HUMAN RESOURCE DEVELOPMENT IN ORGANIZATIONS OF PUBLIC ADMINISTRATION OF LATVIA: A STRATEGIC APPROACH

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1 HUMAN RESOURCE DEVELOPMENT IN ORGANIZATIONS OF PUBLIC ADMINISTRATION OF LATVIA: A STRATEGIC APPROACH Andris Sarnovičs BA School of Business and Finance, Latvia, andris.sarnovics@lais.lv Abstract The goal of the article is to analyze disadvantages in human resource management that disallow achieving the strategic goals of public administration of Latvia, as well as to introduce the establishment process of public sector organization s human resource strategy. Based on a survey of civil servants and employees of ministries and other direct administration institutions of Latvia and using the statistical methods of analysis (calculation of average, group comparison), the author examines the factors influencing the work of intellectual employees of public administration. Conclusions of mentioned analysis are related to principles that should be used in human resource development strategies of public administration institutions and management methodology of intellectual workers. To effectively improve the processes of productivity, motivation and development civil servants and employees of public administration, it is necessary to establish strategic approach to personnel management for each organization of public sector. Keywords: public sector organization, mission, strategy, performance, human resource development. Introduction Intellectual work is the basics of the intellectual organization s performance including the organizations of public administration (PA), and the existence of them fully depends on knowledge, skills, competences and attitudes of the intellectual workers. Professionally trained, motivated and contributory personnel is the very crucial precondition for successful implementation of public administration s mission and realisation of institutional functions and strategies. Goals of learning and growth of the organization s personnel describe how the composite of people, technologies and the organizational climate promotes the accomplishment of the strategy. In individual level, investing in human-resources promotes the growth of knowledge, skills and abilities, encouraging development and growth of the employee. On organizational level, it results in increasing productivity and efficiency. On society level, higher educated and developed individuals together with more efficient organizations provide growth of culture and economy, as well as improve the well-being of society. Management of intellectual workers in public sector organizations Human resource management is a coherent and strategic approach to the management of an organization s most valued assets - the people working there who individually and collectively contribute to the achievement of its objectives (Armstrong, 2006). Development of human resource management systems in public sector organizations can be analysed by using several models (Ban, 2005). According to the customer service model, the department of personnel management carries out all duties of personnel administration and serves organization s management as the main client. The organization development and consulting model is also oriented towards monitoring of duties. This model is commonly used in departments of personnel management which undertake duties of the organization s inner consultant and support department managers in matters and problems of short-term operative planning and consultations. In the strategic human resource management model managers of personnel management departments or services work as full-fledged members of the organization s management team, merging the strategy of personnel and human resource management with the mission, goals of the organization and the institution s working strategy, therefore making human resource management a part of the organization s strategic planning process. The term "human resource strategy" usually applies to a set of coordinated decisions and actions which formulates and directs human resource management (recruitment, positioning, utilizing, developing and rewarding) in the context of achieving the organization s goals (Cooper & Channon, 1998). In this process the understanding of human capital as a value of the organization becomes important. Human capital is characterized by the knowledge and skills of employees that can be considered as the most significant resource, particularly in intellectual organizations (Lengnick-Hall & Lengnick-Hall, 2003). Intellectual work is crucial in the performance of a public sector organization as an intellectual organization, and its existence relies greatly on the intellectual abilities of personnel members. 733

2 Different approaches in the achievement of strategic management of human resources are reflected in the human resource management s priority of either "humans" or "resource" (Bach, 2005; Houldsworth & Jirasinghe, 2006). "Hard" human resource management emphasizes the aspect of "resource" and sees a firm integration of human resource politics, systems and activities in the organization s strategy as crucial (Hendry & Pettigrew, 1990). From this point of view a person is perceived as a passive resource that holds the necessary skills and is available for an appropriate price, instead of being perceived as a source of creative energy (Legge, 2005); personnel recruitment, assessment, development and rewarding is done for the purpose of establishing the organization s performance (Fombrun et al., 1999), and the actions towards human resource development are subordinated to strategic goals of the whole organization(gubbins & Garavan, 2005). "Soft" human resource management is based on the epistemology of human relations and emphasizes the importance of communication, team work and employing individual talents (Poole & Mansfield, 1994; Legge, 2005). P.F.Drucker (2007) draws attention to six factors that are vital to productivity of intellectual workers, but as the demands of the intellectual worker s organization and performance environment vary, these factors may have a different influence and prospects of achievement. Considering that the decisions of PA are being made and services are provided according to restrictions and priorities formulated by the politically administrative system, the most important factors that influence labour productivity of public administration s intellectual workers are the employee s understanding of the core of the task and the goals to be achieved; a chance to take part in and contribute intellectually to the management processes of both their work and the whole organization; a chance to continually learn and develop; the selection of qualitative work assessment methods; work conditions and the organization s inner culture that is both motivating and promotes a creative work atmosphere. During the creation of the organization s strategy attention is paid to the production of a human resource development program (recruitment, learning and career development) - it forms the human capital of organization. Most human resource development programs try to satisfy the needs of all workers, and therefore employees whose work is strategically significant for the organization do not receive enough investment. In the strategic job family model an organization focuses human resource development programs on several critical jobs that have a significant impact on the accomplishment of strategy, therefore ensuring a rapid process of actions and a rational resource spending. However, this approach also describes up to 90% of workers as "non-strategic", and the organization might end up ignoring their reasonable need for development. The strategic value model (Kaplan & Norton, 2004) holds a premise that the job of every worker is strategic - a strategy contains values and priorities which can be included in the goals and actions of every worker. Personnel assessment is closely related to further development of employees. Assessing the performance of a worker in the previous period can help identify areas which need improvement, while the assessment of potential allows identifying the competences which may be crucial in successful development of the worker s further career. The study that was carried out in several European countries (Mathews et al., 2001) shows that the worker s education needs are usually influenced by decisions of the supreme management and direct managers, thus pushing most other methods aside. That might lead to a conclusion that learning might be a process imposed by management, while it can also be interpreted as the assurance of strict management in matters of education quality. A variety of assessment methods for education needs can reduce the influence of subjective methods and the management s control processes. Another important aspect of assuring a wholesome effective civil service management, including the development of human resources, is the approach of either centralization or decentralization of matters of personnel management and development in the PA (Pollitt & Bouckaert, 2004). Traditionally PA systems tend to have a centralized personnel management. Organizations (institutions and agencies) have a relatively low chance to choose their personnel management system freely and develop it; they are obliged to function according to the current civil service law. Matters of administration of the civil service, organising tests for recruiting and promoting, creation of a work pay policy and other functions are the responsibility of centralized structures (e.g. the State Civil Service Administration). It also ensures coordinated actions of organizations, objectivity and precision as well as high professionalism, but it also creates flaws such as bureaucracy, delays and the inability to adapt to changes in external environment in time. Human resource management in the PA of Latvia The law "On State Civil Service", adopted in 1994, legally adjusted the status of workers of the public administration. Civil service positions were separated from political and employee positions, civil servants 734

3 received higher demands as well as certain social security. The law provided a mixed system of the civil service, still including several principles of the career-based civil service system: a certain possibility to promote a civil servant after an internal competition, a possibility to put a civil servant in a different position as well as a certain duty to ensure a continuous improvement of civil servants qualification. The Civil Service Law, adopted in 2000, defines the status of a civil servant without putting an emphasis on the position s title but rather on the position s duties. Therefore common criteria for defining civil servants positions in the PA were established: a civil servant is a person who creates a sector s policy or a strategy for development within a PA institution, coordinates activities within a sector, divides or controls financial resources, develops documentation of legal standards or controls the compliance of these legal standards, creates or passes administrative standards or creates or passes other decisions involving individual rights. Hence the further development of human resource capital of the PA of the Latvian Republic was created according to the strategic job family model, where strategic job families, classified by formal criteria included in the job description, incorporated 55-75% of the people employed in PA institutions in the following years. This approach allowed the creation of a unified system of civil servant position classification throughout the public administration, but it turned out to be ineffective from the point of view of strategic development of PA human resource - the range of employees whose work was defined as strategically important for the organization turned out to be too wide, and the development programs failed to embrace the needs of all these employees effectively enough. Although Latvia had gained progress and stability in the area of civil service development, several shortcomings were revealed in the system - lack of motivation, insufficient qualification, limited career opportunities, an education system that needed to be reorganized, both suppression of initiative and lack of control, "uniform honour" or local patriotism, corporative bonds and corruption under the influence of which the civil servant makes decisions that are not in accordance with the public needs (Dravnieks, 2002). After choosing an orientation to a significantly higher productivity and effectiveness as well as a qualitatively different inner value system in an organization and more determined actions, the search for a new, unified and strategically oriented solution began. In the creation of a job classification system, the main emphasis was put on making it possible to compare PA work and job classification to the one used in the private sector, hence making it easier to plan wages, evaluate competitiveness and prevent the outflow of qualified public sector workers to the private sector as this would mean loss of the knowledge and experience gained in the public administration, resources invested in raising the workers qualification, reduction of administrative capacity of PA and a constant need to spend notable resources for personnel training. The potential of the aforementioned job classification system regarding development of public administration s human resources and improvement of the personnel management system has not been fully embraced. Unfortunately the strategically crucial competences of public civil servants and PA workers, which would make it possible to use the advantages of the Strategic value model rather than the Strategic job family model in the ensuring of development of public administration s human resources and raise the effectiveness of education and development programs, have not been identified and evaluated. Overall strategies of PA institution actions in Latvia focus on the development of sectors included in their field of competence, accomplishment of policy planning initiatives and reaching the goals and priorities of an organization associated with them. Still, the strategies do not include matters of targeted development of the organization itself and its human resources. The matters of human resource development are centralized and common between PA institutions while personnel management departments are responsible for management support with administrative functions as well. Personnel recruitment, education and development according to legal standards, documents of political planning and practice for particular job groups is being planned according to the strategic goals of public administration. Personnel mobility is low, mostly being carried out in the hierarchy. The competence model has not been fully introduced to public administration, therefore job evaluation and wage establishing is done according to hierarchy. In the year due to the economical crisis human resource management solutions representing the "resource" model are dominant, for example, reduction of the number of civil servants and workers, wage and social security as opposed to rational revision of functions and full embracement of civil servants and workers potential which would increase their work effectiveness. Therefore signs of the "hard" model are dominant in the human resource management of PA in Latvia - it does not promote loyalty and an increase in work effectiveness amongst intellectual workers, which include civil servants and PA institution workers as well. 735

4 Factors affecting the motivation, work effectiveness and development of civil servants and workers The aim of this study was to ascertain the civil servants and workers of PA institutions of Latvia sense of the mission, goals and main objectives of their institutions, the role of workers in reaching these goals as well as their evaluation of opportunities to reach personal goals and personal development when working in a public institution. 381 civil servants and workers of ministries and central public institutions participated in the study, and the differences between density of socially demographic subcategories and proportional density in the sample were calculated. The study shows that upon initiating a position civil servants and workers express confidence of their opportunities to develop and build a career in public administration, evaluate the significance of the experience they are about to acquire; they feel motivated to develop and keep building a career in public administration. As the length of service grows, so does the concern of the possibility to keep their jobs as well as wages and social security in the distant future, which does not work well as a development motivator. Civil servants and workers of PA institutions with a lower (secondary) education level, those who do not study in college or the ones holding a desk officer, clerk position etc. in the lower job group show a proportionally low awareness of institution missions, goals and work strategies on average, therefore it is often difficult to coordinate their personal goals with the organization s goals. This leads to difficulties in choosing the appropriate learning program as well as problems with the workers motivation. Explaining the missions, goals and development of the organizations will make the learning more effective and allow using the knowledge, skills and abilities in work. This will also increase the workers wish to develop and a belief in the significance of their work for the organization. Civil servants and workers of PA institutions beyond 40 years of age, also the ones with more than 10 years of service in public administration, are experienced, know their duties well, evaluate their educational needs objectively as well as show an ability to use their recently acquired knowledge in work. Civil servants and workers from these groups do not associate education with career growth but they do recognize the influence it has on the work effectiveness. Although these workers do not always agree with the decisions made in the ministry or PA institution, they remain loyal to their work in PA and do not plan significant changes in their career. Still, in many cases these groups of civil servants and workers show insecurity concerning the possibility to keep their job upon changes, including a change of political management. Civil servants and workers of PA institutions included in the aforementioned groups can be motivated to work effectively and with good quality, but stability, creative work, salary and social security is important to them when working in public administration. Young (up to 30 years of age) civil servants and workers of PA institutions as well as the ones with a length of service less than 5 years are proportionally secure about their opportunities to keep working in PA and do not feel threatened by change, but in many cases these workers associate their future with moving to the private sector which they see as a better opportunity for development. They are motivated to learn and develop, and by supporting the building of these workers careers it is possible to attain loyal, creative and effective civil servants and workers in public administration. The aforementioned suggestions are oriented to increase the motivation of civil servants and workers in the public administration, to assure development opportunities and reaching personal goals while working in public administration. Still, these efforts will not be effective in organizations with a traditional hierarchy and under the circumstances of a centralized human resource management in public administration. The goals of PA concerning human resource development are often different from the corresponding goals in particular organizations, and the missing development strategies of PA organizations are replaced with development strategies of the fields these organizations are competent of. A real improvement in work effectiveness, motivation and developmental processes of civil servants and workers in PA can be reached by creating a strategic approach to the human resource management in every organization of the public sector. Establishment of human resource strategies in PA institutions The human resource management strategy for a PA institutions must be established and implemented in accordance with other strategies in these organizations - finance, information technology and other functional strategies which support the organization s mission and overall strategic progress, therefore ensuring a focused, structured and integrated process of change in the organization. The most important objective in the area of human resource management in a ministry or a PA institution is to ensure accomplishment of their mission and 736

5 main duties with appropriate workers competencies and effective management. The establishment process of public sector organization s human resource strategy is displayed in the Figure 1. Figure 1. Organizational HR strategy s framework Establishment of organizational HR management strategy has to be based on analysis which allows evaluating: 1) appraisal of current personnel provision correlation between number of employees, their skills, competencies, experience and other factors and the tasks, amount of work and level of responsibility; 2) personnel management system, including procedures and systems of developing and recruiting employees, ability to accomplish the organization s future tasks and to adapt to the changes expected; 3) correlation between personnel management supporting system (personnel administration and accounting, documentation and information technologies) and the targets set; 4) organizational culture and internal relationships, for example expectations of employees regarding ability to accomplish their personal targets; 5) regulations and guidelines of documentation of legal standards and national policy planning documentation regarding human resource management; 6) evaluation of the impact of parties interested in the activity and results of ministry or public administration s institution (society, politicians, public organizations, industry s employees and others). Human resource strategy of ministry or public administration s institution is aimed at promoting accomplishment of the organization s mission and maintaining high quality of the performance in the field of organization s competence by providing and developing the potential of human-resources. Considering the specifics of managing intellectual workers, the strategy of human resource management in PA institutions has to focus on the following key objectives: coordination among employees and departments functions and objectives and the mission and strategic goals of the organization; determined development and career growth of the personnel in order to provide accomplishment of professional and managerial potential, as well as maintaining the competencies and introduce them into the whole organization; established performance management system based on qualitative indicators; establishment of motivating work environment in the organization in order to attract highly skilled intellectual workers to public administration. Coordination between employee s functions and tasks of ministries and PA institutions and the mission and strategic goals of organizations has to be initiated by functional audit which consequently allows identification of functions and positions significant to achieve the targets of the organization. The system of job positions has to be established in coordination with the programs performed by the organization, while the internal transfer of employees has to provide the personnel arrangement in coordination with the 737

6 priorities of the organization, encouraging the employee development opportunities. External recruiting has to provide inflow of highly skilled personnel. Considering the common tendency of orientation towards position based civil service system, in cases of dismissal the significant knowledge, skills and competencies have to be transferred and maintained within the organization. In order for the personnel to develop a continuous learning within the organization must be ensured - it facilitates the intellectual organization s ability to continuously change and develop in accordance with external needs. Personnel development and career growth needs to be provided with consolidation of learning and development system which encourages maximal utilization of employee s intellectual and professional potential, as well as allow acquiring knowledge and skills necessary for providing successful performance of the organization in the future, and simultaneously provide the ground of carrier growth. As an important encouraging factor in this situation the organization of team work must be used, which would ensure not only successful fulfilment of duties but also learning during the working process and making the new knowledge available to all workers of the organization. Programs of personnel rotation and mobility within and outside the organizations have to provide establishment of understanding of different public sectors activities, consolidation of horizontal cooperation and increasing the experience and competence of the employees. Success and career growth, on the other hand, needs to be based upon intellectual and creative abilities. Due to the need to limit PA expenses an optimal usage of personnel has become a priority rather than the recruiting of new personnel to ensure more competencies in the organization. That in its turn creates the need to give additional attention to the development of workers that is related to the fulfilment of the organization s future needs to be provided with qualified personnel. The system of raising work effectiveness must be based on the organization s strategic goals, it must reflect each worker s contribution in the process of reaching these goals, promote worker s understanding of the correlation between individual and organizational goals. It is crucial to increase the effectiveness of the current worker evaluation system by carrying out learning programs according to the learning needs, promotion of growth opportunities for civil servants or workers as well as providing a stimulating wage and motivation system s support to this process as much as possible. Performance management needs to be associated with the defining of goals, when the manager together with his inferior defines the main goals to be reached, designs an individual plan for a certain period in time. The goals need to be definite (clear and certain), measurable (a term must be set for the quality and quantity of work, money resources and standards), corresponding with the overall goals of the organization and defined in time (with a beginning and a deadline; a between-period term is also advisable), they need to be mobilizing (challenging) and reachable (enforceable), potential stimuli after the fulfilment of goals should also be scheduled. The wage system for intellectual organization workers needs to combine moral and material methods of stimulation, including a grant system, certificates and personal grades, as well as the giving of special awards for significant contribution in the establishment of the organization s growth. Considering the team work principle, the material stimulation system must be based on collective or group rewarding, as well as the assessment of particular workers knowledge and competence, therefore stimulating the workers to gain new knowledge, skills and abilities and share them with their colleagues who will ensure continuous increase of the organization s human resource quality. As for the inner environment of an organization and culture of cooperation, it is important to create a stable and motivating atmosphere in the organization, which would promote the workers to take initiative, a wish to improve individual competence, participating and developing a creative approach to problem solving, therefore ensuring maximum workers return in the process of reaching the organization s common goals. For this purpose the difference between the status of civil servants and PA workers need to be decreased; this also needs to be done with the wage, social security and motivational systems. Principles of honesty and ethics have to be secured on the level of organizational management and relationships between workers; initiative, promotion of new ideas and the acceptance of changes, which would encourage intellectual workers trust to the organization and support for processes of change in it, needs to be supported and encouraged. Team work increases the effectiveness of an intellectual organization s work. It makes the organization s structure more flexible and capable of reacting quickly to external changes. It is important that the team should combine all necessary functions and roles, associated with the creation of ideas, carrying them out and attending to residents, clients and other people who are interested. Effective team work is described as common interests between team members, a unified perception and understanding of goals, a 738

7 high level of work coordination, ability to adapt to situational changes, well-timed decision making and action, effective communication and a creative atmosphere. Conclusions PA organizations with a traditional hierarchy and under the circumstances of a centralized human resource management do not promote loyalty and an increase in work effectiveness amongst intellectual workers, which include civil servants and PA institution workers. Upon initiating a position civil servants and workers express confidence of their opportunities to develop and build a career in public administration, evaluate the significance of the experience they are about to acquire; they feel motivated to develop and keep building a career in public administration. As the length of service grows, so does the concern of the possibility to keep their jobs as well as wages and social security in the distant future, which does not work well as a development motivator. Human resource strategy of ministry or public administration s institution is aimed at promoting accomplishment of the organization s mission and maintaining high quality of the performance in the field of organization s competence by providing and developing the potential of human-resources and has to focus on the following key objectives: coordination among employees and departments functions and objectives and the mission and strategic goals of the organization; determined development and career growth of the personnel in order to provide accomplishment of professional and managerial potential, as well as maintaining the competencies and introduce them into the whole organization; established performance management system based on qualitative indicators; establishment of motivating work environment in the organization in order to attract highly skilled intellectual workers to public administration. References 1. Armstrong, M. (2006). Strategic Human Resource Management: A Guide to Action, 3rd Edition. London: Kogan Page Publishers. 2. Bach, S. (2005). Managing human resources: personnel management in transition, 4th Edition, Wiley-Blackwell. 3. Ban, C. (2005). The changing role of the Human Resource Office. In S. E. Condrey (Ed.) Handbook of Human Resources Management in Government, 2nd Edition, Jossey-Bass, Cooper, C. L. & Channon, D. F. (1998). The concise Blackwell encyclopaedia of management. Wiley-Blackwell. 5. Dravnieks A. (2002). Publiskās pārvaldes mazspēja vai jau hroniska? jeb administratīvās kapacitātes elementi. "Jaunā pārvalde", 12 (42). 6. Drucker, P.F. (2007). Management Challenges for the 21st Century. Amsterdam: Elsevier Science & Technology. 7. Fombrun, C.J., Tichy, M.M., Devanna M. A. (1999). Strategic Human Resource Management. New York: John Wiley. 8. Gubbins, M. C. & Garavan, T. N. (2005). Studying HRD Practitioners: A Social Capital Model. Human Resource Development Review, Vol. 4, No. 2, Hendry, C. & Pettigrew, A. (1990). Human resource management: an agenda for the 1990s. International Journal of Human Resource Management, 1, Houldsworth, E. & Jirasinghe, D. (2006). Managing and measuring employee performance. Kogan Page Publishers. 11. Kaplan, R.S. & Norton, D.P. (2004). Strategy Maps: Converting Intangible Assets into Tangible Outcomes. Boston: Harvard Business School Press. 12. Legge, K. (2005). Human resource management: rhetorics and realities. Palgrave Macmillan. 13. Lengnick-Hall, M. & Lengnick-Hall, C. (2003). Human Resource Management in the Knowledge Economy: New Challenges, New Roles, New Capabilities. San Francisco: Berrett-Koehler. 14. Mathews, B.P., Ueno, A., Kekale, T., Repka, M., Pereira, Z.L., Silva, G.. (2001). Quality training: Needs and evaluation findings from a European survey. Total Quality Management, vol. 12, No Pollitt, C., & Bouckaert, G. (2004). Public management reform: A comparative analysis. Oxford, UK: Oxford University Press. 16. Poole, M. & Mansfield, R. (1994). Managers attitudes to Human Resource Management: Rhetoric and Reality. In P. Blyton and P. Turnbull (eds), Reassessing Human Resource Management, London: Sage. 739