A Comparative Study of Public and Private Sector Human Resource Management

The Public Sector

The public sector is a broad term that refers to organizations that offer services to citizens. These organizations are often non-profit, self-financing and provide services to the general public. Therefore, the public sector organizations provide services that benefit the society in general, rather than target specific market niches. The private sector, on the other hand, is owned and run by individuals. These organizations aim to make profits and therefore target specific markets. The state has no direct control of these companies. However, the government still performs regulatory functions.

Human Resource Management

Human resource management is a crucial management aspect in any organization. Human resource management, in general, involves hiring, training, developing, and compensating employees within an organization. Strategic human resource management (SHRM) refers to strategies implemented by human resource managers to ensure that employees’ performance is in line with the goals and objectives of the organization (Jackson et al 2014). SHRM is particularly important for public sector companies as their not-for-profit status may encourage complacency that lowers the quality of service. Public sector organizations are responsible for the provision of essential services such as health and security. Therefore, the implementation of sound SHRM strategies ensures efficient and responsive service delivery. Another key benefit of SHRM in the public sector is that it allows the government to only hire the necessary number of employees with the right skills and competencies.

Similarities in SHRM Strategies

SHRM for public and private organizations are similar in that both strategies are aimed at enhancing cost efficiency. Private and public sectors both rely heavily on budget allocations. With sufficient budget, organizations in either sector are able to fund HR activities such as training and recruitment, ensuring only employees with the highest skill set are employed. SHRM strategies in both the private and public sectors are influenced by internal organizational factors. That is to say, private sector strategies are dependent on the available workload. The public sector SHRM is determined by policies implemented by other departments or a change in the organizational hierarchy of the Human resource team.

Challenges in Public Sector HR

Recruitment and retention are key challenges faced by public sector human resource managers. Public sector organizations have slowed down on new recruitment and are investing less in employee training and promotions. These new trends came as a result of the economic downturns of the recessions. Budget cuts forced most public sector organizations to reduce staff numbers. For public sector organizations to maximize their performance, they require investment in technologies and consequently, recruitment of new employees. Such investments are expensive for the public sector, in light of redundant costs. Therefore, public sector HR teams need to implement training strategies that enable current staff to work with modern technologies.

Innovation and Creativity

The public sector is under government control and as such needs to contend with stringent government control. Therefore, innovation occurs less frequently, often as a result of political bottlenecks. Innovation requires risk, which may result in financial loss. In light of current budget cuts, such risks are not a priority. Therefore, innovation and creativity are less common within the public sector than they are in the private sector. The private sector is more flexible in the risks they take and tends to take technological risks. Furthermore, the private sector has little political interference and relatively steady income and is therefore likely to have innovative and creative employees.

References

Mazzucato, M., 2015. The entrepreneurial state: Debunking public vs. private sector myths (Vol. 1). Anthem Press.

Jackson, S.E., Schuler, R.S. and Jiang, K., 2014. An aspirational framework for strategic human resource management. The Academy of Management Annals, 8(1), pp.1-56.