Decentralization of HR Functions

• Published date: 01 June 2009
• Date: 01 June 2009
• DOI: 10.1177/0734371X09332542
• Subject Matter: Articles

168

Review of Public Personnel

Administration

Volume 29 Number 2

June 2009 168-188

© 2009 SAGE Publications

10.1177/0734371X09332542

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Decentralization of HR Functions

Lessons From the Singapore Civil Service

Mussie T. Tessema

Winona State University

Joseph L. Soeters

Tilburg University

Royal Netherlands Military Academy

Alex Ngoma

University of Zambia

In the past two decades, nearly every country in the world has felt the urge to decentral-

ize some of its human resource (HR) functions. This article uses Singapore as a case

study to illustrate how this urge has been addressed in civil service reforms during the

past two decades. In so doing, the article also highlights the necessity as well as the

theoretical and practical implications of the decentralization process to the organiza-

tional arrangement of HR functions in the civil service of Singapore. The article con-

cludes that, as countries seek to decentralize HR functions in the civil service,

understanding how this process works is cardinal to enhancing coordination and the

efficient delivery of public services. For without this understanding, it is not possible

to determine which functions must be decentralized and which ones must not be. Some

popular myths and misconceptions about decentralization are also explored.

Keywords: human resources; reform; civil service; decentralization; Singapore

Traditionally, human resource management (HRM) performs distinct but inter-

related HR functions: planning, acquisition, development, compensation,

integration, maintenance, and separation (Dessler, 2007, p. 22). Nonetheless, the

question of whether these HR functions are best performed by a centralized

governmental structure or a decentralized governmental structure is far from being

settled, as both approaches have merits and demerits to parade against each other

(e.g., Heady, 1996; Pollitt & Bouckaert, 2000; Rockwell, 2005). Over time, the way

these HR functions are performed has tended to conform to changes in political

ideology. As Legge (1995) exemplified, “(In the present era), ideological shifts on

the part of the government, toward a market-based philosophy, have resulted in

changes in personnel management style in the public sector” (p. 58). In other words,

the current neoliberal ideology, driven by free-market forces, has embraced the

decentralized governmental structure as its preferred vehicle for, among other things,

implementing HR functions.

HR in Practice

Tessema et al. / Decentralization of HR Functions 169

In many countries of the world, decentralization of HRM functions has, in the

past two decades, occupied center stage in the restructuring of the public sector (e.g.,

Cayer, 2004; Kearney, 2003; Moore, 1996). This article uses the case of Singapore

to illustrate how civil service restructuring has caused central personnel agencies

(CPAs) to delegate HR authority to the line ministries and departments.

Singapore is one of the newly industrializing countries that have shown a remarkable

economic and social growth during the past four decades. Such fast economic growth

has made Singapore one of the Asian tigers (Cheema, 2005; Weder, 1999; World Bank,

1997). As a result, many less developing countries (LDCs) have taken this nation as a

role model. Although many factors have contributed to Singapore’s outstanding

economic achievements, the existence of an effective civil service has been particularly

crucial to its success. Up to now, the organizational arrangement of HR functions in

the Singapore civil service has not received much attention from researchers and

scholars in development studies. In this article, we aim to fill this void. That is, to

properly comprehend the HR reforms in Singapore’s civil service, we conducted the

current research. The Singapore public sector includes the central ministries (civil

service) and statutory boards (Public Service Commission [PSC], 2004; Public Service

Division [PSD], 2007). This study, however, focuses on the civil service.

Literature Review

The debate over centralization and decentralization of HR functions in civil

service is an ongoing one. During the past two decades, almost all countries have

been trying to decentralize at least some of their centralized HR functions. However,

the real debate is not around the question of whether decentralization of HR

functions in general is desirable. Rather, the debate appears to revolve around the

following questions: How extensive should decentralization of HR functions be?

Which HR functions should be consistent across civil service organizations? Which

HR functions should be up to individual line ministerial departments to determine?

What should the role of the CPA be in a decentralized system?

According to Heady (1996), decentralization and centralization refer to the

extent to which authority is either passed down to lower organization levels or

retained at the top. The greater the degree of delegated HR authority, the more

decentralized the HRM system is. A decentralized HRM system, in our context, is

one of the common administrative reforms made to redistribute certain HR functions

normally performed by a CPA. There are other three decentralization-related terms:

devolution, deconcentration, and delegation. Deconcentration is one type of adminis-

trative decentralization that redistributes decision-making authority and financial

and management responsibility among levels of a government. Devolution is the

transfer of governance responsibility for specified functions to subnational levels,