Historically public sector personnel policies and practices have been targets of reform. These reforms consisted of transferring private sector techniques to a public sector perceived to be more bureaucratic and less efficient. Private sector research is replete with evidence of a connection between “superior” human resource management (HRM) practices and the performance outcome of profitability. Public sector outcomes are more difficult to connect directly to management practices. As a result, the focus of public sector reform has become one of improving the processes of management rather than improving the outcomes of government. The linkage between reform and outcome is assumed. This study suggests municipalities are likely to improve their performance by implementing reforms found to be predictive of higher municipal bond ratings. Evidence suggests for reforms to be successful differences between private and public sectors must be considered when implementing change. This point, coupled with a systems view of HRM, help minimize “deadly combinations” commonly associated with public sector reform and maximize “powerful connections”.

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