I 

Introduction

Human resource management entails how to manage individuals more effectively within an organisation to achieve its objectives. It focuses on performance measures that can be undertaken or implemented to increase employee motivation and productivity. 

 

 

Human resource management often has a separate department within large organisations. However, in small organisations, it is a group of functions performed by departmental managers. 

Nonprofit organisations operate within the fields of art, culture, aid, education, politics, religion, grants, and environment etc. Hence, they tend to serve societal needs which cannot be completely fulfilled by the state and address areas where there is a social gap. Essentially, their priority is to provide services that cannot be given by the state and the private sector. 

In this article, we will consider the need to establish effective human resource management within a nonprofit organisation. 

II

What is Human Resource Management?

Human resource management (HRM) is a strategic method for managing an organisation’s most crucial asset: its employees. By and large, it comprises recruitment, employment, training, performance management, compensation, and employee relations. 

 

 

HRM seeks to guarantee that an organisation has the right people with the right skills in the right roles to achieve its objectives successfully and efficiently. As we all know, organisational culture is dynamic and subject to change. Also, employees are required to embrace organisational culture and identify with it. Once this is accomplished, conformity within the organisation can be maintained and becomes obvious to the outside world.

Many believe that nonprofit organisations lack a professional approach to human resource management. However, there are several NPOs that have the same management understanding as larger business organisations. Despite not being financially competitive as for-profit firms, their approach to management tends to be more professional and institutional.

III

Critical Statistics on Human Resource Management

This section will outline the activities and impacts of human resources across various organizations using critical statistics.  

a. Employee retention

52% of employees who resign say their manager or organisation could have done more to keep them from leaving. However, just one out of every three former employees stated that they discussed leaving with their supervisor before quitting. 

The majority of workers who left their jobs in 2021 report low pay (63%), limited opportunities for advancement (63%), and feelings of disrespect at work (57%), as reasons for leaving. At least one-third disclosed that each of these was an important factor in their decision to leave. 

Employees also ranked various components of employee experience that led to their quitting: lack of trust in their management (45%), and having long-term work expectations (35%).

 

 

b. Organisational benefits

Attractive perks and benefits (such as gym memberships, paid time off, and so on) are still highly regarded by US employees and job seekers. Overall, 48% rank these perks as the most important when seeking a job. A convenient commute comes in second, favoured by 47% of respondents. Also, 46% prioritise high salaries, 43% emphasise a healthy work-life balance, and 41% prefer the flexibility to work remotely.

c. Recruitment obstacles 

According to 30% of respondents, sourcing is one of the most significant recruitment challenges. This figure represents the global recruitment challenges across staffing firms. Adopting a mobile-friendly hiring process can lead to a 58% rise in job searches on mobile platforms. Likewise, Glassdoor reported an 11.5% increase in applicants when promoting a mobile hiring site.

 

 

d. Career path 

44% of organisations don’t offer enticing career paths. Only one out of every four employees is satisfied with their current position, prompting 75% of them to look for new opportunities elsewhere.

e. Praise and commendation

According to a McKinsey poll of over 1,400 integration executives, praise and commendation from an immediate boss was the most effective retention lever. This outperformed performance-based cash bonuses and base salary increases. 

Additionally, 67% of employees cited compensation as a factor in their decision to stay at their current organisation. This statistic indicates the percentage of U.S. employees who would stay at their current organisation provided they were pleased with certain characteristics.

f. Employee engagement

Highly engaged teams are 21% more profitable. Teams that rank in the top 20% in engagement experience a 41% drop in absenteeism and a 59% decrease in turnover. This research emphasises the notion that employee engagement is based on tangible behaviour rather than abstract feelings. 

In addition, 30% of American workers state that their employment is “just to get them by.” Globally, only 20% of employees are engaged at work. This proves that the adage “happy employees are productive employees” is more than simply a corporate cliché.

The manager is exclusively responsible for 70% of the outcome in team engagement. Consequently, actively disengaged employees cost the United States $550 billion in lost productivity per year. Hence, employers who raise employee engagement by 10% can enhance their annual revenues by $2,400 per employee. Simply put, dissatisfied employees cost you money.

64% of HR leaders believe that an always-on feedback platform is required for an engagement listening program, yet only 20% have adopted the initiative.

g. Remote work statistics

Following Covid-19, 97% of employees did not wish to return to the workplace full-time. Only 3% of the employees and entrepreneurs polled stated they wished to work full-time in a physical office. The remaining 97% preferred a degree of flexibility between working remotely and in an office. Also, 17% would contemplate abandoning their job if they had to return to the office 5 days a week. 

More than half of businesses cite higher productivity as the primary advantage of remote working. The most significant benefit, according to 18%, is increased time zone coverage. In addition, 73% of remote workers reported that flexible working helped their wellness and ability to blend work with other activities. 

h. Employee sustainability

30% of new hires quit within 90 days. Also, while 43% feel the role does not match their expectations, 34% quit because of a specific incident, and 32% do not believe the corporate culture is a good fit.

IV

Importance of Human Resource Management

Effective human resource management is essential for establishing and improving corporate culture. Without a doubt, HRM can foster intimate employee relationships and improve business culture through orientation, training programs, and more. By and large, this can help to strengthen work relationships. 

 

 

Effective communication can be facilitated through business lunches and organisational events. Also, designating common goals can improve communication.  Nonprofit Human Resource Management can be classified into three dimensions. 

• The first is personnel services. While for-profit corporations view their people as physical capital, nonprofits view them as their most valuable assets. 
• The second component is that intrinsic values tend to influence and motivate NPO employees. Organisational inherent values include their missions, democratic culture, and emphasis on individuals. 
• Thirdly, employees are considered the most important stakeholders in NPOs’ strategic plans. 

 

As can be seen from these three dimensions, the human factor is fundamental to the sustainability of nonprofits. Hence, human resources are the most crucial component of these organisations. 

Four Types of Nonprofit Human Resource Management

Also, scholars identify four types of HRM used in nonprofit organisations: administrative, motivational, strategic, and values-driven.

• Administrative HRM prioritises both strategy orientation and human resource base at a low level. The term “administrative” refers to NPOs’ poor or nonexistent future perspectives. They frequently do not invest in their personnel, or they do not have the resources to do so.

 

• Motivational HRM prioritises low-level strategic orientation and high-level human resource management.  As we all know, employee motivation differs across nonprofit and for-profit enterprises. The latter are motivated by cash rewards, whereas the former prefer individual rewards that promote personal development.

 

• Strategic HRM prioritises human resources at a low level and strategic orientation at a higher level. For the most part, a nonprofit’s missions and values indicate its strategic ambitions. Hence, strategic HRM focuses on enhancing goals. 

 

• Value-driven HRM prioritises both strategy and human resources. This type of HRM emphasises employee development and leverages the organisation’s vision to inspire and motivate employees.

V

The Role of Human Resource Management in a Nonprofit Organisation

In this section, we will outline some of the most essential roles of human resources in a nonprofit organisation. 

 

 

1. Job analysis

Job analysis is the methodical gathering and evaluation of reliable information about employment characteristics. Essentially, HRM aims to match the right employee to the right job, rather than allocating employees based on work requirements. 

On the other hand, job analysis involves identifying the work, duties, and responsibilities of each position. This also includes the methods and techniques employed, tools and equipment, and the knowledge, skills, and abilities needed for the job. Other areas of consideration include products, services, and working circumstances. 

Also, job analysis is the process of gathering job-related information, while job descriptions are the tangible results. Human resources departments convert job analysis into job descriptions once completed. By and large, job descriptions may vary based on responsibilities and annual goals. 

2. Human resources planning

Administrative functions within an organisation demand effective planning. Planning involves allocating resources based on the nonprofit’s vision and mission, identifying functional goals, and developing relevant strategies. 

Likewise, human resources planning ensures that qualified employees are employed at the right time, trained and developed to meet organisational needs, and evaluated for productivity. On the other hand, failures in human resource planning can lead to increased turnover or an overbalance of staff.

3. Organisational culture development

Organisational culture refers to the ideas that a group develops or improves to address challenges in adapting to external and internal environments. Each organisation has unique values, customs, beliefs, and objectives. Essentially, organisational culture is formed when employees adhere to set standards and share common ideals. Managers have a crucial role to play in fostering employee engagement and organisational culture.

HR management operations include arranging orientation programs for new employees and socialisation events for personnel. Also, the HR manager is responsible for ensuring employees adjust to the organisational culture.

4. Interpersonal relations 

Interpersonal relationships can significantly impact organisational communication. The purpose of organisational communication is to fulfil organisational goals and objectives. 

Primarily, there are two approaches to establishing interpersonal ties. The first is formal communication, which is defined by the hierarchy of the organisation. The second is informal and this takes place among employees. 

Corporate culture is crucial for regulating relationships and bringing together individual and corporate goals to fit a common ground. Hence, HRM enhances formal communication to improve interpersonal relationships. In addition, human resource management can regulate informal communication. Organisational events, training programs, and HRM activities aim to foster interpersonal relationships among all employees.

5. Goal setting

Edwin Locke’s goal-setting theory, introduced in 1968 emphasised the conscious purposes and intentions that drive conduct. Principally, goals are defined by their clarity, difficulty, and level of commitment. 

Research suggests that objectives can either liberate individuals and lead to accomplishment, or induce stress and hinder focus on other tasks. In contrast to such conflicts, goal-setting theory has been confirmed by numerous studies. Clear goals are preferable to ambiguous and generic ones. Accordingly, establishing explicit goals allows for objective staff evaluation.

6. Recruitment and selection

Organisations have varied procedures for recruiting and selection. As a result, it is difficult to establish an ideal and specific form of recruitment process. Each organisation manages the procedure by its own set of regulations. 

Generally, the human resources director conducts the initial interview, which assesses personality attributes, professional sufficiency, sectorial knowledge, and organisational compatibility, among others. Afterwards, successful interviewees take a personality assessment test. 

Candidates with positive feedback advance to the second interview with departmental executives. Also, they undertake a second exam to assess their personality and professional characteristics. Successful candidates are recruited after completing both interviews. The use of personality inventory testing during the recruitment process helps to demonstrate regard for organisational behaviour.

7. Orientation

Orientation sessions for newcomers are vital for effective communication and adaptability within organisations. Nonprofits can provide orientation seminars for both field and permanent personnel. This helps to review job descriptions and introduce participants to the organisation’s structure and management. 

Additionally, the human resources department provides training to people on the field on how to perform their duties effectively. Permanent personnel members can be introduced to the organisation and their respective departments during orientation. 

8  Performance appraisal 

A well-organised human resource management system must include performance appraisal as a key component. Today’s performance reviews tend to prioritise competence. Traditionally, appraisal exams were short-term. They focused on results and a rewarding system. On the other hand, competence-based performance appraisal focuses on the organisation’s future. It is a long-term and prioritised development. 

Overall, organisational success requires all employees, from senior executives to lower-level workers, to perform above expectations. Hence, it is best to create a performance appraisal system that incorporates both classic and new methodologies. This approach examines two categories: job objectives and competencies. Altogether, they help to determine each employee’s strengths and limitations. 

Performance evaluation includes three areas: work profile, objectives, and competencies. 

• The work profile should assess the employee’s commitment to the job’s responsibilities. 

• The job objective section is separated into two categories: strategic planning objectives and individual goals within their routine. This section specifies the level to which the objectives are met.

• Competencies: The third and final section is classified into general and managerial competencies. Employees first rate themselves, followed by their superiors. 

 

9. Motivation

Motivation refers to an employee’s drive to attain specific goals. It guides behaviour in a given context to meet needs and achieve objectives. Therefore, motivation should be viewed as a continual process, not a one-time pursuit. 

Employee motivation varies between NPOs and for-profit enterprises. While financial rewards can inspire individuals, employees at non-profit organisations prioritise their social obligation over financial incentives. Likewise, nonprofits can motivate employees through professional growth, educational training and promotions. Other forms of motivation include participation in cultural events, and international seminars, in addition to financial awards.

10. Training and development 

To fully utilise staff members, organisations must always strive for improvement. Overall, staff performance can be improved through instructional programs, performance evaluations, and counselling as needed. 

Also, training can benefit individuals, organisations, and managers alike. Individual training helps to improve employees’ behaviour, knowledge, abilities, and drive to achieve their goals. Organisational training is a set of managerial methods that aim to improve the effectiveness and productivity of organisations. Managerial training on the other hand can help managers gain experience, and skills, and achieve success as leaders in their organisation. 

Performance appraisals determine the frequency of individual training. Likewise, organisational training should align with performance analysis outcomes and should involve all staff members.

Training programs are implemented to address weaknesses in managerial and organisational outcomes among personnel. For instance, training can be tailored to address time management issues. However, such training should not be limited to personnel with poor performance. Rather, everyone should be invited to participate to reinforce their improvement. 

In conclusion, it’s worth noting that, as for-profit firms embrace corporate social responsibility, some of the distinctions between the types of HR are blurring. More and more corporations, like nonprofits, are prioritising their social goals alongside their financial line.

Conclusion 

Your nonprofit is not only a mission-driven organisation with beneficiaries to serve, but it is also a job creator. As an employer, you must guarantee that your employees have a great experience at your organisation. Also, As your organisation grows, understanding the fundamentals of human resources will become increasingly crucial. The more staff you have, the more complex your HR strategy will become.