Academic journal article Public Personnel Management

Indicators of Strategic HRM Effectiveness: A Case Study of an Australian Public Sector Agency during Commercialization

Academic journal article Public Personnel Management

Indicators of Strategic HRM Effectiveness: A Case Study of an Australian Public Sector Agency during Commercialization

Article excerpt

This study examines the effectiveness of the human resource management (HRM) function of a public sector entity as it became corporatized. There has been little empirical research regarding the effectiveness of the people management functions within the Australian public sector as these entities went through a period of transition to commercialization. A questionnaire obtaining perceptions on different aspects of HR effectiveness, both before and after corporatization, was administered to a sample (N = 122) representing a number of different stakeholder groups of the corporate HRM unit. The results showed a moderate, but statistically significant, improvement in the effectiveness of HRM, and of the corporate HRM unit, as the host organization went through corporatization. Perceptions on HR effectiveness were not found to vary significantly between the different stakeholder groups. Regression analysis showed that the major predictors of the improvement in the overall effectiveness of the corporate HR unit were, firstly, changes in the level of satisfaction with the quality of the HR outcomes as a result of commercialization and, secondly, the change in extent to which the senior HR practitioner had effective influence over strategic decision-making processes.

There is a growing body of literature that focuses on the people management function in public service organizations. Most of these examine the changing nature of the human resource management (HRM) function. Some of these studies have investigated the effect of the adoption of new public management on the shift from personnel management to a more strategic approach to HRM. Most of these studies were conducted in the United Kingdom and the United States, with little empirical evidence available from the Australian public sector context.

Research into the Australian context is important as it allows comparison with other countries in relation to the changing roles and contribution of the people management function in the process of change. In addition, the context of government and the influence of trade unions in Australia are different to those in the UK and USA. Most research on HRM's role changes has focused on private sector entities with little research carried out in commercialized statutory entities. (1) In this study, the aim is to examine the effectiveness of the corporate-level HRM function of a large corporatized public transport organization, before and after its corporatization.

Commercialization and HRM Effectiveness

There are relatively few studies that have examined the changing role of the public sector HRM function in public agencies that have undergone the process of commercialization and corporatization. While there is an emerging body of research on public sector HRM effectiveness, (2) these studies do not fully address the effectiveness of the corporate-level HRM function. Instead, the emphasis of these studies is on the effectiveness of personnel activities and processes.

This current study acknowledges the commonly held view that there are three levels of HRM responsibility, strategic, managerial and functional or operational. (3) It also proposes that the role of human resources (HR) practitioners is not simply to implement preconceived practices (operational level) but to help define best practice for the organization (managerial level). It is further proposed that HR practitioners should be actively involved with the development of business strategies (strategic level).

Recent studies have suggested that a strategic approach to HRM offers an opportunity for practitioners to break out of the personnel management mould, and that it offers a logical framework for practitioners to add value in the HRM function. (4) In most public sector entities, HRM as a function or collection of functions is not perceived to be strategic and it is not properly aligned with corporate missions and goals. …

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