PA 201 Chapter 5 - Managing the People.pdf

Managing the People

1. CHAPTER 5
PA 201 - THEOR Y & PRACTI C E IN
PUBLIC ADMIN I S T R A T IO N
MANAGING THE PEOPLE:
GOVERNMENT EMPLOYMENT,
WAGE POLICY AND PERSONNEL
ADMINISTRATION

2. EVERY MAN IS GOOD AT SOMETHING;
IT IS THE TASK OF THE CHIEF TO FIND IT.

-MALAY PROVERB

3. I. Employment Policy
II. Compensation Policy
III. Personnel Management
IV. Fighting Discrimination and Promoting
Inclusiveness
V. Annex: Government Personnel Policy and
Management in the United States
MANAGING THE PEOPLE: GOVERNMENT EMPLOYMENT, WAGE POLICY
AND PERSONNEL ADMINISTRATION

4. I. EMPLOYMENT POLICY
OBJECTIVE OF GOVERNMENT
PERSONNEL POLICY:
achieve a workforce of the right
size and with the skills,
motivation and compensation
needed for responsive and
efficient administration.
GOVERNMENT EMPLOYMENT – A GLOBAL SNAPSHOT
THE “RIGHT SIZE” OF GOVERNMENT EMPLOYMENT
Factors determine the size of government employment:
1.Country’s wealth. Economic growth has historically
led to increasing government employment.
2.Wage level. Higher wages are generally associated
with larger government employment, except in rich
countries.
3.Population size. A larger population is associated
with smaller relative government employment in rich
countries, but not elsewhere.
•There is no hard and fast rule to
determine how many employees
a government should have, any
more than there is a rule to
determine what the government
should do.
•Understaffing and overstaffing.

5. BENEFITS
COSTS
I. EMPLOYMENT POLICY
GETTING TO THE RIGHT SIZE:
APPROACHES TO
RETRENCHMENT
Retrenchment (downsizing) –
socially, politically and humanly
costly, particularly when
unemployment is high and
alternative job opportunities are
scarce. However, the social costs
can be cushioned by appropriate
provisions, and the political costs
are not inevitable
The Benefits and Costs of Retrenchment
1.Reducing the skill level of the
government workforce
2.Recurrence of overstaffing
3.Long-term risks: demoralization of
employees, lower quality of public
services and social conflict
a reduction in government
workforce can provide the
savings to raise salaries for
the remaining employees,
reduce the fiscal deficit
raise morale and
stimulate the
performance of the
remaining
employees
raise public sector
productivity and
the quality of
public services.

6. EQUITY
•A living wage is a prerequisite
of good compensation policy.
•Reducing real wages below
their level of adequacy sets
in motion a spiral of
demotivation and
underperformance.
THE GUIDING PRINCIPLES OF COMPENSATION:
COMPARABILITY AND EQUITY
• Make their compensation comparable to that for
equivalent skills in the private sector
•Comparable does not mean equal.
•Equal Pay for Equal Work,
Performed Under the Same
Conditions
•This principle is morally and
economically obvious but is rarely
fully implemented in practice.
II. COMPENSATION POLICY
A LIVING WAGE: THE KEY
LESSON OF INTERNATIONAL
EXPERIENCE
COMPARABILITY

7. NON-WAGE BENEFITS
SALARY STRUCTURE AND THE
PRESERVATION OF INCENTIVES
POLICY ON PROMOTIONS, RAISES AND BONUSES
A. Promotion
B. Salary Raises
II. COMPENSATION POLICY
•Government - pensions, health
insurance and family dependency
allowances
•Others – Housing, education,
health care, food subsidies
•Most non-wage benefits are
inefficient and can weaken work
motivation and distort incentives
•In-kind benefits are especially
difficult to uncover, monitor and
control
Structure
-too unequal demotivates lower-level
employees
- too “fat” demotivates higher-level
employees
Compression - measured by
compression ratio
•Based on a number of factors, including primarily “merit”
(i.e., qualifications, skills, performance) and seniority (as
a proxy for experience and good judgment).
•Combination of merit and seniority
Seniority-based promotion system
Merit-based promotion system
•Salary increases within a grade
normal and are withheld only as
punishment.
•Employees quickly reach the top
step - stagnation and
demoralization

8. POLICIES TO FOSTER GOOD PERFORMANCE
Performance Pay: Linking Compensation
to Employee Performance
B. Non-Monetary Incentives
C. Grade Inflation and “Band-Aids”: The Worst
Response to Inadequate Incentives
II. COMPENSATION POLICY
•All pay should be for performance –
whether the performance consists of
protecting government moneys and
assets, or applying regulations, or
behaving with integrity or producing
better results.
•Merit-based annual bonuses -
clear definition of “results” and their
appropriate measurement; the
bonuses are large enough; and are
given only to the highest performers.
•Monetary bonuses - introduce an
element of political control over the
civil servants
•Government employees tend to have a stronger public
service ethos
•Sources of motivation other than money - prevalent
ethical values, the mission of the organization, the
Substance of the job, and the working conditions.
•Recognition by superiors and colleagues’ esteem
•Non-monetary incentives - Awards and recognition,
Career development opportunities, Postretirement
opportunities
•Carry all the disadvantages of
inadequate incentives and in addition
diminish the capacity of the government
to manage its human resources well

9. NON-WAGE BENEFITS
II. COMPENSATION POLICY
MOBILITY: AN OPPORTUNITY
AND A RISK
PRIVATE EXECUTIVE COMPENSATION: A
NECESSARY DIGRESSION
▪Mobility - ministries helps avoid
stagnation, can reduce the need for
retrenchment and can be a welcome
source of new challenges and
improved prospects for higher
positions.
▪Frequent job rotation and arbitrary
transfers - poor performance in
constantly changing jobs, lower
morale and disrupted career
development and family life.
▪Job rotation and transfers must be
based on clear and transparent
criteria.
•Executive compensation in private
corporations has increased inordinately.
Result of two factors:
1.Boards of directors tend to set the
compensation of their top executives at the
same or higher level than the average for top
executives in comparable companies.
2.Executive compensation is in part
made to relate to the performance
of the company stock; even
accepting the proposition that the
stock price depends mainly on the
skills and performance of the CEO
and other senior executives.

10. III. PERSONNEL
MANAGEMENT
THE OBJECTIVES OF PERSONNEL
MANAGEMENT
•Recruit the best people suitable for the jobs at hand;
•Motivate employees to achieve their highest potential;
•ensure that staff are utilized effectively;
•Manage the process of recruitment, advancement,
discipline and retirement;
•Monitor and control the growth of the workforce.

11. III. PERSONNEL MANAGEMENT
ORGANIZATIONAL
ARRANGEMENTS FOR
PERSONNEL MANAGEMENT
JOB EVALUATION AND GRADING
•Centralized systems - one
central entity handles all
personnel matters on behalf of
the entire government;
•Decentralized systems - each
government ministry or agency
handles its own personnel
recruitment, promotion and
terms of employment
Two approaches to the ranking of government jobs
1.Rank-in-person approach - the person’s rank is
independent of specific duties or organizational location; the
disadvantage is that this gives undue weight to seniority and
suffers from inbreeding e.g., a general is a general,
2.Rank-in-job approach- it is the job that is ranked; permits
recruitment through lateral entry and enables more efficient
younger employees to leapfrog in rank over more senior
employees, but hampers staff mobility.

12. C. Inclusiveness
III. PERSONNEL MANAGEMENT
THE GUIDING PRINCIPLES:
MERIT AND INCLUSIVENESS
A. THE MERIT PRINCIPLE
B. Cases in Point
•In China - a system of competitive examinations
for government officials (“mandarins”) was
instituted during the Han dynasty and lasted two
millennia
•In ancient Rome - merit was assessed more by
subjective judgments of the individual’s abilities
than by formal qualifications
Recruitment, advancement,
rewards and sanctions in the
public service should be
based in large part on
individual merit.
•Equal opportunity laws - ban employment
discrimination against women, minorities
and the disabled.
•Aggressive enforcement is needed, as well
as addressing the socio-cultural structural
roots of discrimination.
•Social peace or group equity and the promotion of a more
inclusive society may justify provisions for “affirmative
action”,

13. NON-WAGE BENEFITS
SALARY STRUCTURE AND THE PRESERVATION OF
INCENTIVES
III. PERSONNEL MANAGEMENT
RECRUITMENT PROCEDURES
A. The Recruitment Process
1.Identify the post to be filled and draft
the job description and
specifications
2.Publicize the vacancy, allowing for a
reasonable period of time to apply
and providing prospective applicants
with all necessary information
3.Assessing the candidates
4.Selecting the most suitable one.
Open competition - best way to assure
merit-based personnel recruitment.
•Permanent and full-time basis - indefinite-
duration contracts; Normally, a probationary period
of service needs to be satisfactorily completed first
•Fixed-term and part-time contracts - enable
ministries to use their budget effectively, respond to
changes in needs for labor and meet demands from
employees for flexible arrangements suited to their
circumstances
Whether the contract is permanent, fixed-term or
part-time, the individual is a government employee,
with the responsibilities and rights attached to this
status.
B. Types of Appointment

14. NON-WAGE BENEFITS
A. Promotion and Salary Raises
PROMOTION PROCEDURES
III. PERSONNEL MANAGEMENT
•Advancement -progression to the
next salary step within a grade,
and promotion to the next higher
grade.
•When the salary structure has a
large number of grades, the only
way to raise the salary of
employees who have reached the
top of the salary scale in their
grade is to promote them to a
higher grade.
•“Fatter” organizational structures
and “broad-banding
•If employees keep being promoted to jobs
of greater responsibility so long as they just
perform well in their current job
•Promotions do tend to be awarded on the
basis of good performance in the current
grade
•It is essential that recommendations for
promotion be reviewed and endorsed by a
group or persons other than the immediate
superiors.
B. The Peter Principle

15. NON-WAGE BENEFITS
SALARY STRUCTURE AND THE PRESERVATION OF
INCENTIVES
DISCIPLINE AND PENALTIES APPRAISAL PROCEDURES
III. PERSONNEL MANAGEMENT
A.General Considerations - Guide individual employees toward making
an effective contribution to the work of the organization while at the
same time meeting their personal goals.
•Performance reviews - be specific to the job; measure only
observable behavior
B. Appraisal and Feedback
•Person-related appraisal - compares the employee against other
employees; easy to design and administer,
•Goal-related appraisal - assesses employee performance against
previously established standards;
C.Feedback - Upward feedback, i.e., confidential comments by
subordinates on the performance of their managers.
•Expanded to “360-degree feedback”,
•Measures - oral to written reprimand
to more serious action –
progressively, denial of salary raise,
suspension, demotion and finally
dismissal.
•Disciplinary regulations - be
covered in appropriate detail in a
manual drafted to ensure clarity, and
include a definition of the types of
misconduct and the procedures for
minor and major penalties
•Disciplinary cases - supervisor’s
report; the action taken by the
competent authority; decision on the
penalty and the issue of notice
informing the employee; and appeal
procedures.
D.Managing Poor Performers - four successive
stages of managing unsatisfactory performance:
informal counseling; formal counseling with a
performance improvement plan; following up on
the improvement plan; sanctions.

16. NON-WAGE BENEFITS
SALARY STRUCTURE AND THE PRESERVATION OF
INCENTIVES
UNIONIZATION IN GOVERNMENT
III. PERSONNEL MANAGEMENT
A.Should There Be Unions in the
Public Sector?
The right to form and join unions is inherent
in the right of association that public
employees have, as any other citizen.
•Argument: there is no need for unions
of government employees.
The solution to these problems would not be
to eliminate the public sector unions but to
change the system of political financing.
B. Collective Bargaining in the Public Sector
•3 types of arrangements for collective bargaining
1. Direct negotiation between government and union representatives
2. Determination of salary and allowances
3. Joint decisions on both private and public wages
Bargaining - broad in scope, to allow negotiators the flexibility to trade
wage raises for improvement in work conditions, or offer other
concessions in exchange for higher productivity
C. TRAINING
•Employees must obtain new skills to respond to changes in work
and opportunities. Appropriate training – to refresh existing skills
and to impart new ones – is therefore a key aspect of good
personnel management.
•Training by government - take place through a
central entity and not by specialized sector
institutes

17. IV. FIGHTING DISCRIMINATION
AND PROMOTING
INCLUSIVENESS

18. NON-WAGE BENEFITS
SALARY STRUCTURE AND THE PRESERVATION OF
INCENTIVES
RACIAL AND ETHNIC DISCRIMINATION
DISCRIMINATION BASED ON RELIGION, NATIONAL ORIGIN, AGE,
CASTE, SEXUAL IDENTITY
IV. FIGHTING DISCRIMINATION AND
PROMOTING INCLUSIVENESS
•Equal employment opportunity and
prohibition of racial discrimination are
part of human resource management
in all developed countries and most
developing countries
•Societies with a heritage of
discrimination, “affirmative actions”
•The objective must be to uplift the
conditions and capacity of the
previously disadvantaged group and
not to put down or exclude individuals
of any other group.
•Religious discrimination - a delicate balance is
needed between respecting government
employees’ freedom to exercise religion and the
requirements of the workplace.
•Nationality - overlaps with religion and ethnicity,
there can be a strong social backlash to persons of
different culture
•Age discrimination has been on the wane
•Caste discrimination is a centuries-old and
pernicious problem
•Discrimination based on sexual orientation and
gender identity has been pervasive throughout
history and almost everywhere

19. IV. FIGHTING DISCRIMINATION AND
PROMOTING INCLUSIVENESS
GENDER DISCRIMINATION AND
SEXUAL HARASSMENT
A.The Salary Gap
•Salary inequalities between men and
women employees are persistent
•Salary gender gap is widest in
developing countries
•Unwanted sexual advances in the workplace were
common and tolerated until recently, but have
diminished sharply in developed countries as a result
of changes in cultural attitudes and explicit legislation
•Devised procedures to deal with complaints of sexual
harassment and discrimination.
•Not enough to have a policy against sexual harassment
B. Sexual Harassment
•In Australia, the principle of equal pay for
equal work was not adopted until 1972.
•New Zealand legally codified in 1934 and
1945 different wage rates for men and
women
•Britain explicitly countenanced gender-
based pay discrimination until 1975
C. CASES IN POINT: GENDER DISCRIMINATION IN
DEVELOPED COUNTRIES

20. V. GOVERNMENT PERSONNEL POLICY AND
MANAGEMENT IN THE UNITED STATES
ARE FEDERAL EMPLOYEES OVER-
OR UNDER-PAID?
•The Federal Salary Reform Act
of 1962 established the principle
that federal employee salaries
should be comparable to those
of employees performing
equivalent jobs in the private
sector.
GOVERNMENT EMPLOYMENT
•Compared to other developed countries, general
government employment in the United States is
somewhat lower – a reflection of US structural
characteristics, historical roots, and cultural and political
preferences
•The largest employer in the federal government is the
Defense Department, with over one-third of the civilian
workforce – not counting military personnel.
FEDERAL EMPLOYEE COMPENSATION
•Nominal salaries thus increased by about 40%
over the last two decades but, after
accounting for inflation, they declined by 5%.

21. NON-WAGE BENEFITS
SALARY STRUCTURE AND THE PRESERVATION OF
INCENTIVES
V. GOVERNMENT PERSONNEL POLICY
AND MANAGEMENT IN THE UNITED STATES
THE CURRENT SYSTEM
THE DEVELOPMENT OF THE US PERSONNEL MANAGEMENT SYSTEM
The Main Stages
•“Nature does not make jumps”, as the
Romans said, and neither does
institutional development.
•There five major “stages” in US
administrative history:
a. Citizen-Servant” Stage, - government
service was seen as a civic duty of men of
means and intellect,
b. Patronage/Populism” stage - service-by-
elite was replaced by service-for-loyalty.
c. Transition to Professionalism”, - The
patronage system came under increasing
strain as the economy expanded and the role
of government along with it, d“merit system”,
•“Moving toward results - The merit system
reached full fruition with the 1978 Civil
Service Reform Act.
Main principles of the merit system (1978 law):
•Recruitment of qualified individuals from all segments of society,
•Fair and equitable treatment of all employees/applicants handicap;
•Equal pay for work of equal value and incentives for excellent
performance;
•High standards of employee integrity, conduct and concern for the
public interest;
•Efficient and effective use of employees;
•Prohibition of practices such as arbitrary action, personal favoritism
Prohibition of employees using their position to influence elections.
Organizational Arrangements
•Office of Personnel Management (OPM); Merit Systems Protection
Board (MSPB); Equal Employment Opportunity Commission (EEOC).
Moving Toward Results
•Government human resource management
– an effort to mesh the emphasis on
employees’ qualifications with attention to
the results of their activities.

22. END OF PRESENTATION
CHAPTER 5
MANAGING THE PEOPLE :
GOVERNMENT EMPLOYMENT, WAGE
POLICY AND PERSONNEL
ADMINISTRATION