PUBLIC MANAGEMENT

HUMAN RESOURCE MANAGEMENT IN THE

PUBLIC AND PRIVATE SECTORS:
AN EMPIRICAL COMPARISON
GEORGE BOYNE, GLENVILLE JENKINS AND MICHAEL POOLE
During the 1980s and 1990s, the Conservative governments in the UK
encouraged public sector managers to emulate the behaviour of their private sector counterparts. This implied the replacement of the traditional
methods and ethos of public administration by supposedly superior private
sector practice (Du Gay 1994; Hood 1991; Rhodes 1994). The policy of commercializing the public sector has been pursued in various ways, for
example through the introduction of quasi-markets, competitive tendering,
performance measurement and consumer choice. In addition, there has
been an influx of managers from the private into the public sector, and a
greater interchange of staff between the two sectors (Newman and Clarke
1994). For example, between 1988 and 1996, 23 chief executives of Next
Steps agencies were recruited from the private sector (Horton and Jones
1996).
There has been considerable criticism of the attempt to bring public management into line with private management. For example, Stewart and
Walsh (1992, p. 516) argue that in adopting a private sector language there
is a danger that organizations in the public domain will neglect the values
inherent in that domain (see also Cutler and Waine 1994; Gray and Jenkins
1995; Greenaway 1995; Harrow and Willcocks 1990; Haque 1996). However,
there has been little empirical comparison of managerial practices in the
UK public and private sectors (a rare example is Poole et al. 1995). Have
George Boyne is Professor of Public Sector Management and Michael Poole is Professor of Human
Resource Management at the Cardiff Business School, University of Wales. Glenville Jenkins is Principal Lecturer in Management at the Swansea Business School, Swansea Institute.
Public Administration Vol. 77, No 2, 1999 (407420)
Blackwell Publishers Ltd. 1999, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street,
Malden, MA 02148, USA.

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GEORGE BOYNE, GLENVILLE JENKINS AND MICHAEL POOLE

public and private managers become a homogeneous group, or do they

still differ in their attitudes and behaviour? The aim of this paper is to
answer this question by comparing the pattern of human resource management (HRM) in public and private organizations. It has been widely
claimed that HRM in the public sector has been shifted towards the practices adopted by private firms (see, for example, Farnham and Giles 1996;
Storey 1992; Winchester and Bach 1995), but the extent of this shift has not
been assessed empirically.
The first part of the paper reviews the traditional model of HRM in the
public sector, and considers arguments that this has been replaced by a
new model of staff management in public organizations. In the second part
we present the results of an extensive survey of managers in the public and
private sectors, and draw conclusions on whether significant differences
remain between HRM in the two sectors.
I HUMAN RESOURCE MANAGEMENT IN THE PUBLIC SECTOR
During the last decade there has been a rapid emergence of interest in
human resource management (see, for example, Blyton and Turnbull 1992;
Storey 1992; Legge 1995). Most interpretations of the term may be traced
to the definition of the Harvard School in which HRM is seen to involve
all management decisions that affect the relationship between the organization and employees its human resources (Beer et al. 1985, p. 1). An
important distinction in the literature is between the hard model of HRM
based on the premises of utilitarian instrumentalism and a soft model
grounded in developmental humanism (Legge 1995, p. 66). Analyses of
HRM in private organizations suggest that practice is generally hard
rather than soft. For example, Truss et al. (1997, p. 53) find that the rhetoric
adopted by the companies frequently embraces the tenets of the soft, commitment model while the reality experienced by employees is more concerned with strategic control, similar to the hard model.
Although there is a substantial literature on HRM in the private sector,
the only comprehensive analysis of HRM in the UK public sector is by
Farnham and Horton (1996). We therefore use their framework in order to
identify the received wisdom on the pattern of HRM in public organizations. However, we also draw together arguments from other sources that
deal with particular parts of the public sector (for example health, local
government, Next Steps agencies) or specific issues (for example pay and
the relationship between management and unions).
Farnham and Horton (1996) argue that the traditional pattern of people
management in public services developed alongside the growth of the state
during the twentieth century, and was expressed most fully during the
1960s and 1970s. They identify a number of primary characteristics of conventional HRM practices in the public sector (see also Klingner and Nalbandian 1985). First, a paternalistic style of management which purported to
protect and promote the well being of the workforce. Farnham and Horton

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(1996,p. 85) argue that whilst there was a concern for staff efficiency and
the effective use of manpower, increasing attention was also paid to the
health, safety and welfare of staff. Secondly, standardised employment practices were adopted in each part of the public sector (for example civil service, local government, health service). This implied that workers performing the same task had the same terms and conditions, both within
organizations and across organizations providing the same service regardless of their geographical location. Such standardization provided full-time
employment, job security and life-time employment for large numbers of
workers . . . white collar staff had national pay structures and conditions
of service, where individuals were in standard salary bands with incremental pay scales, whilst manual workers had national grading systems and
national job structures (Farnham and Horton 1996, p. 85).
Thirdly, industrial relations were collectivized there was extensive scope
for staff participation and consultation, and a strong role for trades unions
in pay negotiations, which in turn reflected higher levels of union density
in the public sector (Daniel and Millward 1983; Millward and Stevens 1986).
Fourthly, public organizations aspired to be model employers and thereby
set standards for private organizations to follow, for example in areas such
as staff training and equality of opportunity in the workplace. This role
implied that above all, those in authority accepted the softer norms and
conventions of public employment, which differed from the more thrusting,
market and sometimes anti-union values of the private sector (Farnham
and Horton 1996, p. 83; see also Rosenbloom 1982; Beaumont 1992; Weggenmans 1994).
All four of the traditional features of HRM in the public sector appear
to have been weakened substantially by government policies since 1979.
This reflects a broader concern to respond to economic constraints and
improve organizational performance by making public services more business-like. Oswick and Grant argue that
public sector organizations have perhaps unconsciously mimicked
aspects of behaviour exhibited by their private sector counterparts. If
facets of HRM behaviour have been transplanted from the private sector
they do not appear to be part of an underlying, premeditated and deliberate strategy. Instead they have often been adopted as a knee-jerk
response to financial constraints experienced by the public sector which
are due to the political and economic climate (1996, p. 15).
A similar conclusion is reached by a study of HRM practices in central
government departments in twenty-four western nations:
the reason for changing the way people are managed in the public sector
was very similar across OECD countries : economic strain on the public
sector has increased the demand for greater efficiency and better quality
in delivering public sector programmes and services, oftentimes with a
smaller public service workforce as a result (OECD 1996, p. 9).

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Whatever the specific constraints and motives, it appears that fundamental

changes in public sector HRM in the UK have occurred.
First, the conventional pattern of paternal management has given way
to rational management. According to Farnham and Horton, a rational
style of HRM
is not driven by concepts of fairness, the welfare needs of employees
and the need to maintain good relations with the unions. It is driven
by the demands of those leading public organizations for effective job
performance, high quality of output, service to customers and value for
money (1996, p. 331).
The emphasis on customer needs and financial performance has resulted
in the devolution of power to line managers rather than personnel specialists, which in turn has reduced the priority given to issues such as equal
opportunities and staff training. For example, a case study of a large Next
Steps agency by Cunningham et al. revealed that the objectives of market
testing and those of equal opportunities were often seen by managers . . .
to be inherently incompatible (1997, p. 62; see also Keen and Vickerstaff
1997; Oswick and Grant 1996).
A second change in public sector HRM is that uniform and standardized
employment practices have been replaced by flexibility and differentiation.
Public services no longer offer a guarantee of a job-for-life, pay which is
determined by grade in the hierarchy, or promotion based on seniority.
Instead, many workers are offered part-time or temporary contracts, and
the salary and career prospects of staff are linked to line managers perceptions of their performance. The growth of flexibility is reflected in a number
of areas. For example, each trust hospital in the NHS and each Next Steps
agency is responsible for the pay and conditions of its own staff (Corby
1992, p. 993). In local government, some councils have opted out of
national pay bargaining (Bryson et al. 1993). Furthermore, the widespread
imposition of competitive tendering on local councils has resulted in many
short-term employment contracts in Direct Service Organizations, because
there is no guarantee that a service contract will be retained when retendering takes place. Flynn (1994) argues that this has resulted in an unwillingness to invest in staff training.
Thirdly, there has been a move from collectivism to individualism in
industrial relations, particularly for managerial staff. Bailey (1994, p. 133)
argues that perhaps the most dramatic change in the public sector over
the last decade has been the redefinition of the concept of equity, from one
based on notions of the going rate and a rate for the job, to one based
on labour market and individual performance criteria. This is exemplified
in the reduced role of trades unions in negotiations on employment conditions (Colling and Ferner 1995) and the introduction of performance pay
in some parts of the public sector (Cutler and Waine 1994). For example,
the pay of all civil servants, whether in a Next Steps agency or a core

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central government department, is now linked to performance (Gagnon

1996; Horton 1996).
Finally, public organizations have lost their status as model employers
they were redefined by the Conservative government as laggards in their
approach to HRM. The traditional pattern of HRM in the public sector is,
by assumption, a barrier to better organizational performance. As Farnham
and Horton (1996, p. 349) argue, public organizations are no longer the
model for private sector employers to follow . . .. From being leaders of
people management policy and practice, the public services have become
followers of what is perceived to be best practice in the private sector.
In sum, it has been widely argued that public managers have been
encouraged, exhorted and, in the last resort, forced to adopt a style of HRM
which reflects private sector practices. However, the extent to which this
supposed transformation has occurred remains unknown. In the next section we present new empirical evidence on this issue.
II EMPIRICAL EVIDENCE ON HRM POLICIES AND PRACTICES
The survey results presented in this paper stem from a broader study of
human resource management policies and practices in Britain (Poole and
Jenkins 1996). A self-completion questionnaire was sent to a random sample
of 3,000 fellows and members of the Institute of Management in January
1994; 909 usable questionnaires were returned, a response rate of 30 per
cent. Thirty per cent of respondents indicated that they worked for public
sector organizations, including central and local government, the emergency services (for example, the police, the fire service and ambulance
service) health service and social work, education (where the incumbents
have a substantial administrative or managerial role) and the armed forces.
Hence, a broad range of both public and private sector activities are encompassed in the sample. The survey provided information on personnel policies (the extent to which organizations support particular patterns of staff
management) and practices (the extent to which organizations are actually
involved in the implementation of different policies). Thus the survey data
allow us to compare both the attitudes and behaviour of managers in the
public and private sectors.
It is important to emphasize that cross-sectional surveys can provide only
a snapshot of public and private organizations. Therefore our data can be
used to test for homogeneity but not convergence in patterns of HRM.
This reflects a common problem in evaluations of new public management there are few empirical baselines for longitudinal analyses of policy
impact (Pollitt 1995). However, the results of the survey do provide the
first comprehensive comparison of HRM policies and practices in the public
and private sector. The data not only allow an examination of whether
HRM in the two sectors remains significantly different, but also represent
a yardstick against which future developments can be measured.

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TABLE 1 Extent of organizational support for HRM policies linked with rewards and
performance
Public
Private
Public/Private
(n = 260262) (n = 553554)
Ratio
Performance appraisal systems
using customer ratings
Reward employees for
enhancing own skills and
knowledge
Reward employees for
innovation and creativity
Merit philosophy and emphasis
on individual performance
Reward employees for customer
service and quality
Promote sharing of risks and
rewards of the business
Reward employees for
productivity gains

T Statistic

3.1

3.2

0.97

1.89

3.2

3.5

0.94

3.70***

3.2

3.5

0.91

4.59***

3.3

3.7

0.89

5.01***

3.3

3.7

0.89

5.74***

2.7

3.2

0.84

7.16***

3.0

3.6

0.83

7.27***

Note: Measurement scale:

1 = Strongly against
2 = Against
3 = Neither for nor against
4 = Supports
5 = Strongly supports.

Significance levels in tables 16

* 0.05
** 0.01
*** 0.001

(a) From paternalism and collectivism to rationalism and

individualism?
The results in tables 1 and 2 show the extent to which public and private
organizations are pursuing policies and practices that are consistent with
rationalist and individualist styles of HRM. The figures in these and subsequent tables show the mean public and private scores on a five-point
scale, and the ratio of the public to the private score. The latter figure allows
a direct comparison of the relative difference between the public and private scores. Where the ratio exceeds one, the public sector shows greater
TABLE 2 Extent of organizational involvement in reward practices
Public
Private
Public/Private
(n = 250260) (n = 541549)
Ratio
Equal pay for equal work
Skill-based pay
Knowledge-based pay
Performance-related pay
Plant-wide bonus schemes
Payment for quality
Production-based pay
Fringe benefits
Individual bonus schemes

3.4
2.2
1.9
2.3
1.4
1.3
1.4
2.0
1.7

3.1
2.4
2.1
2.6
1.7
1.7
1.9
2.7
2.4

Measurement scale: 1 (no involvement) to 5 (full involvement).

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1.10
0.92
0.91
0.89
0.82
0.76
0.75
0.74
0.71

T Statistic
2.13*
2.05*
1.76
3.26***
3.84***
4.17***
5.34***
7.64***
6.18***

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support for, or involvement in, the specific practice; where this figure is
less than one, the position is reversed. Finally, the T statistic shows
whether the public mean is significantly higher or lower than the private
mean.
The evidence in table 1 suggests that the level of support for rationalist
and individualist HRM policies is lower in public than private organizations. The public mean is significantly less than the private mean for six of
the seven indicators. In public organizations, there is weaker support for
policies which link rewards to the contribution of individuals to organizational performance. This may partly reflect the governments concern to
maintain a tight central grip on the level of public sector pay, which is
inconsistent with substantial local flexibility (Kessler 1993). The biggest difference between the public and private sectors is on policies which reward
employees for productivity gains: this is supported by 60 per cent of private
managers but only 35 per cent of public managers.
More detailed information on specific reward practices is provided in
table 2. The results show that levels of involvement in rationalist and individualist practices are lower in the public than the private sector. The public
mean is significantly below the private mean for seven of the nine variables.
Public organizations are much less likely to pursue practices such as performance-related pay and fringe benefits. The most pronounced
public/private difference is in the area of individual bonus schemes:
whereas 51 per cent of private managers reported some or full involvement
in this practice, only 30 per cent of public managers did so. The public
mean is significantly greater than the private mean for only one variable:
equal pay for equal work. In the public sector, 42 per cent of organizations
are fully involved in this reward practice, but the figure for the private
sector is only 30 per cent. This result confirms that individualized methods
of rewarding employees are less likely to be adopted in the public sector.

(b) From standardization to flexibility?

Indirect evidence that flexibility is more prevalent in private than public
organizations has already been provided in tables 1 and 2: pay and rewards
are less individualized in the public sector and, by implication, more uniform across employees. More direct evidence on flexibility is presented in
table 3. The data show that public sector managers are generally less likely
to support flexible employment practices. The public/private difference is
significant for four of the five indicators of flexibility. For example, the private sector is less supportive of lifetime job security: 36 per cent of private
managers state that their company is against or strongly against this policy,
whereas 27 per cent of public managers take this view. Similarly, private
organizations are more likely to use a non-permanent workforce in order
to cut expenditure: support or strong support for this policy is reported by
57 per cent of private managers but only 41 per cent of public managers.

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GEORGE BOYNE, GLENVILLE JENKINS AND MICHAEL POOLE

TABLE 3 Extent of organizational support for flexible HRM policies

Public
Private
Public/Private
(n = 259260) (n = 551553)
Ratio
Provide lifetime job security
with the organization
Promote flexible cross-functional
teams and action work groups
Enlarge definition of
opportunities to include
autonomy and the use of
creative skills
Require flexibility of employees
to change jobs, skills or locations
Use non-permanent workforce
to reduce labour costs

T Statistic

3.1

2.8

1.11

4.03***

3.6

3.7

0.97

1.76

3.3

3.5

0.94

3.22***

3.8

4.2

0.90

5.62***

3.1

3.5

0.89

4.53***

Measurement scale:
1 = Strongly against
2 = Against
3 = Neither for nor against
4 = Supports
5 = Strongly supports.

TABLE 4 Extent of organizational involvement in training and development

Public
Private
Public/Private
Mean
Mean
Ratio
(n = 249257) (n = 520545)
Credit accumulated learning
Open learning
Coaching, counselling &
mentoring
S/NVQs
Investors in people initiative
Continuous self-development
Assessment of prior learning
Competence based training
Training needs analysis
Career path development
Management development

T Statistic

2.1
2.5
3.4

1.7
2.1
2.9

1.23
1.19
1.17

4.37***
3.74***
4.46***

2.8
2.8
3.1
2.2
3.5
3.4
3.8
3.5

2.4
2.4
2.8
2.0
3.2
3.2
3.6
3.3

1.16
1.16
1.11
1.10
1.09
1.06
1.06
1.06

3.61***
3.61***
3.20***
2.94**
2.78**
2.71**
2.06*
2.19*

Measurement scale: 1 (no involvement) to 5 (full involvement).

(c) The end of the model employer?

The role of the state as a model employer implies a commitment to staff
training, trade union and workforce participation in decision making, the
promotion of equal opportunities and a concern for the welfare of
employees. Tables 4 to 6 provide evidence which tests whether public
organizations can no longer legitimately claim this role.
The results in table 4 show that there is more involvement in staff training
and development in the public than the private sector. The mean score
of public organizations is significantly higher on all eleven indicators. For

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TABLE 5 Extent of organizational involvement in employee participation practices

Public
Private
Public/Private
(n = 255265) (n = 548555)
Ratio
Management committees where
there is employee or union
representation
Handling individual grievances
brought by union representative
Formal collective bargaining
Attitude surveys
Regular meetings between
supervisors and work groups
New technology agreements
Joint consultation with
employees
Job redesign involving
employees
Suggestion schemes
Works councils
Productivity bargaining

T Statistic

2.9

2.2

1.32

6.35***

3.5

2.7

1.30

7.71***

2.6
3.2
4.0

2.4
3.0
3.8

1.08
1.06
1.05

1.81
0.5
2.02*

2.2
3.4

2.1
3.3

1.05
1.03

1.89
2.02*

3.7

3.7

1.0

0.1

2.6
2.0
1.8

2.6
2.0
1.9

1.0
1.0
0.95

0.1
0.2
1.67

Measurement scale: 1 (no involvement) to 5 (full involvement).

TABLE 6 Extent of organizational support for equal opportunities and employee

welfare policies
Public
Private
Public/Private
(n = 260264) (n = 552554)
Ratio
Promote an equal opportunities
culture
Offer assistance fo help
employees meet personal and
family needs
Ensure employees and their
families pursue good health
Flexible out placement
programmes for all employees
Provide flexible retirement
opportunities

T Statistic

4.4

4.0

1.10

4.82***

3.7

3.4

1.09

4.26***

3.3

3.2

1.03

1.0

2.9

2.8

1.03

1.23

3.0

2.9

1.03

1.60

Measurement scale:
1 = Strongly against
2 = Against
3 = Neither for nor against
4 = Supports
5 = Strongly supports.

example, one important HRM development in recent years is the Investors

in People Initiative. Only 30 per cent of public managers report that their
organization had no involvement in this activity, whereas the figure for
private sector respondents is 42 per cent.
There are fewer significant public/private differences in the extent of
organizational involvement in employee participation (see table 5). Never-

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GEORGE BOYNE, GLENVILLE JENKINS AND MICHAEL POOLE

theless, in general, public sector organizations are more involved in staff

participation and consultation. The public mean is significantly higher than
the private mean for 4 of the 11 variables. The extent of the difference is
particularly marked for the role of trade unions. For example, employees
and unions have no representation on management committees in 53 per
cent of private organizations, but only 24 per cent of public organizations.
Finally, evidence on equal opportunities and the promotion of employee
welfare is presented in table 6. These results also suggest that public organizations have retained a commitment to their traditional role as model
employers. The public sector is significantly more likely to support equal
opportunities in the workplace: 55 per cent of public managers report that
their organization is strongly in favour of this policy, but the figure for
private managers is only 38 per cent. The level of support for employee
welfare policies is generally higher in the public sector, but only one of the
four tests yields a significant result. This concerns whether organizations
offer assistance to employees to help meet their personal and family needs,
which is supported in 61 per cent of public agencies but only 48 per cent
of private firms.
(d) Controls for organization size and type of industry
Our results suggest that there are many significant differences in HRM
between the public and private sectors. It is important to emphasize that
these differences are present for actual practices as well as formal policies.
Significant results were obtained for policy differences in 12 of the 17 tests
(71 per cent), and for differences in organizational practices in 23 of the 31
tests (74 per cent).
However, it is possible that these relationships are spurious and simply
reflect other characteristics of the organizations in the sample. Our data
allow two such characteristics to be investigated. First, the average size of
the public agencies was larger than the private companies. It may be that
differences in the HRM policies of large and small organizations have distorted our public/private results. For example, large organizations may be
more prepared to invest in staff training, in the expectation that employees
will remain long enough to make the investment worthwhile. Secondly, the
pattern of our evidence may be influenced by the industrial location of the
survey respondents. Private companies in the manufacturing sector may be
more likely to pursue hard HRM while those in the service sector adopt
soft HRM policies. In this case, there may be no significant public/private
differences within the service sector.
In order to test for these potentially confounding effects, we introduced
statistical controls for organizational size and industrial sector. However,
these controls made very little difference to the general pattern of the evidence. The vast majority of the significant public/private differences
remained, and in no case was the direction of the difference reversed. Some
contrasts between public and private HRM became significant when size

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and industrial sector were controlled (for example the formal collective
bargaining variable in table 5), while others became insignificant (for
example the skill based pay variable in table 2). We therefore conclude
that the relationship between public sector location and HRM is not attributable to organizational size or type of industry.
CONCLUSION
Since the early 1980s, managers in the public sector have been encouraged
to abandon their bureaucratic traditions and become more enterprising
and entrepreneurial (Osborne and Gaebler 1992). The evidence presented
in this paper suggests that, in the area of HRM at least, organizational policies and practices in the public and private sectors remain different in many
important respects. In particular the traditional style of paternal, standardized and collectivized HRM is more prevalent in public than private
organizations. Furthermore, activities associated with the conventional state
role as a model employer, such as staff training and the promotion of equal
opportunities, are still more likely to be found in public organizations. The
evidence is consistent with Storeys (1992, p. 56) observation that principles
and approaches, refined originally within large and exceptional private
organizations, such as IBM, should not be expected to translate easily into
organizations in very different settings.
Although our results show that HRM varies significantly between the
public and private sectors, it is possible that the distinctions have become
less pronounced over time. In other words, the absence of homogeneity
does not rule out a process of convergence that is not yet complete. A recent
analysis of managerial reform in local government has shown that embedding new approaches and dislodging old ways of life (are) clearly longterm processes, with movements forward and backwards, and change at
different levels (Lowndes 1997, p. 90). Thus, further snapshots of HRM
policies and practices may reveal that the two sectors are moving closer
together. The differences that we have identified could simply reflect a lag
in the adoption of new management practices by public agencies, perhaps
because private companies are more quickly influenced by management
fads (for example downsizing and delayering). In this case, public and
private management may always appear to be significantly different, even
if they are both moving in the same direction. This hypothesis of a lagged
response will be testable only if time-series data on HRM in the public and
private sectors becomes available.
It is also important to note that the extent of convergence between public
and private management is likely to vary across public agencies. Organizations that have been commercialized (such as Direct Service Organizations
in local government) may be driven to emulate their private competitors.
Similarly, public organizations with a large number of new staff may follow
private practices more closely, especially if such staff have been recruited
from the private sector. The role of party politics is also likely to be

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GEORGE BOYNE, GLENVILLE JENKINS AND MICHAEL POOLE

important. For example, HRM policies may be closer to the traditional public sector model in Labour than Conservative councils. These issues represent a substantial research agenda for future empirical studies.
For the present, it can be concluded that our results are consistent with
the persistence of a public service ethos amongst public employees
(Pratchett and Wingfield 1996). Indeed, the very existence of this ethos may
partly explain why public and private managers have not become a homogeneous group. Kessler and Purcell (1996, p. 217) argue that the presence
of professional groups, reinforced institutionally through their associations
has not only affected the determination of terms and conditions but equally
significantly helped preserve a set of values and principles potentially in
tension with the newer managerial practices. Officials with a strong attachment to the distinctive traditions of public management are unlikely to
embrace private sector practices with zeal. In short, the public service ethos
may explain why there was an implementation gap (Marsh and Rhodes
1992) between the Conservatives intentions and the behaviour of public
sector managers. Whether this is regarded as a positive or negative outcome
depends, ultimately, on the relationship between alternative HRM styles
and organizational performance in the public sector.
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