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Human Resources Management for Public and Nonprofit Organizations: A
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Strategichumanresourcesmanagement(SHRM)istheintegrationofhumanresourcesmanagement(HRM) with the strategic mission of the organization It adapts human resources policies and practices to meet the challengesthatagenciesfacetoday,aswellasthosetheywillfaceinthefuture.Humanresourcesmanagement departments must take a proactive role in guiding and supporting agency efforts to meet the changing demandsoftheirexternalandinternalenvironments
This fourth edition updates the current knowledge, HRM practices, and legal, social, economic, and technologicalenvironmentinwhichpublicandnonprofitorganizationsoperatein
Since the third edition, HRM has undergone some significant changes. Many states are attempting to modifythecollectivebargainingrightsofpublicemployeesoraremovinginthedirectionofpassing“right-towork” legislation, which has implications for collective bargaining There have been changes to a number of federal laws that have an impact on HRM, and the public and nonprofit sectors are undergoing tremendous changes with increases in retirements and layoffs. Federal, state, and local governments are realigning their workforcesanddevelopingnewHRMpoliciesandpractices
There have been changes to a number of federal laws that have an impact on HRM, and the public and nonprofitsectorsareundergoingtremendouschangeswithincreasesinretirementsandlayoffs Federal,state, and local governments are realigning their workforces and developing new HRM policies and practices The political environment and the economy have changed since the last edition, bringing about changes in SHRM. Social media are being used at an increasing rate for the recruitment of potential employees, and there have been National Labor Relations Board decisions in regard to employees’ use of social media The economic crisis has forced government to rethink the way it operates There have been cuts to staffing and operating hours, agency consolidation and cross-agency service delivery, and a greater reliance on for-profit and nonprofit organizations to deliver services. These changes have occurred simultaneously with increasing demands for less expensive but more effective services The realignment of public and nonprofit agencies requires that managers and administrators take a strategic perspective and recruit, motivate, and retain competentandprofessionalemployees.
The new public service has become more diverse Changing demographics have resulted in an increase in the number of employees who are women, members of ethnic and racial minorities, persons with disabilities, and employees from different generations with different knowledge, skills, abilities, and other characteristics. Graduates of schools of public policy and administration are likely to take jobs in the nonprofit sector and show a greater interest in seeking employment opportunities in the private sector Today’s graduates are moving across the public, nonprofit, and for-profit sectors, looking for challenging work and the opportunity to learn new skills. Master’s of business administration graduates are also looking for challenging work. This presents an opportunity and challenge for public and nonprofit organizations to design an HRM system that will recruit those who want a challenge that keeps them motivated and enables them to make a difference throughtheirwork
Changes in information and communication technologies have led to the restructuring of many public and nonprofit agencies Advances in technology have enabled employees to work from their homes, provided opportunities for more flexible work hours, and increased the employment options for disabled individuals. Smart telephones, tablets, networks, videoconferencing, and streaming video have changed communication patterns Information and computer technologies are increasingly being used not only to automate routine tasks but also to restructure and integrate service delivery procedures and programs Social media such as LinkedIn, Facebook, Twitter, and YouTube have become common communication tools, and more agencies are using human resources information systems (HRIS) for routine HRM tasks as well as to aid in performancemanagementanddecisionmaking
Organizations must do more than just adapt to internal changes. They must also seek better ways to meet theexpectationsofcitizens,clients,fundingsources,foundations,electedofficials,boardsofdirectors,interest groups,andthemedia
Thepublicsectorisbecominglessinvolvedindirectservicedelivery Governmentatalllevelsisincreasingly relying on nonprofit and private sector organizations to provide services Government work is being implemented through a network of contracting, intergovernmental grants, vouchers, tax credits, regulations, and other indirect administrative approaches. While the public sector in particular is reducing the number of individuals it directly employs, it continues to need a sizable shadow to accomplish its mission (Light, 1999) These employees are part of the shadow that is created when public goods and services are provided through
private,nonprofit,orstateandlocalentities.
Declining revenues combined with demographic changes, changes in employees’ values, and the need to retain effective workers are some of the forces that have compelled public and nonprofit organizations to becomeconcernedwiththeirverysurvival.Thesechangesrequireamoreflexibleandskilledworkforce.Tobe successful, organizations need employees with new skills Public managers need skills in team building, communication, engaging employees, managing a diverse workforce, and performance management These skills have HRM 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 decrease in jobs that are physically demanding Employees in public and nonprofit agencies often deal with a variety of people, many of whom have a stake in the agency Taxpayers, clients, customers, elected officials, donors, contractors, board members, and special interest groups are just some of the stakeholders concerned aboutagencyperformance.Employersmustaskthemselveshowtomeetthepublic’sobjectivesandsatisfythe organization’sstakeholders
The changing nature of job responsibilities has rendered knowledge management more important for agencies Workers define the character of agencies, affect an agency ’ s capacity to perform effectively, and representtheknowledgebaseoftheorganization
To be strategic partners, HRM departments must possess high levels of professional and business knowledge HRM must establish links to enhancing organizational performance and be able to demonstrate onacontinuingbasishowitsactivitiescontributetotheorganization’ssuccessandeffectiveness
Public and nonprofit agencies must be flexible and attuned to the needs of society They must seek to improve the quality of their services by engaging in SHRM Recruitment and selection strategies must be innovative, career development opportunities must be provided, work assignments must be flexible, and policies must reward superior performers and hold marginal employees accountable. These policies must be developed and administered according to the principles of equity, efficiency, and effectiveness Performance standardsmustbedesignedtopromotethegoalsandvaluesoforganizations
Historically, HRM has been seen as Cinderella on the periphery, not integrated into the core of agency functions Fitz-enz (1996, p 3) notes that historically, personnel departments were either dumping grounds for “organizational casualties” likable employees who were not proficient in other tasks or staffed with employees from line functions, neither of whom had any formal education in personnel administration. He also attributes the peripheral relationship of HRM departments to other functional departments to the fact that for years, it was believed that organizations could not measure or quantify what the HRM department accomplished or contributed to the organization’s bottom line. HRM departments did not speak in financial terms, the common denominator of business language, and were not very good at communicating the relationship between successful HRM programs and organizational success As a result, most HRM departments were denied access to the organization’s strategic planning processes and forced into reactive activities instead of being allowed to collaborate with the other management teams to formulate policies and determine future objectives. This approach has been a mistake. Research in the private sector has found that returns on wise HRM policies can surpass returns from other resources (Cascio, 2000; Cascio & Boudreau, 2008; Fitz-enz, 1996, 2002, 2009, 2010) In the public and nonprofit sectors, where 60 to 80 percent of expendituresareforpersonnel,SHRMisevenmoreimportantthanintheprivatesector.
PurposeandAudience
ThisbookaddressesSHRMissuesinnonprofitandpublicagencies.Althoughmanytextbooksaddresspublic personnel or HRM, only a few are dedicated to the nonprofit sector, thus omitting a significant partner that provides services beneficial to society Topics such as recruiting and managing volunteers and working with a board of directors have not been addressed There are other omissions as well, such as a discussion of nonprofitlaborrelations.Forexample,nonprofitlaborrelationsaregovernedbytheamendedNationalLabor Relations Act (the Labor-Management Relations Act), while most federal employees fall under the FederalService Labor-Management Relations Statute (Title VII of the Civil Service Reform Act of 1978), and state and local government employees are guided by their respective public employee relations statutes, which have recently been threatened by new legislation. Social media have also had an impact on SHRM. The National Labor Relations Board has offered rulings on employees’ use of social media to post complaints or criticisms Inthepublicsector,anapplicant’soremployee’sreligionisirrelevant,anddiscriminationbecauseofreligionis prohibited However,religiouslyaffiliatednonprofitsthatprovideservicesofareligiousnaturemay,inspecial circumstances,discriminateagainstapplicantsoremployeesonthebasisoftheirreligion.
The emphasis in this book is on nonprofits that are closely associated with providing a public benefit or serviceorwithsolvingaproblemonbehalfofthepublicinterest.Itfocusesonnonprofitsthatareresponsible for delivering health care, social services, education, arts, advocacy, and research The objectives of these nonprofits often parallel those of many government agencies in terms of the individual and community servicestheyprovide
Publicorganizationsandnonprofitsaresimilarinthattheydefinethemselvesaccordingtotheirmissionsor theservicestheyoffer Theseservicesareoftenintangibleanddifficulttomeasure Theclientsreceivingpublic ornonprofitservicesandtheprofessionalsdeliveringthemmakeverydifferentjudgmentsaboutthequalityof thoseservices.Bothsectorsareresponsibletomultipleconstituencies:nonprofitsareresponsibletosupporters, sponsors,clients,andgovernmentsourcesthatprovidefundingandimposeregulations;andpublicagenciesto their respective legislative and judicial branches and to taxpayers, cognate agencies, political appointees, clients, the media, and other levels of government (Kanter & Summers, 1987; Starling, 1986). Lipsky and Smith (1989–1990) comment that public and private service organizations share many characteristics: the needtoprocessclientsthroughsystemsofeligibilityandtreatment,theneedtomaintainacompetentstaffto be effective, and the need to account for financial expenditures These organizations are also expected to be fair (equitable), accommodate likely and unanticipated complexities (responsive), protect the interests of sponsors in minimizing costs (efficient), be true to their mandated purposes (accountable), and be honest (fiscallyhonorable)
The conceptual foundation of this book is SHRM, the integration of human resources management with the strategic mission of the organization It adapts human resources policies and practices to meet the challenges agencies face today, as well as those they will face in the future Human resources departments must take a proactive role in guiding and supporting agency efforts to meet the changing demands of their environments.TheinformationprovidedinthisbookcanimprovetheeffectivenessofHRMactivities.
In many organizations, HRM policies and practices develop as needed, with little integration of the organization’s future needs. Often policies are developed to solve an immediate problem, with no thought to their long-term implications Such policies and practices lock the agency into inflexible modes of operation, leavingthemunabletoseethatotherstrategiesmightbemoreappropriate
This book emphasizes the importance of HRM functions, revealing them as major contributors to the accomplishment of the agency ’ s mission now and as the agency changes The purpose of the book is to provide practitioners, policymakers (such as elected officials), and board members of local, state, federal, and nonprofit organizations with an understanding of the importance of SHRM in managing change. It provides theguidancenecessarytoimplementeffectiveHRMstrategies
The book was also written to be a textbook for use in public administration and nonprofit management graduate programs that offer courses in personnel administration, HRM, strategic planning, and nonprofit management Although the literature on nonprofit management has increased in recent years, little information exists that addresses nonprofit HRM concerns This book should help fill that void As more public administration programs offer a specialization in nonprofit management, it is important that resources be available to target the challenges that both the public and nonprofit sectors face Although the primary focus of this book is public and nonprofit SHRM in the United States, there are examples as well of HRM practicesinothercountries.Asyoureadthechapters,thereareexamplesofHRMpracticesinothercountries
Part 1 introduces the context and environment of human resources management. Chapter 1 discusses HRM and explains what public and nonprofit organizations are, how society and workplaces have changed, and the HRM implications of those changes Chapter 2 explains how SHRM and human resources planning are imperative if agencies are going to remain competitive and be able to accomplish their missions; it also discusses how the role of human resources specialists has to change as well and explains human resources information systems (HRIS) Chapter 3 presents the legal environment of HRM, and chapter 4 discusses the importancetoorganizationsofmanagingdiversityiftheyaretoprosper
Part 2 presents the techniques and functional areas of HRM with examples in each chapter. Chapter 5 explains the importance of job analysis before executing HRM policies or developing job descriptions, performance appraisal instruments, training and development programs, and recruitment and selection criteria. It discusses as well a variety of job analysis techniques. Chapter 6 explains recruitment and selection techniques; summarizes drug testing, physical ability tests, psychological examinations, and other selection techniques used in the public and nonprofit sectors; and explains important psychometric concepts It also provides information on practical intelligence, emotional intelligence, adaptability, multiple intelligences, and organizational citizen performance behaviors. Chapter 7 identifies the internal and external factors that influence compensation policies and practices, discusses techniques used to develop pay systems, offers examples of job evaluation, and looks at nontraditional pay systems Chapter 8 turns to employer-provided benefitsandpensions Italsodiscussesviolenceatworkandworkplacebullying
Thefocusofchapter9istraininganddevelopmentactivities Changesintechnologyanddemographicsand the development of new responsibilities and expectations have made training and career development more important than ever before. It identifies training needs; explores the development of training objectives and the curriculum and evaluations of training; and summarizes a variety of training formats. The chapter concludeswithexamplesofmanagementtrainingandcareerdevelopmentprograms
Performance management and evaluating employees’ performance are the focus of chapter 10. It explains different performance appraisal techniques and their strengths and weaknesses, the importance of rater training and documentation, ethical issues in performance appraisal, merit pay and 360-degree evaluations, and employee discipline. Chapter 11 discusses collective bargaining in the public and nonprofit sectors: the legal environment of labor-management relations for nonprofit, federal, state, and local employees; and definitions and explanations of such concepts as unit determination, union security, unfair labor practices, management rights, impasse resolution, and grievance arbitration The reasons that unions exist in the public andnonprofitsectorsareexamined.
The importance of managing volunteers and how SHRM practices can assist in making the volunteer experience productive for the agency and satisfying to the volunteers and board members is the topic of chapter 12. The book ends with a summary of the key lessons presented in the book, which I hope will convincepublicandnonprofitadministratorsoftheimportanceofstrategicHRM
JoanE.Pynes
Tampa,Florida June2013
ACKNOWLEDGMENTS
A number of people have made valuable contributions to this book I thank Alison Hankey and Alina Poniewaz of Jossey-Bass, as well as the four anonymous reviewers, for their helpful comments and suggestions,whichwheneverpossibleIhaveaddedtothisfourthedition.
As in the previous editions, friends, colleagues, and students provided assistance by contributing workplace examples, reviewing chapters, or both. Specifically, I thank Anne Goldyche Dailey, Patricia Goldstein, and Patricia Murray for their observations of working in and with public and nonprofit agencies More thanks are extendedtoLisaSuprenand,whodevelopedchapterquestions,exhibits,tables,andPowerPoints(availableon theInstructor’swebsite:wwwwileycom/college/pynes)forthisedition
Special acknowledgment goes to my husband, Mike McNaughton, for his sense of humor and editorial assistance I also express my appreciation to my sister, Robyn, and Mike for their encouragement Like the earliereditions,thisbookisdedicatedtomymother,whoalwaysinspiredmetodomybest.
THEAUTHOR
JoanE PynesisaprofessorofpublicadministrationattheUniversityofSouthFlorida ShereceivedherBA degree (1979) in public justice from SUNY Oswego and her MPA (1983) and PhD degrees (1988) in publicadministrationfromFloridaAtlanticUniversity.
She is the author or coauthor of four books, most recently coauthor of Human Resources Management for Health Care Organizations: A Strategic Approach (Jossey-Bass, 2012) and Effective Nonprofit Management: Context and Environment (M E Sharpe, 2011) She is also the author or coauthor of more than fifty academic articles, book chapters, technical reports, and encyclopedia entries about public and nonprofit humanresourcesmanagement
PARTONE HUMANRESOURCESMANAGEMENTIN CONTEXT
Public and nonprofit organizations are confronting a variety of economic, technological, legal, and cultural changeswithwhichtheymustcopeeffectivelyiftheyaretoremainviable.Thekeytoviabilityiswell-trained and flexible employees To be responsive to the constantly changing environment, agencies must integrate their human resources management (HRM) needs with their long-term strategic plans The four chapters in this part explain how society and workplaces have changed and the strategic human resources management (SHRM)implicationsofthesechangesfororganizations.
Chapter 1 discusses some of the differences between public sector agencies and nonprofit organizations It reviews some of the external factors that affect the internal operations of an organization, such as changes in economic conditions and the fiscal uncertainty that such changes can bring to an agency, and the social and cultural changes affecting the demographic composition of the workforce Most organizations today have a more diverse group of employees than ever before, bringing different experiences and new expectations into the organization. The legal environment must always be monitored for change. Equal employment opportunity,laborrelations,andcompensationandbenefitsareallregulatedbylaw
There is also an increased emphasis on accountability and performance management in public and nonprofit organizations. Staff need critical knowledge skills, abilities, and other characteristics to perform specific jobs, but they also need to be flexible and willing to deal with rapid and unstructured change Knowledge-specific skills and general competencies are important To make this possible, HRM needs to be morecloselyintegratedwiththeorganization’sobjectivesandmission.
Chapter 2 addresses the strategic side of HRM and the importance of strategic human resources and human resources planning. It explains why SHRM and HRM planning are critical to agencies’ missions. SHRM believes that realistic planning is not possible unless strategic planning takes into consideration information on current and potential human resources Human resources planning requires the assessment of past trends, an evaluation of the current situation, and the projection of future events The external and internal environments must be scanned, and changes that might affect an organization’s human resources must be anticipated and planned for. Also discussed is the effect of information technologies on SHRM. Technological changes such as the increased use of computers, information systems, databases, telecommunications,andnetworkinghavechangedthewayagenciesarestructuredandworkisorganizedand managed. Organizations need to recruit, hire, and provide training to individuals who have the skills and motivationtoadapttotechnologicalchanges.
Chapter 3 focuses on the legal environment and the federal laws governing equal employment opportunity. Equal employment opportunity requires that employers not discriminate in the administration and execution of all HRM practices, such as recruitment, selection, promotion, training, compensation, career development, discipline, and labor-management relations To understand the legal environment of equal employment opportunity, public and nonprofit administrators must be familiar with the laws and regulations that govern itsimplementation.
Chapter 4 is devoted to exploring the issues of managing a diverse workforce. As already noted, the composition of public and nonprofit workforces has changed. Women, racial and ethnic minorities, returning war veterans, and older, disabled, homosexual, and transgendered workers are more visible in today’s workplace than in the past Other types of diversity issues exist in agencies as well Diversity must be understoodiforganizationswanttodealeffectivelywithemployeesregardlessoftheirdifferentcharacteristics. When diversity is well managed, all employees are supported, valued, and included. A supportive work environmentenablesemployeestoachievetheirfullestpotential
Human resources management (HRM) is the design of formal systems in an organization to ensure the effective use of employees’ knowledge, skills, abilities, and other characteristics (KSAOCs) to accomplish organizational goals. HRM concerns the recruitment, selection, training and development, compensation and benefits, retention, evaluation, and promotion of employees, and labor-management relations within an organization In public and nonprofit agencies, the greatest expenses and the greatest assets are employees Unlike many for-profit organizations that can use technology to automate the production of their products and reduce staff, public and nonprofit organizations typically provide some type of service. Thus, they rely on theprofessionalismandcompetenceoftheiremployees
Machines cannot be substituted for most public and nonprofit employees. As a result, public and nonprofit agencies are labor intensive; employee costs are typically between 50 and 80 percent of their budgets (Cascio & Boudreau, 2008; Fitz-enz, 2000, 2009, 2010) Employees are also public and nonprofits’ greatest assets Whether referring to top leadership, department directors or managers, or first-level employees, the quality and competencies of the workforce differentiate successful agencies or departments from others. Why is one police department more effective than another when dealing with similar problems and situated in local governments with similar incomes and demographics and with similar responsibilities? Why is one substance abuse treatment center more effective than another if they are using similar clinical protocols and techniques and have clients with similar problems? The answer is likely to be related to the professionalism and competencies of their employees The study of HRM has existed for a long time, despite having different names Scientific management addressed the principle of breaking job positions down into their simplest tasks It was concerned with production efficiencies through making the best employee and job match and alsoaddressedemployeemotivationbydevelopingincentivepaysystems.
Additional psychological aspects of HRM were developed to select individuals for military positions Intelligence, aptitude, and psychological tests were developed to screen and place employees in various positions Thefieldofindustrial/organizationalpsychologyhasplayed,andcontinuestoplay,acriticalrolein thedevelopmentofHRMactivities Humanresourcesmanagementhasevolvedtoencompasssystemsforthe effective recruitment, selection, evaluation, and training and development of employees Compensation studies to pay employees fair salaries and provide them with benefits that are important to them are also importantcomponentsofHRMsystems Faircompensationservestoretainandmotivateemployees
Human resources management responsibilities change as society changes. Today, public and nonprofit organizations are facing serious economic challenges, changes in the legal environment, and social, cultural, generational, technological, and educational changes A strategic HRM system identifies these changes and challengesanddevelopseffectivestrategiestoaddressthem
ThePublicSector
Thepublicsectoriscomposedofavarietyofgovernmentorganizations.Governmentagenciesareownedand controlled by the people Government is used to maintain a system of law, justice, and social organization It protects individual rights and freedoms, provides security and stability, and provides direction for the nation Italsoprovidespublicgoods,regulatescertainindustriesandactivities,andcorrectsproblemsthatthemarkets createorareunabletoaddress(Rainey,2003).
In the United States, we have a variety of federal, state, and local government agencies Federal employees work directly for federal agencies and receive their compensation and benefits from the federal government. Federal Bureau of Investigation agents are federal employees, as are doctors working for the National Institutes of Health and the Centers for Disease Control Other federal employees may work for the Federal Aviation Authority, the Securities and Exchange Commission, and the Food and Drug Administration (To see the scope of federal departments and agencies, go to http://wwwwhitehousegov/government/independent-agencieshtml) In 2010, more than 3 million civilian employeeswereemployeddirectlybythefederalgovernment(USCensusBureau,2012h)
State employees work directly for state agencies and receive their compensation and benefits from state governments Each state has a different number of agencies The compensation and benefits given to state employeesvaryacrossthestates In2010,53millionemployeeswereemployeddirectlybystategovernments (USCensusBureau,2012g).
There are more than eighty-eight thousand units of local government: counties, cities, villages and townships, and special districts such as school districts, fire districts, park districts, hospital districts, museum and zoo districts, and parks and recreation districts. Local government employees work directly for local units and receive their compensation and benefits from the local governments and taxing districts The number of local units varies across the states, as do compensation and benefits given to local government employees Even within the same county, county employees may be paid different salaries from employees working for city governments located in the county. Also, special district employees receive different salaries and benefits. There is often little consistency across local government units In 2010, the number of local government employeeswas142million Mostpublicemployeesworkforlocalunits(USCensusBureau,2012f)
Individuals working directly for federal, state, or local units are considered to be government employees In a democracy, government is owned by all of its citizens, and most of the revenues that support government agencies typically come from taxes. Government’s objectives are political in nature. Public agencies are influenced by certain values found in the private sector such as efficiency, effectiveness, timeliness, and reliability But they are also influenced by values not necessarily found in the private sector and often are in conflictwithoneanother,suchasaccountabilitytothepublicatlargeandtoelectedofficials,beingresponsive to the rule of law and governmental authorities, being responsive to public demands, being open to external scrutiny and criticism, adhering to strict ethical standards, and conducting public affairs with the goals of fairness,equaltreatment,socialequity,andimpartiality(Rainey,2003)
CivilServiceandMeritSystems
Many public agencies are required to comply with civil service or merit systems to facilitate these values and objectiveemploymentpracticesinpublicagencies:
Injurisdictionswithcivilservicesystemsinplace,applicantsaretypicallyappointedaftertheyhavepasseda standardized selection procedure The selection procedure could consist of written examinations, a combination of prior experience and education, or oral interviews. Where competition exists for positions, candidates are ranked by their scores from high to low, with the agency appointing one of the top-ranking candidates
Differentrulesapplytodifferentcivilservicesystems.Somesystemsallowmanagerstoselectoneofthetop three ranked candidates to be selected, others allow one of the top five ranked candidates to be selected, and others allow a larger range of acceptable candidates Some public employees are exempt from civil service requirements. The exemptions permit chief executives to select people who are in agreement with their priorities for policymaking and politically sensitive posts. In most state and local governments, department directors are appointed by the chief executive Many public sector HRM regulations and responsibilities are codified in statutes, which means that any changes need the respective legislative body to make the change Chief executives and managers often have limited administrative and managerial discretion, and increases in compensationandbenefitsareoftendependentonlegislativeapproval.
Public agencies often grant hiring preference to veterans of the US armed services. Additional points may beaddedtothescoresofeligibleveteransapplyingforpublicsectorpositions.
EconomicChallenges
More than 46 million people in the United States are living poverty, and at least 16 million of them are children younger than sixteen The poverty rate for blacks is 276 percent, Hispanics 253 percent, nonHispanic whites 9.9 percent, and Asians 12.3 percent. For children under eighteen years old, the poverty rate is 21.9 percent (DeNavas-Walt, Proctor, & Smith, 2012). When times are tough, the demand for public services grows Low-income residents are dependent on a variety of services, such as housing assistance, assistanceformedicalcare,food,unemploymentbenefits,transportation,andutilitybills
Middle-income Americans are increasingly concerned about jobs, health insurance, pensions, housing, and income security Wage and salary increases have not kept up with increases in the cost of housing, gasoline, food, education, and insurance Residents concerned about their living expenses tend to keep a close eye on government spending and want tax relief. At the same time, state and local governments are facing budget deficits and have to make budget cuts Problems with the housing markets and foreclosures, leading to reduced property taxes, reductions in sales taxes due to declines in consumer spending, and increasing unemployment rates have led to reductions in spending, so state and local revenues are falling As a result of difficult economic times, public agencies are looking to reduce expenses. Strategies to save money include not hiring employees with benefits and instead hiring supplemental direct-hire employees who work irregular hours; they receive a paycheck from the agency for time worked but do not receive health insurance, retirement pensions, vacation or sick leave, and other benefits In some organizations, they are referred to as otherpersonnelservicesworkers.
Governments are also using more contract workers These workers work for public agencies, but they are procured through a staffing agency or other third party. These arrangements, as well as seasonal, part-time, on-call, and temporary agency work, are referred to as nonstandard work arrangements Many previously employed full-time workers are now filling short-term openings as contractors, consultants, freelancers, and temporary workers (Grossman, 2012; Thompson & Mastracci, 2005; “Surge in Temp Jobs,” 2012) A survey conducted by the Society for Human Resource Management (SocHRM) found the primary reasons that agencies hire temporary workers include to complete specific projects (27 percent); as additional resources duringbusytimesorcycles(25percent);asagapfilleruntiltheycanhirefull-timeemployees(17percent);as a way to try out workers for full-time jobs (13 percent); to reduce benefits and other labor costs (95 percent); and because they have difficulty filling key skill positions (4 percent); and other reasons (6 percent) (SocHRM,2011,citedinGrossman,2012)
AlternativeServiceDelivery
Privatization and contracting out occur when public sector agencies contract with private nonprofit, private for-profit,orotherpublicagenciestoprovidespecificservices Atypicalprivatizationagreementspecifiesthat a private or nonprofit entity is responsible for producing particular services. The public employer chooses the service level and pays the amount specified in the contract, but leaves decisions about production methods to the contracted firm From an administrative perspective, privatization is often viewed as a way to save tax dollars,reducethepublicpayrolls,minimizegovernmentspending,andboostproductivity
Supporters claim that contracting out government programs will lead to greater efficiency and more effective operations They maintain that competition and fewer restrictions allow the contractors to be more cost-efficientandresponsiveandthatcostsavingscanbeachievedthroughtheeconomiesofscaleusedbyone vendor to provide services to many communities and organizations. It is believed that nonprofit and private firms, not hampered by bureaucratic rules and regulations, can be more innovative than public sector ones (Savas,2000,2002) However,researchonthecostsavingsofprivatizationisinconclusive Thereareexamples of sweetheart deals with contractors, cost overruns, inefficiencies, and less-qualified staff providing important services. Furthermore, transparency, accountability, and concern for the public interest are often lacking (Feeney&Kingsley,2008;Greenblatt,2004;Moe,1987;Sclar,2001;Starr,1987)
TechnologicalInnovations
Innovations in technology are changing the way organizations are structured and how work is organized and managed More agencies are embracing telework The General Services Administration’s Office of Strategy Management implemented a thirty-day “telework wave ” where employees were supposed to report to their offices and instead work from home or other GSA buildings. The purpose was for them to learn different patterns of behavior, different patterns of communication, different cultures, and different ways of operating (Rausnitz,2012)
ApproximatelyoneinfiveworkersworldwidetelecommuteaccordingtoapollconductedbyIpsos/Reuters Telecommuting is most popular in India, where more than 50 percent of workers were working from home, followed by 34 percent in Indonesia, 30 percent in Mexico, and smaller percentages in Argentina, South Africa, and Turkey. Less than 10 percent of people work from home in Hungary, Germany, Sweden, France, Italy,andCanada ThetreasurerofCuyahogaCounty,Ohio,hasreplacedfiveworkerswithanautomatedtax processing system Instead of opening envelopes and scanning and encoding checks, an automated processing systemprovidesthosefunctions(Johnston,2011)
Police departments are turning to an online talking animated virtual officer to assist residents in filing an onlinecrimereportfornonemergencycrimesonthepolicedepartment’swebsite(Powers,2012),andamobile application is helping US Fish & Wildlife Service refuge officers identify potentially dangerous suspects and stay connected to colleagues while conducting investigations in remote locations Using an application called PocketCop, an officer can connect to the FBI National Crime Information Center database and run backgroundchecks
Key SHRM challenges facing organizations will be the ability to attract and hire qualified applicants and providetrainingforincumbentemployeessothatthebenefitsoftechnologycanberealized
TheNonprofitSector
Nonprofit sector is the collective name used to describe organizations that are not government or private forprofit organizations They have also been called the voluntary sector, the third sector, and the philanthropic sector Nonprofit organizations are chartered by each state and are conferred special tax-exempt status by the states and the Internal Revenue Service (IRS) The IRS exempts nonprofits from paying federal corporate incometaxes,andstateandlocalgovernmentsmaygrantnonprofitsexemptionsfrompropertyandsalestaxes.
To be recognized as a nonprofit, an organization must possess the following general characteristics: (1) it is specifically designated as a nonprofit when organized; (2) profits or assets may not be divided among corporate members, officers, or directors in the manner of corporate dividends; and (3) it may lawfully pursue only such purposes as are permitted for such organizations by statute (Oleck, 1988) Internal Revenue Code section501(c)liststhetypesofassociations,corporations,andtruststhatcanqualifyforfederaltaxexemption (table1.1).
Thelargestnonprofitclassificationis501(c)(3)nonprofits,referredtoaspubliccharities(table12) The IRS defines a public charity as an organization that normally receives a substantial portion of its total income directly or indirectly from the general public or government. This is different from 501(c)(5) (labor and agricultural organizations) and 501(c)(6) (business leagues) classifications, which derive most of their money frommembersandareorganizedtoprimarilyservetheinterestsoftheirmembers(UrbanInstitute,2012)
