College of Education and Behavioral Studies

Department of Educational Planning and Management

Graduate Program of Educational Leadership and Management
Course Title: Human Resource Management and Supervision
Article Review
HRM and the New Public Management
By Stephen Bach
And
Ian Kessler
Submitted to Dr. Demoz

Group Members

S.No Name ID No
1 Ashenafi Getachew GSE/5228/14
2 Misrak Fikre GSE/2720/14
3 Ruth Diriba GSE/4356/14
4 Samrawit Teshale GSE/0768/14
5 Solomon Wolelaw GSE/2196/14
6 Tamirat Mekonnen GSE/2753/14

June, 2022
Addis Ababa, Ethiopia
 1. Introduction

As a field of study the concept of human resource is developed though its growth in the public sector
is restricted. This development limitation is due to its nature of political and fiscal accountability and
the distinct principles the public sector follows. This logical gap becomes unfortunate and hindered
innovation in the public sector people management approach. As a result, a politically sensitive
reform was needed. The purpose of this chapter is to explore the new public management approach
and the other models implemented before and after it in line with their organizational logic,
prescription, policy, and practice.

2. Context

To put the concept of public sector human resource management in to context, two of its faces are
presented accordingly. The first one is about the distinct nature of the public sector which affects the
work force. In this sector government is the employer and it is common to see direct and indirect
intervention to address the aspects of public values unlike the private sectors. This resulted high
public expenditure increment in the last two decades. Moreover, in Europe the situation was
aggravated by the demand of high quality service and EU‟s maximum 3% budget deficit ultimatum.
Also the trading and non-trading organizations existence in the public sector is another factor to be
considered by the human resource managers. The other vital context is the demand of transparency
and ensuring accountability to the wider public is key and has major political implication.

The second face is the work force characteristics of the public sector. The first one is it is highly
labor intensive and commonly accounts 50-70% of the labor force in the developed world. The other
is the increased number of women in the work force. High part-time worker involvement is also
another feature to be accounted. Besides, the occupational composition and the level of educational
qualification attainment is higher than the private sector. Finally, the motivating factors in the public
sector is unique. Mainly they are categorized as knights (for the honest and committed workers) and
knave (for those are not committed). This features encouraged the development of public sector
employment management.

3. Traditional approach

This approach was introduced after the 2nd world war period and continued until the 1980s. The
organizational logic of this approach is hierarchical and bureaucratic with the presence of
standardized rules enabled government policies to be implemented in a uniform manner with the
intention of ensuring political accountability, preventing corruption, and facilitating equality of
access for all citizens. There are two approaches: - „sovereign employer‟ and the „model employer‟
approach.
The sovereign employer approach: is established on state control in shaping HR practice in the
public sector. Under such approach collective bargaining is often absent or modified. France is an
illustration of the absent form of this approach where the government contains ultimate authority to
solely determine pay and working conditions for established civil servants. On the other hand
Germany is an example of a modified sovereign employer model with a division between public
employees with, and those civil servants without, collective bargaining rights.

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The model employer approach is based on the state setting an example to other employers on how
employees should be treated. UK provides an example of such an approach and it is reflected in
tangible benefits including high levels of job security, good pensions and sick-leave benefits, and a
willingness to recognize trade unions.

However, the difference between the sovereign and model employer approaches should not vague
shared features of public administration which is having a lasting emphasis on „fairness‟ which
emanates from the need for public accountability and the high degree of morality required of public
servants. Yet, the economic and political shift after the mid-1970s onward questioned the capability
of the traditional workforce management approach.

4. The New Public Management Approach

4.1.Why NPM reform is needed?

The Public sector work force Management reform has been caused by a number of pressures that
have been an influencing agent. First, fiscal and social pressures on public services have arisen from
the ageing of the population and technological advancement. Besides, the quality of public service
provisions were compromised and failed to meet citizens‟ expectations.
The second factor is the ideological commitment or a belief in free markets and a small state. Rather
than planning and regulating business and people's lives, government's job is to get out of the way
and fix the employees‟ inefficient (knaves) working behavior enhanced by the bureaucratic system.
These two major pressures and other supplementary factors force the government to come up with
the need to reform a politically sensitive agenda.
4.2.The new public management
This approach is organized based on organizational market logic where competition is highly
needed. The public sector in general set a policy prescriptions to solve the aforementioned pressures
which ultimately have HRM implications. These prescriptions are: Hands-on professional
management in the public sector; Private sector styles of management; Disaggregation of units;
Greater competition in service provision; Tighter and more efficient use of resources; Explicit
standards and measures of performance; and Emphasis on output controls.
4.2.1. Management
The management aspect of NPM is characterized as a “business like” approach that empowers the
managers to consider their specific organizational setting and changing the employment practice.
These practices include tighter control of staff, performance related pay, and forceful management of
issues like absenteeism. This change affects the career system of managers as well as staffs to the
extent growing the role of senior managers and chief executives often with private sector experience.
These managers are hired in a contractual term with high salary to serve as a change agent. However
these managers become increasingly reliant on professionals to achieve their goals.
4.2.2. Changing Organizational Structures

The fundamental structural change made during the NPM was the localization of HR practices to
allow managers alter job roles and develop flexibility. This change creates competition between
service units designed to produce a new operational dynamic. These characteristics are revealed
through a program of privatizing nationalized industries which led to cost minimization and

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substantial job losses at the same time. Although pay determination through Collective bargaining
remained, it becomes more decentralized, and the ability of trade union members is diminished. The
other way the government worked to stimulate competition via the creation of internal markets
which separated the purchasers of the service from the providers. The government also created
separate agencies, ministerial bodies under contractual agreement with greater financial and HR
management autonomy. However the development of local HR practice has been inadequate due to
the limited expertise of HR specialists and unwillingness of managers to exercise their HR
discretion.
4.2.3. Resource Utilization

The basic aspect of NPM regarding resource utilization is through cost minimization approach. This
led to work force reduction particularly in central government which created job insecurity unlike
the traditional approach. The HR focused on efficient utilization of resource as the least possible
public expenditure.
5. Beyond the NPM

The new public management approach has become a subject of criticism, mainly, two comments
were raised up front. The first is intent related. By emphasizing on market and competition the NPM
compromised the very purpose of public sector services which has constitutional, legal, cultural, and
leadership essence for the greater public value. The second is operational aspect criticism. The NPM
undermined the people who work in the public sector by considering them as a bureaucratic problem
that must be reformed. This reflect a growing recognition that the social values inherent in public
services may not be adequately addressed by the economic efficiency calculus of market.

The public sector pleaded the dawn of new management Era so as to alleviate the aforementioned
criticisms. It follows a network based organizational logic which emphasizes on values valued by the
citizenry. Its basic view shifted from government to governance that focuses on who makes public
decisions and how are they implemented. Besides, it allows wider range of agencies and
stakeholders both in and out of public sector to deliver service through networking.

5.1.Management of beyond NPm

The central activity of public managers is the achievement of the broader governmental goal of
public value creation through collaborative network form of governance. These fundamental changes
affected how the human resources are supposed to be managed to fit the new public management
approach. The management deals with different stakeholders including the work force. They are
expected to twine their workforce to respond to citizen choice and soliciting trust via quality service
delivery.

5.2.Features of post NPM Era

Post NPM era influences the human resource management aspect and implicates three basic features
that has consequence on people management. Primarily, it intends to indoctrinate employees the
need to serve by delivering user centered services. It advocates not individual citizen entitlements
rather collective civic obligation where citizen have both right and obligation for the quality of
service they get from the government. This reduces the violence customers inflict on public sector
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workers when dissatisfied. In countries like Uk public sectors provide „one stop shop‟ service
through on-line accessories which is a sign of big shift from producer to customer sensitive culture.
This service type requires different skills that forced employees to deal with a range of demands
resulted a new working environment.

The second feature is partnership which favors mutuality over adversarial. Government attempts to
ally itself with professionals, trade unions, and private sectors in search of pragmatic, mixed
approach where „what works best is used‟ at least at workplace level. Moreover, „Joined up‟
approach within government organizations is introduced to present a single face to the people and to
operate as a single unit on multiple yet interrelated problems. It also embraces independent and
private sectors. This challenges HR managers to integrate the employees‟ various payment and work
culture difference that varies as result of their sector difference. Therefore, team up national
employment relations institutions to develop a framework that help integrate the workforce related
decisions like payment is vital HRM activity.

The third feature is performance. To ensure higher-quality public services, not only efficient but also
effective use of resources is highly required. These demands need developing employees‟ skill
through creation of clear career pathway and performance appraisal which negate the NPM cost
minimization approach. It also assumes employees will develop their careers out of heroic act.
Besides, applying performance and audit framework which results tension and pressure on the
employees. These somehow resulted ongoing recruitment and retention difficulties to the public
sector organizations.

6. Conclusion

The public sector has been passing through a continuous reform programs which affects human
resource management aspects. The traditional model of HRM is based on hierarchical organization
logic which gives no room for managers to change and did not create competition among employees.
The emergence of NPM demanded employees to marketize the public sector through competition.
This resulted work overload on employees and increased efficiency. However, the workforce
perceived this as a more intensive work practice, tighter control, and the weakening of the union
influence.

After the emergence of beyond NPM era, it has been notified that the HR practice has to both
enhance efficient delivery of public services and consider the constitutional values which assures the
existence of public sector. Therefore, the traditional bureaucratic model has to be reinstated into the
system so as to give more emphasis to the workplace. This development is expected to map the HR
practice the future needs.