Human Resources Management in Public and Nonprofit Organizations (3rd Edition)

7/30/2019 Human Resources Management in Public and Nonprofit Organizations (3rd Edition)

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Strategic human resources management (SHRM) is the integrationof human resources management (HRM) with the strategic missionof the organization. It adapts human resources policies and practices tomeet the challenges that agencies face today, as well as those they will facein the future. What was written in the previous editions of this book is

just as important today. Human resources management departments musttake a proactive role in guiding and supporting agency efforts to meet thechanging demands of their external and internal environments.

Government and nonprofit organizations are facing many challenges:the tight budgets brought about by declines in tax revenues, declines inconsumer spending, increases in unemployment, and federal governmentobligations in Iraq have reduced the federal dollars flowing to programsin state and local government programs. President Bush has proposed

reducing Community Development Block Grants, Child Care Develop-ment Block Grants, Social Services Block Grants, the Low-Income HomeEnergy Assistance Program, and other programs. Also proposed are cutsto Medicare and Medicaid, as well as a reduction in funding for the Cor-poration for Public Broadcasting and the National Endowment for the

Arts ( Jensen & Perry, 2008). Reductions in public dollars and private dona-tions have required public and nonprofit organizations to lay off staff,even as demands for many services continue to increase. These changes

PREFACE


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have occurred simultaneously with increasing demands for efficient andeffective services.

The new public service has become more diverse. Changing demo-

graphics have resulted in an increase in the number of employees who arewomen, members of ethnic and racial minorities, persons with disabili-ties, and employees from different generations with different knowledge,skills, abilities, and other characteristics (KSAOCs). Graduates of schoolsof public policy and administration are likely to take jobs in the nonprofitsector and show a greater interest in seeking employment opportunities inthe private sector. Todays graduates are moving across the three sectors,looking for challenging work and the opportunity to learn new skills. Mas-ter of business administration graduates are also looking for challengingwork. This presents an opportunity and challenge for public and nonprofit

organizations to design an HRM system that will recruit individuals want-ing a challenge, keep them motivated, and enable them to make a differ-ence through their work.

Changes in information technology and automation have led to therestructuring of many public and nonprofit agencies. Advances in technol-ogy have enabled employees to work from their homes, provided oppor-tunities for more flexible work hours, and increased the employmentoptions for disabled individuals. Computer networks, videoconferencing,and streaming video have changed communication patterns. Informa-tion technology is increasingly being used not only to automate routine

tasks, but also to restructure and integrate service delivery procedures andprograms.

Organizations must do more than just adapt to internal changes. Theymust also seek better ways to meet the expectations of citizens, clients,funding sources, foundations, elected officials, boards of directors, interestgroups, and the media.

The public sector is becoming less involved in direct service deliv-ery. Government at all levels is increasingly relying on nonprofit and pri-

vate sector organizations to provide services. Government work is being

implemented through a network of contracting, intergovernmentalgrants, vouchers, tax credits, regulations, and other indirect administra-tive approaches. While the federal government in particular is reducingthe number of individuals it directly employs, it continues to need a sizableshadow to accomplish its mission (Light, 1999). These employees arepart of the shadow that is created when public goods and services are pro-

vided through private, nonprofit, or state and local entities. According toLight, many of the nations most challenging public service jobs are now


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found outside the federal government, not inside it. Kettl (2002, p. 120)notes the following:

Government has come to rely heavily on for-profit and nonprofitorganizations for delivering goods and services ranging from antimissile

systems to welfare reform. These changes have scarcely obliterated the

role of Congress, the president and the courts. State and local govern-

ments have become even livelier. Rather, these changes have layered

new challenges on top of the old ones, under which the system already

mightily struggles. New process-based problems have emerged as well:

How can hierarchical bureaucracies, created with the presumption that

they directly deliver services, cope with services increasingly delivered

through multiple (often nongovernmental) partners? Budgetary control

processes that work well for traditional bureaucracies often prove lesseffective in gathering information from nongovernmental partners

or in shaping their incentives. Personnel systems designed to insulate

government from political interference have proven less adaptive to

these new challenges, especially in creating a cohort of executives skilled

in managing indirect government.

Declining revenues combined with demographic changes, changesin employees values, and the need to retain effective workers are someof the forces that have compelled public and nonprofit organizations

to become concerned with their very survival. These changes requirea more flexible and skilled workforce. To survive, organizations needemployees with new skills. Hard Truths/Tough Choices(National Commis-sion on the State and Local Public Service, 1993) identified five skill areasthat the public manager needs: competency in team building, compe-tency in communication, competency in involving employees, commit-ment to cultural awareness, and commitment to quality. These skills haveHRM implications for employee recruitment, selection, and training.Public and nonprofit sector jobs are increasingly professional in nature,

requiring higher levels of education. At the same time, there is a decreasein jobs that are physically demanding. Employees in public and nonprofitagencies often deal with a variety of people, many of whom have a stakein the agency. Taxpayers, clients, customers, elected officials, donors,contractors, board members, and special interest groups are just someof the stakeholders concerned about agency performance. Employersmust ask themselves how to meet the publics objectives and satisfy theorganizations stakeholders.


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More recently there has been an emphasis on human capital: arecognition that employees are an agencys most important organiza-tional asset. Workers define its character, affect its capacity to perform, and

represent the knowledge base of the organization. Despite this acknowl-edgment, it has been noted that there is little strategic human capitalmanagement being executed in federal agencies. Reports indicate that thefollowing activities are lacking: (1) leadership, continuity, and successionplanning; (2) strategic human capital planning and organizational align-ment; (3) acquiring and developing staffs whose size, skills, and use meetagency needs; and (4) creating results-oriented organizational cultures. Allhave been identified as challenges facing the federal government (General

Accounting Office 2001a, 2001b, 2002a). State and local governments andnonprofit and for-profit organizations are facing these same human capi-

tal challenges (Adams, 2006; Kunreuther, 2005; Cornelius, Corvington,& Ruesga, 2008; Hall, 2006a; Halpern, 2006; Light, 1998, 2000a,2000b; Partnerships for Public Service, 2005; Brockbank, Johnson, &Ulrich, 2008).

To be strategic partners, HRM departments must possess high lev-els of professional and business knowledge. HRM must establish links toenhancing organizational performance and be able to demonstrate on acontinuing basis how its activities contribute to the organizations successand effectiveness.

Public and nonprofit agencies must be flexible and attuned to the

needs of society. They must seek to improve the quality of their services byengaging in SHRM. Recruitment and selection strategies must be innova-tive, career development opportunities must be provided, work assignmentsmust be flexible, and policies must reward superior performers and holdmarginal employees accountable. These policies must be developed andadministered according to the principles of equity, efficiency, and effective-ness. Performance standards must be designed to promote the goals and

values of organizations.Historically, HRM has been seen as Cinderellaon the periphery, not

integrated into the core of agency functions. Fitz-enz (1996, p. 3) notesthat historically personnel departments were either dumping grounds fororganizational casualtieslikable employees who were not proficientin other tasksor staffed with employees from line functions, neither ofwhom had any formal education in personnel administration. He also attri-butes the peripheral relationship of HRM departments to other functionaldepartments to the fact that for years, it was believed that organizationscould not measure or quantify what the HRM department accomplished


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or contributed to the organizations bottom line. HRM departments didnot speak in financial terms, the common denominator of business lan-guage, and were not very good at communicating the relationship between

successful HRM programs and organizational success. As a result, mostHRM departments were denied access to the organizations strategic plan-ning processes and forced into reactive activities instead of being allowedto collaborate with the other management teams to formulate policies anddetermine future objectives. This approach has been a mistake. Researchin the private sector has found that returns on wise HRM policies cansurpass returns from other resources (Cascio, 2000; Cascio & Boudreau,2008; Fitz-enz, 1996, 2002). In the public and nonprofit sectors, where60 to 80 percent of expenditures are for personnel, SHRM is even moreimportant than in the private sector.

Purpose and Audience

This book addresses SHRM issues in nonprofit and public agencies.Although many textbooks address public personnel or HRM, only a feware dedicated to the nonprofit sector, thus omitting a significant partnerthat provides services beneficial to society. Topics such as recruiting andmanaging volunteers and working with a board of directors have notbeen addressed. There are other omissions as well, such as a discussion of

nonprofit labor relations. For example, nonprofit labor relations are gov-erned by the amended National Labor Relations Act (the Labor-Manage-ment Relations Act), while most federal employees fall under the FederalService Labor-Management Relations Statute (Title VII of the Civil Ser-

vice Reform Act of 1978), and state and local government employees areguided by their respective public employee relations statutes. In the publicsector, an applicants or employees religion is irrelevant, and discriminationbecause of religion is prohibited. However, religiously affiliated nonprofitsthat provide services of a religious nature may, in special circumstances, dis-

criminate against applicants or employees on the basis of their religion.Because service provider nonprofits are typically the recipients ofgovernment contracts and grants, a new intergovernmental environ-ment has emerged as nongovernmental organizations have increasinglybeen used to implement public policy. Kramer and Grossman (1987)and Salamon (1995, 1999) refer to this new interorganizational environ-ment as the new political economy, the contract state, or nonprofitfederalism, while Light (1999) refers to it as shadow government.


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The emphasis in this book is on nonprofits that are closely associatedwith providing a public benefit or service or with solving a problem onbehalf of the public interest. It focuses on nonprofits that are responsible

for delivering health care, social services, education, arts, advocacy, andresearch. The objectives of these nonprofits often parallel those of manygovernment agencies in terms of the individual and community servicesthey provide.

Public organizations and nonprofits are similar in that they definethemselves according to their missions or the services they offer. Theseservices are often intangible and difficult to measure. The clients receivingpublic or nonprofit services and the professionals delivering them make

very different judgments about the quality of those services. Both sectorsare responsible to multiple constituencies: nonprofits are responsible to

supporters, sponsors, clients, and government sources that provide fund-ing and impose regulations; and public agencies to their respective legis-lative and judicial branches and to taxpayers, cognate agencies, politicalappointees, clients, the media, and other levels of government (Kanter &Summers, 1987; Starling, 1986). Lipsky and Smith (19891990) commentthat public and private service organizations share many characteristics:the need to process clients through systems of eligibility and treatment, theneed to maintain a competent staff to be effective, and the need to accountfor financial expenditures. These organizations are also expected to be fair(equitable), accommodate likely and unanticipated complexities (respon-

sive), protect the interests of sponsors in minimizing costs (efficient), betrue to their mandated purposes (accountable), and be honest (fiscallyhonorable).

The conceptual foundation of this book is strategic human resourcesmanagement. SHRM is the integration of human resources managementwith the strategic mission of the organization. It adapts human resourcespolicies and practices to meet the challenges agencies face today, as wellas those they will face in the future. Human resources departments musttake a proactive role in guiding and supporting agency efforts to meet the

changing demands of their environments. The information provided inthis book is to be used to improve the effectiveness of HRM activities.In many organizations, HRM policies and practices develop as needed,

with little integration of the organizations future needs. Often policies aredeveloped to solve an immediate problem, with no thought to their long-term implications. Such policies and practices lock the agency into inflex-ible modes of operation, leaving them unable to see that other strategiesmight be more appropriate.


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This book emphasizes the importance of HRM functions, revealingthem as major contributors to the accomplishment of the agencys mis-sion in the present and as the agency changes. The purpose of the book

is to provide practitioners, policymakers (such as elected officials), andboard members of local, state, federal, and nonprofit organizations withan understanding of the importance of SHRM in managing change. Itprovides the guidance necessary to implement effective HRM strategies.

The book was also written to be a textbook for use in public adminis-tration and nonprofit management graduate programs that offer coursesin personnel administration, HRM, strategic planning, and nonprofit man-agement. While the literature on nonprofit management has increased inrecent years, little information exists that addresses nonprofit HRM con-cerns. This book should help fill that void. As more public administration

programs offer a specialization in nonprofit management, it is importantthat resources be available to target the challenges that both the public andnonprofit sectors face.

Overview of the Contents

Part One introduces the context and environment of human resourcesmanagement. Chapter One discusses human resources managementand explains what public and nonprofit organizations are, how soci-

ety and workplaces have changed, and the HRM implications of thosechanges. Chapter Two explains how SHRM and human resources plan-ning are imperative if agencies are going to remain competitive and beable to accomplish their missions; it also discusses how the role of humanresource specialists has to change as well. Chapter Three presents thelegal environment of human resources management, and Chapter Fourdiscusses the importance of managing diversity if organizations expectto prosper. The importance of managing volunteers and how SHRMpractices can assist in making the volunteer experience productive for the

agency and satisfying to the volunteers and board members is the topic ofChapter Five.Part Two presents the techniques and functional areas of HRM. Exam-

ples are provided in each chapter. Chapter Six explains the importance ofjob analysis before executing HRM policies or developing job descriptions,performance appraisal instruments, training and development programs,and recruitment and selection criteria. A variety of job analysis techniquesare discussed. In Chapter Seven, recruitment and selection techniques are


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explained. Drug testing, physical ability tests, psychological examinations,and other selection techniques used in the public and nonprofit sectors aresummarized. At the end of the chapter, important psychometric concepts

are explained. There is also information on practical intelligence, emo-tional intelligence, adaptability, multiple intelligences, and organizationalcitizen performance behaviors. Performance management and evaluatingemployees performance is the focus of Chapter Eight. Different perfor-mance appraisal techniques are explained and their strengths and weak-nesses identified. The importance of rater training and documentation isnoted. Ethical issues in performance appraisal are discussed, as are meritpay and 360-degree evaluations. Chapter Nine identifies the internaland external factors that influence compensation policies and practices.The techniques used to develop pay systems are discussed. Examples of

job evaluation systems are provided, and nontraditional pay systems areexplained. In Chapter Ten, employer-provided benefits and pensionsare discussed.

The focus of Chapter Eleven is training and development activities.Changes in technology and demographics and the development of newresponsibilities and expectations have made training and career devel-opment more important than ever before. Identifying training needs,developing training objectives and the curriculum, and evaluating train-ing are explored. Different training formats are summarized. The chapterconcludes with examples of management training and career development

programs. Chapter Twelve discusses collective bargaining in the public andnonprofit sectors. The legal environment of labor-management relationsfor nonprofit, federal, state, and local employees is explored. Definitionsand explanations are provided for concepts such as unit determination,union security, unfair labor practices, management rights, impasse resolu-tion, and grievance arbitration. The reasons that unions exist in the publicand nonprofit sectors are examined. Chapter Thirteen discusses strategichuman resource management and information technology. The last chap-ter provides an overall conclusion. It summarizes the key lessons presented

in the book, which I hope will convince public and nonprofit administra-tors of the importance of strategic HRM.

Tampa, Florida Joan E. PynesNovember 2008


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Anumber of people have made valuable contributions to this book.I thank Allison Brunner, Rebecca Heider, and Kathleen Dolan Daviesfrom Jossey-Bass, as well as the four anonymous reviewers for their helpfulcomments and suggestions, which I have made whenever possible.

As in the first edition, friends, colleagues, and students provided assistance

by contributing workplace examples, reviewing chapters, or both. Specifi-

cally, I thank Anne Goldyche Dailey, Patricia Goldstein, and Patricia Murray

for their observations of working in and with public and nonprofit agencies.

Thanks are also extended to Mike Durham, general counsel for the High-

lands County Sheriffs Office, who provided me with updated information

for the content under constitutional rights in Chapter Three.

Special acknowledgment goes to my husband, Mike McNaughton, for his

sense of humor, editorial assistance, and encouragement. I express my appre-ciation to my sister Robyn for her encouragement as well. Like the first and

second editions, this book is in honor of my mother, who always inspired me

to do my best.

In memory and honor of my parents

ACKNOWLEDGMENTS


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Joan E. Pynes is a professor of public administration at the Universityof South Florida. She received her B.A. degree (1979) in public justicefrom the State University of New York at Oswego and her M.P.A. degree

(1983) and Ph.D. degree (1988) in public administration from Florida

Atlantic University. She is the author of articles and chapters on publicand nonprofit human resources management.

THE AUTHOR

Human Resources Management in Public and Nonprofit Organizations (3rd Edition)

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