National HR Policy Efficacy in Driven High Growth Economies: A Case Study in State of Qatar

Background

Qatar has continued to experience rapid economic growth in recent years due to its vast oil resources and the proliferation of other industries in the non-oil sector (Berrebi et al 2009; Weber 2011). Coinciding with the unprecedented economic growth, the number of semi-private corporations and non-governmental organisations (NGOs) operating in the country has increased considerably (Afioni, Ruel, & Schuler 2014), implying that the public sector is no longer viewed as the employer of choice (Forstenlechner & Rutledge 2010).

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The increasing presence of semi-private corporations and NGOs brought into the limelight a scenario whereby more and more employees were migrating from the public sector to the semi-private sector to take advantage of the high wages and improved social services offered by employers in this sector (Sulaiman, Manochehri& El-Esmail 2013). However, the Qatari government took notice of the ongoing trend and, in 2009, sought to revamp the public sector by developing a human resource policy aimed at stabilising the situation and creating equal wages for employees in semi-private and public sectors (Budhwar & Debrah 2009; Iles, Almhedie & Baruch 2012; Sulaiman et al 2013).

From the beginning, scholars and human resource practitioners are divided on the real issues that triggered the government into actualising the 2009 human resource policy. In some quarters, it is felt that the human resource policy was actualised to deal with a host of issues, including

  1. issue of expatriate workers who dominated the workforce,
  2. deficits of a public sector that offered Qataris employment as low-skilled employees but that failed short of its potential to attract highly skilled employees,
  3. overstaffed and inefficient civil service bureaucracy,
  4. high unemployment levels among Qataris looking for their first employment,
  5. entrenched lack of incentives for local employees to seek private-sector employment, and
  6. ensuring that Qataris graduated with the relevant education and skills mix required to find employment in the private sector (Forstenlechner & Rutledge 2010; Al-Waqfi & Forstenlechner 2012; Sulaiman 2013).

It is important to note that the semi-private or semi-government sector is substantially different from the purely private sector in terms of ownership and other key criteria such as recruitment considerations and the skills mix needed for employment (Sulaiman et al 2013). Of significance here is the fact that the Qatar government has a substantial stake in the semi-private sector, hence organisations operating in this sector can attract low-skilled Qataris and provide them with high wages, benefits and other social services mostly available in the private sector (Weber 2011; Sulaiman et al 2013).

It is reported in the literature that few Qataris qualify to work in the purely private sector due to lack of requisite skills and attractiveness of work in the semi-government sector as demonstrated by employee characteristics (e.g., skill-based competitiveness and cultural preferences) and employer characteristics (e.g., benefits, wages, retirement, job security, unemployment security as well as incapacity or unwillingness of the public sector to punish poor performance) (Berrebi et al 2009; Namazie & Frame 2007).

Reasons behind the Introduction of the HRM Policy

Although various reasons have been provided as to why the Qatar government developed and implemented the 2009 HRM policy, it is imperative to look into the historical factors that made most Qataris move away from the civil service to the semi-government sector between 2000 and 2008. The historical reasons discussed in this section include economic acceleration, civil service bureaucracy, decentralisation, lack of competitive workforce, and asymmetrical labour market.

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Economic Acceleration

Berrebi et al (2009, p. 423) suggest that, with the recent development of its natural resources, Qatar has seen a phenomenal growth in per capita income that more than doubled in the past decade, making Qataris among the world’s wealthiest citizens.” Available statistics demonstrate that the economy of Qatar grew at a very rapid average annual rate of almost 8 per cent between 2000 and 2005, and the 2008 International Monetary Fund (IMF) projections placed the country’s per capita GDP at over $80,000 (Berrebi et al 2009). Consequently, as more and more Qataris became wealthy, there arose the need for increased capital investments to cater for the increased demand for consumer goods and services (Salih 2010). Many of these capital investments came in the form of semi-government corporations, which employed locals at higher wages and with many other benefits and services to match with the growing economy (Forstenlechner & Rutledge 2010; Duncan & Denaux 2013).

Additionally, economic acceleration in the Gulf country was facilitated by a substantial increase in the levels of income attained by locals, resulting in a magnified change in government investment into the semi-private sector (Malehorn 2005). As suggested by Berrebi et al (2009), the continued growth in the GDP and other economic indicators witnessed in most oil-rich Gulf nations in the early 2000s induced continuing net investments in these countries in the form of establishing numerous semi-government agencies, corporations, as well as non-governmental organisations.

The emergence and rise of these semi-private agencies and organisations tilted the labour dynamics in Qatar and several other Gulf states, as more employees were willing to leave their civil service jobs to try their luck in semi-government organisations that provided the high salary and benefit inducements for workers with similar skills and expertise as employees in the civil service (Harry 2007; Berrebi et al 2009; Salih 2010; Williams, Bhanugopan & Fish 2011).

Civil Service Bureaucracy

Although international comparative studies strongly acknowledge that an effective and efficient civil service or public service bureaucracy can causally foster growth, development, and economic prosperity (Harry 2007; Brosamle 2012), the bureaucratic structure may lead to entrenched inefficiencies and other adverse outcomes when intensive efforts are not taken to streamline its operations (World Bank 2003; Jordan &Battaglio 2014). In the Qatar context, it is evident that the bureaucratic structure in the public service orchestrated a scenario whereby more and more people became increasingly opposed to taking up jobs in the public sector and instead joined the semi-government sector to benefit from the higher wages and operate within the precepts of an efficient organisational structure (Salih 2010; Williams et al 2011).

It is argued by scholars and HRM practitioners that the 2009 human resource policy in Qatar was indeed a reaction to a public sector that provided the local population with low-skilled employment opportunities, but that nevertheless fell short in its capacity to lure highly skilled people (Abdul Aziz Alsahlawi & Gardener 2004), leading to an “overstaffed and inefficient civil service bureaucracy” (Berrebi et al 2009, p. 442).

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An inefficient and ineffective civil service bureaucracy, according to the World Bank (2003) and Brosamle (2012), can initiate or trigger a skills drain from the public sector into the private sector of the economy due to several reasons including lack of institutional quality as well as deficient human resource practices (e.g., inadequate meritocratic recruitment to the public service, lack of internal promotion capabilities and lack of competitive salaries and benefits compared to the private sector). Additionally, an overstaffed and inefficient civil service bureaucracy often fails to meet the threshold for performance due to the entrenched inability to develop a well-functioning system of administrative procedures that can ensure meritocracy in the service (World Bank 2003).

Decentralisation of Services & HRM Practices

It is argued that the continued decentralisation of human resource practices also provided the impetus for the Qatari government to develop and implement the 2009 human resource policy. Decentralisation implies the spreading out of decision-making processes to include stakeholders at the lower echelons of the hierarchy (Meyer & Hammerschmid 2010). In the context of this particular study, the Qatar government engaged in decentralising critical services not only to overcome the entrenched civil service bureaucracy but also to accelerate the economy. Most of the decentralised services were taken up by the new organisations in the semi-private sector, which had the leverage of comfortable budgets and competitive HRM policies that enabled them to attract more human resources than the public sector.

Additionally, the decentralisation of human resource practices that followed the sustained economic growth and expansion of the semi-private and private sectors in Qatar implied that the government could not fully monopolise HR decision making. This meant that organisations in the semi-private and purely private sectors could develop their own competitive human resource practices with the view to improving the welfare of their employees and at the same time enhancing their motivation through higher pays and bonuses (Berrebi et al 2009).

Consequently, it can be argued that decentralisation of services and human practices in Qatar served to substantially attract employees from the public service into the semi-private and purely private sectors of the economy largely due to the improved terms of service (Iles et al 2012). Indeed, Berrebi et al (2009) argue that the comparatively inflexible salary structure used in Qatari’s public sector discouraged employees from joining the public sector because these workers could command higher offers outside the public sector from employers such as Qatar Petroleum and other private entities.

Lack of Competitive Workforce

Berrebi et al (2009) note that, before the introduction of the HRM policy, the rapid economic growth witnessed in Qatar was been increasingly constrained by the fact that the nation was yet to develop a workforce capable of effectively and efficiently competing in the global marketplace. The government, according to Iles et al (2012), was therefore charged with the responsibility of ensuring domestic workers are incorporated into the country’s labour market, which had been dominated by expatriate labour. Indeed, the introduction of the HRM policy in Qatar was in part informed by the need to address skill and wage discrepancies that affected and continue to affect Qataris.

As acknowledged by Berrebi et al (2009, p. 436), “most Qatari university graduates are qualified in the humanities rather than the science-based technical fields that the economy demands.” This discrepancy, according to Abdul Aziz Alsahlawi & Gardener (2004), ensures that most Qataris continue to be attracted to public-sector employment that may not necessarily require higher skills to undertake. Similarly, it becomes increasingly difficult for Qataris to be retained in high-demanding jobs mostly found in the purely private sectors due to a lack of the requisite skills base (Berrebi et al 2009; Iles et al 2012).

Asymmetrical Labour Market

This reason is related to the lack of a competitive workforce and concerns the fact that most local employees worked exclusively in the semi-public sector due to the security provided by these jobs. According to Berrebi et al (2009, p. 422), the labour market sector in Qatar is constituted in such a way that “private and mixed firms are dominated by expatriate workers, while the vast majority of Qataris work in public sectors.” These authors also argue that “Qataris tend to lack the educational and professional training required to obtain jobs outside the government, making public positions the only employment possibility for the vast majority of Qataris” (p. 428).

Indeed, it is thought that the lack of a competitive workforce in Qatar explains the fierce competition witnessed in recruiting skilled and talented employees from neighbouring Gulf countries such as United Arab Emirates (Berrebi et al 2009). Consequently, it is possible that a major reason behind the introduction of HRM policy in Qatar was to put in place strategies aimed at ensuring that Qataris could fit into both public and semi-private sectors by, for example,

  1. shifting the educational process to ensure English proficiency and computer skills, and
  2. training most Qataris in engineering, finance, marketing and public relations field, rather than in humanities or religious studies (Abdul Aziz Alsahlawi & Gardener 2004; Iles et al 2012).

Conclusion

This section has laid the background on why the Qatar government developed and implemented the 2009 HRM policy. Of course, many reasons have been advanced by scholars and practitioners as to why the HRM policy was implemented; however, the researcher has dealt with issues perceived as historical to the HRM policy implementation, namely economic acceleration, civil service bureaucracy, decentralisation of human resource practices, lack of a competitive workforce, and asymmetrical labour market. Overall, Qatar’s government recognised the challenges and instituted changes through the HRM policy with the view to stabilising the situation (migrating employees from the public sector to the semi-private sector) and creating equal wages for employees in semi-private and public sectors.

Reference List

Abdul Aziz Alsahlawi, K & Gardener, EPM 2004, ‘Human resources and economic development: The case of Saudi Arabia’, Journal of Third World Studies, vol. 21 no. 1, pp. 175-189.

Afiouni, F, Ruel, H & Schuler, R 2014, ‘HRM in the Middle East: Toward a greater understanding, The International Journal of Human Resource Management, vol. 25 no. 2, pp. 133-143.

Al-Khatib, F & Al-Abdulla, SM 2001, ‘The State of Qatar: A financial and legal overview’, Middle East Policy, vol. 8 no. 3, pp. 110-125.

Al-Waqfi, MA &Forstenlechner, I 2012, ‘Of private sector fear and prejudice: The case of young citizens in an oil-rich Arabian Gulf economy’, Personnel Review, vol. 41 no. 5, pp. 601-629.

Berrebi, C, Mortorell, F & Tanner, JC 2009, ‘Qatar’s labour markets at a crucial crossroad’, Middle East Journal, vol. 63 no. 3, pp. 421-442.

Brosamle, KJ 2012, Civil service reform in developing countries: We do not know what we are doing. Web.

Budhwar, P & Debrah, Y 2009, ‘Future research on human resource management systems in Asia’, Asia Pacific Journal of Management, vol. 26 no. 2, pp. 197-218.

Duncan, FB & Denaux, ZS 2013, ‘Determinants of economic success in the Middle East and North Africa’, Global Journal of Business Research, vol. 7 no. 5, pp. 25-35.

Forstenlechner, I & Rutledge, E 2010, ‘Unemployment in the Gulf: Time to update the social context’, Middle East policy, vol. 17 no. 2, pp. 38-51.

Harry, W 2007, ‘Employment creation and localisation: The crucial human resource issues for the GCC’, International Journal of Human Resource Management, vol. 18 no. 1, pp. 132-146.

Iles, P, Almhedie, A & Baruch, Y 2012, ‘Managing HR in the Middle East: Challenges in the public sector, Public Personnel Management, vol. 41 no. 3, pp. 465-492.

Jordan, T & Battaglio, RP 2014, ‘Are we there yet? The state of public human resource management research’, Public Personnel Management, vol. 43 no. 1, pp. 25-57.

Malehorn, J 2005, ‘The nation’s economic outlook’, Journal of Business Forecasting, vol. 24 no. 3, pp. 45-46.

Meyer, R & Hammerschmid, G 2010, ‘The degree of decentralisation and individual decision making in central government human resource management: A European comparative perspective’, Public Administration, vol. 88 no. 2, pp. 455-478.

Namazie, P & Frame, P 2007, ‘Developments in human resource management in Iran’, International Journal of Human Resource Management, vol. 18 no 1, pp. 159-171.

Salih, A 2010, ‘Localising the private sector workforce in the Gulf Cooperation Council countries: A study of Kuwait. International Journal of Public Administration, vol. 33 no. 4, pp. 169-181.

Sulaiman, NF, Manochehri, NN & El-Esmail, RA 2013, ‘Level of total quality management adoption in Qatari educational institutions: Private and semi-government sector’, Journal of Education for Business, vol. 88 no. 2, pp. 76-87.

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Weber, A 2011, ‘What is a knowledge economy? Oil-rich nations post-oil, International Journal of Science in Society, vol. 2 no. 2, pp. 161-169.

Williams, J, Bhanugopan, R & Fish, A 2011, ‘Localisation of human resources in the state of Qatar: Emerging issues and research agenda’, Education, Business & Society: Contemporary Middle Eastern Issues, vol. 4 no. 4, pp. 193-206.

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