The field of HRM has evolved significantly in the past decades as external and internal pressures have forced governments to redefine the role of the state and recalibrate public administration capacities. A number of innovative policies and practices, many of them borrowed from the private sector, are being introduced in public sector personnel management with -- the intent being to deal with escalating costs and to better manage performance and increase efficiency. Recent research however has revealed very strong correlations between the quality of human resources in the public sector and government performance and national development.

In fact, it is people coordinated by institutions who deliver public services. How effectively government institutions align the behavior of staff with the public interest is determined primarily by the capacity, motivation and integrity of human resources and the quality of leadership. In other words, people are the lifeblood of the public service.

As part of this quest for reforms in the public sector and its human resources, many governments are currently grappling with the search for a new synthesis of traditional and modern principles and techniques of public administration and management. The work of the United Nations in this field advocates that this search for a new synthesis involves striking a balance between three broad models or schools in public administration, namely traditional public administration; public management, including new public management (NPM); and an emerging model of responsive governance that emphasizes networks, greater openness and partnerships with civil society and the private sector. Each one of these models offers principles, tools and techniques that are essential in addressing contemporary challenges facing HRM worldwide.

Thus, an important challenge facing public leaders is how to incorporate or reinvigorate desirable traditional civil service values, such as impartiality, integrity and dedication to public service, while at the same time promoting management innovations and efficiency improvements as well as encouraging more open and responsive forms of administration. This synthesis envisages a public service that is impartial, professional and responsive and that draws, where appropriate, on the skills and resources of the private and civil society sectors. In addition, the new synthesis stresses the need for the public service to curb corruption and to exhibit the highest levels of neutral competence, efficiency and performance orientation in every respect.

In many countries, the process of strategic thinking in the area of public sector human resources has to deal with serious challenges, which further adds complexity to the exercise. Three of these challenges have a particular impact in many countries.

Demographic Changes

Populations all over the world are ageing. This poses a critical HRM challenge in the public sector, including the high costs of sustaining public service pension funds. Reducing pension benefits, on the other hand, is likely to decrease the attractiveness of public sector employment and make it more difficult to attract new talent. This is an important consideration since a high proportion of senior civil servants are expected to retire in the next few years in a number of public services, with potentially significant loss of institutional memory and capacity. For this reason, succession planning has emerged as a high priority in HRM in several countries.

Labor migration

The departure of a skilled migrant signifies a loss of investment in previous education and training for the country of origin as well as a loss of skills and experience that would otherwise provide future contributions to development, including future tax payments. In developing countries, it is important that this phenomenon be counterbalanced by "earn, learn and return" strategies to take advantage of the enhanced skills and experience of the expatriate population, with programs to facilitate remittances and encourage migrants to return. In critical employment sectors, such as health and education, governments also need to adopt specific programs and incentives to stem the tide.

HIV/AIDS

In some countries, particularly in sub-Saharan Africa, HIV/AIDS is having a staggering impact on the performance of governments. The management of HIV/AIDS issues in the workplace presents many dilemmas. Mortality is only one aspect of the problem to be managed. Given that the disease normally affects younger adults and those in the most economically productive phases of their lives, HIV/AIDS has the potential to reduce the pool of prospective employees and economic productivity in many countries. Governments facing such challenges need to adopt a clear employment policy on HIV/AIDS in the workplace, addressing issues such as testing, disclosure, absenteeism (including sick pay) and support services.

Policy Recommendations

Some of the steps government should take to ensure that human resources in the public sector contribute positively to the effective functioning of institutions are outlined in the "World Public Sector Report 2005" published by the United Nations.

Merit Appointment: The Best Person for the Job

Strengthening appointment on merit is one of the most powerful, yet simplest, ways in which governments can improve their effectiveness. A merit-oriented and career-based civil service is decisive in explaining cross-country differences in the performance of governments in terms of the quality of services and the absence of corruption. The presence of these factors helps to foster organizational standards, behavioral norms and esprit de corps that promote commitment and integrity among public servants.

The complex internal and external challenges facing the public service in many developing countries also provide a sense of urgency for governments to forge political consensus to establish a merit-based career civil service as part of a national development strategy aimed at promoting sustainable growth and equity. Merit-based HRM policies are also essential to improve and maintain the prestige of public sector employment.

Remuneration: Balancing Motivation, Equity and Ability to Pay

Adequate pay is a key component in improving and sustaining the motivation, performance and integrity of public servants. Thus, the development of a pay policy is an integral part of strategic HRM in the public sector. The goal of such a policy should be to pay public servants enough to attract and retain competent people while providing sufficient incentives for staff to maintain a high level of performance over a sustained period. In a political environment, a delicate balancing act must also be performed by juggling key priorities and interests of stakeholders as well as motivation and equity of staff and the ability of governments to pay when developing a remuneration policy. In short, equitable pay is difficult to achieve without a "right sized" and professional public service.

One favorite approach of NPM-advocates has been performance-related pay. Evidence on performance-related pay, however, is inconclusive and ambiguous. It is certainly not a panacea for improving public sector performance. In part, this is because it is difficult to implement in the way that the model proposes: assessing "performance" according to measures of efficiency alone is rather hard to achieve. A single-minded focus on material incentives also downgrades other reward and incentive measures that may be just as important.

Performance Management: Supporting and Developing Staff

Governments need to instill greater performance orientation among public servants. This means that performance management, including staff appraisal, must become central to the work of government managers. The managers are responsible for the performance of staff, and it is their job to manage them by setting objectives that relate to the overall goals of the organization, monitoring their performance, and giving them support, feedback and the opportunity to develop. Strengthening performance orientation in public service also entails giving greater weight to relative efficiency vis-à-vis seniority in decisions on staff promotion in public service.

Outsourcing: a Double-Edged Sword

Improving efficiency is one of the claimed benefits of outsourcing, with new market-like constraints and incentives pushing managers to lower costs. Yet caution is required to avoid attributing the success of outsourcing to the wrong causes. In fact, savings are due to mainly less favorable pay and working conditions for private sector workers compared to their public sector counterparts.

The recent use of outsourcing in the security and military sectors through private military firms and contractors has also been fraught with controversies, in some instances, because of lack of clear policies regarding the regulation of such companies.

Leadership in the Public Sector: "Walking the Talk"

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.

Public Sector as a Learning Organization

Government should aim at building "learning organizations" that are able to adapt to rapid change, identify and analyze salient cues in the broader environment as well as in responding to those in a strategic, timely and thoughtful manner. In this effort, they should focus on strategies that encourage grater sharing of explicit and tacit knowledge among staff and establish incentives for public service to learn and upgrade their skills. Again in this respect, a merit-based impartial and stable civil service with appropriate steps to promote innovation can go a long way to create learning organizations that build from institutional memory.

Professionalizing HRM: Towards "Strategic Specialization"

Finally, human resources arrangements should be professionalized. Staff responsible for human resources should not be confined to playing a restricted, bureaucratic and reactive role, limited by and large to routine decisions about staff entitlement to pay increments and the like. Instead, they should have real input into strategic decisions about staff management as well as decisions on how to achieve the core objectives of government. This calls for the upgrading of the status and influence of human resource managers in organizational structures and decision-making processes in the public sector.

Strategic specialization implies an all-encompassing approach to workforce planning and development. However, the lack of quality data on employment and wages in the public sector, particularly in developing countries and economies in transition, makes it difficult to measure the actual cost and contribution of staff to the overall performance of the public sector. With a number of socioeconomic factors depleting the pool of talent in many countries, it becomes even more critical to improve the collection and analysis of data on the workforce in order to plan prudently for the future.

-- Mr. Bertucci is currently the director of the United Nations Division for Public Administration and Development Management, Department of Economic and Social Affairs. The views expressed herein are those of the author and do not necessarily represent the views of the United Nations. This article summarizes the findings of the "World Public Sector Report 2005 on Unlocking the Human Potential for Public Sector Performance," prepared by a team headed by the author.

By Guido Bertucci