Personnel constraints in public organizations: a study of intraorganizational variation and performance

Prior research has shown that personnel constraints are far more prevalent in the public sector than in the private sector. Anecdotal accounts suggest that public managers are hamstrung by these personnel constraints – particularly their inability to reward and punish employees to promote higher performance. As a result, more than three decades of public management reform has attempted to loosen these constraints on the assumption that more personnel system flexibility will lead to increased organizational performance. We mount an empirical study to test this assumption with data taken from a large-scale survey of English local authorities and other sources. We operationalize personnel constraints using Rainey’s (1979; Rainey et al. 1976) longstanding measures: "difficulty in removing poor managers" and "difficulty in rewarding good managers". We show that attitudes towards personnel constraint vary within organizations in statistically significant ways. The results from our lagged autoregressive multiple regression models also show that one of our personnel constraint measures – "difficulty in removing poor managers" – is harmful to performance but that the other "difficulty in rewarding good managers" has weak but positive short-term effects. The implications of these findings for public management research and practice are considered in the concluding section of the paper.postprintThe 10th Biennial Public Management Research Conference, Ohio State University, Columbus, OH., 1-3 October 2009