The Nonprofit Human Resource Management Handbook

From Theory to Practice

Jessica Word, Jessica Sowa, Jessica K. A. Word, Jessica E. Sowa

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351722360
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

As an increasing number of individuals go to work in the nonprofit sector, nonprofit managers need support on how best to build their human resource management capacity. They need to know what systems to examine, what questions to ask, and how to ensure they are managing people in a legal manner and as effectively as possible given their particular resource constraints. Important questions include: Do we have a clear philosophy, one that aligns with our nonprofit mission and values and allows us to treat our employees as the professionals they are? How do we select, develop, and retain the best people who will produce high value, high performance work, and how do we do so with limited resources? How do we effectively manage our mix of volunteers and paid staff? What do we need to consider to ensure diverse people work together in a harmonious fashion? With all-new chapters written by the top scholars in the field of nonprofit HRM, these are but a few of the many questions that are addressed in this timely volume.

These scholars delve into their particular areas of expertise, offering a comprehensive look at theories and trends; legal and ethical issues; how to build HRM from recruitment, management, labor relations, to training and appraisal; as well as topics in diversity, technology, and paid versus volunteer workforce management. This essential handbook offers all core topic coverage as well as countless insider insights, additional resource lists, and tool sets for practical application. With chapters grounded in existing research, but also connecting research to practice for those in the field, The Nonprofit Human Resource Management Handbook will be required reading for a generation of scholars, students, and practitioners of nonprofit human resource management.

1

Introduction

Jessica E. Sowa and Jessica K. A. Word

Over the past thirty years, the role of nonprofit and non-governmental organizations has changed dramatically, both in the United States and globally (Salamon, 2015; Tschirhart & Bielefeld, 2012). The nonprofit sector, as a component of the economy and as a critical player in serving the public, has grown in importance, depth, and breadth. In the United States, as of 2013, there are an estimated 1.4 million registered nonprofits operating, with this number not including religious organizations and smaller, largely unregistered nonprofits that are hard to track (McKeever, 2015). Globally, it is incredibly difficult to get estimates on the full scope of nonprofits, but nonprofits operate across numerous continents and in a wide variety of forms (Salamon et al., 2012). Nonprofits play a critical role globally in strengthening societies, assisting governments, and promoting the well-being of citizens along a number of crucial dimensions (Smith, 2008; Weisbrod, 1988).

There are few areas of life, society, government, and governance not influenced by nonprofit organizations. Nonprofits feed the hungry (Feeding AmericaTM, Share Our Strength), help homeless youth (Stand Up For Kids, Covenant House), fight, treat, and cure diseases (St. Jude Children’s Hospital, Leukemia and Lymphoma Society), advocate for the environment (Greenpeace, the Nature Conservancy), aid the poor in starting their own businesses through microloans (Grameen Bank of Bangladesh, Kiva), educate children (Harlem Children’s Zone, Communities in Schools), seek to prevent war and protect human security around the globe (Amnesty International, Carnegie Endowment for International Peace), and countless other actions that attempt to make the world a better place and improve the well-being of individuals and communities. Nonprofit and nongovernmental organizations (NGOs) impact major social, economic, and environmental issues, especially intractable or “wicked problems,” which require multifaceted solutions including advocating for changes to public policy or simply shining a light on the plight of others. While operating on a global scale, nonprofits are also incredibly important on a local scale. They serve as a catalyst to bring people together by enhancing the identity and cohesion of neighborhoods (e.g. Wyman Park Community Association, Summit Neighborhood Association), connecting people with their favorite type of dog (e.g. Northern New England Westie Rescue, Basset Hound Rescue League, Inc.), fostering connection between people with similar interests (e.g. Knots of Love, Cowee Pottery School), and providing opportunities for socialization and connection (e.g. New Haven Rowing Club, Twin Cities Running Club). Nonprofits change the world and also change individual lives—they create policy change and build social capital bonds to strengthen individuals and communities. Overall, few can ignore the importance of the nonprofit sector in the 21st century.

As the sector has grown, both in the United States and worldwide, more and more people are seeking to pursue their goals and achieve their professional identities through work in the nonprofit sector. In 2010, the nonprofit sector constituted around 10% of private employment in the United States, making it the third largest industry (Salamon, Sokolowski, & Geller, 2012). In 2012, a little more than 11 million people worked in the nonprofit sector, according to the U.S. Bureau of Labor Statistics, with nonprofits in some states employing an even larger percentage of individuals as a percentage of private employment (e.g. New York, 18.1%; North Dakota, 14.7%; Pennsylvania, 15.9%) (Bureau of Labor Statistics, 2014). The 2016 Nonprofit Employment Practices SurveyTM, conducted by Nonprofit HR, documented the continued growth of the sector and reported that over half of the nonprofits surveyed anticipate taking on new staff in 2016 (as opposed to around 36% in the private sector) (Nonprofit HR, 2016). Therefore, in the United States in particular, nonprofit organizations represent a major employer, make a strong contribution to the economic well-being of the country, and are a critical player in a strong society. While perhaps not quite as plentiful in other countries, scholars have documented the importance of and continuing growth of nonprofits worldwide, even countries previously considered state-centered in terms of programs for their citizens, such as China (Hu & Guo, 2016; Salamon et al., 2012). Nonprofits and their foreign counterparts’ non-governmental organizations (NGOs) are often even credited with being key to the development and maintenance of democracy both in the USA and abroad (Fukuyama, 2001; Putnam, 1995). Nonprofits are a major force and their importance and influence is only expected to grow as we move further into the 21st century.

Associated with the growth in the nonprofit sector and nonprofit employment, there has been an increase in the number of education programs focused specifically on nonprofit management, including separate degree programs in nonprofit management and specializations or concentrations within existing professional degree programs (such as Master of Public Administration, Master of Social Work, and Master of Business Administration programs). Mirabella (2007) documented the growth in nonprofit education programs. Her work observed a 10-year-long expansion in universities offering some form of nonprofit education, a growth rate of around 50%, with this increase occurring at both the undergraduate and graduate levels. The Network of Schools of Public Policy, Affairs, and Administration (NASPAA), the accrediting body for public affairs programs, now has a section specifically devoted to nonprofit management education and nonprofit management is one of the subfields tracked and ranked by U.S. News and World Report for graduate programs in public affairs (Morse, 2016).

While some choose the public sector, more and more students and workers interested in making a difference increasingly seek out the nonprofit sector as their venue to operate and make professional contributions (Lee & Wilkins, 2011; Mesch, 2010). Scholars have examined where public service-inclined individuals (those who express an interest in public service work or demonstrate high levels of public service motivation) pursue their professional opportunities (Brewer, Selden & Facer, 2000; Mann, 2006; Park & Word, 2012; Taylor, 2010; Park & Word, 2012). For those who teach in programs geared toward public and nonprofit management, there has been an operating assumption that our students move between sectors, seeking different ways to make an impact and improve their professional capabilities. However, research has demonstrated that sector preferences and sector shifting are more complicated in practice (Su & Bozeman, 2009; Tschirhart, Reed, Freeman, & Anker, 2008). Students with expressed preferences and early experiences in nonprofit work are more likely to pursue work in that sector, but research has demonstrated that attraction to the sector and the missions of organizations within it can be difficult to sustain. Nonprofit employees are likely to leave if the organizational capacity fails to provide for sufficient compensation (McGinnis Johnson & Ng, 2015), human resource management (HRM) practices, career advancement opportunities, and training and development in order to maintain and refresh that connection over time (Kim & Lee, 2007; Word & Carpenter, 2013). If the nonprofit sector is increasingly the venue in which public service-focused individuals seek to carve out their professional identities, the time has come to have larger discussions about how well the sector supports those professional identities—how well the nonprofit sector manages its human resources. Therefore, this book seeks to add to the work of scholars before us who have explored the benefits of working in the nonprofit sector and the particular challenges of managing people in the nonprofit sector (e.g. Akingbola, 2015; Pynes, 2013), bringing together the current research across the whole of the human resource management function to explore what we know today and what are some of the continuing questions for the nonprofit workforce.

Human Resource Management in the Nonprofit Sector

In order to understand what it means to manage people in the nonprofit sector, it is first important to explore what human resource management (HRM) is and why this is an important field of study and practice, in particular for those concerned with and working in nonprofits. Formally defined, human resource management is “the design of formal systems in an organization to ensure the effective use of employees’ knowledge, skills, abilities, and other characteristics (KSAOCs) to accomplish organizational goals” (Pynes, 2013, p. 3). Effective HRM involves considering what systems are in place for every step of the employment relationship, from the design of jobs, recruitment, and selection of individuals to fill those jobs, training, development, and evaluation of the performance of the individuals within those jobs, and, sadly, to the occasional termination of people when they are not a good fit for those jobs. While some nonprofits like hospitals and universities may have well-developed HRM infrastructures, for many nonprofits, this has been a challenging area for building management capacity, with many nonprofit executive directors often handling the primary responsibility for HRM practices (Selden & Sowa, 2014). Managing people effectively is one of the toughest skill sets out there—for the executive director who is balancing finances, operations, and HRM, good HR practices may often fall by the wayside, with fingers crossed that no problems occur. In addition, simply holding a management position does not mean one holds the necessary knowledge and skills to manage people effectively. This takes training and study—this book is designed to help fill that need.

While we are not advocating for every smaller nonprofit organization to immediately invest in new expensive HRM systems across the board, as more individuals go to work in the nonprofit sector as their primary professional venue, nonprofit managers need support on how best to build their HRM capacity. They need to know which systems to examine, what questions to ask, and how to ensure they are managing people in a legal manner and as effectively as possible given their particular resource constraints. Therefore, a systematic treatment of HRM in the nonprofit sector examines such questions as:

• What is our approach to managing people in our nonprofit? Do we have a clear philosophy for human resource management, one that aligns with our nonprofit mission and values and allows us to treat our employees as the professionals they are?

• We want to hire and retain the best people for our nonprofit. How do we go about this? How do we select the right people and develop them over time so they remain with our organization and produce high value, high performance work?

• As a nonprofit, our budget is tight and generating new resources can be challenging. How do we design a compensation system that rewards our employees fairly but does not strain the resources of our nonprofit or threaten our financial sustainability?

• Our nonprofit uses a mix of volunteers and paid staff. How do we effectively manage those volunteers? How do we blend those two sets of human capital in a way that promotes the mission of our nonprofit?

• We are employing individuals from many different backgrounds and many different age groups or generations in our nonprofit. What do we need to consider to ensure these diverse people work together in a harmonious fashion?

These are but a few of the many questions that are addressed by the chapters contained within this volume.

While HRM involves many systems, policies, and procedures, with these often being transferable across settings and sectors, effective HRM also involves developing an overall philosophy toward how an organization views its people and their role in the organization, a philosophy that underpins those systems, policies, and procedures (Akingbola, 2012, 2013; Pfeffer, 1998; Ridder & McCandless, 2010). Scholars studying HRM practices considered to be the most effective, what are known as high performance work systems, emphasize a philosophy toward managing people known as the resource-based view (RBV) of human capital (Colbert, 2004; Ridder, Piening, & Baluch, 2012; Selden & Sowa, 2015; Way, 2002; Wright et al., 2001). Holding a resource-based view of one’s staff, an organization (in the case of this book, nonprofit organizations) recognizes the crucial role of people in accomplishing the mission of the organization and performing at a high level. Much like an organization can have other forms of capital (e.g. financial capital, capital investments) to aid in working toward the mission of an organization and help it maintain a competitive advantage, so too does the human capital of an organization (Boxall, 1996; Combs et al., 2006; Pfeffer, 1998). Therefore, this human capital needs to be viewed as a valuable asset, an asset that requires investment and maintenance over time for it to continue to contribute value to the organization. The vital role of an overall strategic approach or philosophy to HRM is discussed in more detail in Chapter 5 in this volume. However, it is important to highlight why nonprofits need to consider their approach to managing their people, both for the good of the nonprofit and for the people that work within the nonprofit. People are the critical ingredient in how nonprofits make a difference—those people are the ones interacting with the clients to improve their well-being, knocking on doors to educate people about environmental challenges, reading to children during story time at the library. Human capital is the main input used by a nonprofit to accomplish their mission. While financial capital helps reward those people and helps the organization keep its lights on, the people are the difference in a good versus great nonprofit and therefore need to be managed accordingly. Your personnel in your nonprofit are not your largest expenditure—they are your greatest asset. Manage them accordingly.

This is easier said than done, as anyone who has worked in the nonprofit sector knows, there are some particular challenges that can make effective HRM a challenge. Therefore, in addition to understanding what is human resource management and what is our overall philosophy to managing people in the nonprofit sector, it is important to understand some of the contextual differences in the nonprofit sector and how this may influence the operation of HRM in this sector. What are some of the particular constraints that affect managing people in the nonprofit sector? First, nonprofit organizations face significant challenges in terms of their financial management and fiscal resources (Chikoto & Neely, 2014; Froelich, 1999; Greenlee & Trussel, 2000). While this is discussed in more detail in Chapters 2 and 3 in this volume, we want to briefly introduce those issues here.

In nonprofit organizations, the ability to generate funding is more challenging ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• Notes on Contributors
• Acknowledgments
• 1 Introduction
• PART I Working in the Sector
• PART II Building an HRM Infrastructure in a Nonprofit Organization
• PART III Emergent Challenges in Nonprofit Human Resource Management
• Index