Scand. J. Mgmt.

16 (2000) 375}389

The public administration paradox: an organisation with a low degree of institutionalisation

Giuseppe Della Rocca
Universita della Calabria, Dipartimento di Sociologia, Arcavacata di Rende, Cosenza, Italy &

Abstract This paper identi"es the distinctive characteristics of the internal labour market of the public administration. It gives some examples of innovation in human resource management (particularly in the "eld of performance-related pay), and discusses whether and how these processes provide a solution to the problems of identity, e$ciency and con#ict that have a!ected the public administration on a broad front over the last decade. The main results of the analysis have revealed the weak institutionalisation of the public administration. The selection criteria by which the organisation determines the professional mix of occupational structure and creates a basis for performance behaviour and attitudes are very weak. Limited mobility and poor wage dynamics are the factors most strongly a!ecting the internal labour market. This, along with other factors discussed in the paper, makes it extremely di$cult to enact private sector principles suitable to the public administration (regardless of the speci"c traits of the organisations concerned). Without certain structural and social preconditions, managerialism cannot provide a solution; legislation alone is not su$cient to bridge the gap and does not create the conditions for improving the organisation of public administration. 2000 Elsevier Science Ltd. All rights reserved.
Keywords: Public administration reforms; Performance-related pay; Wage policy; Blocked labour market; Italian public administration

1. Introduction The aim of the paper is to identify the distinctive characteristics of the public administration's internal labour market. The need to explain certain phenomena such as ine$ciency and con#ict that have been prevalent in the Italian civil service over the
E-mail address: giuseppe@energy.it (G.D. Rocca). 0956-5221/00/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved. PII: S 0 9 5 6 - 5 2 2 1 ( 0 0 ) 0 0 0 1 3 - 0

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last decade, "rst attracted attention to this topic. All these phenomena indicated a crisis in the regulatory context and a discontinuity in relationships between individuals and the organisation. The questions raised here, implicitly or explicitly, concern the nature of regulatory mechanisms, the de"nition of such factors as have characterised the crisis, and the relationship between the forms of regulation in the public and private sectors. The leading concept of the paper is the public administration paradox. This paradox is explained on the one hand by the nature of the public administration as an institution representing collective interests, and on the other by its low degree of institutionalisation owing to structural weakness and the inability to e!ect internal integration between functions, roles and occupational groups. The public administration is regarded as a highly institutionalised organisation, because it works for the general interest of the national community. Its mission, its leading principles for action, its decision-making procedure, and the main tasks and objectives of its employees are all established by law and democratic practice. The role of bureaucracy is not only based on technical knowledge; it is also centred on social responsibility. However, a high degree of institutionalisation is also achieved when an organisation is autonomous vis-a-vis its environment. That is, when it is self-su$cient ` in the allocation and management of human and "nancial resources, and when such a prerogative leads to good administration in relation to both the external and the internal environment. Such control capability is usually achieved through the clear de"nition of organisational boundaries and a high degree of internal integration. From this organisational point of view, we may say that institutionalisation of the public administration is actually very low. Many studies describe it as a fragmented organisation, with little integration between functions and roles, little focus on working processes and "nal results, and little internal labour market integration. In this ambivalence lies the paradox of public administration: on the one hand, an institution representing the collective interest and, on the other, one that is characterised by a di!usion of organisational practices in which selective interests prevail. The current dilemma concerns how to govern these selective interests: what sort of organisations are needed, and what rules for the management of the internal labour market. Several countries have opted to adopt organisational principles and management techniques already employed in the private sector, instead of following a model of public regulation. The paper will address the question of choosing such managerial innovations in the Italian public sector. It will show: how the introduction of management techniques, imported from the private sector, are not providing a new social and economic regulatory practice; how, up to now, no better or more stable solution to problems like social consensus or organisational e$ciency have been found; and how the paradox is not being solved by the implementation of a new practice. Attention will focus on the introduction of performance-related pay for operatives and managers. This speci"c aspect of employment relations is usually emphasised as a turning point in organisational change. The successful introduction of such a system * owing to #exible wage schemes * is seen as a signal, on the one hand, of a more dynamic internal labour market and, on the other, of the introduction of

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new managerial practices based on the de"nition of objectives and the control of results. In the last part of the paper an attempt will be made to describe the di!erences between the public organisation with its internal labour market, and the private organisation. The purpose of such a comparison is: to identify the main factors that limit innovations in new payment systems; why the new managerial practices in this case did not always pay attention to the nature of public management; and why the speci"c environment of the public sector organisation was not taken into account.

2. The policy of reform Persistent concern about the growth of public expenditure, which almost all countries had started to address by the early 1990s, encouraged a more comprehensive approach to the reform of the public sector. Increasing levels of prosperity and improvements in customer service in the private sector have led people to make unfavourable comparisons with the service supplied in the public sector. The widespread introduction of public service charters attests to the pressure on the public services to improve the reliability and quality of their o!erings. In addition, public service employment practices have been criticised for demotivating sta! and contributing to poor performance. Dwindling opportunities for promotion and high levels of absence, coupled with di$culties in recruiting and retaining sta!, are viewed as symptomatic of persistent personnel problems. This type of critique has led to a policy of reform called &new public management', whereby public managers are encouraged to mimic good private sector practices. A wide variety of management reforms have come under the &new public management' label, not all of which actually appeared for the "rst time in the 1980s. The most important key dimensions are: E Ezciency orientation: This emphasises reforms in public sector management practice, resulting in a more businesslike &value for money' approach, with stronger managerial and "nancial controls. It involves the development of professional managerial roles, and encourages the use of a range of corporate management techniques, the adoption of which is aimed at improving e$ciency and e!ectiveness. Associated changes in employment practices include tighter control of sta! by imposing clearer performance targets and making appraisals, sometimes linked to individual performance-related pay. E Changes in organisational structures: These emphasise the break-up of monolithic public service organisations into separate units with more devolved management practices. E Market orientation: This emphasises that public sector managers have to move away from management by hierarchy and towards management by contract. Competition is encouraged by competitive tendering and by internal and external markets. In Italy in the 1990s state policy on public service regulation has included several legal and institutional innovations, most of them focused on e$ciency and the

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development of professional management. These innovations did not take the form of the radical privatisation or the introduction of an internal market approach that has occurred in some other European countries. However, although less radical than developments in other countries, the series of reforms that started in the 1990s, often inspired by the increasing "nancial di$culties of the state, were important and did e!ect change in several traditional features of the Italian public administration. Since 1992 the government has adopted very tight budget policies, involving a series of measures aimed at increasing the accountability of all administrative units and implementing more e!ective "nancial control over their activities. Local authority reforms (regions, provinces and municipalities) have allowed these authorities greater administrative autonomy within the context of tighter "nancial responsibilities. This included some increase in their powers in connection with tax issues and budget "nancing, partly to compensate them for the reduction in "nancial transfers from central government that was initiated in 1990. Reforms in the national health system strengthened managerial autonomy (Bordogna, Dell'Aringa & Della Rocca, 1999). The most important reform has been legislative decree 29 (1993) and subsequent amendments. The decree provides a framework for change in the public administration in Italy. Compared with the &new public management' model it focuses more on e$ciency and management control, and does not directly involve the question of the structural breakdown of public organisations or the introduction of competition between units. In terms of the management of the public administration, it introduced a clear distinction between the powers of the political authorities and those of the bureaucracy. This included the reform of the prerogatives and responsibilities of the managers in the public sector, the &privatisation' of public employees, and the creation of a &technical agency', Agenzia per le Rappresentanze Negoziali delle pubbliche Amministrazioni (ARAN), responsible for general national wage negotiations and public sector labour relations. Some of these strands of innovation were taken up again and intensi"ed as part of the &"scal federalism' project (or the administrative decentralisation of the state), which was approved by the parliament in 1997 and which included some measures aimed at increasing managerial autonomy and "nancial responsibility in the schools sector. As well as legal-bureaucratic forms of control, legislative decree 29 (1993) also introduced processes for managing resource allocation. The decree included auditing principles and evaluation processes intended to verify the achievement of objectives and determine the cost of services. Public sector management is responsible for resources and, according to the decree, must therefore become independent of the political sphere and take initiatives of its own. In order to meet targets it is necessary that decisions on recruitment, promotions and work organisation must be made without any involvement on the part of labour unions. The manager has wide-ranging administrative powers to de"ne work loads, working hours, internal mobility, the introduction of incentives and other decisions for improving productivity (D'Orta, 1995). Collective bargaining is the other important result of decree 29. Under this decree the status of public employees is privatised. This means that national agreements with

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unions are no longer rati"ed by parliament as law, but become a part of the private jurisdiction. This implies the constitution of an employers' delegation in the collective negotiations, with the creation of an autonomous agency for the compulsory representation of public administration bodies in collective bargaining at the national level (ARAN).The idea here is to separate collective bargaining from the political and parliamentary arenas. The decree recognises union demands for a more decentralised bargaining process on the one hand, while on the other it reinforces management prerogatives and seeks to exclude unions from any forms of co-determination in the work organisation sphere. The union is recognised as an actor in the bargaining process, but is not given the authority to participate in management functions or &management prerogatives' in accordance with private sector practices (Bordogna et al., 1999). In this way the national contract for public employees and the structure of collective bargaining in Italy have acquired an important role for the future in the public administration reform (Dell'Aringa, 1995). In national contracts, new forms of regulation now concentrate * in contrast to past practices * on economic incentives for public sector employees. Variable forms of compensation are intended to satisfy di!erent expectations. One of these takes up the possibility of creating a salary index at local level, on the basis of local budgets. The goal is to create mechanisms which will allow for savings at the managerial level, or to establish spending ceilings for personnel at the local level. This formulation de"nes a quota of monetary resources, so that decentralised conditions of employment and industrial relations can still accommodate income policy control in a context where there are no forms of market regulation (in contrast to the private sector). The second aim is to create incentives and motivate the workforce. The goal is to promote greater e$ciency in the workforce, and to establish increased accountability for results and quality. This whole topic was widely debated in the 1980s, not only as regards the operative roles but also and above all the managerial ones. These forms of incentive are especially important in the public sector, where services are being delivered to the public and where there is uncertainty and variability in work performance. The third and equally important type of goal concerns the di!erentiation of compensation. Di!erentiated compensation allows managers to acquire and maintain scarce resources on the market, to create incentives and to grant particular rewards for di$cult jobs, and to promote e!ective organisational dynamics by instituting professional as well as economic career paths. This aspect of #exibility is particularly relevant in the public sector where salary di!erentials are less than those in the private sector, a point that is important in countries like Italy where at the beginning of the 1980s the majority of employees in di!erent sectors of the public administration were receiving almost identical pay. Data from this period indicates that the wage di!erential in the ministries was 14%, in the NHS 9%, in local authorities 16%. In the ministries those with special skills received only 10% more than the basic salary, in the NHS 8-10%, and in local government 6%. In schools the "gure was below 1%. Signi"cant di!erences in remuneration were due not to salary level in the classi"cation system of di!erent occupational groups, but to seniority and overtime (Santi, 1987).

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Wage policy in the public sector has been subject to innovation as a way not only of modifying industrial relations and pay, but also of changing the bureaucratic structure, the culture of public sector organisation, and the behaviour of public sector managers. In Italy the innovations in income policy have given rise to productivity agreements and functional bonuses for managers. The term `productivitya describes an aspect of performance that has not previously been subject to attention, and which re#ects the need for e$ciency measures. For managers, the new bonus means developing a system of management incentives never before adopted in the public sector. In national public sector contracts productivity agreements are seen as a way of reversing a general lack of e$ciency, and of starting the process of cultural change. Financial incentives must be managed by management on the basis of goals and performance, in both individuals and groups, and calls for greater organisational e$ciency, for cultural change and for new managerial roles that are explicit in the agreements. This, obviously, implies a complete revision of managerial practices (in structure, internal relationships, decision-making powers, selection practices, training and pay awards). According to this logic of collective bargaining, the manager must be able to act as any employer would, and must possess economic and managerial skills beyond the traditional administrative ones (Rusciano, 1990).

3. The implementation of incentive-based pay The introduction of pay-by-results can be seen as an important turning-point in implementing the reform and the new national contracts. The implementation of the new pay structure actually predated decree 29, which allowed the necessary time for assessing change in management roles and in the internal labour market of the administrations. Data from various studies (Rebora & Meneguzzo, 1988; Bonaretti & Lattanzio, 1991; Presidenza del Consiglio dei Ministri, Dipartimento della Funzione Pubblica, 1994; Della Rocca, 1996), o!er numerous pointers: for instance that productivity agreements have had limited e!ects, relative to the high expectations of their promoters. Almost every employee was subject to this incentive, but the reward itself did not vary signi"cantly. Di!erentials were minimal, and in 42% of cases there was no di!erential whatsoever. Generally speaking, productivity incentives produced no visible results in more than half the cases analysed. According to some managers, there were no concrete improvements in terms of e$ciency, and this is attributed to a lack of criteria for measuring the e!ects of administrative action. In some cases only indicators were developed for measuring e!ort and results. It would seem, according to some of these studies, that it is di$cult to de"ne methods and criteria for evaluating individual performance. Nonetheless, the studies do demonstrate how productivity agreements have contributed to establishing di!erences between employment quali"cations and occupational groups, irrespective of whether or not the e$ciency goals stipulated in the

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agreements were met. Economic resources dedicated to productivity incentives have been used by individual organisations to pay those occupational groups which perform particularly di$cult or important tasks requiring reliability and #exibility in work performance, or to pay for professional inputs that are better paid elsewhere. For example, the occupational groups in the local authorities that bene"ted most from productivity incentives were teachers, tra$c-wardens, personnel responsible for cultural activities, and some skilled blue-collar workers. This distribution of productivity bonuses to privileged groups which, thank to the nature of their work, were the most di$cult groups to reward with productivity bonuses. This is because in these occupational groups it is extremely di$cult to establish pre-determined goals, to quantify results or to measure performance. This agreement can be seen as a collective #at-rate increase for professional groups which lack adequate career development paths, rather than an individual productivity incentive. As well as the productivity wage for all employees, there are managerial bonuses that reward the complexity of managerial positions. According to the national contract for managers, it is up to each organisation to determine the criteria for evaluating managerial posts and the level of the bonus or allowance. It is implicit in this system that the e!ect of bonuses on the distribution of salaries allows for di!erentiation within managerial groups. The idea is to develop compensation and labour market dynamics for managers. On a basis of organisational needs and complexities, every organisation had theoretically been given a major opportunity to manage and develop their managerial resources through this system of managerial allowance. In practice, however, the results of applying the national agreement for public sector managers in the various administrations, indicate that this expectation was only partially met. Greater di!erentiation appeared between managers and employees, but little di!erentiation appeared between managers, and in some cases there was none at all. In most of the organisations analysed (Della Rocca, 1996), no systematic analysis of management jobs had taken place. Only in some administrations had it been possible to make any such analysis or to achieve any real pay di!erential between managers. In most cases the bonuses have simply caused a #at increase in management wages. According to the managers interviewed, this was principally due to a desire on the part of the administration to avoid con#ict, or the risk of undermining social structures that had consolidated over time and that had worked just because there was little or no di!erentiation amongst managers (Della Rocca, 1996). In sum: wage #exibility was achieved by means of some di!erentiation in pay structures. Relative to the results foreshadowed in the agreements, this suggests that the outcome of the process had been an ambivalent one. On the one hand, "nancial resources for human resource management were decentralised, but the local administration failed to carry out an e!ective selection and di!erentiation of the resources allocated, as it preferred not to adopt a personnel policy that would have upset its internal equilibrium. On the other hand, a certain kind of di!erentiation was in fact enacted, focusing on certain occupational groups which were deemed to be delivering especially important services. The role of the unions was essentially non-existent when it came to formulating the goals for productivity bonuses, and passive when it came to

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evaluating results. The main outcome was an increase in wages for some occupations, empowered by their critical position in the work process. The policy goals for the institution of productivity and managerial bonuses, had been to create a mechanism that would improve the administrative process while also strengthening management roles and management culture. Research has shown that in some of the organisations there was some innovation, although this appears to have been very limited. The few administrations which did achieve greater #exibility in pay were those which had already embarked on a process of organisational development. In most other cases a number of tools were improvised such as management-byobjectives, performance evaluation processes or, sometimes, performance evaluation committees. These tools were incongruent with the way in which the organisation operated and this satis"ed the need to comply with the administrative aspect of the agreements, thereby emphasising legal aspects and not the process of organisational development. At this point, it could be interesting to explore the reasons why the results were so limited. Some of those interviewed spoke of the small lump sums dedicated to this initiative, which allowed only for small variations in awards. Others attributed the outcome to the lack of interest in some administrations when it comes to rationalising the salary structure and making it more #exible. These administrations had never identi"ed #exible and di!erentiated pay as a particular need, and had consequently not given it a priority in the organisation. Some researchers suggest that the experience was limited to an exercise in enforcing legislation and the national contract, without there being any relevance to the organisation itself. This last comment underlines the fact that using legislative means to achieve change does not always in#uence organisational management roles. Legislative action and the application of national contracts are not su$cient tools for guaranteeing innovation or a cultural review in the civil service * especially when innovation means changing the values and behaviour of management and other occupational groups.

4. The bureaucratic slacks Experience of economic incentives in the Italian public sector has made it possible to draw some broader conclusions about innovation, about how to e!ect a rationalisation and decentralisation of the public administration by applying a private sector approach to personnel management. The "rst conclusion is connected with the problem that the introduction of a prouctivity approach is contrary to the nature of a sector that has hardly ever applied such principles. Organisational and management systems are weak in the public sector because there is little control over performance. The intentions expressed in new policy and administrative behaviour are, consequently, characterised by cleavage (Sborlino, 1987; Landau, 1990). This was certainly one of the aspects that discouraged many administrations from adopting a system of salary di!erentiation on the basis of results or individual performance. Secondly, the presence of di!erent occupational groups makes it di$cult in practice to de"ne common standards for selection and di!erentiation. The labour market in

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the public sector is characterised by a polarisation between professional and nonprofessional occupational groups. On the one hand, the public sector is one of the principal places where unskilled and semi-skilled work is to be found. In the United States people in this occupational group are known as service workers. In Italy, according to ISTAT, service workers include salespeople, waiters, refuse collectors, security guards, messengers, clerks, etc. These occupational groups cover both administrative and manual work, and in the ten years between 1971 and 1981 their number increased by half a million (Tousijn, 1986). As regards working conditions, however, the situation of the service workers is by no means uniform. Positions can be temporary and badly paid, temporary and well paid, permanent and poorly paid, or permanent and well paid, as in the case of the public administration (Perulli, 1988; Chiesi, 1988). Replacement and di!erentiation of work performance characterise these groups (Gallino, 1987). Jobs in lower salary grades, of low complexity and easy to reproduce in di!erent contexts, are believed to employ weak occupational groups such as women * who form nearly 50 per cent of the working population in the Italian public sector. On the other hand, owing to the characteristics of some of the public services provided, the public administration has a monopoly of professional or semi-professional work. School teachers and education/social work employees in general are an example of this. Other professional groups include engineers, architects, doctors, pharmacists and some administrators. The term `performancea has di!erent meanings as applied to these two types of occupational group and performance evaluation systems cannot ignore these di!erences. Generally speaking, merit pay, which di!ers from productivity bonuses in that it represents a more approriate evaluation of professional pro"les, did not always succeed. It has not been demonstrated that performance improved as a result of introducing merit pay to reward consolidated professional roles. In some cases it damaged the organisational climate because it implied management control over professional work, in particular via the interaction between the professional worker and the client (for teachers, see Cohen & Murname, 1985). Given the type of work and the sense of professional responsibility typical of these professional groups, it would appear more suitable to follow career paths and mobility based on a clear di!erentiation between roles. This is impeded, however, by a job classi"cation system whereby each professional group shares a job classi"cation with other groups in the public administration. Lastly, the very nature of public administration poses the problem of who is responsible not only for con"rming that results are achieved but also for managing the process of performance evaluation. The search for an external authority (for example, assessment committees composed of external experts appointed by the political system) is conducted through the public service entrance examination and the grading system, and the possibility of appealing to administrative courts outside the organisation. This often implies that organisations assign a purely administrative and abstract meaning to performance evaluation processes, which in some cases, destroys the integrity of the performance evaluation process itself. This partly explains the crisis in di!erentiation policy and practice when it comes to the functional

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bonuses for managers. The new criteria for determining compensation have not simply swept away the old ones altogether. This has created an ambiguous situation in which di!erent processes and criteria for the selection of employees are running side by side. In sum, this and other problems have reinforced the need to think over the nature of the public organisation compared to the private. The di$culties described seem essentially attributable to the nature of the organisational structure, to the system of control and coordination, to organisational dynamics and the mobility in the internal labour market. The nature of organisational structure: Public organisation is assumed to have a single organisational model for di!erent outcomes and functions. Over time, functions have been duplicated, as strategy and the role of the state have evolved (Zan, 1989). The public administration involves many disparate issues which lead to di!erent forms of regulation: legal, economic, social, and the regulation of internal e$ciency (Giannini, 1986). The di!erentiation of these issues has not been followed by concrete change. Organisational structure remained consistent with the issue of administrative legality, and is reproduced at central and decentralised levels even in contexts where economic and social issues are more important. Administrative rationality is subject to no di!erentiation, regardless of the needs of the particular geographical area, the type of service supplied, or the type of client served. Despite the existence of a single type of organisational model, the organisational structure is fragmented over numerous functions that di!er both in the competence required and in their results. This type of fragmentation is more frequent in the local authorities. The number of services and the degree of specialisation imply an occupational segmentation of the labour market that represents a serious obstacle as regards mobility or any sort of internal labour market dynamics. Control and coordination system: Integrative management tools are few and insu$cient compared to other models of organisation. In organisations driven by economic ends, a variety of mechanism are used to achieve integration: strategic roles at di!erent hierarchical levels, special structures for coordination, operative procedures and roles, budget tools for the allocation of resources and the control of results. In the public administration strategic roles turn out to be rather weak. The attempt to create an administrative elite has been foiled by inadequate selection processes. In Italy too H many people entered this elite * 7/8,000 * when no more than 1500 should have H done. The public administration accepted a low management pro"le and low visibility, and is dependent on the political system. The public service exam was not always accepted as the selection tool and this caused local corruption and little sense of identity with the state and its institutions (Cassese, 1994). Many management roles re#ect a fragmented organisation divided according to functional interests, and the legal-administrative type of management is not su$cient to guarantee integration. This type of division constitutes a potential cause of con#ict (Page, 1985). Tension across functional boundaries about resource allocation and the distribution of competence and responsibility is often di$cult to resolve. In many cases this type of problem is ampli"ed and reproduced by the creation, with no regard to any logic of e$ciency, of new managerial roles (Cassese, 1994). When

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such integrative functions (cutting across other functions) do exist, they are often considered to be inferior and are thus penalised (Bianco, 1989). Integration between structures and roles is achieved through procedures that guarantee the legitimacy of legal acts. Work allocation does not appear to be based on an explicit model of work organisation, but is at the discretion of the individual manager. Each individual manager can act according to their own attitudes, not necessarily behaving the same way as any other manager. In work organisation there is no recognition of universal rules. The process whereby work is divided and responsibility attributed can vary and is not homogeneous between functions. This is quite an arbitrary process of organising work, even at the executive level, constitutes a speci"c characteristic of public sector organisation. There are very few techno-structures able to de"ne and impose rules and standards applying throughout the organisation and allowing for control mechanisms beyond the hierarchical function. The working activities of the employees depend on the speci"c relationship with the individual manager. Performance, often the basis for social regulation, consequently represents a much weaker criterion of management and employee evaluation than in other organisations. The professions are the only exception. For them, performance is implicitly crucial to regulation. However, the organisational relationship with other activities remains a loose one and is di!erent from that in the organisational models de"ned in classical organisation theory (Weick, 1976). Unlike operative and administrative work, a `margin of uncertaintya (absence of pre-coded activities, personal interaction with the client) de"nes the autonomy of professional and semi-professional roles, and con#ict consequently arises between the administrative type of control models de"ned by administration, and professional control models based on the certi"cation of knowledge and performance. Even in private sector organisations where pre-coded procedures are the predominant form of control, con#ict may arise between administrative control and professional groups (Gross & Etzioni, 1985). None the less this kind of con#ict seems to be more serious when the professional group is larger, and in organisations where integrative tools are weak or non-existent (the budget, horizontal indicators of performance and results, and cost accounting). Where management structure and rules are weak, di!erences between administrative and professional areas are ampli"ed rather than reduced. Organisational mobility: Organisational dynamics in the public sector are weak compared to the private sector. Generally speaking, #ows into the public administration may be dynamic, but internal #ows are basically stagnant. Internal mobility, when it does exist, usually occurs within a function and a single professional group. Very often, several functions are occupied by autonomous professional communities. Selection and training, professional ethics and the cultural roots of the work processes therefore constitute real barriers to role adaptability and horizontal mobility between functions in the internal labour market. The career path within each professional group is not very broad. For many employees turnover is characterised by the same incidence of new entries and exits; those who hold a position do so for life. This is true of some roles and professional groups such as tra$c-wardens, surveyors and teachers. Management career paths also seem restricted. Very few managers have had

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experience in other organisations and even fewer have had an inter-functional career, in which experience has been acquired in di!erent types of services.

5. A blocked labour market In sum, the distinguishing feature of the public sector is the weakness of its organisational rules. Such a characteristic implies a low degree of autonomy and is one of the reasons for a poor organisational identity. Slack organisational rules are conditioned in the public administration by a lack of internal labour market dynamics, where demand does not predetermine supply. These conditions are the main barrier to innovation in the personnel policies, and they lead to a situation in which di!erentiation in pay, or the encouragement of greater mobility, encounter serious obstacles. On the one hand, despite the weakness in its rationalisation and integration mechanisms, the public administration labour market does not resemble the `open internal labour marketa described by Moss Kanter. This author's empirical references were drawn from professionals employed in the private sector, where resource allocation is determined by high turnover, #uctuating salaries, individual negotiation and little job security (Kanter, 1984). All these characteristics are foreign to the public administration, where job security is assured, turnover is low, and mobility and wage #uctuations are very limited. There are professions for whose members the public administration o!ers the most important work opportunity. The combination of these professions (with no outside market and little internal reproduction) with unquali"ed operative roles, leads to the creation of separate occupational compartments and forces more easily reproducible roles into lower-grade positions, thus generally dividing up the internal labour market and making it more rigid. On the other hand, the public administration internal labour market does not resemble the industrial internal labour market described by Doeringer and Piore in the seventies either (Doeringer & Piore, 1971). These conclusions contradict the many similarities that were claimed by some authors and some labour unions between public sector organisation and the Fordist organisation of industry. Such similarities claimed, were based on the following comparisons: low quali"ed work for most employees, lack of recognition of work content, #at pay structures, limited possibility for promotion and professional development. These aspects, some of them present in the public sector labour market, are not caused by the kind of rationalisation which occurs in industrial mass production processes. Rather, public sector organisation is characterised by its weak mechanisms of integration and rationalisation. If a comparison with industry is possible, this has more to do with the era of 19th century `commercial capitalisma, where according to Taylor the factory was an `empire of foremena * foremen who had the freedom to organise and distribute work within their own jurisdiction, without any limits or rules applying to the entire organisation. The perception of uneasiness in working relationships in the public administration has to do with people being ill-suited to their roles and to the organisation. The feeling of waste in the use of resources, especially human resources, is the principal criticism

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advanced by employees * regardless of whether they de"ne their roles as unskilled or as professional. The result of this analysis of public management regulation thus reveals an internal labour market model that di!ers from the one found in the literature on the subject. Compared to the industrial internal labour market the main di!erence is the absence of an active organisational role able to pre-de"ne behavioural models and professional roles, as well as to supply policies. The public administration internal labour market model thus appears `blockeda (Cerase, 1994; Della Rocca, 1993). The idea of a blockage is evoked by poor mobility and limited wage dynamics. Under conditions in which the internal labour market is blocked, important social incentives like limited working hours and job security can lead to con#ict and dissatisfaction instead of generating identi"cation. The criteria for selection and evaluation are to some extent extraneous to the organisational rules. The selection criteria, whereby the organisation determines the professional mix of its occupational structure and creates the base for performance, behaviour and attitudes towards work, are weak. Entry #ows into the organisation occur at all levels of quali"cation, and internal mobility is very poor: there is a high probability of someone leaving the public administration with the same professional pro"le that they had upon entering it. Lastly, the blocked labour market is characterised by professional roles. Selection and training are important for such roles, but are often independent of the internal regulation system of the public administration.

6. Conclusion The analysis of new managerial practices in Italy (such as pay-through-incentives) has made it possible to draw a number of conclusions. The decentralisation and rationalisation of public organisations with the help of private and professional management instruments alone, are di$cult to realise. First, the introduction of methodological approaches, such as productivity measurement or management-by-objectives, clashes with a situation in which management control systems are weak and still largely dependent on the world outside. Second, the presence of di!erent occupational groups is the main factor de"ning the culture and dynamics of the public administration labour market. Of particular importance is the presence of large professional groups such as teachers, doctors and nurses with their own autonomy and their own rules based on the certi"cation of knowledge and performance. The terms `controla and `performancea have di!erent meanings for all these groups; assessment procedures and performance standards implemented by the administration alone are of questionable value. The analysis con"rms the paradox of an expected high degree of institutionalisation on the one hand (since the civil service represents the collective interest), and a low degree of organisational integration * with fragmentation and a tendency towards selective interests * on the other. New personnel management practices have not overcome this kind of fragmentation of interests. The problem of how to reconcile selective with collective interests remains unsolved. The failure of the new personnel management rules risks reinforcing the di!erences on both sides of the paradox. New

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management is breaking down the traditional internal labour market regulation, raising expectations but not "nding stable solutions. Such experiences can be looked at from di!erent viewpoints, and di!erent alternatives might be found in the future by acting on the assumption that private sector management principles are applicable to public organisation. In the present case, however, in the absence of any adequate con"guration of other `new public managementa factors, professional management and e$ciency policies cannot succeed as the only guiding principles. Private personnel management instruments can solve many aspects of the paradox by way of more e!ective recruitment, selection and promotion; internal fragmentation could be subject to more control so as to avoid a loss of identity and to procure stronger integration and continuity between di!erent occupations and levels. But the promotion of organisational dynamics and the activation of the labour market cannot be limited to the rede"nition of management roles or to local and national collective bargaining practices. Professional and personnel management practices cannot o!er a solution without the appropriate structural and social preconditions. More radical approaches must be implemented * such as changes in organisational structures with the scaling down of monolithic public service organisations into separate units, and with the introduction of competition and market mechanisms between them. In a market-orientated environment, new management instruments can work better than in an administrative one. Another alternative might be to reinvent a new collective identity for public services in a modern society. Owing to the fragmentation of interests, much of the crisis can be explained by the decline of welfare state values, with the extension of non-selective employment criteria as regards service e!ectiveness vis-a-vis the end user (Ferraresi, ` 1980). Such a process might establish a new loyalty among members of the civil service. Above all, better integration and a new identity could be reached from a strategic and cultural point of view. In this case, managerial practice would be seen not as an alternative but as a complement to the strategic issue of reinventing a new collective civil service identity and a more e$cient organisation. References
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