I don't think for a minute that working for a private or a public institution fundamentally changes people's basic humanity. But the incentives in a private system nevertheless encourage them to show more of their human side. That is because they see the clients they have to deal with as valued customers: their job, their income, would not exist if those customers were not satisfied. And they know from their own experience that the way a service is delivered – the cheeriness, the human engagement, the concern – are as much a part of a customer's satisfaction as getting the service itself. By contrast, the incentive structure in too many public services induces staff to regard customers as a necessary inconvenience. Shouldn't we prefer a system that positively encourages and brings out people's humanity, rather than one that discourages and so obviously represses it?
I remember a left-leaning classmate of mine once complaining that it was a pity how people would only act decently towards others if doing so was profitable. I was shocked by this, since my reaction was to be impressed that you could actually buy others’ concern for you. Human decency is rare and apparently unnatural, so we should be thankful that there are ways to acquire it, even if those ways aren’t ideal or on our terms. It’s much better, in my opinion, to pay someone to care about you than to demand that they care for you for altruistic reasons.
Anyhow, this just goes to show you that it is more efficient to exploit human nature than to try to change it.