Reinventing Public Personnel Administration As Strategic Human Resource Management Strategic human resource management (SHRM) is an enhancement in the effectiveness of personnel management which has developed out of pressures for change in the way organi­ zations manage human resources. It consists of common elements found in a variety of public and private employers: recognition that human resources are critical; a shift from position management to work and employees; more innovation; asset development and cost control; and a transition from E E O / A A compliance to work force diversity.

y Donald Klingner B

Strategic h u m a n r e s o u r c e m a n a g e m e n t ( S H R M ) is the purposeful resolution of h u m a n r e s o u r c e a d m i n i s t r a t i o n a n d policy issues s o as to e n h a n c e a public a g e n c y ' s effectiveness. It requires understanding how p e r s o n n e l functions interrelate in context, recognition of their importance, and commitment b y p e r s o n n e l m a n a g e r s , e m p l o y e e s , s u p e r v i s o r s a n d political leaders to w o r k together for change. This analysis will: •

define public personnel administration;

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discuss the c h a n g i n g realities that s h a p e this field;

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p r e s e n t the characteristics of S H R M ; a n d

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p r o v i d e e x a m p l e s of S H R M in practice.

Public Personnel Administration: Functions, Process, Values, and Systems

Donald Klingner is Professor and Coordinator of Doctoral Studies in the Department of Public Ad­ ministration at Florida Interna­ tional University. He serves as Director of the Clearinghouse on Workplace Drug and AIDS Policy. He has published extensively and consulted widely in public ad­ ministration and human resource management.

Public personnel m a n a g e m e n t c a n b e v i e w e d f r o m at least four p e r ­ spectives (Klingner a n d N a l b a n d i a n , 1 9 9 3 ) . First, it is the functions (plan­ ning, acquisition, d e v e l o p m e n t , a n d sanction) n e e d e d to m a n a g e h u m a n r e s o u r c e s in public agencies. Second, it is the p r o c e s s b y w h i c h public jobs are allocated (public jobs a r e scarce b e c a u s e they a r e limited b y t a x r e v e ­ nues). Third, public personnel m a n a g e m e n t is also the interaction a m o n g four f u n d a m e n t a l societal values that often conflict. Responsiveness is best e n s u r e d t h r o u g h an a p p o i n t m e n t p r o c e s s that (at the u p p e r levels of the

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b u r e a u c r a c y ) considers political o r p e r s o n a l loyalty along w i t h education a n d e x p e r i e n c e as indicators of merit. O r a p r o s p e c t i v e c o n t r a c t o r ' s s u p p o r t for a c a n d i d a t e o r elected official is u s e d as o n e criterion for a w a r d i n g c o n t r a c t s for p r o v i d i n g public services. Efficiency m e a n s that staffing deci­ sions s h o u l d b e b a s e d on ability a n d p e r f o r m a n c e rather than political loyalty. O r , b y r e d u c i n g u n n e c e s s a r y p e r s o n n e l costs, privatization a n d c o n t r a c t i n g o u t m a y p r o v i d e services m o r e cheaply. E m p l o y e e s ' individual rights are p r o t e c t e d (by the Constitution, b y m e r i t s y s t e m s , a n d possibly b y collective b a r g a i n i n g a g r e e m e n t s ) against unfair actions of g o v e r n m e n t officials, a n d especially against i n a p p r o p r i a t e p a r t i s a n political pressure. Social equity g r a n t s job p r e f e r e n c e to g r o u p s b a s e d on p r e v i o u s sacrifices (veterans) o r discrimination (minorities, w o m e n , a n d the disabled) that p r e v e n t t h e m f r o m c o m p e t i n g fairly. Finally, public personnel m a n a g e m e n t is personnel systems — the l a w s , rules, a n d regulations u s e d to e x p r e s s these abstract values in fulfill­ ing p e r s o n n e l functions. Political systems a r e designed to e n h a n c e r e s p o n ­ siveness t h r o u g h legislative o r e x e c u t i v e control o v e r hiring a n d firing decisions. C o n t r a c t i n g out m a y fall into the political s y s t e m b e c a u s e both the decision t o c o n t r a c t out, a n d the choice of c o n t r a c t o r , a r e at least partly m o t i v a t e d b y politics as well as c o n c e r n s for efficiency. Civil service systems a r e d e s i g n e d to e n h a n c e administrative efficiency a n d e m p l o y e e rights b y staffing public agencies rationally a n d treating e m p l o y e e s fairly. This m e a n s selecting a n d p r o m o t i n g e m p l o y e e s on merit, p r o v i d i n g pensions a n d health benefits, p a y i n g t h e m equitably, treating t h e m impartially on the job, a n d p r o t e c t i n g t h e m f r o m p a r t i s a n political influences. Policy objectives of civil service s y s t e m s a r e controlled b y elected officials, w h o often a p p o i n t a g e n c y h e a d s responsible for m a n a g i n g the b u r e a u c r a c y . T h e legislature maintains c o n t r o l o v e r r e s o u r c e s b y limiting the total n u m ­ ber of e m p l o y e e s an a g e n c y c a n hire, staffing levels in particular agencies or p r o g r a m s , a n d the p e r s o n n e l b u d g e t . Historically, public personnel m a n a g e m e n t h a s b e e n c h a r a c t e r i z e d b y c o m p e t i t i o n b e t w e e n politics a n d merit. A n d joining the c o m p e t i t i o n a r e t w o m o r e recent entrants (collective b a r g a i n i n g a n d affirmative action), w h i c h a r e actually specialized p e r s o n ­ nel s y s t e m s within a civil service system. T h e p r i m a r y goal of collective bargaining is equitable t r e a t m e n t of m e m b e r s b y m a n a g e m e n t t h r o u g h n e g o t i a t e d w o r k rules o v e r w a g e s , benefits, a n d conditions of e m p l o y m e n t . T h e objective of affirmative action is the v o l u n t a r y correction of an i m b a l a n c e in the p e r c e n t a g e of minorities in its w o r k f o r c e a n d those qualified minori­ ties in a r e l e v a n t labor force, or (alternatively) e n f o r c e m e n t of a judicial ruling requiring the a g e n c y to give special consideration to m e m b e r s of the "protected class" in p e r s o n n e l decisions, especially hiring a n d p r o m o t i o n . B e c a u s e c o m p e t i t i o n for public jobs a m o n g individuals a n d m o r e b r o a d l y a m o n g a d v o c a t e s of these four values a n d s y s t e m s is intense, the history of public p e r s o n n e l m a n a g e m e n t in the U n i t e d States c a n b e u n d e r ­ s t o o d c o n c e p t u a l l y as conflict a n d c o m p r o m i s e o v e r h o w the r a n g e of

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p e r s o n n e l functions will b e p e r f o r m e d . D i s a g r e e m e n t s o v e r individual selection a n d p r o m o t i o n decisions usually reflect m o r e basic conflicts o v e r the criteria b y w h i c h public jobs s h o u l d b e allocated. O r p e r s o n n e l policies a n d practices m a y o p e r a t e at t w o levels — a n ideal level of law, rules, a n d desirable practice; a n d actual practices n o t s u p p o r t e d b y l a w a n d r e g u l a ­ tions, b u t used b y personnel specialists a n d line m a n a g e r s to "get the job done." Conflict a m o n g v a l u e s a n d s y s t e m s is r e g u l a t e d in that e a c h v a l u e , carried to its e x t r e m e , s u p p r e s s e s other v a l u e s a n d limits the effectiveness of h u m a n r e s o u r c e s m a n a g e m e n t . So a t t e m p t s b y e a c h s y s t e m o r v a l u e to d o m i n a t e lead inevitably to stabilizing reactions a n d v a l u e c o m p r o m i s e s . F o r e x a m p l e , responsiveness c a r r i e d to e x t r e m e s results in the hiring o f e m p l o y e e s solely o n the basis of p a t r o n a g e , w i t h o u t r e g a r d for other qualifications; or in the a w a r d i n g of c o n t r a c t s b a s e d solely o n political considerations (graft a n d c o r r u p t i o n ) . Efficiency, carried to e x t r e m e s , r e ­ sults in overrationalized p e r s o n n e l p r o c e d u r e s — for e x a m p l e , g o i n g to d e c i m a l points on test scores to m a k e selection o r p r o m o t i o n decisions, or m a k i n g the selection p r o c e s s rigid in the belief t h a t s y s t e m a t i c p r o c e d u r e s will p r o d u c e the "best" c a n d i d a t e . Individual rights, c a r r i e d to e x t r e m e s , results in o v e r - e m p h a s i s on seniority in p e r s o n n e l decisions a n d on d u e p r o c e s s in disciplinary p r o c e d u r e s . A n d social equity, carried to e x t r e m e s , results in p e r s o n n e l decisions being m a d e solely o n the basis of g r o u p m e m b e r s h i p , d i s r e g a r d i n g responsiveness, m e r i t o r efficiency. W h i l e public personnel directors p e r f o r m the s a m e functions r e g a r d ­ less of the s y s t e m in w h i c h t h e y o p e r a t e , the s y s t e m h a s p r o f o u n d effects o n the relative i m p o r t a n c e of these functions, their o r g a n i z a t i o n a l location, a n d their m e t h o d of implementation. A n d the a u t h o r i t y of p e r s o n n e l m a n a g e r s varies widely. T h o s e w o r k i n g in p r e d o m i n a n t l y political sys­ t e m s h a v e little a u t h o r i t y b e y o n d that given to t h e m b y political leaders, a n d a r e c o n c e r n e d mainly w i t h acquisition. T h o s e w o r k i n g in civil service s y s t e m s a r e m o r e c o n s t r a i n e d b y laws, a n d h a v e responsibilities for a w i d e r r a n g e of functions. T h o s e w o r k i n g with collective b a r g a i n i n g s y s t e m s a r e responsible for negotiating a n d administering collective b a r g a i n i n g a g r e e ­ m e n t s w i t h unionized e m p l o y e e s w h o a r e also m e m b e r s of civil service s y s t e m s . T h o s e w o r k i n g in affirmative action s y s t e m s a r e usually affirm­ ative action officers, with p r e d o m i n a n t responsibilities for acquisition. Traditional personnel m a n a g e r s o p e r a t e within a c o n s e n s u s on o n e s y s t e m a n d its u n d e r l y i n g values. T h e y tend to define themselves, a n d a r e defined b y others, as technical specialists w o r k i n g within a staff a g e n c y . C o n t e m ­ p o r a r y personnel m a n a g e r s o p e r a t e as professionals responsible n o t only for designing personnel functions, b u t for resolving conflicts a m o n g alter­ n a t i v e values a n d s y s t e m s as to h o w functions a r e to b e p e r f o r m e d (Daniel a n d Rose, 1991).

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Pressures For Change

C h a n g i n g realities affect the o u t c o m e of conflict a m o n g personnel s y s t e m s a n d values, a n d in t u r n the w a y p e r s o n n e l functions a r e p e r ­ formed: (1) d e m a n d s for "reinventing g o v e r n m e n t , " (2) rising h e a l t h c a r e costs, (3) legal liability risks, (4) w o r k f o r c e diversity, (5) d u a l labor m a r k e t s , (6) d i v e r g e n t v i e w s of e m p l o y e e s as assets or costs, a n d (7) alternative instrumentalities for p r o v i d i n g public services. 1. "Reinventing government" is a slogan epitomizing the continued p r e s s u r e o n public agencies t o m e a s u r e o u t p u t s , increase efficiency, a n d e n h a n c e political accountability ( O s b o r n e a n d Gaebler, 1 9 9 2 ) . In personnel administration, it m e a n s the relative a s c e n d a n c y of political responsiveness a n d efficiency as values; a n d the n e e d for p e r s o n n e l a d m i n i s t r a t o r s to w o r k w i t h other s y s t e m s (besides traditional civil service a n d collective b a r g a i n ­ ing) to enable agencies to r e a c h objectives a n d c o n t r o l costs. 2. Rising healthcare costs (and related w o r k e r s c o m p e n s a t i o n , sick leave, a n d disability retirement expenses) constitute a large a n d increasing s h a r e of p e r s o n n e l b u d g e t s (Blostin, B u r k e a n d Lovejoy, 1988). Societally, m e d i c a l costs h a v e climbed f r o m $ 2 4 8 million to $ 6 0 0 billion in 1 9 9 0 , g r o w i n g at t w i c e the r a t e of inflation e v e n w h e n adjusted for population increases ( L u t h a n s a n d D a v i d , 1 9 9 0 ) . A n d despite this high cost, there a r e t r e m e n d o u s inequities in the distribution of health c a r e benefits (Allan, 1988). 3. Legal liability risks h a v e increased since the 1 9 7 0 s w i t h the t r a n ­ sition f r o m s o v e r e i g n i m m u n i t y to limited i m m u n i t y for public e m p l o y e e s a n d officials (Walter, 1 9 9 2 ) . This, a n d increased c o n c e r n for the e m p l o y ­ m e n t rights of p r o t e c t e d g r o u p s , h a v e resulted in increased liability of p e r s o n n e l a d m i n i s t r a t o r s w i t h r e s p e c t to w o r k p l a c e safety, affirmative action, s e x u a l h a r a s s m e n t , e m p l o y e e p r i v a c y , a n d d u e p r o c e s s issues. 4. Workforce diversity e n c o m p a s s e s a n u m b e r of e m e r g e n t labor m a r k e t c h a n g e s (Johnston a n d Packer, 1987): an older w o r k force, o n e c o m p r i s e d m o r e of w o m e n a n d minorities, a n d o n e requiring technical a n d professional skills increasingly in short s u p p l y b e c a u s e of g r o w i n g defi­ ciencies in o u r e d u c a t i o n a l system. T h e challenge of channeling diversity into p r o d u c t i v i t y is c o m p l i c a t e d b y the b r e a d t h of e x p e c t a t i o n s m e m b e r s of diverse cultures bring to their w o r k , b o t h as individuals a n d as m e m b e r s of t h o s e cultures. W i t h o u t an organizational c o m m i t m e n t of respect, toler­ a n c e , a n d dignity, differences lead only to divisiveness that c o n s u m e s organizational r e s o u r c e s w i t h o u t positive results ( T h o m a s , 1990). 5. Dual labor market

t h e o r y originated a m o n g e c o n o m i s t s (Doerin-

ger a n d P i o r e , 1 9 7 5 ) seeking to explain the i n a d e q u a c y of traditional m o d e l s

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of u n e m p l o y m e n t a n d u n d e r e m p l o y m e n t . It differentiates b e t w e e n a pri­ mary labor m a r k e t c o m p r i s i n g applicants for skilled m a n a g e r i a l , profes­ sional a n d technical positions c h a r a c t e r i z e d b y high p a y , h i g h status, a n d job security; a n d a secondary labor m a r k e t c o m p r i s i n g applicants for less skilled laborer a n d service positions filled o n a t e m p o r a r y o r p a r t - t i m e basis. S e c o n d a r y labor m a r k e t m e c h a n i s m s a r e attractive b e c a u s e they enable p e r s o n n e l a d m i n i s t r a t o r s to r e d u c e benefit costs, a n d to c i r c u m v e n t p e r s o n n e l ceilings a n d civil service rules. T h e threat of privatization o r c o n t r a c t i n g out is also a powerful tool for b r e a k i n g u n i o n s o r gaining give-backs d u r i n g contract renegotiation. T h e labor m a r k e t is s e g m e n t e d in that the m a r k e t s r e m a i n separate. Jobs filled (coincidentally m a i n l y b y w h i t e males) t h r o u g h the p r i m a r y labor m a r k e t h a v e relatively high quali­ fications, a n d a "glass ceiling" hinders d e v e l o p m e n t o r p r o m o t i o n f r o m jobs filled t h r o u g h the s e c o n d a r y m a r k e t . A n d w h i l e e m p l o y e r s will in­ creasingly utilize minorities a n d w o m e n b e c a u s e of c h a n g i n g w o r k f o r c e d e m o g r a p h i c s , m o s t n e w jobs will b e c r e a t e d in the service s e c t o r a n d filled t h r o u g h the s e c o n d a r y labor m a r k e t ( M c G a h e y , 1987; a n d H u d s o n Insti­ tute, 1 9 8 8 ) . 6. Divergent views of employees as assets or costs a r e o n e o r g a n i z a ­ tional implication of d u a l labor m a r k e t theory. Skilled m a n a g e r i a l , profes­ sional, a n d technical e m p l o y e e s h i r e d t h r o u g h p r i m a r y labor m a r k e t m e c h a n i s m s into career positions a r e c o n s i d e r e d h u m a n r e s o u r c e assets w h o bring h u m a n capital to the labor m a r k e t (Johnston a n d P a c k e r , 1987: 1 1 6 ) . This a s s u m p t i o n underlies h u m a n r e s o u r c e asset a c c o u n t i n g m o d e l s in p r i v a t e i n d u s t r y (Pyle, 1970; a n d F l a m h o l t z , 1 9 7 4 ) a n d public civil service s y s t e m s ( A d v i s o r y C o m m i t t e e on F e d e r a l W o r k f o r c e Quality, 1 9 9 2 ) . T h e relatively high job security, p a y , training a n d benefits of these positions a r e c o n s i d e r e d essential for asset m a i n t e n a n c e a n d d e v e l o p m e n t . O n the other h a n d , e m p l o y e e s hired t h r o u g h the s e c o n d a r y labor m a r k e t a r e m o r e likely to b e c o n s i d e r e d p e r s o n n e l costs. E m p l o y e r s utilize p e r s o n n e l p r a c t i c e s p r e d i c a t e d on cost reduction t h r o u g h elimination of benefits a n d a d v a n c e ­ m e n t opportunities ( O ' R a n d , 1 9 8 6 ) . A n d e m p l o y e r s also r e d u c e legal liability risks b e c a u s e t e m p o r a r y e m p l o y e e s h a v e fewer rights. 7. Alternative instrumentalities for providing public services a r e p o p u l a r b e c a u s e critics h a v e a r g u e d that the p r i v a t e s e c t o r c a n often p r o v i d e services m o r e c h e a p l y a n d efficiently b y eliminating u n n e c e s s a r y p e r s o n n e l costs a n d e m p l o y e e protections. A n d p r o v i d i n g public services outside of traditional civil service s y s t e m s controls the a p p a r e n t size of the public " b u r e a u c r a c y " while e n h a n c i n g opportunities for o u t sourcing. Consequently, m u c h g o v e r n m e n t g r o w t h h a s b e e n t h r o u g h s e c o n d a r y labor m a r k e t m e c h a n i s m s , a n d t h r o u g h alternative instrumentalities: p u r ­ c h a s e of service contracting, franchise a g r e e m e n t s , subsidy a r r a n g e m e n t s , v o u c h e r s , volunteers, self-help, r e g u l a t o r y a n d t a x incentives (International City M a n a g e m e n t Association, 1 9 8 9 ) .

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Strategic Human Resource Management

Strategic h u m a n r e s o u r c e m a n a g e m e n t ( S H R M ) h a s e m e r g e d b e c a u s e of these c h a n g e s . It consists of the following elements: (1) recognition that h u m a n r e s o u r c e s a r e critical, (2) a shift f r o m position m a n a g e m e n t to work a n d employees, (3) increased innovation a n d risk, (4) e n h a n c e d d e v e l o p ­ m e n t , participation a n d benefits for asset e m p l o y e e s , a n d (5) a shift from E E O / A A c o m p l i a n c e t o w o r k f o r c e diversity. 1. Recognition that human resources are critical. Public personnel m a n a g e m e n t is the techniques a n d policy choices related to a g e n c y h u m a n r e s o u r c e m a n a g e m e n t . Seen together, they a r e the a g e n c y ' s strategic plan for a c c o m p l i s h i n g its mission. A n d they a r e a m e s s a g e t o e m p l o y e e s , m a n a g e r s , a n d political leaders a b o u t the v a l u e the a g e n c y places o n h u m a n r e s o u r c e s . In an a g e n c y w i t h effective h u m a n r e s o u r c e m a n a g e m e n t , this m e s s a g e is explicit a n d positive. The e m e r g e n c e of S H R M d u e to height­ e n e d c o n c e r n for a g e n c y p r o d u c t i v i t y a n d accountability m e a n s that better information s y s t e m s a r e essential (U.S. Office of Personnel M a n a g e m e n t , 1992). 2. A shift from position management to work and employees. Tradi­ tionally, legislators a n d chief e x e c u t i v e s h a v e s o u g h t t o m a i n t a i n b u r e a u ­ c r a t i c c o m p l i a n c e , efficiency a n d a c c o u n t a b i l i t y t h r o u g h b u d g e t a r y controls a n d position management. But d u e to a v a r i e t y of political a n d e c o n o m i c p r e s s u r e s (Chief Financial Officers A c t of 1 9 9 0 , 1 9 9 0 ; a n d U.S. Office of P e r s o n n e l M a n a g e m e n t , 1 9 8 9 a n d 1 9 9 0 ) , the focus of public p e r s o n n e l m a n a g e m e n t h a s shifted to work management as m a n a g e r s a n d p e r s o n n e l specialists h a v e continued to d e m a n d flexibility a n d equitable r e w a r d allocation t h r o u g h s u c h alterations to classification a n d p a y sys­ t e m s as rank-in-person p e r s o n n e l systems, b r o a d p a y b a n d i n g , a n d g r o u p p e r f o r m a n c e evaluation a n d r e w a r d s y s t e m s (Shoop, 1 9 9 1 ) . This trend coincides w i t h employee n e e d s for utilization, d e v e l o p m e n t , a n d recogni­ tion. 3. More innovation. Public p e r s o n n e l m a n a g e r s w h o design h u m a n r e s o u r c e m a n a g e m e n t s y s t e m s that m a k e agencies m o r e effective a r e entre­ p r e n e u r s . A n d their self-perceived professionalism is a key p r e d i c t o r of w h e t h e r they will risk u n d e r t a k i n g innovations o r will successfully c o m ­ plete t h e m . T h o s e w h o see themselves as professionals, w h o r e c o g n i z e the d y n a m i s m a n d conflict inherent in their roles, a r e m o r e likely to innovate (Sabet a n d Klingner, in press). But long r a n g e effectiveness in cultivating i n n o v a t i o n requires a r e w a r d s y s t e m that reinforces risk-taking, a n d does n o t penalize failure — t w o characteristics that a r e often in short supply within the c u l t u r e of m o s t public agencies.

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4. Asset development and cost control. O n e r e a s o n for this i n c r e a s e d professionalism a n d i n n o v a t i o n a m o n g public p e r s o n n e l m a n a g e r s h a s b e e n the n e e d to d e v e l o p a n d a p p l y t w o a p p a r e n t l y c o n t r a d i c t o r y h u m a n r e s o u r c e strategies: policies for "kleenex e m p l o y e e s " d e s i g n e d to c o n t r o l costs, a n d policies for "asset e m p l o y e e s " designed to e n s u r e loyalty, p a r ­ ticipation a n d d e v e l o p m e n t . Increasingly, e m p l o y e r s r e d u c e costs b y hiring "kleenex employees" t h r o u g h s e c o n d a r y labor m a r k e t m e c h a n i s m s into l o w w a g e a n d non-benefitted jobs. Skill r e q u i r e m e n t of these jobs a r e r e d u c e d b y job-redesign o r w o r k simplification ( w h i c h ironically contributes to the p e r p e t u a t i o n of s e g m e n t e d labor m a r k e t s a n d the "glass ceiling" b y r e d u c i n g d e v e l o p m e n ­ tal opportunities for e m p l o y e e s "stuck" in s e c o n d a r y labor m a r k e t jobs). W h e r e c o m m i t m e n t a n d high skills a r e required on a t e m p o r a r y basis, e m p l o y e r s m a y seek to s a v e m o n e y or m a i n t a i n flexibility b y using c o n t r a c t or leased e m p l o y e e s . "Asset employees" c o n t i n u e to receive c o m p a r a t i v e l y liberal health benefits, at least c o m p a r e d to other e m p l o y e e s , to help e n s u r e retention a n d loyalty. But health i n s u r a n c e carriers ( a n d self-insured e m p l o y e r s ) h a v e r e s p o n d e d to rising h e a l t h c a r e costs b y increasing p r e m i u m s , r e d u c i n g benefits, lengthening the waiting p e r i o d for exclusion of p r e e x i s t i n g c o n d i ­ tions, o r a d o p t i n g sub-benefit limitations o n c o v e r a g e for health p r o b l e m s that m a y b e c o n s i d e r e d "lifestyle choices" ( F a d e n a n d K a s s , 1 9 8 8 ) . Benefit m a n a g e r s for self-insured agencies a r e r e s p o n d i n g , o n a c a s e - b y - c a s e basis, to a d v a n c e questions f r o m health-care p r o v i d e r s a b o u t w h e t h e r r e i m b u r s e ­ m e n t for specific t r e a t m e n t s will b e authorized. A n d w h e n e v e r possible g i v e n the limits of available t e c h n o l o g y a n d the applicability of h a n d i c a p l a w s p r o t e c t i n g applicant rights, e m p l o y e r s h a v e s o u g h t to r e d u c e benefit costs b y e x c l u d i n g applicants for career positions w h o p o s e l o n g - t e r m health risks ( U z y c h , 1986; a n d R o w e , Russell-Einhorn a n d Weinstein, 1 9 8 7 ) . F o r asset e m p l o y e e s , employee development is related t o c o r p o r a t e h u m a n r e s o u r c e policy b e c a u s e (a) it focuses p l a n n i n g a n d b u d g e t analysis o n h u m a n resources; (b) it facilitates cost-benefit analysis of c u r r e n t training a n d d e v e l o p m e n t activities; a n d (c) it facilitates c o m m u n i c a t i o n a n d c o m ­ m i t m e n t of organizational goals t h r o u g h e m p l o y e e p a r t i c i p a t i o n a n d in­ v o l v e m e n t ( R o s o w a n d Z a g e r , 1 9 8 8 ; a n d B e r n h a r d a n d Ingols, 1 9 8 8 ) . Training a n d d e v e l o p m e n t include not only individual job skills, b u t im­ p r o v e m e n t in e m p l o y e e s ' w o r k relationships. E x a m p l e s a r e t e a m building a n d organizational d e v e l o p m e n t ( F r e n c h a n d Bell, 1 9 9 0 ) , total quality m a n a g e m e n t ( T Q M ) (Deming, 1 9 8 8 ) , a n d training for diversity (Solomon, 1989). Employee involvement

and participation

c o n t i n u e to b e i m p o r t a n t for

asset employees. In a n era w h e n policy a n d p r o g r a m initiatives a r e p r e d i ­ c a t e d o n "budget neutrality," m a n a g e r s a n d s u p e r v i s o r s h a v e c o m e to

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c o n c l u d e that b u d g e t s a r e a fixed r e s o u r c e . B u d g e t directors r e s p o n d to b u d g e t c u t s b y telling the a g e n c y to d o the s a m e w i t h a lower b u d g e t , o r m o r e w i t h the s a m e b u d g e t . In c o n t r a s t , g o o d personnel m a n a g e r s r e c o g ­ n i z e t h a t e m p l o y e e s a r e a variable r e s o u r c e . T h a t is, e v e n in the absence of significant financial r e w a r d s , e m p l o y e e s tend to w o r k happily a n d effec­ tively w h e n they h a v e the n e c e s s a r y skills, see their w o r k as meaningful, feel personally responsible for productivity, a n d h a v e first-hand knowl­ e d g e of the a c t u a l results of their labor. These psychological states a r e m o s t likely t o result f r o m w o r k designed t o i n c o r p o r a t e characteristics s u c h as variety, significance, self-control, a n d feedback. B e c a u s e these psychologi­ cal states a n d w o r k characteristics a r e m o s t likely to a c c o m p a n y career positions filled b y "asset" e m p l o y e e s , p e r s o n n e l a d m i n i s t r a t o r s a n d super­ visors h a v e a critical role in the a g e n c y . W i t h i n the p a r a m e t e r s set b y legislators a n d chief executives, they m u s t d e v e l o p a n d i m p l e m e n t c o r p o ­ rate h u m a n r e s o u r c e s y s t e m s for maintaining a n d i m p r o v i n g the p e r f o r m ­ a n c e of individual e m p l o y e e s a n d w o r k g r o u p s . These include delegation, flexible w o r k locations a n d schedules, job sharing, m a n a g e m e n t b y objec­ tives ( M B O ) , a n d Total Quality M a n a g e m e n t ( T Q M ) . T h e c o m m o n thread a m o n g these s y s t e m s is their e m p h a s i s o n the c o n n e c t i o n b e t w e e n the quality o f the w o r k e n v i r o n m e n t a n d the quality of individual, t e a m a n d organizational p e r f o r m a n c e ( A d v i s o r y C o m m i t t e e on F e d e r a l W o r k f o r c e Q u a l i t y A s s e s s m e n t , 1 9 9 2 ) . W o r k f o r c e diversity h a s also b r o u g h t a b o u t c h a n g i n g definitions of p r o d u c t i v i t y b a s e d o n the n e e d for variation in m a n a g e r i a l styles, a n d resultant d r a m a t i c increases in o r g a n i z a t i o n a l effec­ tiveness ( L o d e n a n d Rosener, 1 9 9 1 ) . E m p l o y e e i n v o l v e m e n t a n d retention a r e related to e m p l o y e r services that help e m p l o y e e s m e e t family obligations. B e c a u s e w o m e n a r e the traditional family c a r e givers, a n e m p l o y e r ' s ability to attract a diverse w o r k force d e p e n d s u p o n the provision of these s a m e services a n d benefits: flexible benefits (Cafeteria Plans, 1 9 9 0 ) , p a r e n t a l l e a v e (Taylor, 1 9 9 1 ) , childa n d elder-care s u p p o r t p r o g r a m s (Child C a r e , 1 9 8 7 ) , alternative w o r k locations a n d schedules, a n d e m p l o y e e - c e n t e r e d supervision. O r g a n i z a ­ tions that w i s h t o attract a n d keep asset e m p l o y e e s b y s u p p o r t i n g "family v a l u e s " n e e d to select a n d train s u p e r v i s o r s w h o a r e sensitive to these issues. 5. From EEO/AA

compliance

to workforce

diversity.

W o r k f o r c e diversity differs from E E O / A A c o m p l i a n c e in three major w a y s . First, diversity implies a broader and more individualized perspective — n o t just affirmative action categories, but a r a n g e of k n o w l e d g e , skills, a n d abilities w h i c h m a n a g e r s a n d p e r s o n n e l directors n e e d to r e c o g n i z e a n d factor into p e r s o n n e l decisions o n c e their attention shifts from position m a n a g e m e n t t o w o r k m a n a g e m e n t . S e c o n d , d i v e r s i t y differs f r o m E E O / A A in that it focuses on human resource productivity (outputs) rather than workforce composition (inputs). Diversity is therefore linked to a n u m b e r of

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o t h e r S H R M elements s u c h as participation a n d d e v e l o p m e n t . Third, diversity differs from E E O / A A in that its locus of control is internal rather than external. A g e n c y m a n a g e r s n e e d to allocate r e s o u r c e s a p p r o p r i a t e l y to mission, rather than m e r e l y developing p r o c e d u r e s to e n s u r e a c h i e v e m e n t of the p r o p o r t i o n a l representation required b y E E O / A A c o m p l i a n c e a g e n ­ cies. T h u s , a c c e p t a n c e of diversity g o e s h a n d in h a n d w i t h increased accountability of a g e n c y m a n a g e r s for m i s s i o n a c c o m p l i s h m e n t , a n d in­ c r e a s e d focus o n e m p l o y e e s as r e s o u r c e s rather t h a n as positions to b e controlled (Haight, 1 9 9 0 ; a n d S o l o m o n , 1 9 8 9 ) .

Strategic Human Resource Management In Practice

T h e following e x a m p l e s s h o w S H R M in practice. Seen individually, they a r e f r a g m e n t s rather than cohesive o r c o h e r e n t p e r s o n n e l policies. But taken together, they s h o w h o w i n n o v a t i v e p e r s o n n e l m a n a g e r s a r e r e ­ s p o n d i n g to the n e e d to i m p r o v e h u m a n r e s o u r c e utilization u n d e r v a r y i n g conditions.

1. Recognition that human resources are critical. •

T h e U.S. Office of P e r s o n n e l M a n a g e m e n t h a s d e v e l o p e d a Strategic Plan for Human Resources Management ( 1 9 9 0 ) w h i c h enables agencies t o recruit, d e v e l o p a n d retain a quality a n d r e p r e s e n t a t i v e w o r k f o r c e , b a s e d on the vision of effective h u m a n r e s o u r c e m a n a g e m e n t t h r o u g h ­ o u t the federal g o v e r n m e n t .

•

The office of the Assistant Secretary for Personnel ( A S P E R ) of the U.S. D e p a r t m e n t of H e a l t h a n d H u m a n Services h a s in recent y e a r s u n d e r ­ g o n e a series of r e o r g a n i z a t i o n s a i m e d at c r e a t i n g a m o d e l for a h u ­ m a n r e s o u r c e m a n a g e m e n t capability in federal agencies (Klingner, 1991).

2. A shift from position management to work and employees. •

T h e federal g o v e r n m e n t ' s r e v i e w o f the a d m i n i s t r a t i v e a g e n c y posi­ tion classification s y s t e m c o n c l u d e d (National A c a d e m y o f Public A d ­ ministration, 1 9 9 1 ) that agencies c o u l d m a k e significant c h a n g e s ( s u c h as b r o a d b a n d i n g ) within existing law. The feasibility of these c h a n g e s has been d e m o n s t r a t e d b y a d e c a d e of e x p e r i m e n t a t i o n in a n u m b e r of federal agencies.

•

T h e U.S. Public H e a l t h Service h a s i m p l e m e n t e d a n alternative p e r s o n ­ nel s y s t e m to i m p r o v e r e c r u i t m e n t a n d utilization of m e d i c a l p e r s o n ­ nel (U.S. Merit Systems P r o t e c t i o n B o a r d , 1 9 9 1 ) .

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3. More innovation. •

Public p e r s o n n e l m a n a g e r s h a v e designed a n d i m p l e m e n t e d a n u m ­ ber of a d m i n i s t r a t i v e innovations, including d r u g testing a n d e m ­ p l o y e e assistance p r o g r a m s (Klingner, O'Neill a n d Sabet, 1 9 9 0 ) .

•

T h e F e d e r a l Quality Institute r e c o m m e n d s that m a n a g e r s a n d p e r s o n ­ nel a d m i n i s t r a t o r s train t h e m s e l v e s to thrive in a c o n t i n g e n t e n v i r o n ­ m e n t w h e r e objectives a r e diverse a n d m e a n s - e n d relationships a r e u n c e r t a i n — a n d that they train a n d r e w a r d subordinates for taking similar risks, a n d for learning f r o m t h e m (U.S. Office of Personnel Management, 1991).

4. Asset development and cost control. •

In its m o s t d r a m a t i c r e s t r u c t u r i n g in the p a s t 2 5 years, the US. Postal Service a n n o u n c e d plans to eliminate 2 5 % of its 1 2 0 , 0 0 0 m a n a g e r i a l jobs a n d o v e r h a u l its military style h i e r a r c h y ( W h e r e things stand, 1992).

•

T h e A d v i s o r y C o m m i s s i o n o n F e d e r a l W o r k f o r c e Quality recently c o n ­ c l u d e d that, "despite w i d e s p r e a d . . . a n e c d o t a l e v i d e n c e , the quality of e m p l o y e e s [in the engineering, scientific a n d c o m p u t e r fields] is n o t generally deficient a n d h a s r e m a i n e d fairly c o n s t a n t o v e r t i m e " ( A d v i ­ s o r y C o m m i t t e e on F e d e r a l W o r k f o r c e Quality, 1992: x ) .

•

A e t n a Life & C a s u a l t y h a s hired o v e r 1 0 0 0 w o r k e r s t h r o u g h a c o o p e r a ­ tive e d u c a t i o n effort w i t h local o r g a n i z a t i o n s that focuses on r e a d i n g a n d written c o m m u n i c a t i o n skills (Bennett, 1 9 8 9 ) .

•

I B M h a s a d o p t e d a high-skill e m p l o y e e e m p o w e r m e n t a p p r o a c h as p a r t of its full-employment, n o layoffs policy. W h e n m a n a g e r s at its A u s t i n ( T e x a s ) plant e s t i m a t e d they c o u l d s a v e $ 6 0 million by b u y i n g circuit b o a r d s e l s e w h e r e r a t h e r than m a n u f a c t u r i n g t h e m , I B M m a n ­ a g e m e n t h a d o t h e r ideas. T h e y c u t costs b y u p g r a d i n g w o r k e r skills, o r g a n i z e d w o r k e r s into t e a m s , a n d g a v e t e a m s responsibility for qual­ ity c o n t r o l , r e p a i r s , a n d m a t e r i a l s ordering. Skill r e q u i r e m e n t s for m a n u f a c t u r i n g jobs w e r e increased, a n d e d u c a t i o n a n d training costs i n c r e a s e d to 5 p e r c e n t of payroll. T h e result: p r o d u c t i v i t y increased o v e r 2 0 0 p e r c e n t , quality w a s u p 5 0 0 p e r c e n t , a n d i n v e n t o r y w a s c u t 4 0 p e r c e n t . T h e plant e m p l o y s m o r e p e o p l e t h a n e v e r before (Karr, 1990).

•

T h e vehicle repair s h o p in M a d i s o n , Wisconsin's m u n i c i p a l public w o r k s d e p a r t m e n t u s e d w o r k planning a n d participative decision m a k i n g to better u n d e r s t a n d c u s t o m e r n e e d s a n d identify basic causes for excessive vehicle d o w n t i m e . This i n v e s t m e n t led to a 2 5 % increase in vehicles serviced despite a 17% staff d e c r e a s e (Klingner a n d N a l bandian, 1993).

•

F l o r i d a P o w e r a n d L i g h t w o n the c o v e t e d D e m i n g A w a r d in 1 9 9 1 for successful efforts b y w o r k t e a m s to increase c u s t o m e r satisfaction a n d

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r e d u c e costs. These efforts e q u i p p e d the public utility to p e r f o r m s u c ­ cessfully w h e n H u r r i c a n e A n d r e w d e v a s t a t e d Miami's s o u t h e r n s u b ­ urbs a y e a r later. •

I B M offers y e a r long m a t e r n i t y leave w i t h s u p e r v i s o r y job retention rights;

•

Stride-Rite offers on-site child c a r e a n d d a y t i m e elder-care;

•

M e r c k & C o . offers p a r e n t - r u n child c a r e centers;

•

J o y C o n e ( H e r m i t a g e , P A ) offers split shifts a n d flexible shift assign­ m e n t s for factory w o r k e r s ;

•

A r t h u r A n d e r s o n & C o . h a s p a r t - t i m e w i t h benefits professional positions;

•

L o t u s D e v e l o p m e n t C o r p o r a t i o n offers o n e - m o n t h p a i d p a r e n t i n g leave to m o t h e r s , fathers, a n d a d o p t i v e parents;

•

The P a l m B e a c h C o u n t y (FL) school b o a r d allows p a r e n t s to p l a c e their children in schools close to the job rather t h a n close t o h o m e . This r e d u c e s the length of time school-age children g o w i t h o u t s u p e r ­ vision, a n d m a k e s it administratively easier for p a r e n t s to leave w o r k for child c a r e emergencies.

5. From EEO/AA compliance to workforce diversity. •

C o r n i n g Glass W o r k s e v a l u a t e s m a n a g e r s o n their ability to "create a congenial e n v i r o n m e n t " for diverse e m p l o y e e s (Schmidt, 1 9 8 8 ) .

•

Mobil C o r p o r a t i o n c r e a t e d a special c o m m i t t e e o f executives to iden­ tify high-potential female a n d m i n o r i t y e x e c u t i v e job c a n d i d a t e s , a n d to p l a c e t h e m in line m a n a g e m e n t positions v i e w e d as critical for a d ­ v a n c e m e n t t h r o u g h the "glass ceiling" ( H o w c o m p a n i e s help, 1 9 8 7 ) .

•

Dr. C h a r l e s M c C a b e , President of M i a m i - D a d e C o m m u n i t y College, recently w o n a M a c A r t h u r F o u n d a t i o n A w a r d for e d u c a t i o n a l leader­ ship, including a ten-year e m p h a s i s o n w o r k f o r c e diversity as a key to c o m m u n i t y involvement a n d mission a c h i e v e m e n t .

Summary

Strategic h u m a n r e s o u r c e m a n a g e m e n t m e a n s m a k i n g public a g e n ­ cies m o r e effective t h r o u g h purposeful resolution of h u m a n r e s o u r c e a d ­ ministration a n d policy issues. It requires understanding h o w personnel functions interrelate in context, recognition of their i m p o r t a n c e , a n d commit­ ment b y personnel m a n a g e r s , e m p l o y e e s , s u p e r v i s o r s a n d political leaders t o w o r k together for c h a n g e . It is c h a r a c t e r i z e d by: (1) recognition that h u m a n r e s o u r c e s a r e critical, (2) a shift from position m a n a g e m e n t to w o r k a n d e m p l o y e e s , (3) m o r e innovation, (4) asset d e v e l o p m e n t a n d c o s t c o n ­ trol, a n d (5) a m o v e m e n t f r o m E E C * / A A c o m p l i a n c e t o w o r k f o r c e diversity.

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Strategic h u m a n r e s o u r c e m a n a g e m e n t will c o n t i n u e to d e v e l o p b e ­ c a u s e c h a n g i n g realities affect the o u t c o m e of conflict a m o n g p e r s o n n e l s y s t e m s a n d v a l u e s , a n d h e n c e t h e w a y p e r s o n n e l functions a r e p e r f o r m e d : (1) d e m a n d s for "reinventing g o v e r n m e n t , " (2) rising h e a l t h c a r e c o s t s , (3) legal liability risks, (4) w o r k f o r c e diversity, (5) d u a l labor m a r k e t s , (6) d i v e r g e n t v i e w s of e m p l o y e e s a s assets o r c o s t s , a n d (7) a l t e r n a t i v e instru­ mentalities for p r o v i d i n g public services.

References Advisory Committee on Federal Workforce Quality (August 1992). Federal Workforce Quality Measurement and Improvement, Washington, DC. Advisory Committee on Federal Workforce Quality. Allan, I. (1988). Financing and managing public employee benefit plans in the 1990's, Govern­ ment Finance Review, 4: 32. Bennett, A. (May 8,1989). As pool of skilled help tightens, firms move to broaden their role, The Wall Street Journal: 1. Bernhard, H., and Ingols, C. (September-October 1988). Six lessons for the corporate classroom, Harvard Business Review, 88: 40-48. Blostin, Α., Burke, T., and Lovejoy, L. (December 1988). Disability and insurance plans in the public and private sector, Monthly Labor Review: 9-17. Cafeteria Plans, Wellness Programs Gaining in Popularity," Employee Benefit Plan Review, July 1990, pp. 90-92. Chief Financial Officers Act of 1990 (Public Law 101-576), November 15,1990. Child care and recruitment boost flexible plans (March 1987). Employee Benefit Plan Review: 32-33. Daniel, C , and Rose, B. (1991). Blending professionalism and political acuity: Empirical support for an emerging ideal, Public Administration Review, 51: 438-441. Deming, W. (1988). Out of the Crisis, Cambridge, MA: MIT Center for Advanced Engineering Study. Doeringer, P. and Piore, M. (1975). Unemployment and the "dual labor market," The Public Interest, 38: 67-79. Faden, R. and Kass, N. (1988). Health insurance and AIDS: The issue of state regulatory Activity," The American Journal of Public Health, 78: 437-38. Flamholtz, E. (1974). Human Resource Accounting, Encino, CA: Dickenson, 1974. French, W., and Bell, C. (1990). Organizational Development, 4th edition, Englewood Cliffs, NJ: Prentice-Hall. Haight, G. (March 1990). Managing diversity, Across the Board, 27: 22-30. Hudson Institute (1988). Opportunity 2000: creating affirmative action strategies for a changing workforce, Indianapolis: The Hudson Institute.

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International City Management Association (1989). Service Delivery in the 90s: Approaches for Local Governments, Washington, DC: ICMA.

Alternative

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An

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