MANAGING HUMAN CAPITAL IN THE PUBLIC SECTOR II
HCA216D
CHAPTER 1 – CONTEXTUALIZING HUMAN CAPITAL MANAGEMENT
1. CONTEXTUALISING HUMAN CAPITAL MANAGEMENT
• Employees are an indispensable asset of any public institution.
• Success, failure or effective utilisation of other resources in the public sector
depends largely on the caliber of employees an institution has in its employ.
• To have skilled human capital, employment practices, policies and procedures
should be designed in a way that enables public institutions to acquire the best
employees available in the market.
• Adherence to good governance principles in the acquisition and management
of human capital builds a firm foundation for an effective public institution.
• Once skilled employees are in the institution, harnessing their skills becomes a
never-ending race.
2. FROM HUMAN RESOURCE MANAGEMENT TO HUMAN CAPITAL
MANAGEMENT
• The field of study of Public Administration and Management and practice
thereof has evolved since Woodrow Wilson's article on the study of
administration in 1887.
• The practice of public administration is as old as the human race.
• Paying lip-service to human capital and its worth will make any attempt to
change public sector institutions an evasive mirage that will keep moving as
public sector institutions get closer to their goals and ideals.
• The question is: what needs to be done to bring employees to the centre stage
of public institutions?
• To bring about lasting change, a new mindset is necessary.
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• The introduction of the concept "human capital" marks a departure from
human capital administration and human resource management.
• The emphasis is on valuing employees.
• Another question that may be asked is: what is the distinction between human
resource and human capital?
• The word "capital" is introduced purposefully to emphasise the need for
holistic investment in human beings for the benefit of the individual and the
organisation.
• The contention is that skills are not the only area in which strategic investment
is necessary.
• Public institutions have a social and moral responsibility towards employees.
• Employees should not be seen and perceived only as factors of production.
• Capital refers to "any asset or resource used to an advantage"
• The word capital further refers to "the abilities and skills of any individual,
especially those acquired through investment in education and training that
enhance potential income earning"
• Employees can further be described as the wealth available and capable of
being used in the service delivery processes.
• Government needs to invest more in its employees because a caring employer
will always get better results out of its employees
3. PUBLIC SECTOR CONTEXT
• Public institutions are established for the sole purpose of addressing the needs
of communities without any expectation to make profit.
• Funds for managing and operationalising public policies in these institutions
come directly or indirectly from contributions made by individuals in the form
of taxes.
• It is for this reason that employees in the public sector are known as civil
servants.
• These employees should selflessly serve the public and be committed to the
public good.
• They should always maintain a moral high ground.
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• A fundamental principle that distinguishes a public institution from a private
sector institution is profit.
• Private enterprises survive and thrive due to profits. In the absence of profits,
such enterprises will be forced to close doors with dire consequences for
owners if there are outstanding debts.
• Although the same legislation is applied in the acquisition and management of
employees in both sectors, there are discernible differences between public
sector and private sector employees.
• Private enterprises are more flexible than public institutions, which are more
rule bound and bureaucratic.
• Public sector employees are appointed in terms of legislation made by
legislative institutions and remuneration packages are subject to discussion by
cabinets.
• The Constitution of the Republic of South Africa (1996) is a typical example of
the standards that public institutions have to adhere to in managing the
human capital.
• Section 195 prescribes, among other things
• that the State may not unfairly discriminate against anyone
• the public service must be representative of the South African people
• a high standard of professional ethics must be maintained
• effective, economic and efficient use of resources
• development orientation public accountability and transparency.
4. GOOD GOVERNANCE IN HUMAN CAPITAL MANAGEMENT
• Graham, Amos and Plumtree (2003) posit that good governance is not about
government.
• It is however about how government functions.
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• Maserumule (2005) defines governance as a "process of decision making at
both political and administrative levels of government to formulate and
implement policies aimed at enhancing the quality of lives of members of the
society".
• Good governance is about openness and accountability, the rule of law and
freedom of the press.
• Graham et al. (2003) identify the following five principles of good governance:
(i) Legitimacy and voice participation. Freedom of speech and association is
fundamental, and decisions should be based on consensus.
(ii) Direction. A long-term view on human capital management should be
established.
(iii) Performance. Effective and efficient use of resources.
(iv) Accountability. Decision makers should be able to account for their
decisions. This implies that such decisions regarding appointment of
employees at all levels should be transparent and information regarding
such decisions should be available for monitoring purposes.
(v) Fairness. This relates to equity and the rule of law.
5. EMPLOYMENT PRACTICES
• The evolution of employment practices in the public sector has to a larger
extent been aligned to politics across the globe.
• Southern Africa as part of the global village is no exception.
• Two employment practices, namely the spoils system and the merit system,
and their derivatives are discussed.
5.1 The spoils system
• The spoils system is an employment practice in which politicians employ
officials that are loyal to the political party in power.
• The argument for this system is that loyal employees who understand and
share the vision of the political party that wins the election are the best people
to implement public policy.
• They can identify with the ideals of the political party; hence they would not
sabotage policies of the ruling party.
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• This system also reduces friction between the political and administrative
head.
• The following are the characteristics of the spoils system:
• Patronage, or the power vested in political office bearers and senior officials
to appoint public officials on the basis of affiliation to the ruling party
• Disregard for qualifications
• Despondence among qualified and capable employees
• Protection of the inefficient
• Administrative inefficiency due to poor service delivery and concomitant
dissatisfied communities
• Entrenchment of the party in power, making the party an end rather than a
means to an end
• It is commonplace for parties to implement the spoils system for political
expedience and to avoid sabotage based on ideological differences between
politicians and senior officials.
• The problem is how the system is implemented.
• If it were limited to the appointment of party loyalists who have the right skills,
service delivery would not suffer.
• Under such circumstances, the aforementioned manifestations of bad
governance would not surface in public debates and academic discourses.
5.2 Merit system
• The merit system came to light as a result of the growing intolerance with the
spoils system.
• Key principles of the merit system are that qualified and capable employees
are appointed and promoted, and that vacant positions are advertised widely
with no ulterior motive.
• Consequently, the best available candidate in the market is appointed subject
to prevailing legislation and the need for employment equity.
• Change of government does not affect the tenure of career public officials.
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• Only employees who are appointed on contract may be affected by the change
in government.
• The appointment of employees following fair and transparent procedures is
also a key principle in good governance within human capital management.
6. CONCLUSION
• Public institutions exist in an environment that needs continuous
improvement.
• The public sector perspective of human capital is explained in connection with
employment practices and the concept of good governance in public human
capital.
