9.Compensation for Non-profit Organization.

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"Techniques for Effective Compensation in Non-  Profit Organizations: A Human Resource Management Approach" 


                                                                                     (Jonathan Grissom, Nonprofit Attorney, 2019)
Underscores the pivotal role of compensation in the realm of human resource management (HRM) for non-profit organizations. Unlike the for-profit sector, where competitive salaries and bonuses are common, non-profits face unique challenges in crafting compensation plans that align with their mission-driven objectives.

Noting that, despite their primary goal being a positive social impact rather than financial gain, competitive and equitable compensation is essential. The ability to attract and retain top talent, foster a motivated workforce, and enhance the organization's capacity to achieve its mission all hinge on offering competitive salaries and benefits.


                                                                                                                       (Nonprofits Decoded, 2021)                    
Several techniques for effective compensation in non-profits are, 

1.Aligning compensation with the organization's mission and values is highlighted as a key strategy to       attract individuals passionate about the cause. 

2. Communication and transparency are emphasized to build trust among employees, achieved through      open discussions about financial situations and the rationale behind pay decisions.

3. A total rewards approach, extending beyond monetary compensation to include benefits, flexible            work schedules, opportunities for professional growth, and a positive work environment. 

4. Regular market research and benchmarking are recommended to stay abreast of compensation trends      in the non-profit sector, ensuring competitiveness.

5. Performance-based compensation is identified as a powerful motivator, tying pay to organizational        goals and encouraging employee engagement.

Additionally, investment in professional development is underscored as a means to indirectly increase an employee's market value, benefiting both the individual and the organization in the long run.

Recognizing the importance of work-life balance,  offering flexible scheduling as a valuable non-cash benefit.
                                                                                                   
conclusion, 
That effective compensation strategies are instrumental in HRM for non-profit organizations, contributing to the attraction, retention, and motivation of employees. The adoption of a total rewards approach, transparency, and alignment of compensation with the organization's mission are emphasized as key elements in achieving a committed and productive workforce, ultimately enabling non-profits to accomplish their social impact objectives in a competitive landscape.

References:

  •  Goldstein, H.W., Pulakos, E.D., Passmore, J. and Semedo, C. (2017). The Wiley Blackwell handbook of the psychology of recruitment, selection and employee retention. Chichester, West Sussex Wiley Blackwell.

  • Antoni, C.H., Baeten, X., Perkins, S.J., Shaw, J.D. and Vartiainen, M. (2017). Reward management: Linking Employee Motivation and Organizational Performance. Journal of Personnel Psychology, 16(2), pp.57–60. doi:https://doi.org/10.1027/1866-5888/a000187.

  • Suazo, M.M., Martínez, P.G. and Sandoval, R. (2009). Creating psychological and legal contracts through human resource practices: A signaling theory perspective. Human Resource Management Review, 19(2), pp.154–166. doi:https://doi.org/10.1016/j.hrmr.2008.11.002.

  • Cascio, W.F. and Aguinis, H. (2018). Applied psychology in talent management. Los Angeles: SAGE.                                                                                                                              

  • Nonprofits Decoded. (2021). Understanding Nonprofit KPIs: Picking the best metrics, plus 10 to track. [online] Available at: https://nonprofitsdecoded.com/understanding-kpi-key-performance-indicators-nonprofit/.

  • Jonathan Grissom, Nonprofit Attorney. (2019). How to Start a Nonprofit Corporation in California. [online] Available at: https://www.californianonprofitlaw.com/blog/2019/9/16/how-to-start-a-nonprofit-corporation-in-california [Accessed 16 Nov. 2023].

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Comments

  1. V.N. Haputhantri.November 20, 2023 at 3:29 AM


    How does the article emphasize the importance of aligning compensation with the mission and values of non-profit organizations as a strategy to attract individuals passionate about the cause, and why is this alignment considered crucial?

    ReplyDelete
    Replies
    1. Mayumi WicramashingheNovember 22, 2023 at 9:28 AM

      Hi Vidura,
      The article emphasizes the importance of aligning compensation with the mission and values of non-profit organizations to attract individuals passionate about the cause. This alignment is considered crucial as it ensures competitive and equitable compensation, vital for attracting and retaining top talent. Despite non-profits' primary goal being social impact, offering competitive salaries and benefits is essential for fostering a motivated workforce and enhancing the organization's capacity to achieve its mission. This strategy recognizes that, even in the non-profit sector, compensation plays a pivotal role in human resource management, contributing to employee commitment, productivity, and the overall success of the organization.

      Delete
  2. Dammika SudeshNovember 20, 2023 at 9:52 AM

    Crafting effective compensation strategies in non-profit organizations is a delicate balance. Aligning pay with the mission, fostering transparency, and considering non-monetary benefits are crucial. This approach attracts talent, motivates employees, and enhances the organization's ability to achieve impactful objectives in a competitive environment.

    ReplyDelete
    Replies
    1. Mayumi WicramashingheNovember 22, 2023 at 9:31 AM

      Dear Dammika,
      Designing compensation plans for non-profits demands a nuanced approach. Harmonizing pay with the mission, promoting transparency, and valuing non-monetary perks are pivotal. This strategy draws talent, inspires staff, and fortifies the organization's pursuit of impactful goals in a competitive landscape.

      Delete
  3. SudarshaNovember 24, 2023 at 3:28 AM

    Hi Mayumi.
    The article emphasizes the crucial role of effective compensation in HRM for non-profit organizations. Techniques such as aligning compensation with mission, transparency, a total rewards approach, and performance-based pay contribute to attracting, retaining, and motivating a committed workforce, aiding in achieving social impact goals.

    ReplyDelete
    Replies
    1. Mayumi WicramashingheDecember 4, 2023 at 9:05 AM

      Dear Sudarsha,
      Absolutely, aligning compensation with mission fosters a sense of purpose. Transparency and performance-based pay in non-profits enhance employee commitment, crucial for achieving impactful goals. A comprehensive approach is key.

      Delete
  4. Masha Rupasinghe.November 27, 2023 at 1:18 AM

    This article highlights the crucial role of compensation in the HRM of non-profit organizations. It points out the distinct challenges non-profits encounter in creating compensation plans that align with their mission-driven objectives, especially in contrast to the for-profit sector. Despite the primary focus on social impact over financial gain, the article emphasizes the necessity of competitive and equitable compensation. It rightly underscores how attracting and retaining top talent, cultivating a motivated workforce, and ultimately bolstering the organization's capacity to fulfill its mission are contingent on offering competitive salaries and benefits.

    ReplyDelete
    Replies
    1. Mayumi WicramashingheDecember 4, 2023 at 9:06 AM

      Dear Masha,
      Absolutely, balancing mission-driven goals with competitive compensation is pivotal. Non-profits face unique challenges, and aligning financial rewards with social impact is essential for attracting and retaining top-tier talent in this secto

      Delete
  5. RoshanNovember 27, 2023 at 6:59 AM

    Another technique of effective compensation in non-profits organization is, addressing both personal and professional issues through providing   employee assistance programs, showing a dedication to the well-being of employees.

    ReplyDelete
    Replies
    1. Mayumi WicramashingheDecember 4, 2023 at 9:07 AM

      Dear Roshan,
      Implementing comprehensive employee assistance programs demonstrates a commitment to holistic well-being, fostering a supportive and thriving nonprofit workplace

      Delete
  6. Mithini Punsara AbeyrathneNovember 27, 2023 at 8:46 AM

    Hi Mayumi, In a non-profit organization, compensation plays a crucial role in attracting and retaining skilled professionals, fostering a dedicated workforce, and ultimately advancing the organization's mission. Adequate compensation ensures that employees feel valued and motivated, enhancing their commitment to the organization's goals. Competitive salaries also attract top talent, enabling non-profits to access expertise vital for effective operations and strategic growth. Additionally, fair compensation fosters a positive work culture, contributing to employee satisfaction and reducing turnover. Ultimately, a well-structured compensation strategy in non-profits is integral to achieving long-term success by nurturing a capable and committed team dedicated to the organization's overarching purpose.

    ReplyDelete
    Replies
    1. Mayumi WicramashingheDecember 4, 2023 at 9:09 AM

      Hi Mithini,
      Compensation is pivotal in non-profits, crucial for attracting and retaining skilled professionals, fostering commitment, and advancing the mission. Competitive salaries attract top talent, promote a positive culture, and are integral for long-term success in achieving organizational goals.

      Delete
  7. Channa MedewelaNovember 28, 2023 at 9:26 AM

    It also include

    1. Benchmarking - Research and align salaries with industry standards to ensure competitiveness.

    2. Total Rewards Approach- Emphasize benefits, work-life balance, and non-monetary rewards to attract and retain talent.

    ReplyDelete
    Replies
    1. Mayumi WicramashingheDecember 4, 2023 at 9:10 AM

      Dear Channa,
      Absolutely, benchmarking ensures competitive salaries, while a total rewards approach highlights benefits for talent attraction and retention

      Delete

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