Public and Private Sector

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“Private and public sector management differ only in context, but this difference is significant.”

George Boyne in his article “Human resource management in the Public and private sectors: An empirical comparison” explains with empirical evidence how even though private and public sector management differs in service ethos but this difference is significant which impacts the tradition, culture and practises of both the sectors. Over the past two decades many different interpretations and perceptions have come into play on the similarities and differences between private and public sector management.

Public sector management before the 1980s was found to be working more on a Weberian centralized model where you would find a hierarchical model of public services, the administrative rules and regulations of the organisations were determined by central government which were often conflicting in nature and were implemented by public organizations with relatively little scope for strategizing at a local level (Bach and della Rocca 2000). Notions of paternalism, standardization, job security, collectivism, developmental-humanism and the aspiration to be a ‘model employer’, were the values underpinning the management of people (Farnham and Horton 1996; Boyne et al. 1999; Jaconelli and Sheffi eld 2000; Lupton and Shaw 2001

There have been increased initiatives in modernizing the public administrations in various parts of the world. Primarily, the reforms have been in the structure, process and systems of the public sector organisations. Two schools of thoughts are being followed, wherein one states that both public and private sector organisations have similarities and show convergence whereas the other states that there is a fundamental difference in working of public and private sector organisations.

It is assumed that the behaviour and attitude of employees of a public sector organisation is vastly different than that of a private organisation. As a result, there has been a tremendous pressure on the public sector employees to perform like a private organisation due to fiscal crises, a brooding and hypercritical public and stunningly rapid movement in the personnel system’s environment (highlighted more by the technological advances and momentous shifts in the labour force) have exacerbated the field’s traditional problems.

The pressure is mainly due to the opinion that, public organizations operate inefficiently and very costly whereas private management is not only superior to public administration but efficient and cheaper (Rhodes 1994). Since, in the public sector, salaries can amount to up to 80 per cent of organizational costs, the domain of human resource management (HRM) has received renewed attention under these reforms (Barnett et al. 1996; Corby and Higham 1996; Horton 2003). Thus public firms should adopt private management behaviours to perform better.

Conservative governments are encouraging employees in the public sector to imitate the performance of their private counterparts, including performance management, customer orientation, and a heightened strategic focus. Public management reform proponents contend public sector pathologies such as monopoly, hierarchy, permanence of structure, and management inflexibility must be eschewed in favour of private sector innovation (Shleifer 1998; Savas 2000). In the bid to make the public sector more commercially viable some of the radical changes being proposed are decentralization and deregulation, broad banding, employment at-will systems, performance-based pay and knowledge management.

Over the years various variables have been examined ranging from sector and organizational characteristics such as red tape and decision making practices to individual-level attitudes and behaviour. The scholars have established that significant organizational differences exist between both sectors. The authors have even assumed that there is significant difference at...
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