April of last year marked a new era for public sector services in the UK as the government seeks to address the deficit and reduce the cost of its public sector workforce. Traditional entitlements for public servants have been heavily scrutinised in a way not seen in the last decade with the announcements of job losses, pay freezes and reduced pension provision.
The traditional lure of job and financial security within the civil service is a focal point of public sector worker discontent and is at the heart of what is known as the psychological contract. This is best explained as a series of unwritten and unconscious reciprocal expectations that the employee and employer have of each other.
For example, an implied (though unofficial) agreement may exist whereby in exchange for diligence and loyalty, an employee may feel assured in his or her job and financial security. It has been suggested that public sector workers often have stronger psychological contracts, placing greater emphasis on long-term involvement and fair treatment, than their private sector counterparts.
But what happens when the employer does not fulfil its end of the bargain? If an employee recognises that the employer’s actions are inconsistent with its obligations, then this breach of the psychological contract has a severely detrimental effect on the employee’s attitudes and behaviour. Research has shown that violating the psychological contract can lead to a lack of trust in the employer, lower performance levels, reduced desire to remain in the organisation and decreased employee satisfaction.
These types of reactions, however, can be moderated by how much procedural justice employees perceive there to be in the organisational restructuring. That is to say, they will be less likely to react negatively to changes in psychological contracts if they are able to attribute the breach to a legitimate need and that the process of implementing the changes was fair. So, the extent to which employers consult with their staff and not simply communicate the changes in employment arrangements will, in large part, influence their employees’ morale and behaviour following any restructuring process.
Unfortunately, of the 330,000 jobs expected to be cut in the public sector, one key area of staff reductions is likely to be managerial posts and in particular senior managers. Potentially it could be an over-stretched and under-qualified pool of public service managers, with little experience dealing with the costs of cuts and redundancies that will be left with the task of delivering to a high standard, whist morale is low.
It will be vital for public service employers to effectively manage change within their organisations. In the long term, reduced commitment to the employer, resulting from a breach of the psychological contract, could lead to difficulty in retaining skilled employees internally. Further difficulties will lie in recruiting talented individuals externally. Bear in mind, these changes are occurring within a wider series of austerity measures such as the substantial increases in university tuition fees. I suspect young people’s career intentions to be further shaped unfavourably against opting for work in the civil service as graduates abstain from low paying public service jobs for higher paying positions in the private sector.
Earlier this week, Labour leadership candidate Diane Abbott is quoted as saying public sector cuts have the "potential to set back race relations and black and ethnic minority communities by a generation." Specifically, she warned that a "last in, first out" approach to redundancies would hit black and female workers particularly hard, presumably given the nature of positive action in recent years. Aside from the "doom and gloom" feel to her statement, I broadly agree; accurate, objective and transparent assessment regardless of time in post is essential to ensuring fair and unbiased selection decisions.
The sad irony is that cutbacks are just as likely
to affect HR budgets as they will headcount and money available for objective assessment will be first to go.
So, where does this leave us?
Employee's perceptions of fairness at the current time will be particularly important. As companies look to reduce headcount, the process by which decisions are made over an individual's future with the organisation will have a significant impact on the subsequent performance of such individuals.
It is critical that organisations employ objective, valid, fair, inclusive and most importantly transparent selection procedures when looking at who is to stay and who, unfortunately, is to go.
Whether the approach is based on appraisal data, competency-based interviewing, assessment centres, or the like, organisations are morally obliged to ensure the process is objective, robust, based on justifiable criteria, inclusive of all groups, and above all cost effective.
Clearly, it is this last point that will resonate with most organisations feeling the pinch of recent governmental cuts. The knee-jerk reaction will be to cut all selection processes and go with a "last in, first out" approach. Unfortunately, by using such an approach, there is a significant risk of injecting bias associated with ill-defined criteria, inconsistent assessment processes and subjective interpretation of performance.
By extension, the apparent cost-saving of "streamlined" assessment is far outweighed by the longer term costs of unfair selection.
As my mum used to say, "do it right, or don't do it at all".
Sir Thomas Legge's decision to apply new rules about politicians’ expenses retrospectively has achieved something that I didn't believe possible: it’s made me feel sorry for MP's.
Justice is something we seek, strive for and want to see applied. Organisational justice has a number of dimensions which include the fairness of procedures, the distribution of rewards and the extent to which people are valued and respected.
The consequences of not applying any or all of these types of justice includes: increased absence; dissatisfaction; reduced co-operation, all of which reduce peoples’ engagement. Our MPs, feeling beleaguered in any case, have now been treated with a lack of all of the types of justice listed above and they will understandably be feeling frustrated and angry.
They have also been let down by their leaders who are more concerned about appeasing a hostile public than in ensuring fairness for their members, all of which smacks of expedient and poor leadership.
The politicians’ sensitivity will be exacerbated when they look at the huge bonuses being paid to staff in what are effectively state owned banks and the powerlessness of the government to prevent this happening.
We can all learn valuable lessons from this sorry episode. It may be rarely discussed in business but make no mistake, the negative reactions that occur when justice is not delivered are all very real.
Feed
Earlier this week, Labour leadership candidate Diane Abbott is quoted as saying public sector cuts have the "