to
follow you enough to stop what they are doing and perhaps walk into danger and
situations that they would not normally consider risking. Although many leaders have
a charismatic style to some extent, this does not require a loud personality. Generally
they have good people skills and styles that give credit to others (and takes blame on
themselves) are very effective at creating the loyalty that great leaders engender. This
does not mean that leaders do not pay attention to tasks - in fact they are often very
 38

achievement-focused. What they do realize, however, is the importance of enthusing

others to work towards their vision.

What is Leadership?
There are many definitions of leadership but most come down to three things:

• A group phenomenon (no leaders without followers. Leadership always

involves interpersonal influence or persuasion)
• Goal directed (guide others towards achieving a goal)
• A hierarchical phenomenon (leaders are at the top regardless of their formal
position in the organisation)

Effectiveness of Leadership
An effective leader is someone who motivates a person or a group
to accomplish more than they would have otherwise accomplished
without that leader‘s involvement. We can liken this to the sporting
arena where a team is comprised of individual players; each with
certain skills, but the team is honed into a finely tuned instrument
by virtue of the coach orchestrating them into a cohesive unit. In
this manner, and only with the proper motivation and care, will this
group of individuals gel into a team and accomplish more together
than they ever could on their own merits. With this framework set in
place, one would argue that leadership effectiveness is not gender-
specific, but there seem to be many attributes that are found in
both males and females that lend themselves to becoming an
effective leader. The measurement of effectiveness has been a
preoccupation with organisations. It can be related to the
definitions:

• A group phenomenon (increased team or group performance)

• Goal directed (achievement of goals)
• A hierarchical phenomenon (implementation of change, greater productivity) -
not just a place at the top of an organisational chart

Barbara Waugh (1960s civil rights activist and Personnel Manager with Hewlett-
Packard wrote that: “effectiveness is helping people communicate more, collaborate
more and innovate more”

So, is there a difference between leaders and managers?

Leaders are said to have a long term and future orientation. They provide a vision for
their followers. They are charismatic and create a sense of excitement, motivation and
purpose in their followers.

Managers focus on routine tasks in their department or group. They are part of the
chain of command. They implement the vision. They bring order and consistency
through planning, budgeting and controlling.

Neuroscience and Leadership

 39

The study of leadership has been so intense that it has involved not only behavioural
studies but also studies in neuroscience to determine whether leaders have any special
physical traits associated with the shape and function of their brains. Imaging
technologies such as functional magnetic resonance imaging (fMRI) and positron
emission tomography (PET), along with brain wave analysis technologies such as
quantitative electroencephalography (QEEG), have revealed hitherto unseen neural
connections in the living human brain. Advanced computer analysis of these
connections has helped researchers develop an increasing body of theoretical work
linking the brain (the physical organ) with the mind (the human consciousness that
thinks, feels, acts, and perceives).

Early work on the sorts of thinking processes associated with either side of the brain
demonstrated that the left hemisphere dominated the rational and logical processes of
thought while the right hemisphere dominated creativity and lateral thought.

Left Hemisphere Right Hemisphere

(Left side of body) (Right side of body)

SPEECH/VERBAL SPATIAL/MUSICAL

LOGICAL, MATHEMATICAL HOLISTIC

LINEAR, DETAILED ARTISTIC, SYMBOLIC

SEQUENTIAL SIMULTANEOUS

CONTROLLED EMOTIONAL

INTELLECTUAL INTUITIVE, CREATIVE

DOMINANT MINOR (QUIET)

WORLDLY SPIRITUAL

ACTIVE RECEPTIVE

ANALYTIC SYNTHETIC, GESTALT

READING, WRITING, NAMING FACIAL RECOGNITION

SEQUENTIAL ORDERING SIMULTANEOUS COMMPREHENSION

PERCEPTION OF SIGNIFICANT ORDER PERCEPTION OF ABSTRACT PATTERNS

COMPLEX MOTOR SEQUENCES RECOGNITION OF COMPLEX FIGURES

Hermman Brain dominance model

Using the research on thinking processes and left/right brain as a platform for
additional discovery, Ned Herrmann, with the support of General Electric, developed
 40

the Whole Brain Model. In this model, the brain is comprised of four quadrants,
instead of two halves. In each of these quadrants, there were dominant attributes that
support its respective thinking styles. The four quadrants are: the logical, the holistic,
the organised and the interpersonal. People generally fall into thinking in a dominant
hemisphere of the brain associated with the use of a dominant hand. Right handed
people (who outnumber left-handed people) think predominantly with their left brain.
Left handed people are associated with being right brain thinkers. The Hermman
Brain Dominance model has become famous for its training courses in whole of brain
thinking.

QUESTIONS:

Leaders and neuroscience

1. What is your dominant hemisphere? If you have access to the internet you can
do a free online quiz which will help you to discover your dominant way of
thinking:
http://www.wherecreativitygoestoschool.com/vancouver/left_right/rb_test.htm

Studies show that workers are roughly divided between left brain (52%) and
right brain (48%) thinkers. Senior managers are predominantly left brain
(60%). Surveys of workers on their experience of leaders ranked them
according to: ‘Believed in me, Listened, Encouraged, Trusted, Inspired’ These
are right brain qualities.

2. Are managers and leaders defined by whether they tend to think with
their left or right brain?
 41

Managers in Australia and Romania

The profile of managers in Australia is much like the rest of the western world. It is
dominated by men as you can see from the figures below. How does this compare
with Romania?

• Managers make up 10% of the workforce (890 000)

• 50% of them are over 40 years of age
• 400 000 managers are at the interface between senior management and the rest
of the workforce
• Every year 30 000 people are appointed as a manager
• Professionals appointed to managerial positions are expected to think as
‘program generalists’ and act as coordinators which means they do not draw
on their original talents. Added to this is the new expectation that they will
also be leaders.

A HISTORY OF MODERN LEADERSHIP THEORY

The development of research instruments to predict leadership effectiveness and

measure leadership characteristics commenced in the early days of the industrial
revolution. This development has followed three broad stages:
–The trait era
–The behaviour era
–The contingency era

The Trait Era (late 1800s-mid 1940s)

Leaders are born and not made. This belief dominated the late 19 th century and early
part of the 20th century. The earliest writings on leaders have become known as the
Great Man Theory led by R Galton in 1869. Historically, leaders have always been
considered as being special and worthy of our attention. Their physical characteristics
are described in detail, their personalities dissected and their actions celebrated. Their
personalities have been studied and documented.

The trait era of leadership studies consists of the great men theories and the trait
theories. Both were concerned with the compilation of thousands of characteristics
which had been observed in great leaders (predominantly men). The assumption was
that if you copied these traits you too could be a great leader. Added to this was the
difficulty in learning such traits.

• Personality traits and innate characteristics were duly documented because

they were thought to be the special qualities which allowed one person to lead
others.

• Development of personality testing, IQ testing: the belief was that you could
distinguish between leaders and their followers. The research at the time
focused on collecting data on existing leaders including demographic,
personality information, physical traits, intelligence, motivation, initiative and
self-confidence.
 42

After 40 years of study there was still little evidence to justify an assertion that leaders
are born. By the 1930s researchers believed that although traits play a role in
determining leadership these traits appeared to be contingent on the setting in order to
be effective. A combination of these traits alone did not make leaders. Nevertheless,
the research resulted in 5 categories of traits:

 Capacity (intelligence, alertness, verbal facility, originality, judgement)

 Achievement (scholarship, knowledge, athletic accomplishment)
 Responsibility (dependability, initiative, persistance, self-confidence)
 Status (socio-economic position, popularity)
 Situation (mental level, interest in followers, objectives)

The demographics of a leader: 1989 survey of US CEOs (Kurtz, Boone & Fleenor)
This study demonstrated that of all the chief executives examined, the following traits
were common:
• They were white males
• Taller than general population

• Studied in public universities

• First-born in two parent middle class families

• 90%
•
• married

• Smoked less than the general population

• Exercised regularly

• 80% right handed

• More educated than general population

This study illustrated both the homogeneity of the CEO population in the US as well
as the snap-shot nature of such an exercise. Clearly in 1989 most of the CEOs were
male from middle class families who could afford the cost of their university
educations. It also demonstrates the weaknesses of relying on traits to predict
leadership. It fails to take into account contingency factors such as the nature of the
followers, the type of task or the situation at hand. Additionally, changing
demographics and cultural shifts have significantly altered many people’s idea of the
traits associated with leadership.

The Behaviour Era (mid 1940s – early 1970s)

The next stage in the search for leadership was the behaviour era in which researchers
focused on what leaders do to make others follow them. Unlike the trait era,
 43

behaviours can be learned and followed by others and so these studies were quickly
picked up in leadership training courses.

• Kurt Lewin’s work on democratic, autocratic and laissez-faire leadership laid

the foundation for behavioural studies in leadership.
• By 1957 there were 2000 leadership behaviours documented through the Ohio
State Leadership Studies program. These were used to create the Leader
Behaviour Description Questionnaire (LBDQ) which is still in use.
• The LBDQ focuses on the behaviours of initiation of structure (task) and
consideration (relationship). Task behaviours include setting deadlines,
clarifying roles while consideration behaviours include helping people and
looking out for employees.
• It is still not clear which behavioural characteristics are the most effective but
researchers generally agree that both structure and consideration behaviours
are required. This is partly a cultural issue as most of the survey instruments
are based on US measures.

The Contingency Era (Early 1960s – present)

This era of leadership research moved beyond simple behaviours and the
concentration on leader and follower to consider the way that a leader acted in
particular circumstances. In doing so the studies enabled leadership to be seen in a
contingency framework which takes into account the leaders’ skills and qualities as
well as the circumstances surrounding the task at hand.

Fred Fiedler’s Contingency model was the first to acknowledge that personality style
and behaviour of effective leaders depends on the requirements of the situation at
hand:
• Different leadership traits, styles and behaviours can be effective
• The situation and contextual factors determine which style will be most
effective
• People can learn to be good leaders
• Leadership makes a difference to the effectiveness of groups and organisations

The leadership grid

The leadership grid was developed to explore visually where a leader’s balance lies
between their concern for people and their concern for the task at hand.

Concern for Production refers to commitment to expected outcome, such as number

of units produced, time expended, sales volume, and quality level - whatever a team is
responsible for producing.

Concern for People refers to attitude towards superiors, peers or subordinates, and
include concerns about job satisfaction, quality of work life, training/development,
working conditions, salary structure, fringe benefits, job security, etc.

Grid thinking identifies five broad leadership styles. Identifying styles allows people
to understand different approaches and their respective strengths and weaknesses.
 44

Go through the following statements and see if you can identify your dominant style:

• (9,1) I expect results and take control by clearly stating a course of action. I
enforce rules that sustain high results and do not permit deviation.

• (1, 9) I support results that establish and reinforce harmony. I generate

enthusiasm by focusing on positive and pleasing aspects of work.

• (5, 5) I endorse results that are popular but caution against taking unnecessary
risk. I test my opinions with others involved to assure ongoing acceptability.

• (1, 1) I distance myself from taking active responsibility for results to avoid
getting entangled in problems. If forced, I take a passive or supportive
position.

• (9, 9) I initiate team action in a way that invites involvement and commitment.
I explore all facts and alternative views to reach a shared understanding of the
best solution.

For all the advantages of simplicity of the tool, the leadership grid is not without
criticism:

• It is only a mirror for leadership qualities with respect to two dimensions; it

does not identify any universal standards of leadership that is effective under
various situations. Common sense says that the emphasis on tasks or relations
is a function of situation in which leader operates.
• Also the leadership grid identifies dominant behaviours of leaders, but under
pressure leaders may resort to what is called by experts as backup style. This
means that leaders shift their style to gain maximum mileage. This practice of
adapting different styles for personal gains is called opportunism.
 45

Laissez faire leadership

Laissez-faire is a French phrase that means ‘leave it be’ and is used to describe a
leader who leaves his or her colleagues to get on with their work. It can be effective if
the leader monitors what is being achieved and communicates this back to his or her
team regularly.

Most often, laissez-faire leadership works for teams in which the individuals are very
experienced and skilled self-starters. Unfortunately, it can also refer to situations
where managers are not exerting sufficient control.

In a survey of 2,273 Norwegian employees, laissez-faire leadership was positively

correlated with role conflict, role ambiguity, and conflicts with co-workers. Path
modelling showed that these stressors mediated the effects of laissez-faire leadership
on bullying at work and that the effects of laissez-faire leadership on distress were
mediated through the workplace stressors, especially through exposure to bullying.
The results support the assumption that laissez-faire leadership behaviour is a
destructive leadership behaviour.

The laissez faire style has been said to work best when:
• Employees are highly skilled, experienced, and educated.
• Employees have pride in their work and the drive to do it successfully on their
own.
• Outside experts, such as staff specialists or consultants are being used
• Employees are trustworthy and experienced.

This style should not be used when:

• It makes employees feel insecure at the unavailability of a manager.
• The manager cannot provide regular feedback to let employees know how
well they are doing.
• Managers are unable to thank employees for their good work.
• The manager doesn’t understand his or her responsibilities and is hoping the
employees can cover for him or her.

Transactional leadership
The transactional leader seeks to control his or her workers though strict rules and
procedures. These are based on the assumptions that people are motivated by reward
and punishment rather than other motivations; that social systems work best with a
clear chain of command and that when people have agreed to do a job, a part of the
deal is that they cede all authority to their manager.

The transactional leader works through creating clear structures whereby it is clear
what is required of their subordinates, and the rewards that they get for following
orders. Punishments are not always mentioned, but they are also well-understood and
formal systems of discipline are usually in place.
 46

When the Transactional Leader allocates work to a subordinate, they are considered to
be fully responsible for it, whether or not they have the resources or capability to
carry it out. When things go wrong, then the subordinate is considered to be
personally at fault, and is punished for their failure (just as they are rewarded for
succeeding). The transactional leader is thus highly autocratic.

Transformational Leadership
(source: http://changingminds.org/disciplines/leadership/styles/transformational_leadership.htm)

Transformational leaders believe that people will follow a person who inspires them.
They are people who have vision and passion and believe that with these they can
achieve great things. The way in which they do this is by enthusiasm and energy into
those who work with them. They also care about their workers and want them to
succeed.

Transformational Leadership starts with the development of a vision, a view of the

future that will excite and convert potential followers. This vision may be developed
by the leader, by the senior team or may emerge from a broad series of discussions.
The important factor is the leader buys into it, hook, line and sinker.

The next step, which in fact never stops, is to constantly sell the vision. This takes
energy and commitment, as few people will immediately buy into a radical vision,
and some will join the show much more slowly than others. The Transformational
leader thus takes every opportunity and will use whatever works to convince others to
climb on board the bandwagon. In parallel with the selling activity is seeking the way
forward. Some Transformational Leaders know the way, and simply want others to
follow them. Others do not have a ready strategy, but will happily lead the exploration
of possible routes to the ‘promised land’.

The route forwards may not be obvious and may not be plotted in details, but with a
clear vision, the direction will always be known. Thus finding the way forward can be
an ongoing process of course correction, and the Transformational Leader will accept
that there will be failures and blind canyons along the way. As long as they feel
progress is being made, they will be happy.

The final stage is to remain up-front and central during the action. Transformational
leaders are always visible and will stand up to be counted rather than hide behind their
troops. They show by their attitudes and actions how everyone else should behave.
They also make continued efforts to motivate and rally their followers, constantly
doing the rounds, listening, soothing and enthusing.

It is their unswerving commitment as much as anything else that keeps people going,
particularly through the darker times when some may question whether the vision can
ever be achieved. If the people do not believe that they can succeed, then their efforts
will flag. The Transformational leader seeks to infect and reinfect their followers with
a high level of commitment to the vision.

One of the methods the Transformational leader uses to sustain motivation is in the
use of ceremonies, rituals and other cultural symbolism. Small changes get big
hurrahs, pumping up their significance as indicators of real progress.
 47

Overall, they balance their attention between action that creates progress and the
mental state of their followers. Perhaps more than other approaches, they are people-
oriented and believe that success comes first and last through deep and sustained
commitment.

Famous Trasformational Leaders

Many leaders have been named as transformational over time:
• Martin Luther King
• Ghandi
• Hitler

Modern Leadership Principles

• Know yourself (develop an awareness of your won strengths and weaknesses
as well as your personality traits and styles)

• Understand your leadership context (the national and organisational

cultures, your followers and co-workers etc)

• Actively seek out training opportunities (leadership can be learned)

 48

Leadership in the Information age

Leadership in an information age might require a different set of skills for the future.
The public sector is becoming increasingly professionalised and with it comes a
highly educated workforce which increasingly turns to electronic means of
communication and e-governance. The following set of attributes may play a large
role in the recruitment of leaders in the new workforce.

• Innovation, entrepreneurship and creativity

• Life-long learning
• Electronic communication tools
• Leading up, down and across organisations
• Building multidisciplinary teams
• Balancing research, teaching, coaching and engagement with industry and
government
• Engagement with community
• Engagement with the international profession

READINGS:
Aioanei, I. 2006 ‘Leadership in Romania’ Journal of Organizational Change
Management 19(6): 705-712
Bouwhuis, S. 2007 ‘Leadership Harvard Style’ The Australian Journal of Public
Administration, 66(4): 507–511
Brooks, S. 2008 ‘Are Public Leaders up to Standard?’ CSL leadership review,
www.csl.uoguelf.ca
Goleman, Daniel. 1998 “What Makes a Leader.” Harvard Business Review, November-
December, pages 93-102.
Rock, D & Schwartz, J. The neuroscience of leadership, Strategy and Business, Issue 43,
Summer.
 49

TOPIC 5: PERFORMANCE MANAGEMENT

Generally when we speak of performance management it is directed at managing the

output of employees. However, performance management applies to all levels and
activities of the organisation and its aim is to improve the effectiveness of each of
these in line with organisational strategies and goals:

Organization
Dpartments (computer support, administration, sales, etc.)
Pprocesses (billing, budgeting, product development, financial management, etc.)
Programs (implementing new policies and procedures; or, delivery of services to a
community for example)
Products or services to internal or external customers
Projects (automating the billing process, moving to a new building, etc.)
teams or groups organized to accomplish a result for internal or external customers

The performance appraisal system would be used to ensure that all contributions to
organisational effort are accounted for. For individual workers the appraisal system
should:

• Align individual and team objectives with business initiatives

• Facilitate communication and feedback between managers and staff
• Ensure training and development will be focused and relevant

Performance measurement is an important component of merit based systems which

recognize and reward high performance.

PERFORMANCE MANAGEMENT IN THE PUBLIC SECTOR

Because of the responsibility the public sector has to citizens in terms of delivery of
the government’s agenda, performance management is vital. By evaluating successes
and failures in the sector the performance management system strives to improve
effectiveness and accountability for the use of public money and resources. That said,
it is common for most nations to have their public sector criticised for inefficiency
and poor performance. It is one of the key reasons for the massive restructuring and
reform of the public sector in most nations over the past 20 years. Much of this has
entailed the incorporation of private sector management principles into the public
sector. A key import has been performance management and evaluation systems.

International Perspectives on Performance management

As described above, most governments emphasise public sector performance because
of concerns that it is not working well. In the US the concern is that it is inefficient
and spends too much on the wrong things. The chart below demonstrates the findings
of a national survey of American citizens on government spending.
 50

In the UK there is a concern that there are gaps in government services which have
been caused by privatisation and contracting out. Recent government policies have
emphasised taking a joined up approach by government to communicate with and to
coordinate the various service providers.

Measuring Performance
1. Performance is measured at two levels:
o at Organisational Level
o at individual level
2. Performance management is the process through which managers are
congruent with the organisation’s goals
3. Performance appraisal is an audit which can be done at organisational or
individual levels
4. It is dependent on having appropriate measures

Establishing Performance Indicators

Given that the public sector has been criticised for inefficiency it is not surprising that
performance indicators in many countries have emphasised throughput. In other
words for a given input many public organisations are interested in increasing output.
How much goes through the system is often taken as a measure of productivity. For
instance in Australia, during the 1990s, nurse-patient ratios were increased so that
nurses were made more ‘productive’ because they were allocated more patients than
in the past. However this measure of productivity had poor quality results including
patients being re-admitted to hospital and increased recovery times. Similarly,
student-teacher ratios were also increased to become more efficient. This meant larger
classroom sizes. Not surprisingly the results showed themselves in poor literacy and
numeracy rates amongst students.

These criteria are drawn from a manufacturing model of productivity. They are
difficult to transport to other industries – particularly human industries where ratios of
input to output depend so critically on the quality of care of human input.

Benchmarking is another way of setting performance indicators. It relies on making a

comparison against either a specific standard or a similar organisation. There are
many types of benchmarking but Trosa and Williams (1995) have identified three
main approaches:

• Standards benchmarking – setting a standard of performance which an effective

 51

organization could be expected to achieve;

• Results benchmarking – comparing the performance of a number of
organizations providing a similar service; and
• Process benchmarking – undertaking a detailed examination within a group of
organizations of the processes which produce a particular output, with a view to
understanding the reasons for variations in performance and incorporating best
practice.

PERFORMANCE INDICATORS
(source: http://www.adb.org/Documents/Events/2005/Leadership-in-Water-Governance/paper-Arriens-Pascua-Flor.pdf)

Indicators are standards used to measure achievement of an organization. They are

measures of change or results brought about by an activity or series of actions. A
performance indicator is a guide to show how well organizations are doing in meeting
their goals and objectives. Indicators are pointers, numbers, facts, opinions or
perceptions that measure organizational performance.

Performance indicators should be specific, measurable, achievable, realistic, time-

bound and objective. In other words they will be measured the same no matter who
makes the measurements. They must have a verifiable and quantifiable meaning that
is provable or demonstrable and capable of being measured by metrics or some means
of measurement. The most important qualities of a performance indicator are validity
and reliability. Validity means that the information that indicators provide must be
close to the reality they are measuring while reliability means that indicators used
must be accurate and consistent. An indicator is reliable if multiple uses of the same
instrument (such as interview, survey, etc) yield the same or similar results. The most
common indicators measure effectiveness and efficiency.

Performance indicators may be qualitative or quantitative. Quantitative indicators are

defined as measures of quantity, such as number of river basin organizations
established or the number of water resources development plans formulated.
Quantitative indicators deal with outputs and are easier understood and defined. It is
commonly accepted that quantitative indicators are measurements that stick to cold
and hard facts and rigid numbers, thus, there is no question as to their validity, truth
and objectivity. On the other hand, qualitative indicators can be defined as people’s
judgment and perception about a certain subject matter. Qualitative indicators are seen
as subjective, unreliable and difficult to verify. They are more difficult to ascertain
because these type of indicators probe into the whys of situations and contexts of
action as well as perception of people. Nevertheless, they are valuable in the
evaluation process because they seek to measure the impact of an action or initiative
and are therefore used to evaluate long term effects and benefits. When properly
developed and interpreted, qualitative indicators can play a vital and significant role
in identifying constraints to implementation of actions or initiatives and obstacles to
success, which normally is not readily apparent.

Finks Criteria
Fink advanced addressed the issue of performance measurement of human serviceyby
suggesting that performance indicators should be built around positive behaviours that
demonstrate commitment to each of the tasks performed. He identified three groups of
behaviours to measure: identification with the work, identification with the work
 52

group and identification with the organisation. His performance indicators are listed
below.

Consider the criteria above

• What do you think of these criteria as indicators of good performance?
• How might you measure these?

1. RATING ERRORS
The graph illustrates the typical error you get when forms are marked from 1-4
(leniency or severity because there is no middle figure and you are forced to choose),
1-5 (central tendency because you tend to choose either side of the 3)

2. HALO EFFECT
(source: http://www.letsstartthinking.org/HR/performance-appraisal-rating-errors.asp)

The Halo effect occurs when a rater attaches too much significance to a single factor
of performance and gives similar ratings on other performance elements. Thus overall
evaluation is significantly influenced by a single factor. Such a perception undermines
the importance of other elements and leads to an unbalanced performance assessment
of the individual.

For example a manager rates a worker very high on quality because of her immaculate
attention to details and lack of defects in her work. Then assuming the individual to be
an overall high performer based on the quality of her work output, the manager rates
her very high on efficiency, responsibility, punctuality, etc. without taking an
objective look at her performance in these areas.

Supervisor Bias
 53

People differ in their tendency to evaluate people or performance. Some supervisors

are very strict or conservative in their ratings and generally give low scores in their
evaluations. This tendency may make high performers attain somewhat average
ranking and average performers appear as poor performers. Raters with such tendency
are known to have a strictness bias.

On the other hand, some supervisors demonstrate a leniency bias and rate their
subordinates very liberally which may make even average performers seem like star
performers, attaining very high performance scores. Others "play safe" by rating
everyone around the average. This may be done to avoid the necessity to justify
scoring across the two extremes as some systems expect managers to specify
additional comments as they give too high or too low ratings to employees. This
rating error is known as the central tendency bias. Of course some rating instruments
leave the supervisor little choice but to cluster his or her ratings into a particular
leniency, severity or central tendency zone.

Many supervisors have been promoted from positions similar to those held by their
staff. A rating bias may occur when a supervisor subconsciously looks for traits and
characteristics which are reminiscent of when the supervisor held that job. This leads
to a supervisor favouring someone with the same demographics and performance as
him or herself. Similarly, personal beliefs, attitudes, assumptions, experiences,
preferences and lack of understanding about a person, class or a phenomenon can lead
to an unfair evaluation which is off from reality. We all suffer from these
shortcomings, consciously or unconsciously, while making everyday judgments about
people, things, events etc.

It is especially important to be aware and sensitive to possible biases, prejudices and

stereotypes while making judgments about employee performance. While many of the
prejudices operate covertly and unconsciously, others strike us through conscious
thoughts and feelings. Understanding common biases and being on guard while
appraising can significantly raise the objectivity of the evaluation process.

Examples of personal bias include a bias against a race, ethnicity, religion, age, sex,
or assuming that certain type or class of people are not suitable to perform a specific
job or function etc. If you believe for instance, that women are emotional and men are
rational, then chances are that you would not employ a female worker for a role that
involves making objective decisions. Similarly, an assumption that young workers are
faster and more efficient than old workers would make it more probable to give a
higher efficiency rating to a younger worker than an old worker.

WHEN JOBS CHANGE BUT MEASURES DO NOT

In 1989 Ann Hopkins took a case against KMPG for failing to promote her as a
partner. The case remains as an important indication of how a poor performance
evaluation system can lead to enormous organisational risk. In this case Ann was
ranked against criteria which were not part of her job.

In that case, Ann had done well in her job but failed to gain a promotion because she
she was too aggressive and was told she had to learn to walk, talk, and dress in a more
feminine manner. In a landmark decision – Hopkins v. Price Waterhouse (1989) – the
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Supreme Court found that "we are beyond the day when an employer could evaluate
employees by assuming or insisting that they matched the stereotype associated with
their group [and]… disparate treatment of men and women resulting from sex
stereotypes.

Basically the court found that the management team which appraised Ann did not rely
on the criteria from her actual job but instead used criteria based on their stereotyped
vision of what a woman accountant should wear and how she should behave. In the
diagram below Ann’s actual job is represented by the circle to the left: what should be
measured but is not. Instead a large part of the appraisal has occurred on criteria
which had nothing to do with her job and thus constitutes a factors which contaminate
a proper appraisal of her performance in the job. Only a small part of their appraisal
fell into the valid areas of what should be measured.

FEEDBACK AND COUNSELLING

A key element of a good performance appraisal system is feedback to individuals on

their performance. Feedback is generally informal and involves you and your staff
member exchanging information in a broad range of situations about how you can
best work together to achieve the goals of your organisation. Feedback requires you to
communicate clearly to the person what is expected in terms of work performance and
conduct and regularly inform them of the extent to which they are meeting those
expectations. Feedback ranges from oral comments on a person's performance to
written reports, such as probation, performance appraisal or referee reports.

Counselling is a formal process, initiated when a person has not responded to advice
and assistance you have provided on a less formal basis, and will usually involve your
taking the following steps:

• advise the person in advance that a discussion about his or her work
performance or conduct is to be held at a given time and place, with sufficient
notice to enable you both to come to the discussion prepared;
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• arrange for the meeting to be held in private, although a support person for the
person being counselled may be present, as well as someone you may have
asked to attend as an observer; and
• keep a brief record of the meetingthis could be a diary note.

TEAMS AND PERFORMANCE REVIEW

Reviewing teams is not well done in most organisations because it often clashes with
the goals of the individual review. Most organisations pit individuals against each
other to some extent in the pursuit of productivity incentives and so forth. This can
lead to competitive behaviours amongst members of teams rather than in sharing
teamwork.

Team rewards can also dilute the performance of those who would otherwise be
motivated to strive for extra – a team can encourage the lowest common denominator.
Teams have also been used in managerial restructuring as a way of keeping wages
down and career path expectations low.

Readings:
Christensen, M. & Yoshimi, H. 2003 ‘Public Sector Performance Reporting: New
Public Management and Contingency Theory Insights’ Government Auditing
Review Vol 10, 71-83
Jarrar, Y. & Schiuma, G. 2007 ‘Measuring performance in the public sector:
challenges and trends’ Measuring Business Excellence, 11(4): 4-8
Mabey, C. & Ramirez, M. 2004 A survey of management training & development in
the United Kingdom, France, Germany, Spain, Denmark, Norway & Romania,
Chartered Management Institute (pub) London
Radnor, Z. & McGuire, M. 2004 ‘Performance management in the public sector: fact
or fiction?’ International Journal of Productivity and Performance Management
53(3): 245-260