The public sector in Africa is riddled with widespread ineffectiveness. Although some countries have implemented various reform programmes with the support of international development agencies, the results so far have been disappointing. One reason for the failure is that the policies have focussed more on achieving macroeconomic stability than making the organisations effective. This article explores a fundamental problem of the policies—the need to focus on the human component of organisational performance. Using education and health organisations in Ghana as examples, the article advances a hypothesis that the livelihood strategies of public sector employees and the performance of their organisations are interconnected. Specifically, it is argued that as public sector employees have become more dependent on multiple sources of income, they have developed multiple social identities, which influence the culture of their organisations. The organisational culture may have encouraged employee effectiveness in some cases, but for most organisations, it has resulted in practices that perpetuate inefficiency and poor performance. To be successful, public sector reform policies must therefore involve deliberate efforts to change organisational cultures.