(Jessica K. A. Word, Jessica E. Sowa) The Nonprofi

“If I were to make a list of scholars who we should hire to assemble current
thinking on human resource management in the nonprofit sector, Sowa and

Word would be at the top of my list. Lo, it seems that these two have been doing
just that. They have organized an impressive panoply of both young and established
nonprofit sector scholars who represent our best current thinking on strategic
human resource management. Interested readers will be able to pick and choose
among its offerings. Some teachers will assign the entire volume in their college
courses on nonprofit HRM.”
Mark Hager, Arizona State University, USA
“Sowa and Word have contributed an outstanding new guide for both nonprofit
managers and scholars, in The Nonprofit Resource Management Handbook. This book
offers an impressive collection of thoughtfully-written and practical pieces by
leading voices in the field. Comprehensive in scope, Sowa and Word cover
critical topics ranging from how to attract the best and brightest employees and
volunteers into the sector, to managing and cultivating diversity, to applications
of technology in human resource management, and everything in between. This
book serves as a valuable resource that I look forward to sharing with my students
undertaking careers in the nonprofit sector.”
Kelly LaRoux, The University of Chicago at Illinois, USA
“The Nonprofit Human Resource Management Handbook is an excellent confluence

of the state-of-art research on human resources in nonprofit organizations and
the practical matters confronting nonprofit managers seeking to effectively deploy
their human capital. Sowa and Word and their outstanding colleagues have com-
piled an accessible, yet rigorous, resource that benefits both scholars and practi-
tioners by highlighting critical issues that nonprofit organizations must successfully
navigate to recruit and retain talented workers in the current environment. This
will certainly be a much-used textbook in nonprofit management courses. I wish
I would have had this book when I was a student!”
Rebecca Nesbit, University of Georgia, USA
The Nonprofit
Human Resource
Management Handbook
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 (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. 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 compre-
hensive 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 manage-
ment. 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.
Jessica K. A. Word is an Associate Professor in the School of Public Policy and

Leadership at the University of Nevada, Las Vegas, USA.
Jessica E. Sowa is an Associate Professor in the School of Public and International

Affairs in the College of Public Affairs at the University of Baltimore, USA.
PUBLIC ADMINISTRATION AND PUBLIC POLICY
A Comprehensive Publication Program
EDITOR-IN-CHIEF
DAVID H. ROSENBLOOM
Distinguished Professor of Public Administration
American University, Washington, DC
Founding Editor
JACK RABIN
RECENTLY PUBLISHED BOOKS

The Nonprofit Human Resource Management Handbook: From Theory to Practice,
edited by Jessica K. A. Word and Jessica E. Sowa
Cost and Optimization in Government: An Introduction to Cost Accounting, Operations
Management, and Quality Control, Second Edition, by Aman Khan
The Constitutional School of American Public Administration, edited by Stephanie P.
Newbold and David H. Rosenbloom
Contracting for Services in State and Local Government Agencies, Second Edition,
William Sims Curry
Democracy and Civil Society in a Global Era, Scott Nicholas Romaniuk and
Marguerite Marlin
Development and the Politics of Human Rights, Scott Nicholas Romaniuk and
Marguerite Marlin
Public Administration and Policy in the Caribbean, Indianna D. Minto-Coy and Evan
Berman
The Economic Survival of America’s Isolated Small Towns, Gerald L. Gordon
Sustainable Development and Human Security in Africa: Governance as the Missing
Link, Louis A. Picard, Terry F. Buss, Taylor B. Seybolt, and Macrina C. Lelei
Information and Communication Technologies in Public Administration: Innovations from
Developed Countries, Christopher G. Reddick and Leonidas Anthopoulos
Creating Public Value in Practice: Advancing the Common Good in a Multi-Sector,
Shared-Power, No-One-Wholly-in-Charge World, edited by John M. Bryson,
Barbara C. Crosby, and Laura Bloomberg
Digital Divides: The New Challenges and Opportunities of e-Inclusion, Kim Andreasson
Living Legends and Full Agency: Implications of Repealing the Combat Exclusion Policy,
G.L.A. Harris
Politics of Preference: India, United States, and South Africa, Krishna K. Tummala
Crisis and Emergency Management: Theory and Practice, Second Edition, Ali Farazmand
Labor Relations in the Public Sector, Fifth Edition, Richard C. Kearney and Patrice
M. Mareschal
Democracy and Public Administration in Pakistan, Amna Imam and Eazaz A. Dar
The Economic Viability of Micropolitan America, Gerald L. Gordon
The Nonprofit
Human Resource
Management Handbook
From Theory to Practice
Edited by Jessica K. A. Word and

Jessica E. Sowa
First published 2017
by Routledge
711 Third Avenue, New York, NY 10017
and by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2017 Taylor & Francis
The right of Jessica K. A. Word and Jessica E. Sowa to be identified as
the authors of the editorial material, and of the authors for their
individual chapters, has been asserted in accordance with sections 77
and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic, mechanical, or
other means, now known or hereafter invented, including
photocopying and recording, or in any information storage or retrieval
system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and
explanation without intent to infringe.
Library of Congress Cataloging in Publication Data
Names: Sowa, Jessica E., 1975– editor. | Word, Jessica K. A.,
1977– editor.
Title: The nonprofit human resource management handbook : from
theory to practice / edited by Jessica E. Sowa and Jessica K.A. Word.
Description: New York : Routledge, 2017. | Includes bibliographical
references and index.
Identifiers: LCCN 2016054950 | ISBN 9781498738170 (hbk : alk.
paper) | ISBN 9781315181585 (ebk)
Subjects: LCSH: Nonprofit organizations—Management. |
Personnel management.
Classification: LCC HD62.6 .N656 2017 | DDC 658.3—dc23
LC record available at https://lccn.loc.gov/2016054950
ISBN: 978-1-4987-3817-0 (hbk)

ISBN: 978-1-315-18158-5 (ebk)
Typeset in Bembo
by Keystroke, Neville Lodge, Tettenhall, Wolverhampton
Contents
List of Figures x
List of Tables xi
Notes on Contributors xii
Acknowledgments xix
1 Introduction 1
Jessica E. Sowa and Jessica K. A.Word
PART I
Working in the Sector 13
2 Theories of the Nonprofit Sector 15

Beth Gazley
3 Trends in Nonprofit Employment 29

John C. Ronquillo, Annie Miller, and Ida Drury
4 Legal Aspects of Nonprofit Employment 44

Eric Franklin Amarante
PART II
Building an HRM Infrastructure in a Nonprofit
Organization 67
5 Strategic Human Resource Management 69

Hans-Gerd Ridder and Alina McCandless Baluch
6 Recruitment and Selection for Nonprofit Organizations 87

Rikki Abzug
7 Succession Planning and Management in Nonprofit

Organizations 101
Yeonsoo Kim
vii
Contents
8 Talent Management 122

Heather L. Carpenter
9 Compensation Practices in Nonprofit Organizations:

Examining Practices Adopted by High Performing Nonprofits 142
Sally Coleman Selden
10 Labor Relations in Nonprofit Organizations 166

Joan E. Pynes
11 Engagement, Satisfaction, and Nonprofit Organizations 185

Kunle Akingbola
12 Volunteer Management: It All Depends 204

Jeffrey L. Brudney and Hayley K. Sink
13 Training and Development in Nonprofit Organizations 223

Toby Egan
14 Making Nonprofits More Effective: Performance

Management and Performance Appraisals 250
Marlene Walk and Troy Kennedy
PART III
Emergent Challenges in Nonprofit Human Resource
Management 269
15 Interchangeability of Labor: Managing a Mixed Paid and

Volunteer Workforce 271
Allison R. Russell, Laurie Mook, and Femida Handy
16 Managing Human Resources in International NGOs 285

Carrie R. Oelberger, Anne-Meike Fechter, and
Ishbel McWha-Hermann
17 Managing Generational Differences in Nonprofit Organizations 304

Jasmine McGinnis Johnson, Jaclyn Schede Piatak, and Eddy Ng
18 Diversity and Diversity Management in Nonprofit

Organizations 323
Judith Y.Weisinger
viii
Contents
19 Technology and Human Resource Management in

Nonprofit Organizations 339
Jennifer A. Jones
20 Conclusion: Toward a Research Agenda for Nonprofit Human

Resource Management 359
Jessica K. A.Word and Jessica E. Sowa
Index 370
ix
Figures
3.1 Number of registered 501(c)(3) organizations 30

3.2 Average annual employment in 501(c)(3) organizations (millions) 31
3.3 Nonprofit employment by census region (millions) 32
3.4 Mean executive compensation level by region and budget size 39
5.1 Types of HR architecture in nonprofit organizations 77
7.1 The Leadership Pipeline Model 107
7.2 The Acceleration Pools Model 109
8.1 Components of a good job description 126
8.2 The Talent Development Platform 128
8.3 Leadership Development Process 131
9.1 Strategic Compensation Model to guide nonprofit
decision-making 161
13.1 Human Resource Wheel 230
14.1 Performance management in nonprofit organizations 257
x
Tables
4.1 Federal regulations and protections 62

7.1 Five generations of the succession planning and management
lifecycle 111
7.2 The key roles of members in succession planning 114
9.1 Internal and external equity practices 151
9.2 Cross-tabulation of organizations exploring internal and
external equity 151
9.3 Difference of means tests for internal and external equity
consideration: High performing nonprofits 152
9.4 Cross-tabulation of organizations exploring internal and
external equity for high performing nonprofits 153
9.5 Compensation strategies adopted by nonprofits 154
9.6 Difference of means tests: High performing nonprofits 154
9.7 Difference of means tests: Male and female executive directors 156
9.8 ANOVA: Size and use of compensation systems 157
12.1 Ellis’ major elements of volunteer management 208
12.2 Management adjustment to contingencies in volunteer
programs 211
12.3 The ratchet model of volunteer program management 215
12.4 Management adjustment to contingencies in volunteer
programs 217
13.1 ADDIE Training Model: Steps, tasks and deliverables 241
13.2 Training policy: Level of formality 243
13.3 Training deployment: Internal versus external 243
13.4 Training delivery: In-person versus online 244
13.5 Training topics emphasized 245
14.1 Article review sample 254
xi
Notes on Contributors
About the Editors

Jessica E. Sowa is an Associate Professor in the School of Public and International
Affairs in the College of Public Affairs at the University of Baltimore, USA. She
currently serves as Director of the M.S. in Nonprofit Management and Social
Entrepreneurship program. Her research focuses on public and nonprofit manage-
ment, with an emphasis on organizational effectiveness, leadership, and the man-
agement of human resources in public and nonprofit organizations. Dr. Sowa’s
work has been published in Public Management Review, Administration and Society,
Public Personnel Management American Review of Public Administration, Journal of
Public Administration Research and Theory, Nonprofit and Voluntary Sector Quarterly,
and the Review of Public Personnel Administration. Her current research on high
performance work systems in nonprofit human service organizations was funded
by a grant from the Society for Human Resource Management (SHRM)
Foundation. She serves on the editorial board of a number of journals in public
administration and human resource management.
Jessica K. A. Word is an Associate Professor in the School of Public Policy and

Leadership at the University of Nevada, Las Vegas, USA. She currently serves as
Director of the Nonprofit, Community, and Leadership Initiative and Graduate
Coordinator for the School. She received her doctorate from the Rueben Askew
School of Public Administration and Policy at Florida State University in 2006.
Her research focuses on capacity building in the public and nonprofit sector. Her
work has been published in Public Administration Review, Review of Public Personnel
Administration, Public Personnel Management, Journal for Nonprofit Management, Journal
of Management, Spirituality and Religion, and The Innovation Journal. She currently
serves as the book review editor for the International Journal of Public Administration.
She has worked with notable national nonprofits such as the Girl Scouts of the
USA, Volunteers of America, and Opportunity Knocks on issues related to
employee engagement and burnout.
About the Contributors

Rikki Abzug (PhD, Yale University), is a Professor and Convener of Management,
Anisfield School of Business, Ramapo College, USA. A prolific researcher of
organizational governance, sector theory, social purpose organizations, and
xii
Notes on contributors
neo-institutionalism in organizations, Dr. Abzug is co-author (with Jeffrey

Simonoff) of Nonprofit Trusteeship in Different Contexts; as well as the author/co-
author of a myriad of scholarly peer-reviewed articles in journals including:
Organization Science, The Academy of Management Journal, Nonprofit and Voluntary
Sector Quarterly, Nonprofit Management & Leadership, Voluntas: International Journal
of Voluntary and Non-Profit Organisations, and Sexualities. Before coming to
Ramapo, Dr. Abzug was the Chair of the Nonprofit Management Program at
The New School for Social Research in NYC and before that, the Associate
Director of Yale University’s Program on Nonprofit Organizations.
Kunle Akingbola is an Associate Professor in the Faculty of Business Administration

at Lakehead University, Canada. His research focuses on the interactions in human
resource management and strategic management in nonprofit and healthcare
organizations. He is a certified HR professional with industry experience and a
consultant to nonprofit organizations. He is the author of Managing Human
Resources for Nonprofits, published in 2015 by Routledge.
Alina McCandless Baluch is Lecturer in Management at the University of

St Andrews, Scotland, and Associate Director of the Centre for the Study
of Philanthropy and Public Good. Her research looks at employment relations in
nonprofit organizations with a particular focus on implementation gaps in HRM,
employee-line manager relations, and employee well-being. Alina’s research has
been published in several nonprofit, HRM, and management journals.
Jeffrey L. Brudney, Ph.D., is the Betty and Dan Cameron Family Distinguished
Professor of Innovation in the Nonprofit Sector at the University of North Carolina
Wilmington. Dr. Brudney has received notable honors and awards for his scholar-
ship and service to the field, including the Award for Distinguished Achievement
and Leadership in Nonprofit and Voluntary Action Research (formerly called the
Award for Distinguished Lifetime Achievement) from the Association for Research
on Nonprofit Organizations and Voluntary Action (ARNOVA), and the Harriet
Naylor Distinguished Member Service Award from the Association for Volunteer
Administration. His book, Fostering Volunteer Programs in the Public Sector: Planning,
Initiating, and Managing Voluntary Activities, earned the John Grenzebach Award for
Outstanding Research in Philanthropy for Education. He has served as Editor-in
-Chief of Nonprofit and Voluntary Sector Quarterly, the leading academic journal
in nonprofit and voluntary sector studies world-wide.
Heather L. Carpenter is Assistant Professor and Program Coordinator of the

MA in Nonprofit Management in the Business Department at Notre Dame of
Maryland University, USA. She is co-author of the book, The Talent Development
Platform: Putting People First in Social Change Organizations. Heather’s research
interests include nonprofit employment, professional development, and nonprofit
management education.
xiii
Ida Drury is a doctoral student in the School of Public Affairs at the University of
Colorado Denver and a Sr. Instructor at the Kempe Center for the Prevention and
Treatment of Child Abuse and Neglect on the University of Colorado Anschutz
Medical Campus. She has almost twenty years of practical experience in human
services nonprofits and government organizations. Her research centers on citizen
engagement and emotional labor performance by street-level bureaucrats.
Toby Egan, Ph.D., is Associate Professor and Senior Executive Fellow in

the School of Public Policy and the Robert H. Smith School of Business at the
University of Maryland, USA. He is former vice-president of a US-based consult-
ing firm now merged with Korn-Ferry International (the world’s largest talent
management organization). Dr. Egan researches learning organizations, nonprofit/
private/public management, dyadic development, and creativity/innovation.
He has received international, national, state and university level awards for his
leadership, research, teaching and service.
Anne-Meike Fechter is Senior Lecturer in the Department of Anthropology at

the University of Sussex, UK. Her research focuses on migration processes,
including mobile professionals, with a regional emphasis on Southeast Asia. Her
work has examined corporate expatriates (Transnational Lives: Expatriates in
Indonesia, Routledge, 2007), and international development workers (The Personal
and the Professional in Aid Work, Routledge, 2013). She is currently researching
forms of ‘Do-it-yourself Aid’ in Cambodia.
Eric Franklin Amarante earned his B.A. from the University of Texas at Austin
and his J.D. from Cornell Law School. He is an Assistant Professor of Law at the
University of Tennessee where he directs the Community Economic Development
Clinic. Prior to joining UT, he directed the Small Business & Nonprofit Legal
Clinic UNLV’s William S. Boyd School of Law and was the inaugural Whiting
Fellow at the University of Denver Sturm College of Law. Before entering
academia, Eric spent over five years in transactional private practice in Palo Alto
and Seattle.
Beth Gazley is Professor of Public and Environmental Affairs at Indiana University-

Bloomington, USA. She teaches public and nonprofit management, and directs
IU’s Master of Public Affairs program. Her research addresses nonprofit manage-
ment and governance, volunteerism, nonprofit participation in public service
delivery, and intersectoral collaboration. Before entering academia, she had a career
in nonprofit fundraising and management consulting.
Femida Handy is Professor at the School of Social Policy and Practice at the
University of Pennsylvania and currently the Director of the Ph.D. program in
Social Welfare. She has served as the Editor-in-Chief of Nonprofit and Voluntary
Sector Quarterly. Her research and teaching focus on the economics of the nonprofit
sector, volunteering, and philanthropy.
xiv
Jasmine McGinnis Johnson is an Assistant Professor at The George Washington

University in the Trachtenberg School of Public Policy and Public Administration,
USA. Her research interests include the implications of variations in nonprofit
governance, within the context of foundation, how nonprofit organizations are
shaped by the philanthropic market, and the causes and consequences of how
nonprofits shape their human resource practices for Millennials’ public service
commitments. She worked in development and evaluation for several human
service organizations prior to beginning graduate school.
Jennifer A. Jones, Ph.D., is an Assistant Professor of nonprofit leadership and man-

agement at the University of Florida. She holds a Ph.D. in Leadership Studies (non-
profit specialization) and an M.A. in Nonprofit Management and Leadership from
the University of San Diego. She is a member of the Nu Lambda Mu international
honor society for nonprofit scholars, has received an Emerging Scholar Award in
2015 from the Association for Research on Nonprofit Organizations and Voluntary
Action, and has more than a decade of experience as a nonprofit practitioner.
Troy Kennedy is a Graduate Assistant at the School of Public and Environmental

Affairs at Indiana University-Purdue University Indianapolis, USA. He is cur-
rently finishing his Master of Public Affairs with a concentration in Public
Management. Previously, Troy completed his Bachelor of Science majoring in
Policy Studies at Indiana University-Purdue University Indianapolis.
Yeonsoo Kim, Ph.D., SPHR, has been in HR field both professionally and aca-
demically for more than 15 years. She is an assistant professor in School of Public
Policy and Leadership at University of Nevada Las Vegas. In that capacity, she
teaches and conducts research in the field of Human Resource Management and
Development. Her research interests include human resource development, stra-
tegic human resource management, talent management, organization development
in both public and private sector.
Ishbel McWha-Hermann is an Early Career Fellow in international human

resource management at the University of Edinburgh Business School, Scotland.
Her research focuses broadly on issues of social justice and diversity at work. She
has a particular interest in the people management practices of international
NGOs and their impact on both organizations and their employees, including,
for example, through motivation, performance, commitment, and teamwork.
Ishbel has a Ph.D. in psychology from Massey University, New Zealand.
Annie Miller is a Research Assistant Professor in the Graduate School of Professional

Psychology at the University of Denver and a social change consultant, senior
project manager and researcher at the Spark Policy Institute. Annie has authored
chapters on public engagement in higher education, immigrant threat and national
salience, non-profit network membership and network effectiveness. Her current
xv
research focuses on management of public networks, combating human trafficking,

preventing acts of mass and ideological violence, and social service provision through
multi-sector networks.
Laurie Mook is Associate Professor in the School of Community Resources and

Development at Arizona State University, USA. She is also a research associate at
the ASU-Lodestar Center for Philanthropy and Nonprofit Innovation. Her
research focuses on social accounting, the social economy, and volunteering.
Eddy Ng is a Professor of Organizational Behaviour and the F.C. Manning Chair

in Economics and Business at Dalhousie University. His research focuses on manag-
ing diversity for organizational competitiveness, the changing nature of work and
organizations, and managing an intergenerational workforce. He is Editor-in-Chief
of Equality, Diversity and Inclusion, and Associate Editor of Personnel Review, and he
serves on the Editorial Boards of Cross-cultural and Strategic Management, Employee
Relations, Management Communication Quarterly, and Public Personnel Management.
Carrie R. Oelberger is an Assistant Professor of Management at the University

of Minnesota’s Humphrey School of Public Affairs. Her research examines how
working in nonprofit organizations influences the private lives of their staff.
In particular, she studies how various social identities––especially gender, sexual
orientation, and family status––influence how employees navigate careers in
deeply meaningful work settings that compromise meaningful private lives. She
also studies how the private interests, needs, and desires of nonprofit employees
and trustees shape organizations and fields, with an empirical focus on how phi-
lanthropy shapes social movements and organizational fields. She received her
Ph.D. in organization studies from Stanford University.
Jaclyn Schede Piatak is an Assistant Professor in the Department of Political

Science and Public Administration at the University of North Carolina at Charlotte,
USA. Her research examines how organizations interact to deliver public services,
how job sector relates to individual outcomes and behaviors, and how society influ-
ences employment and volunteering. Her professional experience includes working
in the federal government at the U.S. Department of Labor and the Corporation
for National and Community Service.
Joan E. Pynes is Professor of Public Administration at the University of South

Florida. She is the author or co-author of five books including Human Resources
Management: A Strategic Approach, 4th ed. (Jossey-Bass, 2013), co-author of Human
Resources Management for Health Care Organizations: A Strategic Approach (Jossey-Bass,
2012), and Nonprofit Management: Context and Environment (M. E. Sharpe, 2012);
Public Sector Labor Relations: A Guide for Public Administrators (Quorum Books,
1993); and Nursing Home Management: A People Oriented Perspective (Charles C.
Thomas, 1988). She is the author or co-author of more than 50 academic articles,
xvi
book chapters, technical reports, and encyclopedia entries about public and non-
profit human resources management.
Hans-Gerd Ridder holds the Chair in Human Resource Management at the

Leibniz Universität Hannover, Germany. His research focuses on strategic HRM
in for-profit and nonprofit organizations. He is the former editor of the German
Journal of HRM (Zeitschrift für Personalforschung) and his work appears in leading
HRM, nonprofit, and public management journals.
John C. Ronquillo is Assistant Professor of Nonprofit and Public Management

in the School of Public Affairs at the University of Colorado Denver, USA.
His research focuses on issues related to organizational and social innovation,
indigenous leadership and governance, and leadership of nonprofit and public
organizations, in general.
Allison R. Russell is a Ph.D. student at the School of Social Policy and Practice at
the University of Pennsylvania. She has served as the Managing Editor of Nonprofit
and Voluntary Sector Quarterly. Her research interests focus on volunteering, civil
society, nonprofit management, and related issues.
Sally Coleman Selden is Vice President and Dean for Academic Affairs and
Professor of Management at Lynchburg College, USA. She is the author of a
number of articles on human resource management and public administration.
She is the author of two books, The Promise of a Representative Bureaucracy and
Human Capital: Tools and Strategies for the Public Sector, both of which won book
awards. Dr. Selden is currently involved in two research projects: a study of High
Performance Work Systems in Nonprofit Organization funded by the SHRM
Foundation and the State Government Workforce Project, which is a collaborative
project with the National Association of State Personnel Executives.
Hayley K. Sink, M.P.A., is a practitioner in the nonprofit field in Wilmington,

North Carolina, USA. Her research interests include volunteer management
and volunteering, with particular interest in the impact of volunteering on special
populations, such as those with disabilities, and the aging population. She received
a Master of Public Administration with a concentration in Nonprofit Management
at the University of North Carolina Wilmington and a Bachelor of Science in
Sociology with a minor in Political Science from Virginia Tech. She has served
as a Graduate Research Assistant, as well as Editorial Assistant to Dr. Jeffrey L.
Brudney for the academic journal Nonprofit and Voluntary Sector Quarterly. Hayley
wishes to acknowledge Dr. Brudney for his invaluable mentorship and support.
Marlene Walk is Assistant Professor of Nonprofit Management at the School

of Public and Environmental Affairs at Indiana University-Purdue University
Indianapolis. Marlene holds a Ph.D. in Social Welfare from the University of
xvii
Pennsylvania, School of Social Policy and Practice. She researches and publishes
on human resource management, volunteering, and volunteer management
in nonprofit organizations as well as on organizational change and the effects of
change on employees in public and nonprofit organizations. Her work has earned
awards from numerous institutions, including the Academy of Management,
Organization Development and Change Division’s Best Paper based on a
Dissertation Award in 2015 and the Association for Research on Nonprofit and
Voluntary Action’s Emerging Scholar Award in 2013.
Judith Y. Weisinger, Ph.D., is Visiting Associate Professor of Management at

Bucknell University in Lewisburg, PA, USA. Her research examines diversity and
inclusion in nonprofit organizations, with interests in the role of organizational
structuring for diversity/inclusion and the role of social capital. Dr. Weisinger’s
work has appeared in the Nonprofit & Voluntary Sector Quarterly, Nonprofit Management
& Leadership, and the Journal of Nonprofit Education and Leadership, among others.
xviii
Acknowledgements
The editors would like to thank the generous contributions of our colleagues to
this volume. We are honored that so many of our wonderful colleagues agreed
to participate in this project and we look forward to continuing the conversation
on how to build better human resource management in the nonprofit sector. We
also are grateful to our students and colleagues in the nonprofit sector, for doing
the hard work to make the world a better place.
Jessica Word would like to acknowledge her family for their patience and
support through many busy days and nights. In particular, I want to thank my
daughter Lela Spilman for reminding me playtime is important and to always
keep smiling.
Jessica Sowa would like to acknowledge her family for their unending support
and Sally Coleman Selden for being such a great mentor and building my love
for all things human resource management.
xix
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 promo-
ting 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 count-
less 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
1
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 employ-
ment, 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)
2
Introduction
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 non-
profit 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 pref-
erences 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 com-
pensation (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
3
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 relation-
ship, 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?
4
Introduction
• 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 develop-
ing 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 manag-
ing 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 invest-
ment 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 differ-
ence—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 man-
agement 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.
5
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
than in the private sector or government. That money needs to be found
somewhere—nonprofits cannot just raise the price of the product (as many
of their clients may not be able to pay) or pass a new tax. Generating revenue
requires human capital and human resource management capacity—one needs to
have a strong case for support, staff, or volunteers to raise money from donations,
and/or staff or volunteers to help secure government or foundation grants or
contracts. However, gaining that human capital generally requires a certain level
of revenue, otherwise a nonprofit may struggle to acquire and sustain that staff
or support those volunteers. Therefore, for many nonprofits, this becomes a
chicken or the egg problem. As will be addressed later in this volume, many
nonprofits are very small, operating with few paid staff members and relying on
volunteers to help fill their human capital stock. As explored in Chapters 12
and 15, managing volunteers on their own and balancing the management
of volunteers alongside paid staff requires careful attention to HRM policies in
practice in order to support and maintain that human capital stock, regardless of
whether it is donated or paid labor. However, we recognize that building HRM
capacity has been a challenge for many smaller nonprofit organizations.
In addition, nonprofits often face pressures from various stakeholders,
including funders, donors, and other groups reviewing nonprofit operations, to
keep “overhead” or administrative costs down or low (Bowman, 2006; Gregory
& Howard, 2009; Hager et al., 2004). While we would argue spending on
good human resource management is not in any way, shape, or form wasteful
and in fact is directly tied to the effective operation and performance of nonprofits,
this pressure is real for many nonprofits. Donors and other stakeholders want to
know where money is going—if that money is being spent on programs.
However, for nonprofits, there are no programs without staff—volunteer or paid.
We as scholars and practitioners of nonprofit management need to change the
discussion around investing in our human resource management, the policies
and practices and the people. This is not money wasted—well-managed staff are
happier staff, who should perform better and leave the organization at a lower
rate (Selden & Sowa, 2015). Good human resource management is a good
investment for the nonprofit sector and this book is designed to explore how to
make that investment work for those in the field in nonprofits.
The Purpose and Scope of This Book

While research has been growing on nonprofit HRM and there have been
several comprehensive examinations from some leading scholars (e.g. Akingbola,
6
Introduction
2015; Baluch, 2012; Pynes, 2013; Ridder & McCandless, 2010; Ridder et al.,
2012), we are adding to this conversation and area of study by bringing together
many of the top scholars to reflect on the state of research and the field. These
scholars are diving into their particular areas of expertise in human resource
management, in the chapters contained in this volume, exploring where we have
progressed in studying and understanding nonprofit HRM and also charting a
course for future areas of research and practice. This book is for scholars, stu-
dents, and practitioners. The chapters are grounded in existing research, but also
connect research to practice to demonstrate the usefulness of research in non-
profit studies for those in the field directly managing people (or human resources).
Therefore, the primary utility of the book is to provide an up-to-date and com-
prehensive picture of the state of research on the management of human resources
in nonprofit organizations and to inform practice in the nonprofit sector. Overall,
the book is meant to do the following:
• Provide a solid grounding in existing research on nonprofit human resource

management, encompassing the core components of the HRM process along
with special topics and areas of consideration in managing the paid and
volunteer human capital that populates the nonprofit sector.
• Raise questions on how this research connects to practice, including
considerations of what we know about how to strengthen practice and what
are some continuing questions on how to improve the HRM process in
nonprofit organizations.
Overview of the Chapters

The chapters in this handbook cover a wide spectrum of topics on human
resource management in the nonprofit sector, ranging from foundational issues
of the sector and the workforce within it, the core HRM functions, from
recruitment and selection, to compensation, performance evaluation, and training
and development. In addition, the scholars included in this volume raise new and
emerging questions for how we understand the workforce in the nonprofit sector
and how best to manage it. This includes questions of what a strategic approach
is to managing people that fits the nonprofit sector, how we engage our employees
in the nonprofit sector so they remain committed to the missions of their
organizations, and what it means for nonprofits as their workforces become more
complex demographically, including different age groups, backgrounds, countries,
and cultural understandings.
The handbook is divided into three Parts. Part I, Working in the Sector,
provides a critical background of the nonprofit sector, its workforce, and the legal
environment for effectively managing people in the nonprofit sector.
In Chapter 2, Beth Gazley provides an overview on the nonprofit sector,
including foundational theories on why the nonprofit sector exists and what this
means for working in the sector and managing its employees.
7
In Chapter 3, John Ronquillo, Annie Miller, and Ida Drury deliver an

overview on employment in the nonprofit sector in the United States. Drawing
on data from the U.S. federal government and several major nonprofit research
groups, this chapter examines patterns of employment and some of the challenges
facing nonprofits as they seek to grow their human capital stock.
In Chapter 4, Eric Franklin Amarante provides a primer on employment law
for nonprofits. While this subject alone could be a multi-volume set, this chapter
highlights some of the main laws and policies nonprofits need to review to ensure
they are in compliance with federal and state laws as they build and manage their
workforces.
In Part II, Building an HRM Infrastructure in a Nonprofit Organization,
this handbook then comprehensively explores the HRM function, from the
overall philosophy or approach nonprofits should consider to effectively managing
their people through recruitment and selection, compensation, labor relations,
training and talent development, evaluation, and employee motivation and
engagement.
In Chapter 5, Hans-Gerd Ridder and Alina McCandless Baluch explore
strategic human resource management (SHRM) in nonprofit organizations,
focusing on the core principles underlying this approach and on what SHRM
means for nonprofits, with lessons from the construction of and examination of
a model of nonprofit-focused HR architectures.
In Chapter 6 by Rikki Abzug, the process of staffing a nonprofit is examined,
from what kinds of workers are attracted to the nonprofit sector to how to adopt
a strategic approach to recruitment and selection to maximize the value of your
nonprofit’s human capital.
Chapter 7 by Yeonsoo Kim aligns with recruitment and selection, but with
a focus on the challenge of ensuring a steady flow of leaders through succession
planning and management. Effective nonprofit human resource management
requires an overall strategic approach to making sure key positions are filled in a
timely and effective manner.
In Chapter 8 by Heather Carpenter, the question of how to invest in
employees is examined with a discussion of talent development and talent
management in nonprofit organizations. This chapter explores various models of
talent management, highlighting how to apply these in nonprofit organizations.
Chapter 9 by Sally Coleman Selden adds to the discussion of how to strategically
manage human resources in nonprofits, with the focus being compensation systems.
Compensation can be a key component of developing a high performance approach
to managing human resources in nonprofits, but requires attention and careful
design on the part of nonprofit managers.
Chapter 10 by Joan Pynes considers the employment relationship in the
nonprofit sector from the perspective of labor relations, examining how unions
operate in the nonprofit sector and the legal environment associated with labor
relations in the sector. In addition, she examines the role of unions for workers
in the sector and worker rights.
8
Introduction
In Chapter 11, Kunle Akingbola shows that human resource management is

not only about programs and policies. How we engage employees in our
nonprofit organizations can have a significant impact on the motivation of these
employees over time and their job satisfaction.
Chapter 12 by Jeffrey Brudney and Hayley Sink considers how we manage
our donated human capital in the nonprofit sector, the valuable resource of
volunteer labor that helps many nonprofits accomplish their missions. They
propose a “ratchet” model of volunteer management that allows for tailoring
effective volunteer management practices for particular nonprofit organizational
contexts.
In Chapter 13, Toby Egan highlights the role that human resource management
plays in maintaining the quality and performance of human capital in nonprofits,
discussing training and development in the nonprofit sector, including the
history, role, and particular needs of training and development for nonprofits.
Chapter 14 by Marlene Walk and Troy Kennedy continues this examination
with a focus on performance management and appraisals. Grounding their
analysis in a comprehensive review of the existing research on performance
appraisal and performance management, they propose a comprehensive model of
performance management and appraisal for nonprofit organizations.
The final section of this handbook, Part III, Emergent Challenges in Nonprofit
Human Resource Management, focuses on some emergent issues that are affecting
how we understand managing people working in nonprofits today, such as new
technology and demographic changes, and the overall increasing complexity in
our workforce and some of the unique challenges faced by nonprofits, including
balancing paid and volunteer human capital and the particular challenges of
managing people in international nongovernmental organizations (INGOs),
which often operate across national borders and contexts.
Chapter 15 by Allison Russell, Laurie Mook, and Femida Handy builds on
many of the previous chapters by examining the question of how to manage
effectively together the two forms of human capital prevalent in the nonprofit
sector—paid and donated human capital. They review the research on managing
volunteers and paid staff together, what is known as the inter-changeability of
labor, addressing the conditions and challenges associated with a blended staffing
structure in nonprofits.
In Chapter 16, Carrie R. Oelberger, Anne-Meike Fechter, and Ishbel McWha-
Hermann provide a comprehensive examination of the particularly challenging
HR issues that arise in international non-governmental organizations (INGOs),
including multiple different approaches to staffing these organizations, where
differences in contracts, compensation, and designation as in-country staff and/or
central staff can lead to tensions. They also explore some of the unique pressures
and motivational challenges for those who work in nonprofits on the international
stage.
Chapters 17 and 18 together consider the opportunities and challenges
associated with the changing demographics in the nonprofit workforce today. In
9
Chapter 17, Jasmine McGinnis Johnson, Jaclyn Schede Piatak, and Eddy Ng
tackle the issue of the multiple generations present in today’s workforce and what
that means for effective human resource management. They specifically address
the question of bringing younger generations into the nonprofit workforce and
present a strategic approach for managing multiple generations. Chapter 18 by
Judith Weisinger dives deeper into the question of diversity, reviewing traditional
approaches to diversity and inclusion and addressing how current models of
diversity management need to be tailored to capture the true complexity of the
workforce in today’s nonprofit and be improved to be truly inclusive.
Chapter 19 by Jennifer Jones tackles the question of technology and its relation-
ship to human resource management in nonprofit organizations. Technology has
changed how we carry out a lot of HR practices, but has also raised new questions
and concerns that must be addressed by nonprofit managers.
We conclude in Chapter 20 by considering what we know and the areas we
still need to explore in terms of HRM in the nonprofit sector. We are so grateful
for the wonderful contributions of the scholars in this volume and hope that this
collection represents an important step forward in building the human resource
management capacity of the nonprofit sector. We want to ensure that those who
choose to dedicate their professional careers toward service of the greater good in
the nonprofit sector are provided with every opportunity to have a well-developed
and rewarding career path.
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12
Part I
Working in the Sector
2
Theories of the
Nonprofit Sector
Beth Gazley
Introduction
In keeping with the aim of The Nonprofit Human Resource Management Handbook
to connect research to practice, this introductory chapter focuses on nonprofit
theories of particular interest to the study and practice of nonprofit human
resource management (HRM). Each chapter author in this book will have made
his or her own choices about the conceptual landscape considered worthy of
coverage. As a consequence, we may vary in the groundwork we cover, but that
strategy overall should be considered an exciting rather than confusing aspect of
nonprofit HRM study and practice, since all chapter authors would agree that
this field of research and practice is still in development and moving in rapid and
sometimes unexpected directions.
With this book’s interest in using research to inform the practice of non-
profit human resource management, and also in offering students as future
nonprofit managers a current picture of the state of the field, this chapter also
attempts to ground its introduction of major nonprofit theoretical concepts with
plenty of concrete examples to help readers envision how these ideas play out at
the forefront of managerial action. Given the relative youth of nonprofit HRM
research (reflected in part by the paucity of nonprofit HRM textbooks), most HR
professionals working within the nonprofit sector will have had limited exposure
to general nonprofit theory, except for those few who have obtained a specialized
degree in nonprofit management or closely related fields such as public affairs.
Thus, these general theories of nonprofit behavior at the sectoral or organizational
level may still be unfamiliar and therefore useful to frontline professionals.
Another aim of this chapter is to avoid making the requisite discussion of
“theories” at the start of a management book dry, inaccessible, or irrelevant to
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Beth Gazley
its readers. The poor authors of “theory chapters” must sometimes feel like a
sadly paraphrased parody of the 1970 Edwin Starr song (i.e., “Theory, yeah!
What is it good for? Absolutely nothing . . .”). The problem arises when theories
themselves are widely misunderstood by the public as simple guesses about what
happens in the real world, especially outside the natural sciences. Applied to the
workplace, theories may be considered too abstract to be of much value to
the practitioner. Theories vary considerably in their descriptive and predictive
powers. And in a world that values intellectual and situational diversity, not all
theories make sense in all circumstances.
Good management theories, however, can be fairly reliable and helpful
predictors of organizational phenomena. The best offer a logical and ordered set
of arguments about how people and organizations behave (DiMaggio, 1995;
Sutton & Staw, 1995; Weick, 1995). The reader should pay careful attention,
however, to the strong role that “normative” theory plays in managerial decision-
making. Normative theories are easy to find: they tend to be accompanied by
the statement that nonprofits should behave a certain way. Such directions can be
both powerful and problematic to nonprofit decision-making. They can certainly
steer managers in the wrong direction when attempts to mimic the prescriptive
advice fail to account for differences in organizational context such as mission,
age, culture (of course, predictive theories can, as well). But normative theories
do help to connect managerial decisions to potentially valuable philosophical
and moral underpinnings about how nonprofits should behave (for example,
that it is better to be honest and open in sharing information with stakeholders
than it is to withhold information).
While they vary in the clarity with which they make sense of the world, and
while new paradigms pop up unexpectedly, strong theories help a manager
identify the crucial aspects of an event and sideline the less relevant factors (Kuhn,
1970). Theories, therefore, support managerial efficiency. Weick (1995) put it
charmingly when he wrote that “good” theory “explains, predicts, and delights.”
Certainly, HR managers deserve to be delighted when theories help them make
sense of a challenging personnel problem.
Structure of the Chapter

To introduce readers to this broad theoretical field in the brief confines of a single
chapter, this chapter is organized to cover nonprofit theories at two conceptual
levels: first, a set of economic and legal theories that address sectoral-wide
behavior, followed by a selection of organizational theories from many other
disciplines that excel at helping the HR manager understand distinct workplace
settings. The emphasis is on economic theories over organizational theories
following the rationale that these are fundamental to understanding what plays
out in the front lines of employee and employer behavior in the nonprofit sector,
yet less likely to have been incorporated into the following chapters. All theories
should be understood as complementary to one another, to offer just one of many
16
Theories of the Nonprofit Sector
possible lenses, perspectives, or frameworks by which to understand workplace

behavior. No discipline alone can capture the complexity of human and organ-
izational behavior. Thus, nonprofit scholars are taking an increasingly multi-
dimensional and multi-disciplinary perspective to pull together our understanding
of the sector and its human capital (see, for example, Nesbit et al., 2011).
Nonprofit Sectoral Theories

Why study human resource management within the context of nonprofit sectoral
theory, rather than using a broader, non-sector-specific perspective? Aren’t emplo-
yees more alike in terms of their common characteristics (e.g., age, seniority)
than they are distinct across the nonprofit, for-profit, and governmental sectors?
The answer rests in the important ways that each sector has created certain
economic incentives and legal conditions for human resource management. The
distinct legal status of U.S. nonprofit organizations under state and federal law
results in a related set of legal circumstances respecting nonprofit employ-
ment discrimination, volunteer management, governance, compensation, labor
relations, and a host of additional HR concerns. These circumstances sometimes
impose legal constraints on nonprofit employers but they often offer greater legal
freedoms as well.
“Three Failures” Theory and Implications for Human Resource

Management
Economic theories have made essential contributions to explanations of sectoral
distinctiveness, which in turn impacts employment practices and obligations.
Theories of market failure, government failure, and voluntary or philanthropic
failure were developed to explain why market-driven economies can produce a
vibrant third sector, and why even in a state-controlled economy (such as China)
nonprofits can still achieve a foothold (Hansmann, 1980; Salamon, 1987; Steinberg,
2006). Each “failure” describes the circumstances where a lack of perfect market
conditions makes any sector unable to produce an independent, efficient solution
to a human need (Anheier, 2005). For example, market failures might occur
where consumers of a service that is widely desired (“demand homogeneity”)
consider the charitable organization the more trustworthy provider because it is
less likely to cheat the consumer (“contract failure”; Anheier, 2005; Steinberg,
2006; Weisbrod, 1988).
Circumstances of both market and government failures encourage voluntary
organizational activity (Salamon, 1987; Weisbrod, 1977). They explain why the
U.S. healthcare industry spans all three sectors in that it can take for-profit,
nonprofit, or public form. Not only are hospitals expensive to build, discouraging
open competition, but the nonprofit form can signal greater trustworthiness
to consumers and less likelihood of skimping on quality (“contract failure”). As
a consequence, six out of ten U.S. hospitals have taken the legal status of a
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Beth Gazley
charitable nonprofit. Healthcare, incidentally, is also responsible for more than

half of all nonprofit wages (Roeger et al., 2012).
Even then, the charitable sector is not immune to concerns about opportunistic
behavior and transparency of information. The U.S. Congress and Internal
Revenue Service carefully scrutinize 501(c)(3) hospitals for assurance of a balance
between profit motive and charitable mission. The research of Brickley and Van
Horn (2002) suggests nonprofit hospitals maintain a tenuous hold on sectoral
distinctiveness since hospital executives are incentivized mainly by the same
things across sectors, i.e., performance rather than charitable behavior. Meanwhile,
healthcare “conversions” occur frequently, as business investors continue to find
new ways to make healthcare profitable, and acquire the assets of nonprofit
hospitals to do so.
Given copious examples of nonprofit activity despite the absence of market
and government failures, and also the evidence of centuries-long historical
cooperation between U.S. governments and nonprofits to deliver public services,
Salamon (1987) argued the sector’s behavior was better viewed through the lens
of “voluntary failure.” This third concept has been joined with the others to
comprise a set of “three failures theories” but its original conceptualization was
as an alternative or prequel to “market” and “government” failures (see Steinberg,
2006, for an explanation).
Voluntary failure can also occur for several overlapping reasons described by
Salamon (1987; 1990). Insufficient financial resources can make the nonprofit
response too weak to meet demand for services, or can increase the cost of raising
money (“philanthropic insufficiency”). That circumstance explains why Fund
Development is one of the most highly paid jobs in the sector. It also explains
why an estimated three out of four U.S. volunteers is providing free labor to a
nonprofit organization, giving rise to another crucial but less generously compen-
sated profession, that of Volunteer Management (Gazley, 2009). It also explains
the variations in dependence on volunteers, with some subsectors heavily
dependent on them but others much less so. And it has given rise to additional
scholarly discussion over the implications for the quality and sustainability of
volunteer resources (Brudney & Meijs, 2009; see Chapter 12 in this volume).
The obvious fact that many nonprofit organizations lack both the profit-
making opportunities that attract capital investment and the overwhelming public
demand that attracts stable governmental grants and contracts means that many
struggle financially. The HR manager must be fully aware of these potentially
challenging circumstances given the nonprofit sector’s status as much more human
capital-intensive than either the business or government sectors (i.e., the majority
of nonprofit expenditures are invested in personnel rather than infrastructure;
Roeger et al., 2012). Various forms of voluntary failure may also explain why
employee turnover is higher in the nonprofit sector when compared to business
or government sectors, and why nonprofit employers express considerable concern
about employee retention (Gazley, 2009).
18
“Philanthropic insufficiency” can create, in turn, circumstances of financial

volatility that lead to “philanthropic amateurism” where service provision is
insufficiently professionalized (Salamon, 1990). It would be unfair to assume
“amateur” care is of lesser quality, but it may certainly be of lower consistency
and therefore less attractive to consumers or donors. For that reason, employee
and volunteer professional development, certification, and other means of
professionalizing service roles are of great interest to HR management.
Another reason for voluntary failure is “philanthropic particularism,” the
ability of nonprofits to form themselves to serve only individuals who share select
characteristics or preferences (e.g., religion, gender identity, ideology, geography;
Salamon, 1987). Since associational rights in the U.S. derive from the First
Amendment to the U.S. Constitution, this circumstance first explains why so
many nonprofits are free to provide overlapping services in a region (e.g., multiple
clubs, after-school programs, animal welfare organizations). This situation seems
to the casual eye to be inefficient and redundant, but it also creates a unique and
somewhat opportunistic labor market for the paid and volunteer nonprofit
workforce. For example, the situation allows for greater donor choice based on
mission attraction: a volunteer or employee could choose between an animal
shelter that euthanizes and a “no-kill” shelter based on their personal values and
preference for each mission. And if they don’t like either organization, they have
government support for creating a third option.
This circumstance of “particularism” also explains why it is possible to hire
employees based on certain select characteristics and exclude others from
consideration. Even when such a decision appears to violate employment
discrimination laws under Title VII of the Civil Rights Act, selective hiring is
legally permitted provided (a key point, and the focus of many lawsuits) that
the preferred characteristic is necessary to maintain the “essence” and normal
operation of the business or mission (Berman, 2000). This necessary qualification
then becomes, in legal terms, a “bona fide occupational qualification” (BFOQ) of
the job. An example that seems fairly straightforward is the requirement that a
spiritual leader (such as a priest, imam, or minister) practice the religion of the
sponsoring faith-based nonprofit organization. Indeed, Civil Rights laws have
been written to provide strong protection for such intentional faith-based
discrimination, in the form of a general “religious exemption” doctrine.
Three failures theory has other implications for human resource management.
The opportunity for market conditions to support the provision of some services
(e.g., healthcare, education, childcare, musical performances) across the three
sectors increases the diversity of many industries. An employee in most professions
(e.g., an engineer, a nurse, a firefighter, even a trombonist) can span the for-profit,
nonprofit, and public sectors in a single career. Those responsible for the nonprofit
HRM function will be responsible for ensuring employees recruited from other
sectors are prepared to navigate the new legal environment and interact successfully
with a new set of stakeholders (e.g., donors, regulators).
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Beth Gazley
Even when capably described according to its predominant characteristics, the

nonprofit sector harbors subsidiary features that can confuse both internal
and external stakeholders attempting to understand the organization’s responsi-
bilities. For example, the sector’s predominant characteristics as “private, volun-
tary, and for public benefit” (Anheier, 2005, p. 11) mask its still considerable
public obligations with respect to transparent reporting, its non-voluntary dimen-
sions (for example, when a publicly chartered nonprofit such as the American
Red Cross must petition the U.S. Congress to change its bylaws) and its mutual
benefit activities (where most legal forms such as c(6) business leagues, c(7) social
clubs, are engaged in distinctly private, member-serving, and exclusionary
activities).
Further, the blurred and evolving borders of the three sectors, in addition to
fostering an enormous amount of nonprofit policy research, mean that it is not
easy to characterize the nonprofit workplace environment, nor the incentives
that will motivate nonprofit employees. An example is the creation of new
hybrid legal forms that operate at the borders of the nonprofit sector, such as
low-profit limited liability corporations (L3Cs), which in turn introduce new
employment opportunities and dilemmas. Entrepreneurial behavior within the
sector is widespread, although not always understood or trusted. Many scholars
have argued for a closer examination of nonprofit behavior through the lens
of entrepreneurship theory, and a better understanding of its implications for
management (see, for example, Badelt, 2003; Young, 2003). Unfortunately, the
study of these hybrid enterprises is very new and not yet focused on human
resource management questions. When the scholarship advances, it will be
fascinating to see how it changes our understanding of employee motivation
since most of the new public benefit entrepreneurs come from the millennial
and post-millennial generations and therefore are important to the future of the
nonprofit sector generally.
The Non-Distribution Constraint and Implications for Compensation

Ending the last section on the topic of employee motivation reminds us that
a central concern of many nonprofits is their ability to offer competitive com-
pensation packages. Here, public law puts some brakes on that ability. In many
countries (e.g., the USA, Canada), public laws for charitable organizations restrict
how the profits are used. The “non-distribution constraint” encoded in tax law
is a fundamental although widely misunderstood legal condition that allows
nonprofits to make a financial surplus (“profit”) but requires those in control
of the organization to retain or reinvest the surplus in public benefit activities
(Hansmann, 1980). This non-distribution constraint is intended to discourage
insider self-dealing and private benefit transactions among those in control of the
organization. Steinberg (2006, p. 118) observes how fundamental a distinction
this restriction on self-dealing has been for human resource management, since
the non-distribution constraint on nonprofits “affects how the organization
20
obtains resources, how it is controlled, how it behaves in the marketplace, how

it is perceived by donors and clients, and how its employees are motivated.”
One of the more visible aspects of the non-distribution constraint is reflected
in compensation policies. Nonprofits must follow stringent laws respecting how
those leaders with even a hint of control over organizational assets are compensated.
The transparency of this information under federal law and the amount of public
concern over self-dealing have resulted in many normative expectations respecting
compensation levels in the charitable sector. The State of New Jersey, for
example, began capping executive salaries for all charities with state contracts.
Another normative expectation is that charitable board members should serve
voluntarily (see, for example, the Panel on the Nonprofit Sector, 2007). However,
legally, compensation of board member labor is allowed, provided procedures
are in place to prevent self-dealing. As a result, while nearly all board members
of 501(c)(3) public charities now serve without pay, compensation is still
widespread in 501(c)(3) private foundations (Schambra, 2008). But the cultural
backlash against board compensation is strong, as evidenced by recent news
stories addressing hospital board stipends (see, for example, McCambridge, 2016).
Some implications of the non-distribution constraint, however, are at odds with
others. The theory also suggests that since all surplus profits are reinvested in a
nonprofit organization rather than being redistributed, as they are in the for-profit
firm, nonprofit employees will benefit from the reinvested profit in the form of
marginally higher wages. Yet, the “donative labor hypothesis” suggests the opposite:
that mission-driven nonprofits can attract employees who are willing to work for
less. In her review of the theory-testing that has been undertaken in this area, Leete
(2006) observes that neither the causes for wage differentials across the sectors nor
their consequences are entirely understood. While job-seeking behavior in the
absence of a profit motive does cause employee self-selection within the nonprofit
sector (see, for example, Brown & Yoshioka, 2003), wages are more likely to be
based on a unique combination of market pressures, labor supply and demand,
geography, and factors unique to each industry (Gazley, 2016).
Implications of Theories for Third Sector Employment Law

The blurry lines between sectors extend to implications for employment law.
Public law is still somewhat ambivalently carving out a distinct third sector when
it comes to employment practice. Nonprofits are, to some extent, deliberately
protected from the obligations of for-profit firms in order to encourage a robust
civil society. As examples, many state Civil Rights Acts exclude smaller nonprofits
from compliance, and the federal Volunteer Protection Act of 1995 deliberately
protects a large portion of the nonprofit workforce from groundless lawsuits.
Volunteers, as uncompensated workers, generally have few employment rights or
protections. Exceptions do exist, such as instances where nonprofits operating
under government contracts have stronger obligations to employees. And public
laws requiring “interns,” whether paid or unpaid, to receive a true educational
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Beth Gazley
experience apply equally to nonprofits. But for the most part, U.S. state and federal
law continues to recognize nonprofits as private sector actors, enjoying most of the
free agency of the for-profit sector with respect to employment (such as
the euphemistically labeled “right-to-work” laws, which facilitate job termination
and apply to both for-profit and nonprofit organizations) (see Chapter 4 for a
discussion of the legal environment of nonprofit human resource management).
Implications of Theories for Nonprofit Accountability

The unique status of nonprofits as private organizations from the perspective of
employment law but with some public privileges as well as public obligations from
the perspective of tax law amounts to a simple and problematic fact: the public
is interested in more details of nonprofit activity (e.g., salaries, programmatic
efficiency) than it can access. A current example is the public controversy over
501(c)(4) social welfare nonprofits that, since the 2010 U.S. Supreme Court
Citizens United v. FEC decision, may influence public elections without disclosing
the sources of the money.
This gap between what the public expects of nonprofits and what nonprofits
are legally obligated to deliver amounts to what many describe as a “crisis” or
“paradox” of accountability (Ebrahim, 2010; Salamon, 1990; Sidel, 2005). The
concern partly focuses on the risks of opportunistic behavior by a few bad actors
within the sector, since the imbalanced coverage of these events by the media
certainly reduces public trust in charities generally. But as the term “paradox”
suggests, the greater concern is theoretical—that the more complex economic
and legal status of the sector makes developing clear accountability expectations
not simply more difficult but impossible.
In the face of public confusion as to what can be expected of nonprofit
organization leaders and their employees, the question of to whom and for what
nonprofits are accountable is central to managerial practice (Schatteman, 2013).
The research is too young to explain very well the implications of this ambivalent
status for HRM, but Ebrahim’s (2010) helpful list of possible accountability
mechanisms (e.g. disclosure statements, performance assessment, codes of
conduct, citizen participation in nonprofit decision-making) makes it clear that
HR managers are centrally involved in creating and implementing the employee
systems that support a healthy sectoral environment for accountability. Some
on Ebrahim’s list, in fact, are at the forefront of employment best practice, such
as adaptive learning and critical reflection to help employees capably identify
stakeholders and learn how to communicate effectiveness to them.
All organizations, whether for-profit or not-for-profit, face competing
accountability demands (e.g., Ebrahim’s “upward, downward, inward, outward”
accountabilities). A commercial business has multiple accountabilities—to
regulators, stockholders, employees—but (at the risk of oversimplifying business
science) has a relatively efficient means of reconciling them. A nonprofit
organization that operates in a “double” or “triple bottom line” world (responsible
22
for social value, fiscal, and environmental sustainability—i.e., “profit, people,

planet”) faces multiple accountabilities—to regulators, stakeholders, donors,
employees, volunteers, taxpayers, not to mention all self-appointed proxies for
the public interest such as “watchdog” organizations, and the media.
Ebrahim (2010) and Sidel (2005) are among the many who argue nonprofits
should reconcile themselves to operating within a world of multiple accountabilities
and should simply be vigilant in pursuing the “splendid diversity” of self-regulation
options at their disposal (Sidel, 2005, p. 835). HR managers are in a position to
provide valuable guidance to employers about how the multiple accountability
frameworks that employees face should be navigated, and most especially about
how the hard choices should be made respecting priorities. Stakeholder theory
covers the field of inquiry interested in understanding who really counts, and what
mechanisms are most helpful in remaining responsive to them (Freeman, 1984).
When conducting a stakeholder analysis, the lens is still complex regarding the
factors that matter (e.g., power, legitimacy, urgency) but the practice is sufficiently
advanced to provide helpful decision-making tools to the manager (Mitchell,
Agle, & Wood, 1997).
Organizational Theories
As this chapter has argued so far, human resource managers who are focused on
public accountability have their hands full addressing the legal incentives and
disincentives to nonprofit work, sometimes with limited empirical evidence to
guide them. Fortunately, however, the internal management of the nonprofit
enterprise can rely on a much older and broader theoretical understanding of the
work environment. The second section of this chapter introduces a selection of
organizational theories that explain some of the key dynamics of workplace
behavior.
The term itself belies the fact that organizational theories have a keen interest
in human and not simply organizational behavior (see, for example, Nahavandi
et al., 2014). The eponymous Hawthorne Studies of the 1930s were, after all,
studies of the effect of workplace environments on the productivity of individual
employees. And because of their well-known finding that worker productivity
depends on much more than the controlled work environment, these early
studies helped researchers to understand how complex and unpredictable the
study of employee motivation could be.
Most of the functional stages of strategic human resource management, after
all, are about finding, motivating, training, evaluating, and retaining good people.
On days that don’t go so well in the HR office, managers are disciplining, firing,
and resolving conflicts. The modern view grounds organizational theories in
many social science disciplines that excel at explaining human behavior, such as
psychology, political science, sociology, anthropology, and communications
(Denhardt et al., 2013; Rainey, 2009). These fields, in turn, have created distinct
sub-disciplines that a scholar or practitioner of nonprofit HRM would be wise
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Beth Gazley
to explore further (the well-developed discipline of sociology has more than 40

subfields, psychology has more than 20, and many have applications to HRM).
Comparing their value to his field of economics, Meier (2006) comments that it
is somewhat of an understatement that economic theories offer a limited ability
to predict pro-social behavior since the “institutional environment might significantly
interact with pro-social preferences” [emphasis added] to explain observed
variations in an individual’s behavior.
In social psychology, for example—the discipline closely related to the
Hawthorne Studies—we discover a range of theories (e.g., social cognition,
equity) helpful in explaining current nonprofit employee and volunteer behavior.
Chief among them is social role theory, which explains why individuals of
different sexes and gender identities pursue different jobs, volunteer at different
rates, make different ethical decisions, assume different workplace roles, and
donate money in different ways. The theory of pro-social behavior is one micro-
theory emerging from this field, and helps the HR manager to understand the
value in shaping incentives and workplace culture to attract individuals who are
strongly oriented toward public benefit missions (Eagly & Crowley, 1986).
Certain motivational theories are also especially useful in explaining why
people are attracted to nonprofit work, as well as why they stay. This knowledge
is important, given that the more complex economic and legal incentives of
nonprofit work, layered on top of an enormously diverse field of nonprofit
industries, mean that assumptions about nonprofit employees’ intentions can
easily be misconstrued. For example, a popular perception is that nonprofit
employees are motivated by “mission, not money.” This statement not only
grossly over-generalizes a complex sector, it is wrong since most employees are
motivated by both goals at the same time (Gazley, 2016). Theuvsen (2004,
p. 125) observes that “most [employee] actions are . . . extrinsically as well as
intrinsically motivated.” Employees perform their work for both psychological
and self-determined needs (intrinsic) and for instrumental reasons and externally
derived rewards (extrinsic) (Ryan & Deci, 2000). An over-emphasis on the
extrinsic rewards of a position, such as pay and benefits, praise, even the corner
office, can cause an employer to overlook important intrinsic benefits inherent
to nonprofit work, such as the ability to produce work of social value, to serve
others, to improve the environment, and to effect change. But an over-emphasis
on the intrinsic nature of a job can lead to burnout and harm workplace morale
if it makes employees feel undervalued. The solution for most employers appears
to rest in good internal data collection to understand how to balance the benefits
package. For nonprofits specifically, however, the value in understanding how
to help employees achieve the personal benefits of a mission-driven job cannot
be overstated, given this is an area where nonprofit organizations may enjoy an
enormous competitive advantage.
Organizational theories are also strongly based on the discipline of sociology.
It has produced, for example, resource dependency theory, which has consistently
and predictably linked nonprofit organizational behavior to the expectations of
24
donors and other revenue sources (Grønbjerg, 1993). A seminal contribution to

organizational theory generally was made by sociologists DiMaggio and Powell
(1991) in the form of a group of neo-institutional theories that explain why
organizations do not always appear to behave in the same (assumedly rational)
manner within industries or subsectors. Rather, they adapt to mimetic, normative,
and coercive pressures unique to their individual circumstances. For example,
two similarly sized nonprofits with similar missions could end up creating very
different work environments due to differences in accreditation, certification, and
regulation (coercive isomorphism), differences in training, ethics, and rules
(normative isomorphism), and differences in the techniques they borrow from
their industry and others (mimetic isomorphism).
The application of neo-institutional theories to the accountability concerns
described above should be clear. Nonprofits are likely to look for the means of
responding to stakeholder demands from many places, and apply them in different
ways. Mitchell (2016) describes this impetus as a central “managerial logic” of
nonprofit decision-making, given the strong normative culture of the sector.
How to choose the right path remains an open question. For human resources
managers, it will seem tempting and time-saving to rely on “normative” practices
by looking for guidance from similar organizations (for example, borrowing
boilerplate policy documents or adopting generic job descriptions). However, by
doing so, a manager may lose opportunities to achieve workplace success based
on more evidentiary grounds, the “instrumentalist” side of the managerial mind.
Conclusion
Economic theories help to explain a basic fact: The existence of a third sector,
with distinct legal requirements in the United States, as in many other parts of
the world. These distinctions explain, in turn, why a book focused on nonprofit
human resource management has value. But as Anheier (2005, p. 148) has
observed, economic theories put the emphasis on rational action and simple rules,
so they benefit from being balanced with organizational theories that emphasize
sociological and cognitive processes to better capture the complex nature of
organizational and human action. When combining the two, HR managers are
better equipped to navigate both the blurry edges of the nonprofit sector and its
enormous internal diversity as they locate, recruit, motivate, and reward an
equally diverse nonprofit workforce. But they must also understand when
theoretical blurriness gives way to the nonprofit sector’s clear-cut legal distinctions,
whose legal responsibilities must in turn be communicated to employees.
Discussion Questions
1 How many professions can you identify that are exclusive to one sector?
2 Is it a misplaced assumption that nonprofit services are less “professional”
than those in other sectors?
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Beth Gazley
3 What examples of “philanthropic particularism” can you find in your

community? In addition to those discussed in this chapter, what are the
possible implications for HR management?
4 How many “stakeholders” can you identify who care about nonprofit
accountability and performance?
5 Think about a time when you preferred to take a certain role in the workplace
(at a meeting, on a team, etc.). Do you know why you chose the role? How
could social psychology explain your choice?
6 What would a nonprofit workplace look like if the HR office thought
workers were motivated by “mission, not money”?
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28
3
Trends in Nonprofit
Employment
John C. Ronquillo, Annie Miller, and Ida Drury
Introduction
Nonprofits face a variety of challenges that necessitate distinct labor and
management skills, including the ability to work with stakeholders in government
and the private sector, but also skills that accommodate the diverse industries in
which nonprofits operate. While many perceive the nonprofit sector to be
focused exclusively on the charitable sector, other industries, including energy
and technology, for example, are seeing expansion among their nonprofit
counterparts. Recent studies show the nonprofit sector employs the third largest
number of paid workers in United States, with almost 1.5 million nonprofit
organizations employing nearly 11 million people (Salamon, 2012; Salamon,
Sokolowski & Geller 2012). The industry produces revenue that totals over $2
trillion and constitutes 5.4% of the U.S. gross domestic product (GDP) (McKeever,
2015; Nonprofit HR, 2016). As the nonprofit sector has expanded in size and
scope over the past several decades, so has its share in the labor market.
Diversification of the sector merits ongoing monitoring of how employment
and human resource management (HRM) is evolving. This sector is often mis-
understood, yet is dynamic in its composition and scope of work as well as
providing a sufficient number of challenges with regard to high-quality data
collection practices across the sector, leading to difficulties in analyzing
employment trends. One such challenge includes the diversity of organizations
included in this sector, from very small, community-based agencies to large,
internationally recognized agencies with a global scope. As such, the HRM needs
will vary greatly and may have very different implications for each type of
employer. This chapter provides some insights on current issues and trends in
nonprofit employment.
29
John C. Ronquillo et al.
Assessing the State of the Sector: Size and Employment

The Bureau of Labor Statistics has compiled data on nonprofits in past years as
part of its Research Data on the Nonprofit Sector series. These data contain
observations on employment, wages, and establishment figures for nonprofit
organizations, and illuminate the sector’s economic footprint. However, there
are certain limitations of these data, including a fairly limited time series (2007–
2012) and no data updates since 2012. The data include observations on only
501(c)3 public charities, and are pulled based on the existence of unemployment
insurance. As these data come from states and territories with different laws
and rules governing this insurance, researchers had to rely on varied data cleaning
by jurisdiction. However, what currently exists provides insight on where the
charitable sector has grown, especially in the years immediately preceding and
following the economic recession of the late 2000s (Bureau of Labor Statistics,
2015).
Figure 3.1 details the number of registered 501(c)(3) charitable organizations
from the year 2007 to 2012. In 2007, just over 1.02 million organizations were
registered, steadily climbing to 1.16 million in 2010, then dropping to 1.06
million in 2011. This drop is reflective of the 279,599 organizations across the
sector that lost their tax-exempt status with the Internal Revenue Service over
the preceding three years (Blackwood & Roeger, 2011; Cyr, 2011). While that
number may seem alarmingly high, it is likely most of those nonprofits had
already ceased operations prior to their tax-exempt revocation. Blackwood and
Roeger (2011) attribute these revocations largely to the implementation of the
Pension Protection Act of 2006, which mandated nonprofits with less than
$25,000 in annual gross receipts to file the “e-Postcard,” or Form 990-N. The
number of revocations represented 16% of nonprofits nationwide, with human
Figure 3.1 Number of registered 501(c)(3) organizations
30
Trends in Nonprofit Employment
Figure 3.2 Average annual employment in 501(c)(3) organizations (millions)
service organizations seeing the largest share, followed by public and societal
benefit organizations and arts organizations as the next largest groups (Blackwood
& Roeger, 2011).
Despite the number of nonprofit organizations that lost their tax-exempt
status, the average annual employment (at least in 501(c)(3) organizations)
continued to climb steadily from 2007 to 2012. In 2007, there were just over
10.5 million people employed in 501(c)(3) organizations, climbing to 10.8
million in 2008, 10.9 million in 2009, and 11.1 million in 2010 (Figure 3.2).
One might assume with a drop in the number of registered 501(c)(3) organizations
in 2011, the average annual employment would also drop. Employment grew,
however, to 11.2 million in 2011, and further to 11.4 million in 2012, suggesting
steady job creation over that span of six years. Regional employment, of course,
has risen concomitantly with the national numbers between 2007 and 2012, as
well, as seen in Figure 3.3. Middle Atlantic states (New York, New Jersey, and
Pennsylvania) had the largest share of employees in the nonprofit sector, followed
by the East North Central (Illinois, Indiana, Michigan, Ohio, and Wisconsin),
South Atlantic (Delaware, Florida, Georgia, Maryland, North Carolina, South
Carolina, Virginia, Washington, D.C., and West Virginia), and Pacific (Alaska,
California, Hawaii, Oregon, and Washington) regions, respectively.
Current Trends and Challenges in Nonprofit Employment

Four key areas present challenges for human resources managers within the
nonprofit sector. Market pressures, retention, talent acquisition, and workforce
needs remain prevalent issues to consider when projecting and exploring trends
in nonprofit employment. This section provides an overview of each of these
four challenge areas and connects each to key trends emerging in nonprofit sector
human resources.
31
Figure 3.3 Nonprofit employment by census region (millions)
Shrinking government budgets appear to increase financial pressures on non-

profits while the same decreases in public spending require greater services to be
provided from the nonprofit sector. The additional pressure of social enterprise
(for-profit) agencies recruiting and retaining employees who historically may
have opted for mission-driven nonprofit employment creates additional market
pressure challenges for the nonprofit sector.
Retention, the ability of nonprofit organizations to retain high-quality, com-
petent, and well-trained employees, is generally considered to be correlated with
the personal connection to the mission of the organization, how well the employee
fits with the organizational culture, and effective supervision (Brown & Yoshioka,
2003; Rycraft, 1994). Alongside retention, as agencies grow or when employees
inevitably leave, talent acquisition of qualified staff rises to the forefront of chal-
lenges for human resources. Current trends in sector growth play into this need,
as well as the associated challenges of diversity and inclusiveness for agency talent.
Workforce needs include the skills, supply, demand, and overall ‘goodness’ of
fit in employment across the nonprofit sector. Several of the trends identified
below suggest a rise in skills that few nonprofit or social science bachelor’s or
master’s level programs appear to be meeting. Specifically, quantitative and quali-
tative skills are requirements for many jobs in this sector and will be a workforce
need with potentially low supply. This will likely drive up the cost to employ
methods-trained employees and increasing competition across the marketplace.
Market Pressures
Nonprofit organizations face two simultaneous market-based trends that have a
direct impact on HRM. As a result of the new public management movement
32
(Hood, 1995), many government agencies have reduced or changed the nature
of public goods. Fundamentally this reduction in grant making and funding for
social services has increased the demand for nonprofit services.
Additionally, the rise of social enterprise organizations creeping into the third
sector space primarily reserved for nonprofits challenges nonprofits in new ways
that have direct impacts on HRM (Dees, 1998; Defourny & Nyssens, 2007;
Kerlin, 2006). This shift to a market-driven focus may challenge important values
such as equitable access to public goods, the democratized nature of service
provision networks, or the overall goal of strengthening civil society as an
important externality of third sector organizations (Dart, 2004; Eikenberry &
Kluver, 2004). The pressure from these organizations results in talented, entre-
preneurial potential employees leaving nonprofits to be compensated at levels
similar to for-profit organizations while attracting individuals who desire mission-
driven or socially beneficial workplaces. Some evidence suggests that as a result
of the rise of charitable giving following the “great recession” in the United
States, there may be increases in staff sizes and perhaps the creation of new posi-
tions, bolstering the nonprofit sector as a viable area of employment (Nonprofit
HR, 2016). The Nonprofit HR survey reports approximately 57% of nonprofits
that responded (n = 443) expect to create new positions in the very near future.
Organizations were assessed based on the size of their respective annual operating
budgets: Over 50% of small ($0–$5 million), medium ($5.1–$15 million), and
large ($15.1 million and above). However, this survey does not distinguish clearly
between social enterprise and nonprofits, with the possible new positions in the
very near future created by the nonprofits.
Turnover and Retention

Alongside sector growth, nonprofit rates of turnover remain constant, between
17–19%. Turnover as a whole can be divided into three groups: voluntary,
involuntary, or retirement (Selden & Moynihan, 2000). According to the 2016
Nonprofit Employment Practices Survey™, involuntary turnover (where an
employee is terminated or laid off) remains low, while voluntary turnover (where
an employee quits) has remained between 11 and 13% (Nonprofit HR, 2016).
The costs of turnover are well known to human resources in many sectors,
including the need for recruitment and retraining, as well as additional strain on
employees remaining with the organization who must take on the work of the
vacant position. In nonprofits, direct service employees are the hardest to retain
and have the highest rates of turnover. This staff churn can directly impact both
the continuity and quality of care for service recipients, which in turn may
negatively influence the desired service outcomes (Chester, Hughes, & Challis,
2014; Nonprofit HR, 2016). Selden and Sowa (2015) specifically examine
voluntary turnover and the deleterious effects it can have on nonprofit human
service organizations, including reductions in performance and threats to overall
sustainability.
33
The reasons for turnover in the public sector may be generally grouped into
three areas: environmental, individual, and organizational (Selden & Moynihan,
2000). Similarly, a meta-analysis of human services turnover (which may closely
mirror or represent direct service turnover in nonprofits) pointed to the
relationship between burnout and stress and increases in employee turnover
intent, whereas social support, fairness in management practices, and job
satisfaction were related to decreases in turnover intent and actual turnover
(Barak, Nissly, & Levin, 2001). Retention strategies must target these areas
specifically. Little can be done about environmental effects (such as a bustling
economy that encourages mobility of employees), but opportunities for human
resources targeting individual experiences and organizational realities may create
promise for nonprofit sector employee retention. As an example, high perform-
ance work practices including effective onboarding practices, active leadership
succession programs, high-performance compensation programs, and solid
employee relations are likely to reduce voluntary turnover (Selden & Sowa,
2015). Researchers and practitioners seem to be acknowledging these turnover
antecedents more often, focusing on issues of professionalization and examining
individual needs through strategic human resource management (Akingbola,
2012), as well as talent development and empowerment of employees through a
“people first” approach (Carpenter & Qualls, 2015). Issues of turnover and
retention have also seen increasing coverage in the research literature through
topics such as mission attachment (Brown & Yoshioka, 2003; Kim & Lee, 2007),
and work-life balance and job choice motivation (Word & Park, 2015). Despite
the challenges of turnover and retention for nonprofit stability and the extant
empirical research on solutions, 84% of respondents to the 2016 Nonprofit
Employment Practices Survey™ report they do not have a formal retention
strategy, and most (76%) will either not create a formal retention strategy, or are
unsure of whether or not that is something they will undertake in the future
(Nonprofit HR, 2016).
While employees may have varying levels of discretion and authority in
nonprofits, executive directors provide leadership and report to organizations’
boards of directors. They also may be partially or solely in charge of fundraising,
depending on the size of the nonprofit. This is a unique position in a nonprofit
agency and warrants specific attention, particularly when discussing retention and
turnover. Turnover intent for this group has been consistently monitored,
and in a 2011 survey it was estimated that 67% of current nonprofit executive
directors would leave their positions in the subsequent five years (Cornelius,
Moyers, & Bell, 2011). The transition at this pinnacle may be fraught with many
issues, such as organizational instability and disruption in funding streams due to
relationship loss (Stewart, 2016). In smaller nonprofits, the transition may
necessitate a period of time where the board of directors must take a more active
role in daily operations. The importance of succession planning is well understood
in the sector, but not well practiced, according to disclosures from boards and
executives alike (Froelich, McKee, & Rathge, 2011; Nonprofit HR, 2016).
34
In the interest of retaining executives, the characteristics of environment,

individuals, and organizations are again at play. According to a survey of nonprofit
executive directors by Peters and Wolfred in 2001, controlling for the size of
organizations, fundraising and low compensation were the most stressful factors
for small nonprofits with an annual budget of less than $499,999. Mid-sized
nonprofits with a budget size between $500,000 and $999,999 experienced HR
management as the most challenging, while the large agencies reported a high
level of stress and lack of support at the top. They concluded managing these
stressors could decrease executive turnover rates. Further, when executives are
replaced in nonprofits, they come from outside the organization at a rate of
almost 3 to 1 (Nonprofit HR, 2016). Based on a survey of emerging leaders in
the sector, potential executives fear lack of development, mentorship, and support
from incumbent leaders (Cornelius, Corvington, & Ruesga, 2008). Legitimately,
networks in the organization can play a strong role in retention (Moynihan &
Pandey, 2007), making it imperative for executive tenure to develop this network
early and not watch relationships leave with the old director.
Diverse and Inclusive Talent Acquisition

When turnover occurs, regardless of magnitude, recruiting qualified, diverse, and
talented staff requires resources. Currently, the demonstrated expansion of jobs in
the nonprofit sector and the expected continued growth create a clear market
demand for job seekers. At the same time, turnover rates persist, even in times of
growth. Looking to the Nonprofit Employment Practices Survey™, 33%
of respondents reported the most difficult challenge was hiring qualified staff
under the current budget constraints. This challenge has remained constant since
2012, whereas the 23% who report finding qualified staff as the biggest challenge
has grown since 2012 (Nonprofit HR, 2016). Some 73% of small nonprofits
report they do not have a formal talent acquisition strategy, while 49% of medium
nonprofits, and 41% of large nonprofits report the same (Nonprofit HR, 2016).
Some 91% of small nonprofits report they do not have a formal talent acquisition
budget, while 64% of medium organizations and 59% of large organizations report
the same. Fifty-six percent of those surveyed state they have no plans to change
how they recruit talent, while 20% report they are considering making changes,
and 14% affirm they will be making changes; and 75% of the nonprofits surveyed
state they do not have an employment branding strategy (Nonprofit HR, 2016).
Nonprofits have directed a fair amount of attention to diversity and inclusion
efforts in recent years. It is necessary to distinguish different types of goal related
to diversity and hiring strategies within the nonprofit, as different organizations
likely to seek different results from hiring practices. According to Kossek, Lobel,
and Brown (2006), there are three key considerations in regard to understanding
strategies for diverse hiring practices: (1) organizations may seek to increase the
number of individuals hired who represent marginalized, underrepresented, or
protected class identities; (2) organizations may seek specific types of outcome as
35
a result of diversity or inclusion hiring practices (i.e. increase number of Spanish-

speaking employees to more effectively serve the client population); or
(3) organizations may recognize that one level of the organization has a great
deal of diversity but at the mid and upper levels of management, for example, a
lack of diversity may occur. This section outlines implications for hiring and
retention challenges that may arise as a result of trends in the three different types
of organizational goals for inclusion and diversity efforts. Many different types of
diversity are considered below.
A generational difference among employees has been and continues to be of
interest to researchers and practitioners alike (Kunreuther, 2003; McGinnis,
2011a; 2011b). The Nonprofit Employment Practices Survey™ (2016) highlights
the struggle of retaining staff under the age of 30 as a challenge, noting these staff
want to engage in meaningful work, and tend to seek more responsibility and
leadership. They tend to look for cultures focused on innovation, as many per-
ceive the nonprofit sector to be more innovative, or at least have a culture that
values innovation (Ronquillo, 2013). As Millennials surpass Generation X as the
largest generation in the workforce, along with steadily decreasing numbers of
Baby Boomers, nonprofits will need to find ways to better incorporate Millennials
into the workplace. As is the case with many nonprofit organizations, resource
dependency is a factor, and one that is often tied to the ability to adequately
compensate future generations, and Millennials appear to prefer higher compen-
sation over other types of benefit when considering workplace choices (McGinnis
Johnson & Ng, 2015). The values held by this emerging generation in the work-
force will require nonprofit leaders to examine hiring practices that allow
Millennials to act autonomously, provide opportunity for leadership and personal
development as a part of compensation packages, and find innovative ways to
balance work experience and Millennial zeal in mid and upper management roles
and responsibilities.
The 2014 national survey of Board Source of 846 nonprofit chief executives
found more than 80% of leadership positions including chairs, board members,
and CEOs are white, which is higher than the 64% of White Americans reported
in the 2010 U.S. census. The responding organizations show an even greater
gender gap when controlling for the size: more than half of females are in leader
positions in small and medium-sized agencies while only 37% of large agencies
account for female leaders. Ruhm and Borkoski’s (2003) study demonstrated that
females had a 70% share of employment in nonprofit sector jobs, compared to
about 46% of jobs across all sectors. Conversely, women encounter the glass
ceiling even in this sector, with fewer women executive directors and board
members (Pynes, 2000). This gap is not accounted for by education or experience
levels among women (Peters & Wolfred, 2001).
Compensation and Equity

Compensation of both employees and executives in the nonprofit sector is
complicated by both the financial constraints facing many nonprofit agencies as
36
well as the public perception tied to tax-exempt status. Compensation is often

linked to the available labor supply and demand paradigms, and nonprofits
often serve areas of “market failure,” where the goods and services offered are not
lucrative for the private sector, or “government failure,” where governments
cannot publicly provide these goods and services in an efficient or cost-effective
manner (Salamon & Anahier, 1998). Traditionally, the nonprofit sector has also
been characterized by value and mission-driven work, where the “spoils” are
delivered in kind, not in financial gain. As sectoral boundaries continue to be
blurred, and as organizations of differing sectors continue to partner, nonprofits
often find themselves in an increasingly competitive labor market, and in order
to remain competitive with public and private sectors, the nonprofit sector must
offer incentives to attract potential employees and provide advantages over
competitors (Ruhm & Borkoski, 2003; Twombly, 2009). The need to remain
fiscally salient coupled with the need to recruit and retain talented employees pulls
nonprofits from two sides in a manner that Kellner, Townsend, and Wilkinson
(2016) observed as “the balance between the mission and the margin” (p. 1).
Previous studies on nonprofit compensation have varied in results over the
past decade, making generalized assumptions about pay differentials in the public
and private sectors difficult to ascertain. A prevailing thought among many is that
individuals are attracted to work in the nonprofit sector for altruistic reasons, and
that individuals will forsake higher wages and benefits for the sake of creating
impact (Handy & Katz, 1998; Leete, 2006; Tschirhart et al., 2008; Word, 2011;
Word & Park, 2015). For example, Johnston and Rudney (1987) found the
average annual earnings of nonprofit workers are more than 20% less than those
employed in for-profit companies. A more recent study by Leete (2001) demons-
trated there was no wage differential after controlling for industry and occupation.
The setting of hospitals, as an example, offers a look into similar industries and
occupations across the nonprofit and for-profit divide, as both are relatively
common. Ruhm and Borkoski (2003) demonstrated that nonprofit weekly
earnings were an average of 2.7% lower than for-profit counterparts, though also
showing variation within industry and occupation. Social services, hospitals, and
other health services, along with education and nursing or personal care facilities,
were all better compensated in the nonprofit sector than in the for-profit sector.
In terms of occupation, those who worked in nonprofit health and education
were likely to have a higher weekly take-home than for-profit counterparts,
while administrative support, other management, and non-health service workers
took home more in the for-profit sector (Ruhm & Borkoski, 2003). This
discrepancy may be associated with altruistic value prescribed more to direct care
as opposed to indirect service (Ruhm & Borkoski, 2003).
Apart from sectoral distinctions in pay, there is also the issue of compensation
equity within the nonprofit sector when it comes to protected classes such as sex,
gender, education, and race or ethnicity. The nonprofit sector tends to be
predominantly female in terms of gender identity, and yet questions still emerge
about pay equity, as in other sectors (see, for example, Faulk et al., 2012; Mesch
37
and Rooney, 2008). The salary gender pay gap is 6% for CEOs in organizations
with an annual budget size of less than $250,000, while nonprofits with budgets
of $2.5 million to $5 million report a gender gap of 23% (GuideStar, 2015).
These data indicate a gendered pay gap persists in the nonprofit sector, and while
some analyses find this gap lower than in the for-profit sector, recent research
argues this may be an artifact of greater numbers of traditionally female-occupied
positions available in nonprofits and in industries where nonprofits have a greater
share of the market than for-profits (Faulk et al., 2012). With regard to race
and ethnicity, the representation of Whites is similar when examining all jobs
(86% White) versus nonprofit jobs (87% White), while Blacks and Hispanics are
largely underrepresented across the board. Blacks had both a 10% share in
employment across all sectors and in nonprofit jobs, while Hispanics had a 9%
share in employment across all jobs, and a 4% share of employment in nonprofit
jobs (Ruhm & Borkoski, 2003). Beyond the issues of wage equity among varying
populations who work in the nonprofit sector, other dynamics factor into the
debate, as well. Resource availability and the fiscal health of nonprofit organi-
zations will always be considerations, and more research on the relationship
between compensation and organizational financial performance is emerging
(see Grasse et al., 2014; Yan & Sloan, 2016).
In addition to the general discourse on wages paid to employees in the non-
profit sector is a focus on the compensation of nonprofit executives. Oster (1998)
found that organizational size is a strong predictor of compensation, but also that
the size effect varies considerably within the sector. Like other studies that touch
on this topic, the type of organization (e.g. hospitals, educational institutions,
and foundations) is a significant factor (Ruhm & Borkoski, 2003). Grasse et al.
(2014) found a bit of variation based on their hypotheses and industry, when it
comes to executive compensation. Across all nonprofits, however, they found
support for executive compensation being positively associated with organiza-
tional efficiency, support from nongovernmental grant-making organizations,
total expenditures, total number of employees, and total number of expert staff
or management employees (Grasse et al., 2014).
While the public at large often misunderstands certain aspects of the nonprofit
sector, executive compensation is an issue that can often find itself in the spotlight,
as press attention has given more exposure to it in recent years. One example
of such controversy is the Wounded Warrior Project, which made national news
for elaborate meetings, expensive marketing strategies, and higher than average
executive compensation. Organization director Steve Natuzzi was paid $473,000
in 2014 (Phillips, 2016). This revelation, along with other, relatively large non-
profit executive salaries, has been the source of intense public backlash, despite
services provided by these nonprofits. This salary is an outlier, of course. For a
more representative illustration of nonprofit compensation levels, see Figure 3.4.
Nonetheless, public demand for financial constraint may force some nonprofits
to find other methods of reward and non-monetary compensation in order to
adequately retain talent (Akingbola, 2012; Selden & Sowa, 2015).
38
Figure 3.4 Mean executive compensation level by region and budget size
Conclusion
The nonprofit sector comprises an increasingly dynamic range of industries and
occupations that has grown significantly in the past several decades. In short, it is
a major segment of the economy and employs a substantial supply of labor that is
seemingly poised to grow more in the next decade. The evolving dynamics will
require thoughtful and serious treatment by all those concerned with and interested
in the changing state of the sector. Opportunities abound for assessment and
improvement, along with continued professionalization of various practices
in nonprofit human resources management (HRM). The state of employment in
nonprofit organizations appears to be sound, though much more attention should
be devoted to specific areas, of which only a few are outlined here. Perennial
challenges, such as turnover and retention, talent acquisition, diversity issues, and
compensation will persist, however, as will the pursuit of altruism and the drive
that comes from mission. Serious treatment of the sector, its human resource and
employment practices, and the research that emanates from it can only improve
and continue to improve the quality and value of nonprofit employment over time.
1 Given the knowledge that nonprofit sector salaries are often lower than
government or private sector counterparts, what could be considered as
additional motivating factors for employment in the nonprofit sector?
2 In lieu of monetary compensation, what are some ways that nonprofit
organizations can attract and retain employees? How might these differ by
industry or occupation?
3 While the nonprofit sector as a whole is viewed as increasingly diverse, the
backgrounds of many nonprofit CEOs are considerably less so. In what ways
can leadership in the nonprofit sector become more diversified?
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4
Legal Aspects of Nonprofit
Employment
Introduction
Employment law as applied to nonprofit organizations is not easily summarized.
It has local, state, and federal components, with overlapping requirements that
can appear contradictory and impossibly complex. To illustrate this complexity,
consider the federal minimum wage law. The Fair Labor Standards Act sets the
minimum hourly wage for certain employees at $7.25. This may be the final
word in your state. But more likely, your state imposes a higher minimum and
your city or locality may impose a separate minimum wage for certain industries.
The only way to be certain is to ensure familiarity with federal, state, and local
statutes. This simple example is repeated across the employment law spectrum,
creating an increasingly intricate regime with numerous interactions among
federal, state, and local laws that need to be followed by nonprofits.
In addition to its complexity, employment law is not static. Laws are amended,
new laws are adopted, and courts and agencies issue new interpretations of
employment regulations and laws on a near-constant basis. Take, for example,
the distinction between employees and independent contractors (a discussion of
which appears below). Due to cost concerns, many nonprofit employers attempt
to classify their workers as independent contractors. However, recent administrat-
ive guidance from the U.S. Department of Labor details a new emphasis on this
distinction and warns misclassification of workers as independent contractors will
be more strictly policed. Employment law constantly evolves in this manner.
Given this state of affairs, it is virtually impossible for a single chapter to
incorporate everything a nonprofit organization will need to know in terms
of employment law. Indeed, a multi-volume treatise will not likely cover all
the nuances of a particular organization’s employment law needs. As such, this
44
Legal Aspects of Nonprofit Employment
chapter is not intended to replace the advice of an employment lawyer, and a

nonprofit organization is strongly encouraged to engage a lawyer to review its
organizational policies and procedures and ensure its legal compliance. Quite
simply, this chapter is no substitute for a seasoned legal professional’s expertise
and judgment.
There are, however, some universal steps a nonprofit organization can take
to mitigate its risk, regardless of its size, number of employees, or jurisdiction.
This chapter endeavors to cover these areas. By reviewing this chapter, a nonprofit
organization will know many areas of potential risk, have the tools to take
precautionary measures, and make the job of the organization’s employment
lawyer much easier (and hopefully cheaper).
Application of Employment Law on Nonprofits

Many nonprofits mistakenly think that charitable organizations are exempt from
employment laws. Perhaps this is because many organizations view compliance
with employment laws as, at best, a nuisance, and, at worst, a costly intrusion.
This is a reasonable assumption. After all, charitable organizations are exempt
from most taxes, many business licenses, and countless other local regulations. It
is therefore not a stretch to think that nonprofit organizations may be exempt
from employment laws. Unfortunately, this is simply not the case.
To understand why, recall that employment laws were put in place to protect
employees, not punish employers. This is perhaps best illustrated by a note in the
Occupational Safety and Health Act (OSHA). Congress passed OSHA to make
workplaces safer for employees. In discussing whether OSHA regulations should
apply to nonprofit organizations, the Act states that “any charitable or non-profit
organization which employs one or more employees is covered under [OSHA]
and is required to comply with its provisions” because “[t]he basic purpose of
[OSHA] is to improve working environments in the sense that they impair, or
could impair, the lives and health of employees.”
It is difficult to argue with this logic. Why shouldn’t an individual enjoy the
benefits of federal protections simply because his or her employer is a nonprofit
organization? Indeed, because employment law’s primary aim is to protect employ-
ees from poor treatment by employers, there is little room to argue exemption for
any entities.
Due to the differences among the states and localities, this chapter primarily
focuses on federal law. In a few cases, state law is consistent enough to be sum-
marized, and this chapter addresses such areas. However, this chapter cannot offer
a state-by-state catalog of employment law, and it is important for a nonprofit
organization to engage a lawyer familiar with the nonprofit’s jurisdiction-specific
legal requirements.
This chapter begins by discussing the hiring process, including how to classify
workers (i.e., as employees or independent contractors), before discussing
45
important practices to maintain at the beginning of the employment relation-

ship, including having detailed job descriptions, the importance of maintain-
ing an employee handbook, and the potential liability for damages caused by
workers. Next, this chapter discusses federal anti-discrimination laws, describing
the steps employers must take to avoid discrimination. This chapter then discusses
termination of employees and how organizations can avoid potential lawsuits
from terminated employees before discussing some best practices regarding how
to manage employees, including conducting regular employee performance
reviews.
Are We Hiring an Employee or an Independent Contractor?

Before discussing the process of actually hiring employees, it is important to
identify whether the person you are hiring is an employee or an independent con-
tractor. The distinction is important. If the individual is an independent contrac-
tor, the nonprofit will have fewer obligations and responsibilities regarding
the relationship. More specifically, if an individual is an employee, the employer
must withhold income, Social Security, and Medicare taxes as well as pay
unemployment taxes (“Independent Contractor (Self-Employed) or Employee?,”
n.d.). None of this is required for an organization hiring an independent
contractor.
In addition to taxes, the employee-independent contractor classification also
carries important implications regarding potential liability. Generally speaking,
an organization is liable if an employee willfully or negligently causes harm
while acting within the scope of their employment. In other words, if you hire
an employee to drive a delivery truck and the employee negligently causes an
accident during a delivery, your organization may be responsible for the damages.
This concept is known as vicarious liability, and it does not apply to independent
contractors.
Thus, it is reasonable to expect organizations to do all they can to classify
their workers as independent contractors. Not only does an organization avoid
potential vicarious liability, but if an organization does not have to pay and
withhold taxes, the organization also stands to save as much as 40% on a would-be
employee’s overhead costs (Harris, 2010). However, a nonprofit may not simply
declare that an individual is an independent contractor in order to lighten its
potential liability. Rather, the determination is based upon the details of the
relationship.
An organization must ignore the obvious advantages of the independent
contractor classification and honestly engage in the classification process. This is
because an incorrect determination may result in significant fines and penalties
imposed by both the state and the Internal Revenue Service. Further, regulating
agencies are paying closer attention to this distinction. As noted in the introductory
section to this chapter, the U.S. Department of Labor (DOL) has made
misclassification of workers an enforcement priority. In an official statement, a
46
DOL administrator emphasized that not only does misclassification rob employees
of “important workplace protections,” but it also “results in lower tax revenue
for government and an uneven playing field for employers who properly classify
workers” (Weil, 2015).
Employees vs. Independent Contractors: How to Make the

Determination
Given the potential consequences of misclassification, one might reasonably
assume there is a clear and bright-line rule to make the appropriate employee-
independent contractor determination. Unfortunately, this is not the case. Without
any obvious self-awareness, the IRS warns that “[i]t is critical [to] correctly deter-
mine whether the individuals providing services are employees or independent
contractors,” before noting that “[t]here is no ‘magic’ or set number of factors
that ‘makes’ the worker an employee or an independent contractor, and no one
factor stands alone in making this determination” (Weil, 2015, p.5). As if that
were not confusing enough, the IRS continues to note that “factors which are
relevant in one situation may not be relevant in another” (Weil, 2015, p.5).
Thus, nonprofits must engage in a detailed investigation to determine if an
individual providing services is properly classified as an independent contractor
or an employee. Traditionally, the determination turned on the amount of control
the nonprofit had over the individual: the more control the nonprofit enjoyed
over the worker, the more likely the worker should be classified as an employee.
This common law control test, however, is no longer the determinative factor.
Rather, it serves as a single factor in a six-factor test. This test is known as the
“economic realities” test, and includes the following factors:
• The extent to which the work performed is an integral part of the employer’s business.
Determining the precise activities that constitute an “integral part” of the
nonprofit’s activities is not clear. Case law provides some examples, with
courts finding that cake decorators are integral to the business of selling
customized cakes1 and pickle pickers are integral to the pickle business.2
Suffice it to say that if a worker’s contributions are integral to an organization’s
operations, this factor suggests that the worker ought to be classified as an
employee.
• The worker’s opportunity for profit or loss depends on the worker’s managerial skill.
This factor may be more simply stated as the ability of the worker to make
decisions that affect his or her bottom line. If an individual has the autonomy
to exercise managerial decision-making that results in savings realized by
the worker, then this factor weighs in favor of an independent contractor
classification. As an example, imagine two grant writers, Anne and Bob.
Anne prepares grant applications as assigned by the nonprofit, does not
advertise her services, and does not solicit additional clients. Bob prepares
grant applications for clients that he secured through advertising and direct
47
solicitation. For each such client, Bob negotiates a contract, decides which
jobs to perform, when to perform them, and whether or not to hire
additional workers. Anne’s lack of managerial skill suggests that she is an
employee, while Bob’s exercise of managerial skill directly affects his
opportunity for profit and loss and suggests that he is an independent
contractor. Please note that merely working more hours to make more
money does not constitute exercise of “managerial” skill.
• The extent of the relative investments of the employer and the worker. To be
considered an independent contractor, a worker should make some invest-
ment in order to prove that the worker is engaged in an independent busi-
ness. This coincides with the previous factor: an independent investment
suggests the possibility of realizing profit and loss based on that investment.
• Whether the work performed requires special skills and initiative. On its face, this
factor is misleading. The DOL is not interested in the technical skills of the
worker in determining the classification of the worker. For example, a highly
skilled engineer may be properly classified as an employee while a low-skilled
janitor may be properly classified as an independent contractor. Rather than
technical skills, this factor focuses on the worker’s “business skills, judgment,
and initiative” (Weil, 2015, p. 10). To illustrate this, the DOL describes a
“highly skilled carpenter” who does not make any independent judgments
at the construction site with respect to work sequence, materials necessary,
or securing additional jobs. In other words, the carpenter is “simply provid-
ing his skilled labor” but is not “demonstrating the skill and initiative of
an independent contractor” (Weil, 2015, p. 10). In this case, the carpenter is
properly classified as an employee.
• The permanency of the relationship. The more permanent or indefinite the work
is, the more likely that the worker will be deemed an employee. For this
factor, it is important to note that permanency does not necessarily mean
forever; If an employee accepts a job and quits after one week, that relation-
ship may still be considered permanent under this factor. Rather than actual
time, this factor is more concerned about the nature of the work. The
prototypical independent contractor works on a project-by-project basis,
skipping from employer to employer. Thus, a person who performs sporadic
work for the same employer may be considered an employee under this
factor. As an example, the DOL describes an editor who works for the
same publishing house for several years, following the publishing house’s
instructions and editing books provided by the publishing house. Even if
the editor’s work is sporadic, “[t]his scenario indicates a permanence to the
relationship between the editor and the publishing house that is indicative
of an employment relationship” (Weil, 2015, p. 13).
• The degree of control exercised or retained by the employer. The final factor is the
traditional common law question of the amount of control the hiring
organization has over the worker. If the control of the hiring organization
is at a level such that the worker can no longer be considered an independent
48
businessperson, then this factor weighs in favor of an employee classification

(Weil, 2015, pp. 13–14).
Predictably, the DOL’s guidance caused quite a stir, with many commentators
noting these factors skew toward classification as employees rather than independ-
ent contractors. Indeed, the DOL admitted as much in its guidance by stating
that “[i]n sum, most workers are employees” (Weil, 2015, p. 15). The key to the
classification analysis is to follow the DOL’s instructions that “each factor should
be considered in light of the ultimate determination of whether the worker is really
in business for him or herself (and this is an independent contractor) or is eco-
nomically dependent on the employer (and this is its employee)” (Weil, 2015,
p. 15). As with all areas of employment law, an organization is urged to consult
with an experienced attorney to make the employee-independent contractor
classification.
Crafting Job Descriptions

Having an adequate job description is a remarkably important step that many
nonprofits overlook. A job description is not a legal requirement, but it can be
an invaluable tool to prevent potential future liability. A proper job description
may include the following: job title and salary range; where the work will be
performed and expected hours; how the position fits within the organization’s
hierarchy (i.e., to whom the individual reports and who the individual supervises);
a description of the job’s essential functions (e.g., driving, lifting certain weight,
standing for certain periods of time, etc.); required credentials and other pre-
requisites (e.g., experience, education, skills, etc.); and a statement on how the
job fits into the organization’s mission.
An adequate job description is important because it may help the organization
avoid liability. Without a detailed job description, a nonprofit will not have
clearly detailed minimum qualifications for a particular job. Such minimum
qualifications may be necessary if an applicant claims he or she did not receive
a job offer based upon a discriminatory reason. To illustrate the importance of a
job description, imagine the following scenarios:
• A job description describes a certain physical activity as a requirement

for the position. An applicant with a disability is not hired for a position
because the applicant would not be able to engage in the activity, even with
reasonable accommodation. Without the job description, the decision not
to hire might be construed as an impermissible discrimination based upon
the applicant’s disability.
• A job description indicates a particular credential required for the position. A
female applicant is not hired because she lacks the required credential. The
applicant sues, claiming she was not hired solely because of her gender.
Because the job description includes a reference to the required credential,
the employer has a solid defense against this discrimination claim.
49
As these examples illustrate, a well-crafted job description may prove to be the

best defense an organization has against a claim of discrimination in the hiring
process.
Employee Handbook
Similar to the job description, there is no legal requirement for a nonprofit
organization to have an employee handbook. However, a nonprofit should
strongly consider having and following an updated employee handbook. From a
practical perspective, it is an efficient way to communicate expectations and
workplace policies to your employees in an efficient and consistent manner.
But it also can help mitigate potential liability. It is not an exaggeration to say
that the employee handbook is the first place a lawyer will look to defend an
employment-related claim.
One of the most important things to include in an employee handbook is clear
language stating the employment is at-will. Even though at-will employment is
the default in most states, this default status can be frustrated if the employer
enters into an employment contract or makes statements that provide an implied
contractual right of continued employment. Thus, it is important all documents
contain language that reinforces the at-will employment status and refrains from
language that contradicts such status. Such language should clearly indicate that
all employment contracts must be in writing and all employees are subject to
termination at any time for any reason. The employee handbook is an ideal place
to include such language. A sample statement follows, but it is important that an
attorney review your particular statement to ensure compliance with local laws.
Employment is on an at-will basis unless otherwise stated in a written

individual employment agreement signed by the Executive Director. This
means the employee or employer may terminate the employment relationship
at any time, for any reason or for no reason, and with or without prior notice.
No one has the authority to make any express or implied representations in
connection with, or in any way limit, an employee’s right to resign or the
employer’s right to terminate an employee at any time, for any reason or for
no reason, with or without prior notice. Nothing in this handbook creates
an employment agreement, express or implied, or any other agreement
between any employee and the employer. No statement, act, series of acts, or
pattern of conduct can change this at-will relationship.
(adapted from Kearney, 2014)
In addition to the statement regarding employment at-will, an employee manual

may contain one or more of the following:
• Holidays and vacation policies. Neither holidays nor vacation time is legally
required, however, similarly situated employees must be treated similarly.
50
• Drug, alcohol, and smoking policy. If an employee is expected to refrain from

certain activities, an organization should clearly detail the contours of this
expectation. In addition, recipients of federal grants in excess of $100,000
must comply with the Drug Free Workplace Act. This law, in part, requires
publication of the drug-free expectations and employee notification of the
policy. The employee manual represents a perfect means of complying with
such requirements. Please note that many states have instituted laws and
regulations relating to drugs and alcohol testing, so it is vital that an attorney
review your policies to ensure federal and state compliance.
• Disciplinary procedures. As noted in the termination section, the documentation
of disciplinary procedures is an effective way to defend against employment
litigation. An organization may want to include a consistently applied policy
that explains the organization’s disciplinary procedures. However, any such
procedures should be flexible. For example, although it is considered best
practice to apply progressive disciplinary measures that give employees
adequate notice of their inadequacies and an opportunity to remedy their
missteps (e.g., oral warning, followed by a written warning, followed by
suspension, followed by termination), it is best not to specifically require
such a progressive disciplinary policy. This is because it may serve to restrict
an employer from terminating an employee without strict adherence to the
progressive policy. Generally speaking, an entity should have the flexibility
to immediately terminate an employee in the event of egregious misconduct.
• Complaint procedures. An employee handbook ought to detail clear procedures
for employees to report any instance of workplace issues. Employees will
often be aware of employment issues long before the employer, and expedi-
ent notice of potential issues provides the employer with an opportunity to
properly address issues in a timely manner.
• Harassment policy. State and federal laws require certain employers to institute
a harassment policy. Thus, it is important for an organization to consult with
a lawyer to determine the proper means of complying with this requirement.
However, even if an employer is exempted from this requirement, it is a good
idea for all employers to institute a comprehensive harassment policy. The
policy will give employees notice that certain behaviors are not tolerated, and
provide the procedures for employees to report harassment.
• Social media. An employer may consider a robust social media policy to
inform employees of the appropriate means of representing the organization
on social media platforms. Such a policy might clearly prohibit an employee
from speaking for the organization on social media. In any case, social media
is a near-ubiquitous aspect of modern life, and a hiring organization would
be wise to consider its effect on the organization.
An employee handbook is only useful if you have proof that all the employees
have received it. Thus, it is important for every employee to sign a form
acknowledging receipt of the handbook.
51
Hiring and Retention

For nonprofits, it is important to make sure you take certain precautions in hiring
and retaining employees. Most organizations are aware that an employee will
serve as the organization’s de facto representative. This is true in a very practi-
cal sense, in that employees are often the face of the organization. They wear
the organization’s t-shirts, solicit donations for the organization, and carry out the
charitable works of the organization. But more importantly, the notion of
an employee as representative of the organization is true in a legal sense, and an
employer may be responsible for harm or damage committed by an employee. As
noted above, the doctrine of vicarious liability holds an employer liable for harm
and damages committed by an employee in the scope of his or her employment.
In addition to vicarious liability, an employer may be liable for an employee’s
damages under the theory of negligent hiring or negligent retention. This concept
stands for the proposition that an employer may be liable for an employee’s actions
if the employer knew or should have known the employee represented a threat
of harm to third parties. The difference between negligent hiring and negligent
retention is timing: if the employer’s failure occurred during the hiring process,
it is negligent hiring, and if the employer’s failure occurred after the employee is
engaged, it is negligent retention. In either case, a court will ask two questions:
(1) did the employer know or should the employer have known about the
employee’s potential risk?; and (2) would the employer have discovered the risk
through a reasonable investigation?
In many ways, the concepts of negligent hiring and negligent retention make
sense. Indeed, the examples of plaintiffs winning such cases are not surprising and
do not offend intuitive notions of justice. Although the standards vary from state
to state, the prevailing fact patterns are fairly consistent. A prototypical example
is an organization that provides childcare hiring a convicted child molester.
When such situations end poorly, it is not a surprise that courts find the hiring
organizations liable. The law simply asks a hiring organization to take reasonable
measures when hiring and retaining employees.
How to Protect Against Negligent Hiring and Negligent Retention

Claims
If one of your employees harms a third party, you should expect to be sued.
There is no mechanism to prevent those harmed from seeking compensation in
court. However, there are steps a hiring organization may take that will help
defend against a claim of negligent hiring or negligent retention. As the previous
section notes, a nonprofit must prove it acted in a reasonable manner in hiring
and retaining an employee. Acting reasonably involves two basic components:
screening and taking appropriate action.
To the first component, an organization should incorporate proper screening
mechanisms whenever an employee is hired. Such screening mechanisms must
52
be tailored to the employee’s job description (the importance of the job

description is discussed later in this chapter). For example, if a job description
includes significant driving duties, it is reasonable to expect an employer to
inquire into the employee’s driving history.
One word of warning on conducting the reasonable inquiry in the screening
process: many states have laws that govern the extent to which prospective
employers may inquire into an applicant’s criminal background. Thus, it is impor-
tant to have a lawyer familiar with your state’s laws review your proposed screen-
ing procedures. Further, federal law prohibits blanket discrimination against
applicants with criminal histories. Under Title VII of the Civil Rights Act
of 1964, an employer may not exclude an applicant due to his or her criminal
history unless there is a business necessity for the exclusion. In other words, you
cannot have a policy that refuses to hire any applicants simply because they have
any criminal history.
For the second component, it is imperative an employer act in a reasonable
manner as soon as it learns an employee may not be fit for a particular activity.
For example, if an employee’s job description involves driving duties and the
employer learns that the employee was recently cited for reckless driving,
the employer should respond appropriately. To ignore this information is to
endanger the organization. The following list details some specific steps that will
protect your nonprofit from negligent hiring and negligent retention claims:
• Institute job-specific policies to ensure that employees are properly screened. This may
include criminal background checks, confirming work history, and checking
professional references.
• Carefully document the screening process. If you are ultimately sued for negligent
hiring, you will need to provide proof you properly screened the employee
in the hiring process. If you are unable to prove you took such steps, then
you may be unable to properly establish a defense against a negligent hiring
claim.
• Supervise employees to ensure appropriate behavior. The threat of liability for
negligent hiring or retention stems not only from facts the employer knew,
but also facts the employer should have known. In other words, willful
ignorance will not protect you. If an employee repeatedly acts in a reckless
manner, the employer should know about this and take appropriate action.
Thus, it is important for the employer to institute proper monitoring
procedures to arm the employer with the knowledge of how an employee
is operating.
• Take immediate action upon receiving information that an employee engaged
in inappropriate activity. Once an employer knows an employee engaged in
inappropriate activity, it is vital the employer act immediately. To do
otherwise may be considered unreasonable and may expose the organization
to liability.
53
• Carefully document any investigation conducted into an employee’s activities. Again,

the inquiry in a negligent hiring or negligent retention action will be
whether or not the employer acted in a reasonable manner. One of the best
ways an employer can prove it acted reasonably is to produce a detailed and
thorough investigation into any inappropriate activity committed by an
employee. A carefully documented investigation will be the best defense
against a negligent retention claim.
Anti-Discrimination Laws
The previous sections detailed how vicarious liability, negligent hiring, and
negligent retention could result in liability for a hiring organization. It is there-
fore important to hire the right people. However, a nonprofit must be careful
that the search for the best employees is free from discrimination. The entire
hiring process, including the application form, the job interview, and any job
advertisement, must comply with anti-discrimination laws. However, this is not
as simple as it might seem. There is a comprehensive set of laws that prohibit
many forms of discrimination, including discrimination based on a number
of characteristics, and it behooves a hiring organization to be familiar with the
anti-discrimination legal regime.
Federal law prohibits certain organizations from using an applicant’s race,
color, sex, age, national origin, religion, disability, pregnancy, military status, or
genetic information in the hiring process. The federal restrictions apply to
organizations based on the number of individuals they employ. The employee
threshold is different for each statute (see Table 4.1 on p. 62). For example, Title
VII, which prohibits discrimination based on race, color, religion, sex, or national
origin, applies to private employers that have 15 or more employees. However,
a hiring organization that employs fewer than 15 employees should also avoid
discrimination, and not just because it is the right thing to do. Even if your
organization has fewer than 15 employees, your organization may still be subject
to anti-discrimination laws. This is because many states have their own anti-
discrimination laws with lower thresholds. In addition, states may prohibit
discrimination on characteristics not covered by Title VII, such as sexual
orientation. Further, if you hope to eventually grow into a larger organization,
you may find yourself surpassing the relevant threshold and becoming subject
to federal laws. Finally, many foundations require their grantees to have anti-
discrimination policies in place. Thus, it is in the best interest of the organization
to follow anti-discrimination laws, regardless of the number of individuals
employed.
Hopefully, it is no great burden to ask a nonprofit not to discriminate. But
even well-intentioned pre-employment inquiries may inadvertently discriminate.
Thus, it is important to institute the following policies:
• Avoid asking any pre-employment questions that are intended to discover

information about any of the applicant’s protected categories.
54
• Ask all applicants the same questions, to avoid any appearance of disparate
treatment.
• Ask objective questions and avoid subjective inquiries.
• Do not ask third parties to engage in impermissible questioning (i.e., you
cannot have someone discriminate on your behalf).
• Avoid questions that may inadvertently disclose protected information (e.g.,
asking an applicant for their high school graduation date may reveal the
applicant’s age).
• Given expansive definitions of discrimination based upon sex, avoid questions
regarding marital status, name changes, and children.
• Avoid asking about criminal convictions unless there is a legitimate business
reason for the inquiry.
• Avoid asking about arrest records; because of the disproportionate number
of minority arrests, this inquiry may be viewed as an impermissible attempt
to exclude minority applicants.
• Avoid using gender-specific terms (e.g., salesman, waiter).
Harassment in the Workplace

Sexual harassment is a form of unlawful discrimination under Title VII. As set
forth in the statute,
[u]nwelcome sexual advances, requests for sexual favors, and other verbal
or physical conduct of a sexual nature constitute sexual harassment when
this conduct explicitly or implicitly affects an individual’s employment,
unreasonably interferes with an individual’s work performance, or creates an
intimidating, hostile, or offensive work environment.
(U.S. Equal Employment Opportunity Commission, 2009)
The first portion of the definition encompasses the obvious cases. Hopefully,
there is little question that unwelcome sexual advances and inappropriate requests
constitute harassment that should not be tolerated in a workplace. The more
subtle distinctions fall within in the latter portion of the definition: what,
precisely, constitutes activity that creates an “intimidating, hostile, or offensive
work environment” under the statute?
The latitude within the definition is intentional. The point of the definition
is to capture the subjective state of the victim, and employers are wise to err on
the side of caution in crafting a sexual harassment policy. To emphasize the
subjective nature of the definition of a hostile workplace, note the following
examples of activities that have been found to constitute sexual harassment:
• persistent gender-based slurs, sexual innuendoes, lewd jokes, or ribbing

about gender-specific traits;
• leering, staring, or ogling;
55
• sharing sexually suggestive material (pictures, calendars, websites, etc.);

• unwelcome touching (rubbing shoulders, pinching, slapping, etc.);
• inappropriate comments about an employee’s attire or appearance;
• gender-based jokes or comments that demean one gender.
A sexual harassment policy should make clear such activities are not tolerated,
and all complaints of sexual harassment will be vigorously investigated and
addressed.
Although sexual harassment is generally the most well-known form of legally
actionable workplace-based harassment, harassment on the basis of any protected
characteristic may expose the organization to liability. This includes harassment
based upon race, religion, national origin, disability, and age. Some examples of
behavior that have been found to constitute harassment include: racial epithets
or race-based jokes; comments on a person’s skin color, hair, or other racially or
ethnically identifiable characteristics; negative comments or jokes about certain
religions or religious practices; negative comments or jokes based on age (when
the employee is over 40 years of age); and negative comments or jokes about a
person’s physical or mental disability.
The Employer’s Responsibility to Address Harassment

As the language of Title VII makes clear, the employer is expected to provide a
harassment-free workplace. Once an employer knows (or should have known)
about harassment, the employer is subject to liability if it fails to take appropriate
action. Generally speaking, an employer ought to have an open-door policy for
complaints, and it is wise for any policy to include a detailed mechanism for victims
of harassment to report improper behavior in a confidential and sensitive manner.
Once a complaint is received, the employer ought to take the complaint seriously
and conduct an investigation. If the complaint has merit, disciplinary action must
be taken. If the harassment was especially egregious, the disciplinary action may
include terminating the employee.
The first step an organization ought to take is to adopt a comprehensive
harassment policy and include the policy in the employee handbook, in order to
ensure each employee acknowledges receipt of a copy. A harassment policy
should contain the following elements:
• a statement that the organization is dedicated to providing a harassment-free

workplace;
• a clear and comprehensive definition of harassment, providing examples of
inappropriate behavior;
• the process for reporting harassment, identifying the individuals responsible
for receiving complaints, and a statement that all complaints will be handled
confidentially and with sensitivity;
• a description of the steps the organization will take to investigate the
harassment claims;
56
• a notice that violations of this policy will result in disciplinary action, up to

and including termination;
• a statement that employees will not be subject to retaliation for reporting
harassment.
If an organization adopts a comprehensive anti-harassment policy and engages in

a good faith investigation of all harassment complaints, then the organization is
taking steps to protect itself from liability. More important than avoiding liability,
however, these steps may help prevent harassment from occurring altogether.
Terminating Employees
At this point, it is clear an organization might have to terminate an employee
under certain circumstances. In addition to harassment claims, an organization
may have to terminate an employee to avoid potential liability through vicarious
liability, negligent retention, and negligent hiring claims. However, it is important
to be careful when terminating an employee. Terminating an employee is a
sensitive situation and should be treated as such. If an employee is treated fairly
and respectfully during termination, the employee is less likely to sue the employer.
Thus, it is in an organization’s best interest to be honest with the employee, give
the employee as much notice as possible, and provide appropriate transition
services.
Even if all precautions are taken to make the termination as respectful and fair
as possible, a lawsuit is a very real possibility. The following section discusses the
facts that might give rise to a wrongful termination claim. For example, if an
employee is terminated for a discriminatory purpose (i.e., the termination is based
upon the employee’s race, gender, religion, etc.), then the employee may have
a legal claim against the organization for wrongful termination. However, a
terminated employee is not limited to the rights detailed in federal and state
statutes. In the absence of a statutory right, an employee may make a claim based
upon: (1) breach of contract; (2) breach of the duty of good faith and fair dealing;
or (3) violation of public policy.
Wrongful Termination Claims

As stated earlier, the default position of the law in most states is that an employer
may terminate an employee for any (or no) reason. Absent an employee contract,
employment is considered “at-will.” This means that either an employer or an
employee may terminate the relationship at any time. This default rule is true in
most situations and in most states.
However, the actions and statements of the employer may frustrate the at-will
nature of an employment relationship. This is known as the “implied contract”
exception. If an employer makes promises to an employee of job security, then a
court may determine a contract is in place and the employer may no longer freely
57
terminate the employee. The most common example of an implied contract is

when a statement made in an employee handbook establishes an expectation of
continued employment (such statements include promises that an employee will
only be discharged for “just cause” or similar terms). In many states, an implied
contract may be created orally as well. Thus, it is important for employers to take
care not to make any promises of continued employment, either orally or in
writing, and statements similar to the following should be avoided:
• We have a policy of only terminating employees for just cause.

• As long as you do your job, you will have a position here.
• We have a progressive discipline policy and you won’t be terminated
without receiving oral and written warnings.
• If you perform well during a six-month probationary period, you will have
a job here.
In addition to the implied contract theory of liability, there is the possibility that
an employee might sue for breach of the duty of good faith and fair dealing. This
common law duty is implied in every contract and requires contracting parties
to act fairly with one another, honor commonly understood obligations, and
avoid frustrating the other party’s understanding of the contract. For employment
relationships, a minority of state courts have held this duty requires employers to
avoid dealing with their employees in an arbitrary manner3 (Equal Employment
Opportunity Commission v. Chestnut Hill Hospital, 1995). In some of the states that
recognize this cause of action, there is an implied “just cause” standard in the
employment relationship (i.e., an employer must have just cause to terminate an
employee) (Chambers v. Valley National Bank of Arizona, 1988).4 In other states,
courts have held that employers may not terminate employees for malicious
reasons (i.e., the terminations must be in good faith). The quintessential example
of malicious termination is when an employer terminates an employee prior to
retirement in order to avoid paying retirement benefits. Several state courts have
held that this constitutes bad faith and violates the implied duty of good faith and
fair dealing (Stafford v. Purofied Down Products Corporation, 1992).5
In some cases, a court may deem a termination against public policy. This
rarely used doctrine is invoked when a court determines an employee’s termi-
nation would harm the public. Such cases involve an employee refusing to engage
in illegal activity, such as terminating an employee for not bribing a public official
or refusing to file an inaccurate public document. Other examples include
terminations for actions states have determined to be in the public interest. These
situations include, for example, a termination as retaliation for an employee filing
a workers’ compensation claim.
How to Terminate an Employee

Before taking any action, it is important to determine if the employee had an
express or implied contract. If there is a written employment agreement, then
58
you must follow any terms of the contract, some of which may limit the
circumstances in which an employee may be terminated. Further, an organization
should check all other written documents (e.g. employee handbook, documents
distributed upon hiring) to ensure there were no written assurances of continued
employment. Once an organization has determined there are no written
agreements of continued employment, it must make sure there has been no oral
statement that might be construed as a promise of continued employment.
Even if an organization has determined it has no legal obligation to continue
employment, it is a good idea to have a legitimate reason for the termination.
Again, the “at-will” employment doctrine generally means an employer does not
need a reason for termination. However, a legitimate reason for firing may help
discourage any potential wrongful termination claims. Legitimate reasons may
include excessive tardiness, poor performance, use of alcohol or drugs at work,
or violating organizational rules. However, a legitimate reason for termination
will not provide much protection if the employer does not consistently enforce
the rules. For example, if an organization terminates a black employee for violat-
ing a particular organizational rule routinely violated by white employees, then
a court might uphold a wrongful termination claim.
Finally, it is imperative that an organization carefully documents the terminat-
ion process. If an employee brings a lawsuit claiming wrongful termination, it
is important the organization is able to provide proof of the reasons for the
termination.
Consider Securing a Release

An employer may wish to have a departing employee sign a release of claims. By
signing a release, a former employee promises not to sue the organization. If
properly drafted, a release will protect the organization from future lawsuits.
A release is only valid if it is given in exchange for something of value. If an
employee signs a release but receives no compensation, it is an unenforceable
promise a court may not uphold. Compensation can be anything of value, but it
usually comes in the form of severance pay. For example, an employer who does
not normally give severance may decide to offer a severance package to a particular
employee in exchange for an executed release. This release will be enforceable
as long as the severance package is a new consideration. The idea behind this
requirement is that the release must be a product of a bargained-for exchange.
Thus, if an organization has a policy of providing severance, the organization will
have to offer something in addition to the normal severance package to secure an
enforceable release.
In addition to an exchange of value, some statutes require any purported
releases to specifically list the rights a former employee is giving up. Further, many
states have requirements that affect the enforceability of releases. Thus, it is imper-
ative that an organization consults with an attorney before having a departing
employee sign a release of claims.
59
Employee Performance Reviews

Regular employee performance reviews are strongly recommended for all organiz-
ations. There are several practical reasons for regular performance reviews. For
employees, it provides an opportunity to hear how they are performing and how
they might improve. It is also a chance for the employer to point out areas in which
employees are excelling and areas that could use some attention. From a legal
perspective, regular employee performance reviews provide the documentation
necessary to protect the organization against future potential claims. If an organiz-
ation needs to terminate an employee, the employee’s performance reviews should
help establish the termination is for a legitimate reason. For example, imagine an
employer needs to terminate an employee for poor performance. How would
an employer prove the employee’s shortcomings without proper documentation?
Regular employee performance reviews provide the perfect opportunity not only
to discuss the employee’s shortcomings, but also to document the issues in the
event of future discipline and/or termination.
For the employee review process to be useful, the process should be consistently
applied. This means the reviews should occur at regular times throughout the year
(or at least annually) and the content of the reviews should be consistent. Ideally,
employers will use a form that permits consistent reviews and encourages detailed
documentation of the review process. Finally, the review process should ensure the
employee has the opportunity to understand the performance review contents.
Paying Employees
The federal law that governs payment of employees is the Fair Labor Standards
Act (FLSA), which in part establishes a federal minimum wage and overtime
requirements (Elaws: Employment Laws Assistance for Workers & Small
Businesses, n.d.).6 In addition to the FLSA, most states have minimum wage laws
that are higher than the federal minimum. Indeed, some localities have their own
minimum wage laws. For example, San Francisco has a minimum wage of $14.00
(as of July 2017), Albuquerque has a minimum wage of $8.80 (as of January 1,
2017 if the employer does not provide healthcare benefits), and Chicago is phasing
in a minimum wage that will reach $13.00 by 2019. Thus, it is important to
understand not only federal minimum wage laws, but also the state and local laws
that may affect the minimum payment requirements of your employees.
However, not all employees are subject to all minimum wage laws. Many of
the local laws apply to certain sectors (e.g., New York City is raising the minimum
wage of fast-food workers to $15.00). In addition, the federal minimum wage
requirement does not apply to all employees. Such employees are called “exempt”
employees, and it is important to understand how employees are classified under
the FLSA.
The minimum wage requirements of the FLSA are complex, but there are
certain employees who are always considered exempt and certain employees who
are always classified as non-exempt. The former category includes “blue-collar”
60
employees and first responders, who are always subject to the FLSA’s minimum
wage and overtime requirements. Similarly, the FLSA also describes a category
of employees who are always exempt (e.g., employees of seasonal businesses,
small circulation newspaper employees, and newspaper deliverers).
Further, there are provisions in the FLSA that permit certain organizations to
apply to pay disabled employees less than the minimum wage. Specifically,
Section 14(c) of the FLSA allows employers to pay subminimum wages to
employees with disabilities directly affecting their job performance. In order
to qualify for this exception, employers must obtain a special certification from
the DOL. It is important to note that Section 14(c) is somewhat controversial,
with some commentators arguing it does more harm than good for the disabled
community. Organizations relying upon this exemption should pay careful
attention to changes in the law, as there are several organizations attempting to
repeal or phase-out the exemption.
Outside of those specific situations, an organization has to look at the FLSA’s
requirements to determine if a particular employee is exempt or nonexempt. The
FLSA lists the following employees as common exemptions on their website
(“Compliance Assistance: Wages and the Fair Labor Standards Act (FLSA),” n.d.):7
• Commissioned sales employees. If more than half of an employee’s compensa-

tion is derived from commissions and the employee averages at least 1.5
times the minimum wage for each hour worked, such employees are exempt
from overtime.
• Certain well-paid computer professionals. Certain computer professionals paid an
hourly wage of at least $27.63 are exempt from overtime.
• Certain well-paid white-collar employees. Those employees who earn a salary of
at least $23,660 per year and have executive, administrative, or professional
duties are exempt from the overtime and minimum wage requirements of the
FLSA.
The foregoing exemptions do not represent all of the exemptions set forth in the
law, and this list is not intended to be exhaustive. Rather, this list is provided to
show the precision of the federal wage and hour regime and emphasize the need
to engage legal help. Given the complexity of the FLSA and its exemptions, it
is vital for an organization to consult with an attorney to ensure compliance with
federal, state, and local wage and hour laws.
Summary of Federal Laws

As this chapter has shown, there are a number of federal laws that regulate
employers. These laws not only regulate harassment claims and wage and hour
complaints, but they also cover safety in the workplace and privacy concerns. As
noted earlier, although many of the federal laws are only applicable to organizations
with a certain number of employees, it is in the best interest of organizations to
comply with all federal laws regardless of the thresholds. The list in Table 4.1 is
61
Table 4.1 Federal regulations and protections
Law Federal Threshold Protection
Title VII of the Civil Rights Act of 1964 15 or more employees working for 20 or more Prohibits discrimination based upon race, color,
weeks during previous or current calendar year religion, gender, or national origin
Age Discrimination in Employment 20 or more employees Prohibits discrimination against workers older than 40
Act years of age (but note that an organization may
discriminate in favor of older workers)
Employee Retirement Income Security Applies to most private benefit plans (e.g., Imposes protections of benefits, including continuation
Program (ERISA) health and disability, pension, and retirement) of coverage (COBRA) and confidentiality requirements
(HIPPA)
Fair Labor Standards Act Employees that engage in interstate commerce Establishes minimum wage, overtime pay,
recordkeeping, and child labor standards
Organizations that (i) have annual sales or
business of over $500,000 or (ii) are hospitals,
businesses that provide medical or nursing
care for residents, schools, or government
agencies
Equal Pay Act All employers subject to Fair Labor Standards Prohibits pay discrimination based upon gender for
Act work of equal skill, effort, and responsibility
Family and Medical Leave Act 50 or more employees (within a 50 mile Employees entitled to a total of 12 work weeks of leave
radius) due to birth, adoption, or serious health condition of
employee, spouse, child, or parent
Federal Fair Credit Reporting Act All employers Requires disclosure of use of investigative consumer
reports (e.g., credit reports)
Law Federal Threshold Protection
Federal Protection of Juror’s All employers Prohibits discharging employees for taking time to serve
Employment Act on a jury
Occupational Safety and Health Act All employers engaged in interstate commerce Requires employers to provide workplaces free from
(including nonprofits) hazards
Older Workers Benefit Protection Act 20 or more employees for at least 20 weeks a Prohibits discriminating against workers over 40 years
year of age in providing benefits (e.g., lowering life
insurance benefits for older employees)
Pregnancy Discrimination Act 15 or more employees Prohibits discrimination based upon an employee’s
pregnancy, childbirth, or related condition
Immigration Reform and Control Act 4 or more employees Prohibits discrimination against workers who are not
of 1986 U.S. citizens or nationals
Vocational Rehabilitation Act of 1973 Recipients of federal funds Prohibits discrimination on the basis of disability
Genetic Information 15 or more employees Prohibits discrimination on the basis of a person’s
Nondiscrimination Act genetic make-up (e.g., family history of disease)
Americans with Disabilities Act 15 or more employees working for 20 or more Prohibits discrimination based upon disability. If a
weeks during previous or current calendar year person can perform a job (with a reasonable
accommodation), such person must be treated the
same as others
intended to serve as a general guide to the types of laws that may apply to your
organization, and should serve as a starting point in discussing compliance with
an attorney. The list is not exhaustive, but it will provide a good idea of the type
of federal regulations that may apply to your organization.
Conclusion
This chapter opened with a warning about the breadth and scope of employment
law. While every effort has been made to cover the more important steps that
nonprofits might take to comply with employment laws, there are many areas
that simply could not be addressed. The requirements of OSHA, for example,
are too complex to adequately cover in this format. Further, this chapter did not
mention obligations to provide continuation of certain health benefits under the
Consolidated Omnibus Budget Reconciliation Act (COBRA), the mass layoff
notice requirements of the Worker Adjustment and Retraining Notification
(WARN) Act, or the anti-discrimination requirements and reasonable accom-
modation provisions of the Americans with Disabilities Act (ADA). This chapter
provides a foundation of employment law, empowering nonprofits to recognize
issues and identify areas of concern, but it is absolutely imperative for nonprofits
to recognize the need for legal counsel. Only an attorney well versed in your
industry and local jurisdictional laws will be able to adequately protect your
organization.
1 Reflect on your own experience as a worker or job candidate. Have you
seen instances where legal guidelines presented in this chapter have been
violated? If so, what, if any, negative events or changes occurred?
2 Issues of sexual harassment and discrimination are some of the most often
litigated issues for employers. What are some actions your employer or
volunteer organization has taken to avoid these issues? If they have not, what
actions do you suggest they take?
3 Termination of an employee is also often litigated. Have you ever been fired
from a job or do you know of someone fired from a job? If so, in what ways
was the termination handled well (in a legally defensible way) and in what
ways was it handled poorly?
Notes
1 Dole v. Snell, 875 F. 2d 802 (10th Cir. 1989).
2 Sec’y of Labor v. Lauritzen, 835 F. 2d 1529 (7th Cir. 1987).
3 E.E.O.C. v. Chestnut Hill Hosp., 874 F. Supp. 92, 96 (1995):
Pennsylvania has adopted the Restatement (Second) of Contracts § 205, which

imposes a duty of good faith and fair dealing in the performance of a contract.
64
The Superior Court has observed that this duty “does not evaporate merely
because the contract is an employment contract, and the employee has been held
to be an employee at will.”
(citations omitted)
Kankonde v. Richmond Cancer & Blood Disease Center, Inc., 2012 WL 423366 (February
8, 2012) (“[Plaintiff] is correct that, unlike with most other contracts, Indiana law will
imply a duty of good faith and fair dealing into employment contracts.”).
4 Chambers v. Valley Nat. Bank of Arizona, 721 F. Supp. 1128, 1131 (1988):
Arizona recognizes three major exceptions to the employer’s right to terminate

an employee at will[, including] the “implied-in-fact contract” exception, which
relies upon proof of an implied promise of continued employment absent just
cause for termination, to protect the legitimate expectations of workers, and
which may be established by oral representations, a course of dealing, personnel
manuals or memoranda.
5 Stafford v. Purofied Down Products Corp., 801 F. Supp. 130, 135 (1992):
[Plaintiff] argues that [Defendant] terminated his employment in bad faith and
for the malicious purpose of depriving him of commissions to which he was
and would be entitled. Under Seventh Circuit precedent, an employee at will may
bring such a claim, despite the lack of an employment contract.
6 The FLSA also protects against pay discrepancies based upon gender and establishes
rules for the employment of minors.
7 See www.dol.gov.
References
Chambers v. Valley National Bank of Arizona, 721 F. Supp. 1128, 1131 (United States
District Court, D. Arizona, Phoenix Division October 4, 1988).
Dole v. Snell, 875 F.2d 802 (United States Court of Appeals, Tenth Circuit May 23, 1989).
Elaws: Employment Laws Assistance for Workers & Small Businesses – Fair Labor
Standards Act Advisor. (n.d.). elaws – employment laws assistance for workers and
small businesses. Available at: webapps.dol.gov/elaws/whd/flsa/screen75.asp
Equal Employment Opportunity Commission v. Chestnut Hill Hospital, 874 F. Supp. 92, 96
(United States District Court, E.D. Pennsylvania. January 26, 1995).
Harris, S. D. (2010). Statement of Seth D. Harris Deputy Secretary U.S. Department of
Labor. Address presented at Committee on Health, Education, Labor, and Pensions
U.S. Senate, Washington, DC. Available at: www.dol.gov/_sec/media/congress/
20100617_Harris.htm
Independent Contractor (Self-Employed) or Employee? (2016, July 7 Available at:
www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-
self-employed-or-employee
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Department of Labor.
66
Part II
Building an HRM
Infrastructure in a Nonprofit
Organization
5
Strategic Human Resource
Management
Introduction
Ask nonprofit managers and they will likely concur that their employees are their
most valuable asset—trumping their mission, reputation, or program of activities
in importance. Given that nonprofit organizations (NPOs) often provide services
to vulnerable groups in society and their employees are engaged in some form
of knowledge work, the value attributed to human resources is hardly surprising.
Managing and sustaining the commitment of these employees is therefore a
central management function in NPOs.
This human resource (HR) function is often carried out by an HR department,
or, if the NPO is a small organization, managers or employees themselves are
responsible for selecting, socializing, organizing, developing, rewarding, promot-
ing, and even dismissing employees. These HR practices are often understood as
“administrative” if they are not very well connected to the organization’s goals.
On the other hand, the organizational goals may well be strategic. In this case,
the NPO would carefully align its strategic goals with the question: “Which HR
practices are most important to achieve these goals?” Instead of having repetitive
administrative practices, specific practices are developed or supported, whereas
other practices are neglected if they are not important for the outlined goals.
Consider, for example, NPOs that believe a strong strategic orientation should be
transferred from the top down into the organizational departments. HR practices
are then evaluated in terms of how they contribute to achieving the nonprofit
mission and organizational strategy. Alternatively, NPOs might believe the careful
selection and development of employees are central to adapting to their uncertain
environments and responding to these challenges. Again, HR practices will be
assessed with regard to these goals. These orientations—whether administrative,
69
strategic or employee-centered—influence an organization’s HR architecture in

which HR practices are, consciously or not, arranged in a specific manner.
Given the importance of the HR function in NPOs, it remains puzzling that
there is so little research on strategic human resource management (SHRM) in the
nonprofit field and, in turn, how the aforementioned orientations shape the ways
in which NPOs carry out their HR function. Therefore, this chapter aims, first,
to provide an overview of SHRM in NPOs. Stemming from these foundations,
second, we outline a model of HR architectures in NPOs (Ridder, Baluch, &
Piening, 2012; Ridder & McCandless, 2010). Third, we review the empirical
support for this model of HRM that considers both strategic and HR orientations
when designing and implementing HR practices. Finally, we conclude with some
lessons learned, which invite the reader to reflect on the practice of managing
employees in NPOs.
Strategic Human Resource Management

There is a long tradition in management theory to define objectives, structures,
processes, and outcomes of an organization from its strategic perspective. This
strategic view can be subdivided into two dominant streams (Tucker & Parker,
2013). Strategy content is concerned with the objectives of an organization: Why
does the organization exist? What is the mission of the organization? What are
the related goals? What are the products and services? What structures are in place
for the organization to achieve these goals? What are the expected outcomes of
the strategy? The second stream in the strategic perspective is concerned with
processes. How are strategies formulated (top down, bottom up, or both) and how
is the strategy implemented (top down or participative)? Needless to say, there are
numerous theoretical approaches and empirical findings in all of these domains
(for an overview, see Ahearne, Lam, & Kraus, 2014; Canales, 2015; Mirabeau &
Maguire, 2014).
SHRM, like other functions of the organization, is expected to contribute to
the strategic perspective of the organization. Consequently, SHRM can be
defined “as the pattern of planned human resource deployments and activities
intended to enable an organization to achieve its goals” (Wright & McMahan,
1992, p. 298). This definition has two implications. On the one hand, there must
be a strategic orientation of the organization—either consciously or not—and
HR has to have knowledge about this orientation. On the other hand, HR must
be able to plan how it systematically contributes to the organizational strategy.
Concerning the first implication, the strategy of the organization and HRM
have to be aligned, which is usually termed vertical fit. Consider, for example,
an NPO in elderly care that has a strategy of growth and plans to expand its
services beyond the nursing home to offer individualized at-home care services.
HR has to systematically develop plans in which it outlines how HRM will
contribute to the strategy of expanding its reach into this market. When planning
to hire new care personnel, HRM will dictate where, when, and with what
70
qualifications new personnel will be procured. Accordingly, new organizational

structures, changes in work organization, and the division of responsibilities will
accompany the increase and diversification of care services. Again, HR plans how
these changes will support the strategic orientation of the organization. HRM is,
in this perspective, a strategic partner (Ulrich, 1997), as all of these plans have
not only to be in sync with the overall strategy, but also with other departments,
e.g. finance and marketing.
This vertical fit is accompanied by a horizontal fit. A horizontal fit is achieved
by reconciling the old and new HR practices into a coherent and consistent
system. For example, SHRM may entail reacting to a strategy of expansion by
implementing a new recruiting strategy. This HR strategy has to be brought
in line with the existing practices of socialization, training, development, and
promotion. If there is a professional personnel development system in the organi-
zation, the organization might hire young, less experienced workers, and offer
training systems and promotion opportunities. If there is not a sophisticated
personnel development system or even no system at all, the organization might
look for more experienced workers in the labor market who fit the jobs without
delay. For the latter, it has to be considered that higher wages are likely to attract
this clientele. This example highlights that a new HR strategy will require a set
of coherent HR practices for recruiting, training, and retaining employees.
This horizontal fit is largely inspired by research that provides evidence that
harmonized HRM bundles affect better (performance) results than isolated, often
contradicting, single HR practices (for an overview, see Jiang, Lepak, Hu, & Baer,
2012). This concept reflects both organizational experience and research that
coherent HRM systems are more likely to have the desired effects (Gooderham,
Parry, & Ringdal, 2008). For instance, high performance work systems target the
synchronization of HR practices in order to meet high standards of productivity.
Control systems aim to bundle HR practices that are focused on achieving
pre-specified performance measures. Commitment practices are based on the
assumption that bundles promoting identification enhance the quality of work
and employee retention. Depending on the organization’s HR goals (e.g., high
performance, control, or commitment), the impact of HR practices on perfor-
mance will be greater if these practices are complementary, mutually reinforcing,
and introduced simultaneously. Needless to say, organizational performance and
financial outcomes are the dominant goals in this strategic perspective (Batt &
Banerjee, 2012; Boxall, Ang, & Bartram, 2011). SHRM is seen as a management
tool that links HR practices to financial outcomes rather than human or social
outcomes (Kramar, 2014).
Although the organizational strategy plays a dominant role in defining and
planning SHRM, the relationship between strategy, SHRM, and organizat-
ional outcomes is multilayered (Kehoe & Wright, 2013). SHRM is concerned
with the formulation and implementation of the strategy. In strategy formulation,
issues have to be considered which might constrain strategic options, such as the
labor market, employment laws, or important stakeholders, such as workers’
71
representatives or unions’ activities. As a result, the intended HR practices are

an amalgamation of the organization’s strategic plans and SHRM considerations.
In strategy implementation, numerous studies demonstrate the often-held assump-
tion that the intended HR practices will succeed. This assumption is risky for
two reasons. First, HR processes are often neglected. The implementation of HR
practices may fail because of a lack of communication, insufficient preparation,
and resistance from managers and employees (Sikora & Ferris, 2014). Even if the
intended practices are implemented and communicated to the employees, various
deviations in practice by middle managers can produce a gap between intended
and implemented practices (Piening, Baluch, & Ridder, 2014). Second, research
indicates the perceptions of HR practices among employees differ as well (Bowen
& Ostroff, 2004). In particular, when employees receive contradictory messages
about their HR practices and these practices are not perceived as fair, employees
neither experience consistency nor is consensus enabled by the HR system. As
individual employees are subject to different experiences with the HR practices,
this ambiguous situation can lead to confusion, disillusionment, and other nega-
tive reactions (Baluch, 2016). HR practices are more likely to take proper effect
if employees are aware of the practices, accept them, and interpret them similarly
as both useful for the organization and their own jobs.
While the aforementioned strategic perspective emphasizes the dominance
of the strategic goals of an organization, the Resource-Based View highlights a dif-
ferent orientation. The Resource-Based View does not concentrate on external
factors such as market position and competitors, but focuses instead on the ques-
tion of which of the organization’s resources are valuable enough to serve as a
foundation of competitive advantage. These resources might be natural resources
to which a competitor does not have access, but for the majority of organizations
these resources are within a range of financial, structural, organizational, and
human resources. They provide competitive advantage if they are of value, rare,
non-imitable by the competitor, and are non-substitutable (Barney, 1991). While
these resources build the foundation of competitive advantage, capabilities are
still needed to deploy these resources in organizational processes. If the environ-
ment is turbulent, these capabilities are made up of dynamic processes that build,
integrate, and reconfigure internal and external competencies in addressing the
changing environment (Teece, Pisano, & Shuen, 1997). This resource-based
and capabilities perspective has heavily influenced theoretical development in
SHRM. Human resources are perfect candidates to be viewed as valuable, rare,
non-imitable, and substitutable if they are scarce, firm-specific, and possess non-
imitable knowledge (Shaw, Park, & Kim, 2013). The investment in people is
one of the most promising means to achieving competitive advantage as know-
ledge can be built, integrated, coordinated, and adapted. Organizations consider
that their mission, goals, products, and services have to attract highly motivated
people. HR practices build on that orientation by carefully investing into train-
ing, work organization, and incentives that build value, rareness, and inimitability
in the long run.
72
Both the strategic and resource-based approaches were developed in the

domain of private sector organizations and the question arises whether these
orientations are adequate tools for NPOs. Of course, NPOs are different; they
often operate under social, religious, environmental, or political missions, have
challenging tasks mostly related to people and the external operating environment,
while facing scarce resources, multiple stakeholders, and institutional constraints.
From a resource and strategic perspective, however, all of these circumstances
have to be considered when deploying scarce resources to achieve defined goals.
According to a resource-based and capabilities view, NPOs possess valuable
resources as seen in the research about the specificity of the HR capital pool
(Ridder, Baluch, & Piening, 2012). Such NPOs emphasize the unique character-
istics of their intrinsically motivated and often highly committed workforce when
investing in and developing their employees, as we discuss in the section on the
conceptual model of HR architecture in NPOs.
Strategic Human Resource Management in Nonprofit

Organizations
Our knowledge of the extent and use of SHRM in NPOs still remains scarce,
with only a few empirical studies shedding light on this issue. With regard to
overall strategic planning in NPOs, studies highlight the differences in the gen-
eration and implementation of strategies in NPOs. McHatton, Bradshaw,
Gallagher and Reeves (2011) emphasize the importance of membership involve-
ment and stakeholder consensus in their case study of strategy formulation in a
nonprofit professional organization in education. Considering the implement-
ation of strategy, Tucker and Parker (2013) investigate how NPOs use manage-
ment control systems. Drawing on interviews conducted in Australian NPOs,
they conclude that control systems in implementing strategies are similar to
private organizations but for different reasons: “institutional pressures are instru-
mental in driving control processes in relation to nonprofit strategy” (Tucker
& Parker, 2013, p. 101). These studies suggest that formulating organizational
strategy in NPOs entails participatory and democratic processes of negotiation
among diverse constituencies. At the same time, isomorphic tendencies in the
uncertain environment lead NPOs to control and monitor their strategy to
ensure it is properly enacted.
In research examining SHRM in NPOs, Guo, Brown, Ashcraft, Yoshioka,
and Dong (2011) used survey data to investigate the organizational and contextual
determinants of SHRM across a sample of 229 NPOs. The authors found that
NPOs that are larger, technologically experienced, and that cooperated with
independent contractors are more likely to apply SHRM. Smaller NPOs tend to
introduce SHRM if they are affiliates of national organizations. Additional
research confirms that using professional managers as well as internal or external
consultants with HRM expertise promoted fit and flexibility in HR practices of
NPOs (Akingbola, 2013b). Regarding the dimensions of both strategy-focused
73
and flexibility-focused HRM, Akingbola’s (2013b) case study of two NPOs points
to evidence of both vertical and horizontal fit. HRM was aligned with strategy
to achieve fit through practices such as strategic recruitment, employee involve-
ment, managerial training, and performance management, yet few HR practices
consistent with indicators of resource and coordination flexibility were imple-
mented. Taking the wider context into account, Walk, Schinnenburg, and
Handy’s (2014) case study in a large German NPO sheds light on the dominant
factors influencing SHRM. Based on interviews with HR managers and employees,
they identified the overwhelming perception of environmental influences,
especially the policy environment and dramatic changes in labor supply. Themes
regarding the architecture of SHRM in NPOs underscore the dominance of
the overall pressure exerted by the external environment. Walk et al. conclude:
“Thus, the interaction of external changes on internal processes exacerbates the
influence of external factors and hinders the development and implementation of
comprehensive HR bundles” (p. 1016).
As mentioned above, we do not have a clear picture of SHRM in NPOs
yet. The prior studies take place across different countries and are usually based
on small samples within various NPOs, using a range of methods. The non-
profit field would thus still benefit from theory building and empirical research
on SHRM. In this vein, Akingbola (2013a) provides a model with a twofold
purpose. The model is developed as a basis for further research. At the same time,
it offers nonprofit managers a framework to plan and implement SHRM. The
model is theoretically founded and its core essentials consider the specifics of
what we know about NPOs. It contains the following three aggregates (Akingbola,
2013a):
• A social mission is the foundation of the goals of the NPO. These goals are
mediated by the resource base of the NPO leading to the NPO strategy.
This strategy is interrelated with principles of the NPO. These principles
are defined as “the overarching values, beliefs and approach adopted by
management and/or board of directors in the design of its NHRM system”
(Akingbola, 2013a, p. 223).
• The resulting HR policies and practices are embedded in interactions and
processes. Akingbola (2013a) delineates four main parts of this interaction.
In line with the literature, HR policies and practices interact heavily with the
competency and behavior of managers, organization characteristics, funders
and government, and system-level characteristics, such as social legitimacy and
commitment of the employees. System-level characteristics and contextual
variables drive HR policies and practices.
• HR policies and practices result in attitudes and skills of the workforce of
the NPO, which finally lead to nonprofit performance.
This model considers the research on NPOs at length and its dual character
(guidance for research, framework for managers) has several implications. First,
74
research indicates that advanced SHRM is more or less a domain of large

organizations with professional HR staff or supported by consultants (Ulrich,
1997). The sparse research in NPOs seems to support this tendency (Akingbola,
2013b; Guo et al., 2011). Second, even large NPOs suffer from external pressures
that influence the use of HR practices. The study by Walk et al. (2014)
demonstrates how changes in legislation and dramatic developments in the labor
market can erode strategic thinking in NPOs. Therefore, and third, managers
confronted with these constraints and pressures may interpret SHRM as too
distant from their reality. Finally, the research shows there is no single consensus
regarding the definition of nonprofit performance (Ridder et al., 2012). Helmig,
Ingerfurth, and Pinz (2014) demonstrated in their literature review that this
dependent variable has different theoretical foundations, definitions, and measures.
Their study revealed that although the mission of NPOs is at the core of strategic
models, the development of the dependent variable “mission accomplishment,”
as a natural result of the strategic process, is often neglected in research.
Given these implications and the opportunities they bear for further research,
we draw on an analytical framework of HRM that affords us a more nuanced
view of SHRM. Instead of outlining a normative model, we present an approach
that acknowledges the wide spectrum of (S)HRM in NPOs and its implications
for the design and implementation of HR practices.
A Conceptual Model of HR Architectures in NPOs

In order to better understand HR practices in NPOs and what shapes these
practices, we developed a conceptual model of HR architectures in prior work
(Ridder et al., 2012; Ridder & McCandless, 2010). This model entails four steps:
1 Drawing on the aforementioned theoretical perspectives of strategic HRM

and resource based HRM and in line with the state of the art in nonprofit
research, we derived two dimensions as the basis of a typology of HRM:
i The first dimension is developed from strategic HRM theory. In essence,
this theoretical view focuses on a strategic perspective in which the
environment (markets, competitors) plays a dominant role. Accordingly,
the organization combines observation of the external environment
and anticipation of future opportunities and constraints with internal
structures and processes (vertical fit). Adapting these structures and
processes has to be aligned with the existing HR practices, considering
both the culture and climate of the organization (horizontal fit). Research
in NPOs demonstrates that not only markets and competitors play an
increasing role regarding the strategic perspective, but this strategic
approach is also driven by their values, mission, and the expectations,
needs, and goals of internal and external stakeholders, such as funders
(Kellock, Beattie, Livingstone, & Munro, 2001; Ridder & McCandless,
75
2010). In contrast to private sector organizations, the need to maximize

shareholder value is absent; instead NPOs must carefully identify the
needs and demands of their stakeholders and align these expectations
with the mission and values of the NPO. Strategic challenges arise
when, for example, the core mission faces pressure from competition
among NPOs, public, or private organizations, scarce resources and
the pluralistic environment. Consequently, we expect a wide range of
strategic responses to these challenges, resulting in considerable variety
in the use of HR practices. We refer to this as an organization’s strategic
orientation (Ridder & McCandless, 2010).
ii The second dimension stems from the Resource-Based View (Penrose,
[1959] 1980; Wernerfelt, 1984; Barney, 1991). This perspective is less
concerned with markets and more with the identification of valuable
resources within the organization as a basis for competitive advantage.
As such, it serves as a fruitful approach given that nonprofit research
suggests the importance of internal resources, e.g. employees of NPOs
have a mission-driven attachment to their organization (Brown &
Yoshioka, 2003; Kim & Lee, 2007). In contrast to for-profit organiz-
ations, the specific characteristics of employees in NPOs entail their
acceptance of intrinsic and relational incentives in place of extrinsic
rewards (Borzaga & Depedri, 2005). Given this valuable advantage, the
resource orientation implies that NPOs can have a competitive advant-
age due to employees’ intrinsic motives and capabilities. HR practices
that emphasize employee engagement, empowerment, and well-being
instead of rewards that are performance-based as in private organizations
are thus the basis to manage the organization’s challenges through auto-
nomous and highly motivated employees. As a result, we refer to this
as the HR orientation. Accordingly, HRM in NPOs is influenced by the
guiding principle that the motivations and needs of employees have to
be considered as the basis of HR practices (Ridder et al., 2012).
2 In Ridder and McCandless (2010) we maintain that the strategic and HR
orientations are likely to reflect a broad variety of characteristics. To capture
this variety, we envisioned each of the dimensions along a continuum.
NPOs differ widely in their missions and goals as well as in their human
resources. As a consequence, the strategic and HR orientations each range
from a low to a high value. Taking into account the variety of reasons for
which organizations adopt and implement a range of HR practices, these
dimensions are not understood to be mutually exclusive.
3 Juxtaposing these two dimensions with different characteristics along a
continuum, we developed a typology of HR architectures. We conceptualize
HR architectures as an overall internally consistent and coherent HR system
structure, which is a multi-level construct that encompasses components
such as HR principles, policies, programs, practices, and climate (Arthur &
Boyles, 2007; Becker & Gerhart, 1996). The combination of the two
76
dimensions revealed four quadrants (Ridder et al., 2012), which are depicted
in Figure 5.1.
The ideal-type “Administrative HRM” is scored as the minimum value on

both dimensions.1 A low HR orientation entails that these practices are not spe-
cifically aligned to the needs and values of the employees (Conway & Monks,
2008; Cunningham, 2010a). Due to the low degree of strategic orientation, HR
practices are often merely copied from the for-profit sector without a syner-
gistic relationship to the existing HR practices or the organizational strategy
(Akingbola, 2006; Cunningham, 2001). In contrast, “Motivational HRM” marks
the minimum value along the strategic orientation and the maximum value of
the HR orientation. These NPOs can be assumed to focus on the internal devel-
opment of employees, promotion, and participation to elicit and maintain their
commitment to the organizational values and mission (Benz, 2005; Borzaga &
Depedri, 2005). Furthermore, “Strategic HRM” is scored high on the strategic
and low on HR orientation. Due to a strong emphasis on strategic goals related
to different external stakeholders combined with a low focus on the specific needs
of the employees, investments in human capital are selective and focused on the
allocation of rewards based on measurable output criteria (Brandl & Güttel, 2007;
De Prins & Henderickx, 2007). Finally, “Values-based HRM” is scored as the
maximum value on both dimensions and represents NPOs in which HRM is
driven by the core values of the mission and by the employees’ strengths (Frumkin
& Andre-Clark, 2000). Investments in HR that support the acquisition, devel-
opment, and retention of highly qualified and satisfied employees are not only
seen as a means to achieve the organization’s strategic objectives but also as a
primary goal in and of itself (Ridder & McCandless, 2010).
Figure 5.1 Types of HR architecture in nonprofit organizations

Source: Reprinted from Ridder et al. (2012). Copyright (2012), with permission from Elsevier.
77
4 Lastly, we propose that each of the types will have different HR architectures
that, in turn, lead to variations in performance in NPOs (Ridder et al.,
2012). HR practices are expected to impact organizational outcomes (e.g.
service quality or productivity) through the mediating effect of employee
outcomes (e.g. employee commitment and satisfaction) (Boselie, Dietz, &
Boon, 2005; Dyer & Reeves, 1995; Paauwe, 2009). Depending on the
strategic and HR orientations, the four types of HRM in NPOs are likely
to display different performance outcomes.
Take, as an example, the negative effects on employees’ attitudes and behaviors

from a low HR orientation which is marked by short-term contracts and HR
practices based on control rather than autonomy, thereby signaling a low level
of support to employees (Allen, Shore, & Griffeth, 2003; Piening et al., 2014).
In contrast, employees view HRM as supportive and fair when it is aligned with
the organization’s model of care, as exemplified in the values-based HR
architecture (high HR orientation and high strategic orientation) (Eaton, 2000).
Empirical Evidence on HR Architecture in NPOs

To the best of our knowledge, two empirical studies have been conducted thus
far on the basis of this model. In their multiple case study of NPOs providing
health and social services in Germany, Ridder, Piening, and Baluch (2012)
demonstrate that HR practices in administrative HRM signify a bureaucratic HR
mode that addresses basic HR functions such as employment contracts, terms and
conditions, and union-employer relations. Given the external demands these
NPOs face, they adopt a cost-covering orientation that seeks to avoid negative
HR outcomes. The study also reveals that in motivational HRM, the organizational
mission is translated into humanistic principles about employees, leading to an
emphasis in the HR mode on investing in employees as valuable individuals
in and of themselves. The performance outcomes differ from administrative
HRM, however, as these NPOs remain mission-driven, focusing on service
users’ needs (Ridder, Piening, & Baluch, 2012). In strategic HRM, the authors
observe that HRM is aligned with strategy that is driven by market logics. HRM
and organizational strategy are synergistic. Strategic HRM proactively seeks
opportunities in the external environment. Long-term strategic development is
generated in part by the employees themselves. The authors observe that multiple,
often competing goals around HRM arise from varying strategic priorities that
might be in tension. As a result, differences in strategic perspectives are found to
result in various HR outcome goals.
Finally, Ridder, Piening and Baluch (2012) observe that NPOs with values-based
HRM embrace both the market-related demands of their operating environ-
ment and the pressures stemming from organizational values. A values-based
HR architecture thus combines the two poles of upholding strategic goals and
employees’ terms and conditions at the same time. In contrast to motivational
78
and strategic HR architectures, values are clearly translated into strategic goals. As
a result, positive employee outcomes are accomplished through balancing the
mission with strategic imperatives to invest in the workforce. This balancing is
achieved, for example, by viewing strategic outcomes as a vehicle to reinvest in
developing and retaining employees.
Drawing on the typology by Ridder et al. (2012) as well, Walk et al. (2014)
empirically examine the HRM types in their case study of HR managers and
employees from a large German NPO. Identifying dominant themes within the
quadrants, their interviews reveal the overwhelming perception that NPOs have
to consider external pressures. By explicitly addressing these influences, the
authors extend the original model. With regard to the typology, the following
main themes emerged.
In administrative HR, the interviewees perceived three themes as critical: short-
term employment contracts, cost-cutting strategies, and compensation. There is a
striking difference between managers’ and employees’ perceptions of compen-
sation levels as employees are dissatisfied while employers perceive this level as
fair. Cost-cutting strategies are the answer to the dual problem of increasing tasks
and shrinking budgets. Finally, short-term contracts are used as a means to reduce
costs in anticipation of an uncertain future. In contrast, the main themes in strategic
HR are the absence of strategic practices and professional development. Both
time pressure and an uncertain future hinder any long-term strategic planning.
Professional development is needed for managers as well as for workers (career
planning, professional qualification). In motivational HR, working conditions,
on-the-job-training, and appraisals are dominant themes on the agenda. Given the
intrinsic motivation of employees in NPOs, good working conditions, especially
the work climate, are seen as critical for employees. Although managers consider
this need, it is at the same time contradicted by the decrease in public funding.
On-the job training is regarded as important in this orientation but conflicts with
day-to-day routines and the lack of time. Although appraisal reviews are highly
valued in the orientation, their extent and quality are below these expectations.
Finally, in values-based HR, religious values and organizational identification are
highlighted. Although these values play an important role in this orientation, they
are weakened by external pressures.
To summarize, these few empirical studies using the model support our
assumptions about the heterogeneity of HRM in NPOs. It could be argued that
the empirical data in the study of Walk, Schinnenburg, and Handy (2014) centers
on one large NPO in which the pressures facing its strategic orientation stem
from the same environment. But even with this shared background, the spectrum
of perceptions and reactions is impressive. NPOs do not respond automatically
or similarly to decreasing budgets, increasing competition, and mounting tasks.
Instead, their interpretation of the current situation and the anticipation of the
future vary, leading to differences in strategic thinking and acting.
When the range of NPOs is broader, as demonstrated in the case study by
Ridder, Piening, and Baluch (2012), these variations in organizational responses
79
can be aggregated into clusters of strategic thinking. Of course, a dichotomy still

occurs with NPOs sticking strictly to their HR orientation, and not surprisingly,
with NPOs that believe that only a strategic orientation in line with for-profit
practices will guarantee their survival. At the same time, a cluster emerges in which
NPOs are configuring their HR practices by both adopting a proactive approach
in dealing with external constraints to achieve quality in the competitive market,
while attempting to respect their internal convictions in managing their employees.
Rather than financial pressures undermining the role of HRM (Cunningham,
2010b), HRM is viewed as an integral part of the organizational strategy.
Consequently, Ridder, Piening, and Baluch (2012) argue that this “third way” of
configuring HRM represents a specific combination of these two orientations.
They conclude that this third way may serve as a means for NPOs to strategically
position themselves as distinct from the for-profit competitors who are moving
into traditional areas of nonprofit service provision with lower costs (Chew, 2010).
Lessons Learned for the Practice of Managing

Human Resources in NPOs
What are the lessons learned for HRM in NPOs? From the discussion above, it
becomes evident that there are not any best practices that allow NPOs to move
from strategy to HRM to outcomes, such as satisfied employees, low turnover,
mission attainment, service quality, or other relevant nonprofit performance
measures. The research suggests instead that there are different opportunities and
pressures leading to various perceptions and responses. Therefore, NPOs first need
a realistic diagnosis of the HR architecture within their organization. Second, this
provides the basis for either professionalizing this architecture or, third, shifting to
the desired HRM type. We will now discuss these lessons learned for the practice
of managing human resources in greater depth.
1. Aligning HR Architecture with the Strategic Orientation of the NPO

Like all organizations, NPOs have to analyze their HR architecture and their
relationship to the overall strategic orientation of the organization. Several proposals
in the literature provide guidance on how to conduct this diagnosis (Arthur &
Boyles, 2007; Becker & Huselid, 2006; Colbert, 2004; Lepak & Snell, 1999; 2002).
Adapted from Arthur and Boyles (2007), a diagnosis can be based on the following:
• HR principles pertain to the choice about which policies and practices are
in use in the organization. In NPOs, missions and values are of utmost
importance and the organization must clarify what are the guiding principles
for their HR architecture.
• HR policies are aligned with organizational goals or objectives (staffing,
training, rewards, and job design). Organizations have to decide whether
these practices are focused on performance, productivity, or other financial
80
variables. Particularly in NPOs these practices are the basis for individual
commitment as well.
• HR programs entail the assessment of whether bundles of internally consistent
HR programs and practices exist. The organization will also evaluate the
relationship between these programs and the desired employee-related
outcomes (e.g. satisfaction, retention).
• HR climate: The organization evaluates whether there is a climate in place
that supports the employees in collectively perceiving and interpreting the
HR principles, politics, programs, and practices as intended.
Assessing these levels and their coherence will reveal the type of HRM in the
NPO. The next lesson learned concerns whether this HR architecture is adequate
for achieving the organization’s goals or has to be adapted.
2. Professionalizing the HR Architecture

Once a consistent set of principles, policies, programs, and practices exists, the
question of the quality still remains. Gratton and Truss (2003) highlight that there
is often a gap between rhetoric and reality, i.e. the practice of HRM. For
example, even if the NPO has come to the conclusion that administrative HRM
is an adequate type for the organization, this orientation can still be professionalized.
A low orientation in administrative HRM will leave the tasks to managers with—
in the view of the organization—more important responsibilities. HRM is seen
as a bureaucratic sideline job with lower skills in this realm and a tendency
toward bureaucratic routines, especially in rewards. In such cases, the organization
can consider outsourcing its HR function to professionalize it, or if part of a large
NPO, joining a shared services center that bundles all HR needs of the different
branches of the organization.
The other extreme is also valuable; the organization might intend strategic
HRM to match the goals of NPO. The HR department may have precisely
outlined what programs and practices exist and have to be added in order to reach
the desired goals, but the NPO may be neither willing nor capable of (financially)
supporting the necessary programs and practices. This exemplifies a strategic HR
rhetoric. Either way, the message is that not every NPO can transform its existing
HRM into a different HR architecture. Yet, if equipped with an analysis of the
existing type of HRM, NPOs can more precisely estimate which programs and
practices fit the type and, in turn, how to professionalize the respective HR
function.
3. Shifting the HR Architecture

Lessons one and two may reveal the organization needs to shift its HRM type
(Lepak & Snell, 1999; 2002). Again, there are no best practices for achieving this
shift. What we have gleaned from the outlined empirical investigations is that
81
NPOs are faced with the challenge of combining strategic orientations and HR
orientations under difficult competitive environments. Although the values-based
quadrant is not imbued with a normative connotation, this HR architecture
represents such efforts of NPOs. The combination points the NPO toward two
vital aspects. With regard to the content of HRM, the translation of values into
strategic goals leads to balancing in the organization’s HRM principles, programs,
and practices. This desired balancing of values with strategic requirements is
not an easy task, but an ongoing struggle especially in changing environments
(Swanson, 2013).
The second aspect refers to the process of implementing new HR practices. As
indicated in recent research, employees’ perception and interpretation of HRM
matter for employee-related and performance outcomes (Baluch, Salge, & Piening,
2013). Intended HR practices are often mistaken for the actual practices employees
experience daily. Top managers might believe adequate programs and practices are
in place, only to find these are implemented differently by middle managers and
heterogeneously interpreted by employees. Such research underscores that profes-
sionally shifting the HR architecture entails carefully observing its implementation
and continually monitoring its further development. Regarding employees’ expe-
rience of implemented HRM in NPOs, research by Piening, Baluch, and Ridder
(2014, p. 17) demonstrates “the visibility of HR practices, consistency of HRM
messages, continuity of usage of HR practices, and fairness of HR practices as the
relevant categories that characterize the way employees perceive the organization’s
HR practices.”
In sum, these three lessons invite nonprofit managers to reflect on their practice
of HRM. All of these efforts require practitioners to devote their attention to HR
processes with regard to implementation and consider the perceptions and
acceptance of managers and employees, since these aspects have consequences for
the way HR practices are used and responded to in the NPO.
Think of a nonprofit organization you have recently encountered. This might
be, for example, a charity, church, nonprofit nursing home, or hospital you
volunteered at, a nonprofit advocacy organization you donated to or an NGO
you heard about in the media. Consider the following three questions with
regard to your chosen organization:
1 What is the NPO’s strategic orientation? Address the ways in which nonprofit
managers can ensure the organization’s HRM is aligned with its strategy.
2 Discuss why the NPO might want to pursue administrative HRM. In which
scenarios might strategic HRM or motivational HRM be more appropriate?
3 Debate whether values-based HRM is achievable, given the constraints that
NPOs are operating under. How might the NPO shift its HRM to develop
and implement a values-based HRM?
82
Note
1 This paragraph was reprinted from Ridder, Piening, and Baluch (2012) with permission
of International Society for Third-Sector Research and Johns Hopkins University.
Voluntas: International Journal of Voluntary and Nonprofit Organizations is the official
journal of the International Society for Third-Sector Research.
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6
Recruitment and Selection for
Nonprofit Organizations
Rikki Abzug
Introduction
As Millennials and all generations of workers interested in public service
increasingly focus their job search efforts on the nonprofit sector as their arena
for employment, they create an actual pool of human resources from which
organizations may choose. As such, organizations of the nonprofit sector are
increasingly (and often gratefully) challenged to upgrade their recruitment and
selection processes to ensure fit. Strategic nonprofit recruitment and selection are
so important because research continually highlights the relationship between
employment practices (such as recruitment and selection) and both organizational
performance and individual well-being in the nonprofit sector (Haley-Lock &
Kruzich, 2008).
Indeed, nonprofit practitioners and academics alike care deeply about both
nonprofit performance and the benefits to those who labor to fulfill the organi-
zational mission. To those ends, recruitment and selection are studied as both
independent variables correlated with organizational and individual sustainability/
well-being, as well as dependent variables that, themselves, may be sustained and
enhanced. In this chapter, we review the literature on nonprofit recruitment
and selection as both independent and dependent variables in order to glean best
practices for sustaining and enhancing recruitment and selection in the sector, and,
through that, organizational and individual effectiveness.
The beginning of the chapter is also a good place to remind the reader of
the importance and uniqueness of recruitment and selection to organizations
of the nonprofit sector (Watson & Abzug, 2016). Haiven argued: “The axiom of
recruiting the ‘right’ people making an organization and recruiting the ‘wrong’
ones breaking it has special significance in the voluntary and nonprofit sector for
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three reasons” (2004, p. 83). These reasons were that: (1) the relative scarcity of
funding in the sector puts excessive pressure on managers to ensure hiring decisions
do not lead to wasted resources; (2) choosing experienced people is essential to
professionalism in the sector; and (3) the sector’s relatively poor-paying and
thankless jobs need to be supplemented by amicable work environments that can
only be achieved through careful recruitment and selection processes. Just as
Haiven painted unique recruitment and selection in the sector as a burden on
nonprofit human resource professionals, Watson and Abzug (2016) highlighted
the distinctiveness in a more positive way. Noting the primacy of mission focus
in nonprofits, Watson and Abzug argued most staff are attracted to nonprofits
because they are motivated by their organization’s mission. Thus compared to
their for-profit counterparts, “nonprofits have an extremely powerful advantage
in all aspects of their human resource systems,” and they regard human resources
“as the central conduit through which organizations succeed” (pp. 599–600).
Thus, nonprofit recruitment and selection are unique on both the dependent
and independent variable dimensions because, respectively, the nonprofit mission
is a particularly effective recruitment and selection tool (see, also, Brown &
Yoshioka, 2003), and because nonprofit staff who are effectively recruited and
selected directly effectuate societally beneficial organizational performance. Of
course, despite the uniqueness we often observe and, perhaps, more often, extol,
there is also tremendous overlap in the philosophies and practices of recruitment
and selection across the sectors. In this review, we recognize and draw inspiration
from the latter (the overlap), but stay focused, where we can, on the former (the
nonprofit novelty).
And yet, before we dive in, a caveat derived from the tension between
overlap/novelty is in order. Our review of the literature is designed to unearth
“best practices” revealed in the research, in the fully plural sense of the term.
For every “best practice” identified in the literature review, there is likely to be
a nonprofit organization impervious to its impacts. Although the individual
studies reviewed may suggest a “one-size-fits-all” recruitment or selection
solution, this chapter will not follow suit. Indeed, past research in the sector has
made clear the pitfalls of “one-size-fits-all” nonprofit solutions (see Abzug, 1995;
Carson, 2002; Miller-Millesen, 2003; Robinson, 2001) and we will advocate
a configurational approach (Ridder et al., 2012; Toh et al., 2008; Watson &
Abzug, 2010) to the suggestions garnered from the literature. Specifically, we
remind the reader that because nonprofit organizations differ greatly by, at least,
size, lifecycle, and subsector/industry, all suggested “best practices” must be
reviewed in the context of such organizational variability. Indeed, just as recruit-
ing personnel for museums differs greatly from recruiting personnel for animal
welfare agencies, selecting staff for large national research universities differs
greatly from selecting staff for small, local river keeper organizations. While
not all of the reviewed literature will make explicit distinctions between organi-
zations of different sizes, ages, subsectors, etc., as solutions are proffered, we will
try to provide the context for making just such distinctions. Further, we note
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Recruitment and Selection
that much of the literature we review has explored nonprofit human resources
in the United States, still, we will try to incorporate findings from international
studies wherever possible.
The chapter will proceed as follows. We will begin with an overview of the
research positing differential recruitment processes in the nonprofit sector. We
will follow that with a review of the literature on predictions/antecedents of
successful nonprofit recruitment and then selection. Finally, we will review the
literature on the impact or consequences of recruitment and selection processes
in the sector.
Recruitment and the Nonprofit Labor Force

From whence a nonprofit labor force? Before a nonprofit comes to select an
employee, a potential employee may need to select the nonprofit sector.
Foundational work in public service recruitment and selection provides a
compelling (and nonprofit/public conflating) proposition. In 1990, Perry and
Wise sought to identify a typology of motives associated with public service. In
delineating the behavioral implications of such Public Service Motivation (PSM),
they proposed a general attraction-selection framework. Interestingly, from our
vantage point, they validated their framework using Rawls, Ullrich, and Nelson’s
(1975) findings that nonprofit entrants valued helpfulness, cheerfulness, and
forgiveness more highly than for-profit job seekers. Perry and Wise (1990), thus,
used Rawls et al.’s (1975) nonprofit finding to support their notion that Public
Service Motivation would attract and select employees into public (and, apparently
nonprofit) organizations. International research has also identified a related
“voluntary sector ethos” (Cunningham, 2005; Nickson, Warhurst, Dutton, &
Hurrell, 2008) based on an original “public sector ethos” (Hebson, Grimshaw, &
Marchington, 2003). In the United States, local and industry-specific reports
mostly confirm potential nonprofit employees are a breed apart. Hansen, Huggins,
and Ban (2003, p. 2), surveying employee recruitment by nonprofit organizations
in the Pittsburgh area, demonstrated that “[n]on-profit employees are primarily
interested in jobs offering opportunities to do good or to help others; for-profit
employees are more concerned with financial remuneration. But both groups
give the highest ratings to interesting or challenging jobs.” In 2013, LeRoux and
Feeney, studying managers in the nonprofit sector, found the greater freedom
over work functions and greater control over work schedules in the nonprofit
sector were particular attractors. We might argue, then, that the wicked societal
problems addressed by mission in the nonprofit sector, as opposed to, say, a more
straightforward maximization of bottom line in the for-profit sector, would afford
greater challenges and flexibility to service providers in the former sector.
More recent research sheds light on how a specifically nonprofit labor force
is created. Nemenoff’s (2013, p. 1) dissertation begins by suggesting an individual’s
interactions with a variety of nonprofit organizations over their lifecycle “may
lead to a heightened awareness of nonprofit work, and help promote awareness
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Rikki Abzug
of careers in the nonprofit sector.” Nemenoff (2013, p. 14) develops a model of

nonprofit career awareness, implicating the interplay of “parental and role model
socialization to voluntary and philanthropic behavior” with “continued
engagement through both volunteering and service-learning.” However, her
research with nonprofit practitioners ultimately found “a disconnect between
having a desired occupation that involved helping people, and knowing that
those types of careers, in other words paid employment, are found in the
nonprofit sector” (Nemenoff, 2013, p. 115). Nemenoff’s (2013, p. 121) identifica-
tion of an “accidental career” in the nonprofit sector is consistent with past
findings (see, for example, Lyons, 1992; Weaver & Herman, 1991), but, nonethe-
less, points to great potential returns on early nonprofit career education. Indeed,
the earlier that potential practitioners learn there are organizations and careers
in the nonprofit sector that would allow them to do good while doing well, the
easier it will be for such organizations to have an attractive pool of potential
employees. This view is supported by research by Tschirhart, Reed, Freeman,
and Anker (2008), who, in surveying recent MBAs and MPAs, find that whether
through self-selection or educational inculcation, students who are attracted
to careers in the nonprofit sector originally, remain loyal. Rose’s (2013) work
on undergraduates points to earlier educational intervention, noting that the
nonprofit sector is particularly attractive to students displaying commitment to
public interest, compassion, and self-sacrifice.
So, for recruiting purposes then, there exists a manifest nonprofit labor force,
and a latent nonprofit labor force. The manifest labor force may further provide
clues about who comprises the potential labor force. Organizational actors charged
with recruitment activities might be particularly interested in the characteristics of
the nonprofit labor force as unearthed by decades of research (see Chapter 3 in this
volume for a more extensive review). Indeed, much of what we assume about the
nonprofit labor force (in the United States) can be traced back to the pioneering
work of Preston (1989; 1990; 1994) and Odendahl and O’Neill (1994). As early
as 1990, Preston determined the nonprofit labor market was dominated by white-
collar occupations (specifically, service provision as opposed to goods manufacturing)
and employees who were both female and well-educated. Comparing that 1989
picture with the nonprofit labor force in 2015, Gazley (2016) noted such similarities
as the consistent 66% of the nonprofit workforce that is female, and that the sector
is substantially more educated than the U.S. workforce at large.
Gazley (2016), following work by Salamon and Geller (2007) and Salamon,
Sokolowski, and Geller (2012), notes that nonprofits have been fairly resilient
in meeting workforce challenges, due in no small part to nonprofit demand
demonstrating countercyclical tendencies to the U.S. economy. However, as
Gazley (2016) notes, the great variability in the sector coupled with concerns
about noncompetitive compensation practices (see Chapter 9 in this volume) has
led to a perception (if not reality) of recruitment challenges in the sector. But,
as the literature suggests, many of these challenges may be overcome by strategic
human resource management.
90
Summing up the research findings on ways that recruiting differs in the

nonprofit sector, we can point, on the supply side, to a pool of potential emplo-
yees with a Public Service Motivation, who are hungry for the challenges and
satisfaction of working to solve societal problems in interesting and relatively
autonomous jobs. Nonprofit employers who can communicate and/or augment
such working conditions are likely to appeal to a motivated potential workplace.
We turn to a review of how nonprofit organizations find that success in recruiting.
Nonprofit Recruiting Best Practices: Findings on Antecedents
The Role of HR Specialists

First in 2004, and then again in 2010 and 2016, Watson and Abzug underscored
the importance of strategic alignment of human resources with organization
strategy. Recruitment, then, as well as all other human resource management
activities, in best practice, would flow from the strategic (mission-driven)
direction of the nonprofit. Watson and Abzug (2004; 2010; 2016) further suggest
small or large nonprofit organizations can think strategically about putting
“people first.” They recommend working backwards from the goals of the
recruitment program: “Is the organization trying to attract a large applicant pool?
Is diversity of applications a major objective? Is promotion from within the
desired outcome?” (Watson & Abzug, 2004, p. 642). Indeed, if an organization’s
strategic priorities include, for instance, demographically diversifying their staff
to appeal to a broader constituent set, then promoting from within a relatively
demographically homogeneous workforce might limit progress toward the
strategic goal of diversification. Conversely, if staff development and retention
are key to outstanding service provision, recruiting externally may engender,
among extant staff, a climate of distrust or feelings of betrayal. Watson and Abzug
(2016, p. 617) also note that “nonprofits would do well to strategically consider
the staffing mix at start-up, at present, and for a future desired state.” Watson
and Abzug’s emphasis on strategic approaches to recruitment and selection that
begin with the desired end state begs the question of who is best to oversee such
efforts.
One answer comes from the number of studies that have suggested that having
human resource specialists on board can better focus recruitment efforts (Ban,
Drahnak-Faller, & Towers, 2003; Haiven, 2004). Haiven’s (2004) national
comparative study of human resources in nonprofits in Britain versus Canada
noted British nonprofits followed the protocol of best practices (job analysis
conducted, job description drawn up, job posted and advertised internally and
externally, applications submitted then culled, a short-list selected by hiring
committee/panel, interviews with short-listed candidates conducted, candidates
scored, best candidate selected), much more closely than their Canadian
counterparts. Haiven attributes the Canadian nonprofits’ propensity to resort to
recruiting and selecting shortcuts to lack of trained human resources managers.
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Rikki Abzug
Haiven (2004) defined the human resource specialists as those who had taken
course work or professional certification in the personnel field.
Only about a quarter of Ban et al.’s (2003) Pennsylvania nonprofits had a
formal HR organizational structure and the others coped by relying on board
members’ expertise or the largesse of umbrella organizations. Yet, Ban et al. found
most nonprofits (regardless of size or professionalization of the HR function) were
relatively satisfied with their recruiting efforts, although hiring in technology
and development posed difficulties, and use of the internet, at least at the turn of
the Millennium, remained limited.
Whoever does the recruiting, both the prescriptive and the research literature
have outlined two major pathways to attracting recruits in the nonprofit sector:
internal (identified by Marsden (1994) as informal) approaches and external
(Marsden’s (1994) formal) approaches. The following lays out findings about
each.
Internal/Informal Recruitment Approaches and the Role of

Social Networks
In 1994, Marsden set out to use data from the National Organizations Survey to
explore the methods used by U.S. establishments to publicize the availability of
job opportunities to potential workers. He found that both for-profit and
nonprofit organizations were more likely to use informal referrals for recruitment
than were public sector organizations. Almost twenty years later, Eng, Liu, and
Sekhon (2012) noted social networks are particularly important and effective in
the recruitment of NPO staff. They argue the motivation to support social or
charity activities is both a key indicator of successful organization integration and
much more difficult to identify than basic business skills. As such, they found
personal relationships can best identify/refer friends/colleagues with requisite
motivation sets. Of course, another good way to ensure a candidate’s motivation
to support the mission is to hire from within. In 2004, Haiven discovered that
every Canadian nonprofit (most with very informal human resource practices),
in her study, gave preference to internal applicants. She noted Canadian nonprofits
used internal hiring as a way to help staff advance their careers.
A year earlier, Ban et al. (2003) found most of their sample nonprofits, regard-
less of size, relied primarily on social network word-of-mouth and newspaper ads.
The larger organizations in their sample were more likely to employ professional
networks while the smaller organizations reported greater use of e-mail networks.
The authors attributed reliance on word of mouth to the relative low cost,
minimal need for technology, and local focus of these methods. They noted these
methods resulted in great satisfaction with applicants identified. Still, following
Werther and Berman (2001), they cautioned word-of-mouth and employee
referral processes also represented a potential challenge to attracting a diverse pool
of candidates and could also lead to the creation of potentially disruptive cliques
(Ban et al., 2003).
92
Indeed, Watson and Abzug (2016, p. 602) specifically note that “recruiting
by internal referral is so successful” because “individuals who know insiders are
much more likely to understand what the organization is about and accurately
assess whether or not they would like to work there.” And yet, they, too, caution
that “fit is not a synonym for homogeneity” (Watson & Abzug, 2016, p. 602),
suggesting that the more “successful organizations tend to seek and engage
diverse viewpoints.” Organizations would need to undertake internal recruitment
or encourage word-of-mouth referrals within the context of encouraging insiders
to think broadly about their networks and creatively about staff promotion.
External/Formal Recruitment Approaches and the Role of Competition

On the cusp of internal and external approaches to recruitment sit social networks
of the technological (as opposed to word-of-mouth) variety. While a generic
organizational literature captures the growing role of social media in recruitment
(Karl & Peluchette, 2013; Kluemper, 2013; Ollington, Gibb, & Harcourt, 2013;
Roulin & Bangerter, 2013; Zide, Elman, & Shahani-Denning, 2014), there is a
distinctly nonprofit flavor to this as well. Research on Millennials (roughly the
children of the Baby Boomers born between 1984 and 2000) has noted how this
hyperconnected generation connects specifically with nonprofit organizations
through social media sites such as Facebook (McCorkindale, DiStaso, & Sisco,
2013).
Indeed, understanding the different external avenues to reach distinct groups
of potential employees is particularly important in an environment of competition
for resources between mission-driven organizations. Hall and Hall (1996) noted
similarly situated social movement organizations may finely granulate different
recruitment strategies such that one organization may seek maturity and perspective
in their candidates while a competing organization may seek youth and zeal.
Indeed, nonprofit organizations interested in appealing to the sensibilities of
potential Millennial employees would want to hone their social media presence
across the newest and hottest platforms, while nonprofits (perhaps even in the
same subsector) who are interested in recruiting more seasoned/experienced
employees may place their recruitment resources in more traditional media
including trade journals and newspapers.
Other Antecedents of Successful Recruitment

Some of the studies of antecedents to successful recruitment in nonprofit organiz-
ations do not fall neatly into effectiveness of internal or external approaches. In
a summary statement, Gazley (2016) has implicated competitive salaries, benefits,
and advancement opportunities as key organizational factors supporting non-
profit staff recruitment. Yet, to the extent that nonprofits find it difficult to
compete focusing on such extrinsic motivation factors, Gazley (2016) suggests that
nonprofits take pains to also understand the intrinsic motivations of prospective
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employees. She counsels that nonprofits can achieve this latter objective “by
engaging in the foundational activities of effective recruitment: job design,
screening, and interviewing, where a purposeful discussion of employee goals
can be achieved” (Gazley, 2016, p. 98). Indeed, Ban, Drahnak-Faller, and Towers
(2003) pointed out that nonprofits have particular flexibility in their human
resource strategy compared to public agencies constrained by civil service rules
and regulations. This flexibility would characterize both recruitment and selection
processes.
Reviewing the literature on recruitment, we see best practices emerging in
internal/informal recruitment, external/formal recruitment, and studies that do
not fit neatly into either of the former. We note how authors use the concepts
of increased “fit” and lower costs in explaining the popularity of internal/
informal recruitment, even as they warn that precautions must to be taken to
ensure personal networks can lead to diverse applicant pools. In the external/
formal recruitment literature, we also note a concern for attracting diverse
applicant pools, as authors describe how various media (social and traditional)
can be utilized to target different audiences. Finally, we return to the theme that
nonprofit recruitment may be differentiated from recruitment in other sectors
due to the relative advantage of using mission as an attractor compared with
for-profit recruiting and the relative advantage of private sector flexibility
compared with governmental recruiting.
Nonprofit Selection
There does not appear to be a huge scholarly empirical literature on selection in
the nonprofit sector. Perhaps because the sector as a whole (exceptions abound,
of course) seems to be perennially portrayed as under-staffed (see, for example,
Lynn, 2003; Rehling, 2000; Silverman & Taliento, 2006), there may be a sense
that selecting among multitudes of candidates is a nonprofit’s fantasy. Then again,
Ban et al.’s (2004) study of Pennsylvanian nonprofits noted that “focus group
participants reported no shortage of good resumes to choose from, especially
when the very top-level positions such as executive director became vacant”
(p. 137). In reviewing the credentials of the applicants, Ban et al.’s Pennsylvanian
nonprofits used a variety of selection methods—with some organizations
consciously trying to hire locally. One of the few studies that appears in a search
for “employee selection in nonprofits” makes the claim that the relatively lower
wages of the sector may be causing self-selection for (at least) managers in
nonprofits (Handy & Katz, 1998).
Nickson, Warhurst, Dutton, and Hurrell (2008), writing in the Scottish
context, promulgate the related idea of a social process model of recruitment
and selection to help make sense of the recruitment conundrum of lower wages
in the sector (for global perspectives on nonprofit recruitment difficulties,
see Barnard, Broach, & Wakefield, 2004, and Wilding, Collis, Lacey, &
McCullough, 2003). They suggest the social process model of recruitment and
94
selection—whereby selection is a two-way street where both the applicant and

organization size up person/organization fit—is particularly appropriate for the
voluntary sector. They suggest, following Herriot (1989), that selection is actually
the beginning of a two-way relationship.
Other studies provide suggestions for future selection criteria in the sector.
Bish and Becker (2015), for instance, suggest their findings of unique nonprofit
manager capability requirements—an emphasis on personal knowledge and
experience and a commitment to the nonprofit sector and organizational values—
have implications for establishing selection criteria. Such a commitment to
organizational values in the selection criteria might presuppose the adoption of
the social process model as opposed to a more traditional (read: for-profit)
selection focus solely on the “‘product’ or ‘procedural’ characteristics of selection
(e.g., reliability, validity of selection tools)” (Derous & De Witte, 2001, p. 319).
Limited empirical studies are supplemented by theoretical or modeling
exercises of nonprofit selection. For instance, Caers, DuBois, Jegers, De Gieter,
De Cooman, and Pepermans (2009) use economic modeling to recommend “the
importance of a strong commitment to the organization’s mission and caution
for both a strong self-interest and a strong devotion to the well-being of the
clients” (p. 173), for the selection of nonprofit employees.
Bringing together Caers, DuBois, Jegers, De Gieter, De Cooman, and
Pepermans’ (2009) admonishments with Nickson, Warhurst, Dutton, and Hurrell’s
(2008) work in Scotland seems to point to the value of a negotiation or social
process model in nonprofit selection. According to Derous and De Witte (2001,
p. 319), such a model would include eight process characteristics that applicants
could expect from nonprofits:
(1) provision of general information on the job opening, (2) participation and
control, (3) openness to assertiveness, (4) creation of transparency of testing,
(5) provision of feedback, (6) guarantee of objectivity and standardization,
(7) assurance of human treatment, and (8) respect for privacy and job relevance
of information gathering.
The research seems to be pointing away from a for-profit reliance on testing

of applicants in selection, and toward a more non-profit friendly, mutually
getting-to-know you process.
The Impact of Nonprofit Recruitment and Selection

The success (or not) of nonprofit recruitment and selection can have profound
organizational effectiveness and consequences for employee well-being. A
meta-analysis of the large literature on individuals’ fit at work (Kristof-Brown,
Zimmerman, & Johnson, 2005) corroborated that person-organization fit strongly
correlates with job satisfaction and organizational commitment. In the nonprofit
sector, as Gazley (2016, p. 95) notes, “An organization’s inability to find the right
95
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staff will make the jobs of other staff more challenging. An inability to find staff
who reflect the demographic characteristics of clients will make it more difficult
to serve particular client populations.” Indeed, Kettlitz, Zbib, and Motwani
(1997) found that poor selection practices, including not using weighted application
blanks (WABs) in pre-employment screening, are correlated with nursing aides
turnover. Although focused specifically on nursing aides in nursing homes, Kettlitz
et al. (1997) linked higher turnover to applicants who left information about prior
length of service, prior wage increases, and percent of general (non-nursing)
coursework blank on their applications. They also implicated applicant unemployed
status, finding the job through the newspaper, and finding the job through referral
by a current employee as correlates to shorter tenure. Further, Kettlitz, Zbib, and
Motwani’s (1997) research supported the use of biographical information blanks
(personal history data) to predict employee theft, as well as turnover.
Research by Taylor and McGraw (2006), coming out of the study of nonprofit
sport organizations in Australia, found the strong emphasis placed on the recruit-
ment and selection of paid staff (in comparison to that of volunteers): (1) was not
correlated with further employee development or training; (2) reflected funding
limitations on training and development coupled with the belief that recruiting
and selecting for strong business and management skill and expertise would
obviate the need for training; and (3) suggested these organizations believed
employing the right people would pay off in the long run. These findings circle
back to the idea that self-selection in/to organizations of the sector helps delineate
what is both unique and potentially enviable in recruitment and selection in
Indeed, the limited empirical data on the impact of (poor) recruitment and
selection processes in the nonprofit sector seems to suggest that, given high costs
associated with subsequent training as well as the liabilities inherent in making
recruitment/selection mistakes, nonprofits are well advised to invest resources
upfront to strategize these all-important core activities.
Lessons Learned
This review of a somewhat delimited empirical literature on recruitment and
selection in nonprofit organizations has still unearthed some common themes:
(1) recruitment in the sector, though vitally important given scarce human
resources, is often comparatively informal; (2) such informality decreases as the
human resource function professionalizes, yet, such informality is not always seen
as problematic; (3) self-selection into the sector confirms a differentially-motivated
labor force while also, often, substituting for more formal selection processes; and
(4) recruitment and selection, especially in the nonprofit sector, have profound
individual, organizational, and societal impacts.
In the end, then, the extant literature suggests that nonprofit recruitment
and selection are of utmost strategic importance to the success of the nonprofit
mission, yet may still be, too often, performed informally. Yet, formalizing
96
strategic recruitment and selection need not entail hiring staffing experts, although
that might be preferable where funding is plentiful. However, for most nonprofits
with smaller staffing budgets, where every hire is crucial, strategic planning and
implementation of recruitment and selection processes are still achievable with
commitment from the governing team. Nonprofit managers, working backwards
from thoughtfully delineated recruitment/selection goals, can economically adopt
best practices, including the strategic use of informal networks and social media
platforms coupled with a social process model of selection. Indeed, the individual,
organizational, mission, and societal payoff from investing time, thought, and
resources into the nonprofit recruitment and selection process will likely be
tremendous.
1 Think back to when you (or a friend/family member) were recruited and
selected to a nonprofit organization. To what extent did the organization
follow the best practices reviewed in the chapter? What other best practices
did the organization use?
2 In what ways would recruiting and selecting volunteers differ from the
recruitment and selection of paid staff members at nonprofits?
3 What roles might the Board of Trustees play in the recruitment and selection
of nonprofit staff?
Exercises
1 Look for nonprofit ads in the Chronicle of Philanthropy or on Idealist.org.
Work with a group to determine what other recruitment avenues the
organization might use to fill this position. Next, working in your group,
put together a plan to make a selection among qualified candidates.
2 Consider a nonprofit organization with which you have worked or
volunteered. Put yourself in the place of the Board of Trustees and write a
strategic plan for future recruitment and employee selection.
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7
Succession Planning and
Management in Nonprofit
Organizations
Yeonsoo Kim
It’s always wise to look ahead, but difficult to look further than you can see.
(Winston Churchill)
To ensure the sustainability of the organization, nonprofits need to be serious about

planning for the transition of key positions and leadership (Allison, 2002). Being
ready with a strategic plan in place for an effective transition, whether due to an
expected vacancy or the anticipated transition of a leader, can help organizations get
ready for inevitable challenges of leadership transition.
(National Council of Nonprofits, n.d.)
Introduction
Since many nonprofits are typically small and heavily reliant on a deeply moti-
vated staff, planning for sustained leadership is critical for nonprofit organizations
(Adams, 2010). In recent years, nonprofit practitioners and scholars have pointed
to challenges with leadership transition and succession planning for executives
as critical for organizational success (Allison, 2002; Froelich, McKee, & Rathge,
2011; Stewart, 2016). Despite the projected retirement of many nonprofit execu-
tives in the coming decade, few nonprofits have created or implemented formal
succession plans (Wolfred, 2008). Surveys have consistently demonstrated non-
profits are aware of their leadership development gaps, but have not identified
strategies to address them (Tierney, 2006). Therefore, as a key human resource
management (HRM) practice, nonprofits have a lot of work to do in building
their HRM capacity associated with transitions and succession.
Many nonprofit organizations are relying on the practices and evidence
developed for for-profit organizations for succession planning. However, a close
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Yeonsoo Kim
examination suggests these strategies are ill suited to the nonprofit context due to
key differences between the sectors (Froelich, McKee, & Rathge, 2011). Effective
succession planning should be a system and program that address each organization’s
unique situation and help address future challenges. As Froelich et al. (2011)
highlighted, nonprofit organizations are different from for-profit organizations in
terms of end goals, reliance on volunteers, a complex relationship between the
executive director and board of directors, and an increasingly complicated mix of
revenue streams. Similar to other systems and programs of management, effective
succession planning and management begins with understanding the core concepts
of the practice, including definition and general models. Based on an accurate
understanding, each nonprofit organization should then think about their particular
context and figure out how to tailor succession planning and management practices
to their organizations. With this, these nonprofits will be able to design an effective
succession planning system and implement succession planning and management
as a program. Therefore, this chapter has two primary goals. First, we provide
general information about succession planning and management, including the
definition and an overview of some common models of succession planning and
management. Second, we provide information and best practices for nonprofit
organizations to begin to create their own succession plans and manage the process
effectively.
Definition of Succession Planning and Management

Succession planning is the process of identifying and developing new leaders to
succeed current leaders (Kramer & Nayak, 2013). Succession planning is a means
of identifying key positions in an organization, starting with supervisors and
managers up to the highest positions in the organization (Carter, 1986). At its
best, it is a proactive and systematic process to build a clear pipeline of leaders
(creating strong bench strength) within an organization and to identify strong
external candidates, so when transitions are necessary, the organization is ready
to act. The potential of effective succession planning, as a system, lies in its
ability to help organizations in developing and sustaining a leadership pipeline.
This helps assure leadership continuity for key positions, fosters the engagement
of the senior management team in a structured process to review talent over time
(not simply in a reactive mode), facilitates the examination of diversity issues to
guide leadership development, encourages a periodic re-examination of unit
structures, processes, and systems, and finally aligns human resource management
functions to support the leadership renewal process (Liebman et al., 1996).
In today’s dynamic environment, especially in the nonprofit sector, traditional
succession planning, which encourages organizational stability, needs continuous
modification to remain useful in addressing various organizational challenges. An
effective succession plan cannot simply be a list of future promotions. To remain
effective, succession planning should serve as a means to regenerate a nonprofit’s
leadership and fulfill the goal of developing a strong leadership team (Froelich
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Succession Planning and Management
et al., 2011). The best means to realize the potential of succession planning lies
in succession management, which moves planning into a more active approach
to leadership and talent development (Rothwell, 2005). Succession management
assumes a more dynamic organizational environment and career development of
people within an organization. In contrast, succession planning focuses upon the
slating process, which identifies individuals who are ready to lead or who have
the potential to lead. For example, traditional succession planning would look to
identify key actors who are ready now (or in six months) to take which position,
with the assumption that the position and its requirements remain largely
unchanged (Rothwell, 2005). The succession management process, on the other
hand, asks the current leadership to create a strategy to develop future leadership,
focusing on developing the needed and required future competencies and
delivering an array of supporting development opportunities, with the assumption
of changing organizational needs (Liebman et al., 1996). To be effective and com-
petitive, succession planning and management must work in concert to produce
desired outcomes for nonprofit organizations (Froelich et al., 2011; Rothwell,
2005). However, for nonprofits, especially those who struggle with resources for
training and development, succession planning and management can be a
challenge. We argue it is worth the investment and that nonprofits cannot ignore
their future leadership needs.
A succession planning and management program is a deliberate and focused
effort to maintain continuity of key positions, through both retention and devel-
opment of future intellectual and knowledge capital, and to encourage the
advancement for individuals (Rothwell, 2005). The need for succession planning
and management is not confined to management or senior roles. Effective suc-
cession planning and management work to ensure critical backups and individual
development across job categories—including key clerical, front-line, profes-
sional, technical, and production positions. The extension of succession planning
and management beyond management ranks is even more important as organiz-
ations take active steps to build higher performance and create environments
that involve their workers, as in many service areas including the nonprofit
sector, these environments involve decentralized decision-making, empowered
employees, diffused leadership throughout the workforce, and accumulated tech-
nical knowledge based on experience in the organization (Rothwell, 2005).
These environments create a fertile ground to involve employees in thinking
about the future.
A key goal of succession planning and management is the alignment of the
organization’s current talent with future talent needs: What do you have now
and what will you need in the future? A second goal is enabling organizations to
better address operational and strategic challenges by matching employees to the
needs and actions of the nonprofit at the right time. When challenges arise for
nonprofit organizations, succession planning and management should allow
a nonprofit to evaluate how well their current workforce was able to weather
these challenges and what was learned about the existing human capital stock and
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how it could be improved. In this sense, succession planning and management are
important tools to allow organizational learning. Succession planning and manage-
ment ensure that the institutional memory and collective experiences are preserved
and synthesized to achieve continuous improvement in work outcomes. This
can enable double loop learning, which helps to challenge underlying values and
assumptions that may get in the way of organizational progress (Argyris, 1999;
Senge, 1990). In other words, succession planning ensures continued development
of leadership and talent through structured reflection and development and aids in
the management of knowledge in the nonprofit organization over the long term
(Froelich et al., 2011; Rothwell, 2005).
Succession Planning and Management and HR Processes:

Distinguishing the Concepts
Although the term succession planning is used often, succession planning and
management are often misunderstood and used interchangeably with related
terms such as replacement planning, workforce planning, and talent management.
Since the purpose and scope of those relevant terms are different and could lead
to different strategies in terms of program implementation, we now clarify the
differences between key concepts and terms related to succession planning and
management.
Replacement Planning
Although replacement planning is often a compatible and overlapping activity,
succession planning and management are distinct from replacement planning.
Replacement planning is “the process of identifying short-term and long-term
emergency backups to fill critical positions or to take the place of critical people”
(Rothwell, 2011, p. 87). This planning focuses more on filling gaps based on
extraordinary circumstances or temporary disruptions versus more sustained
leadership development and succession. At its core, replacement planning is a
strategy to manage organizational risk. In contrast, succession planning does not
focus per se on identifying staffing backups within a department; it is a more
comprehensive approach to examining needs at different levels of the organization.
However, many people consider replacement planning as succession planning or
as a part of succession planning. Unlike replacement planning, succession planning
is a strategic effort and system of human resource management instead of a plan
to address an episodic event. Having backups identified is a good first step, but
it is not enough for the long term.
Workforce Planning
Unlike succession planning, which focuses on succession, transition, and devel-
opment of key positions in an organization, workforce planning is a broader
HRM practice tied to the planning and development of the workforce, a
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comprehensive approach to the entire workforce for an organization (Bechet,

2008). This type of planning is also known as human resource planning. Workforce
planning involves matching the number and quality of people to the organi-
zation’s strategic objectives. The goals of workforce planning and succession
planning are the same. These processes plan for the right number and right type
of people to meet the organization’s needs over an extended time (Rothwell,
2011). However, workforce planning is different from succession planning in
several aspects, including its focus on staffing jobs in current time, hiring forecasts
and internal resources projection, and its budget-driven aspect (Pynes, 2013).
Workforce planning also focuses on understanding labor market and trends
that impact the clients, services, and funders, and developing individual and
organization-wide strategies and changes that will impact job, internal activities,
and costs (Workforce Magazine, 2012). While often associated with workforce plan-
ning, succession planning is an approach with the specific purpose of ensuring that
selected (typically senior leaders of an organization) staff are trained, experienced,
and ready for future leadership positions. Succession planning is often embedded
within a larger framework of workforce planning and overall strategic human
capital management (Pynes, 2013; Selden, 2009).
Talent Management
The recent interest in talent management has led to the growing popularity of
the terms talent strategy, talent management and succession planning being used
interchangeably to capture a larger approach to developing an organization’s
human capital (Kim et al., 2014). However, the differences between talent
management and succession planning are distinct. Talent management moves
beyond succession planning toward the larger goal of competing and developing
talent. Generally, talent is a tool for managing the “best-in-class talent”—the
upper 1–10 % of employees (Smart, 2005). Talent management involves a broad
spectrum of HR activities, including identifying, developing, appraising,
deploying, and retaining high performing and high potential employees (Collings
& Scullion, 2007). It is the process of attracting, developing, and retaining the
best people. This threefold-integrated focus distinguishes talent management from
succession planning (Rothwell, 2011). Talent management and development are
covered in Chapter 8 of this volume.
Talent management is comprised of many typical human resource management
(HRM) practices, functions, and activities (Lewis & Heckman, 2006). In this way,
talent management is similar to strategic human resource management. Talent
management focuses on the most talented employees (commonly mentioned as
high performing and high potentials). Therefore, talent management typically
classifies employees into top, middle, and low performers. It then focuses on
development activities for these top performers. Talent management also
concentrates on mobility and flows of employees within an organization, which
encompasses succession planning and human resource planning (Collings, 2014).
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Lastly, talent management emphasizes the key positions within an organization in

relation to the strategic goals of the organization. It is believed these positions and
the employees currently holding them can allow an organization a competitive
edge. The critical focus of talent management is not on talented employees per se
but on key positions within the organization from a strategic perspective (Collings
& Mellahi, 2009).
As mentioned earlier, the terms replacement planning, workforce planning,
talent management, and succession planning are often used interchangeably due
to some similarity in terms of strategic aspects and goals, but the differences
between these terms should be clarified as distinct HR activities or programs
aligned under an organization-wide HR strategy. But it is also important to
understand that each of the HR activities and programs described should be
designed and planned carefully to be aligned and integrated within the entire
human resource management strategies and goals of an organization in order
to be effective. It is worthwhile reviewing different models that provide various
perspectives that can be adapted as a guide to developing effective succession
planning and management.
Models of Succession Planning and Management

Succession planning and management are composed of processes and systems that
must be adapted or specifically tailored to the unique needs and situations of
organizations. For succession planning to be a valuable management capacity
investment for a nonprofit, it is critical to consider what approach best suits the
needs of the organization. While there has been a lot of research on this manage-
ment process and the consultants working in this area, there are several different
models and approaches that are most commonly used and may be best suited for
nonprofits. Among them, the three models widely used for succession planning
and management across the different sectors are: (1) the Leadership Pipeline
Model; (2) the Acceleration Pool Model; and (3) the Seven-Pointed Star Model.
The Leadership Pipeline Model by Charan et al. (2001), based on the work of
Mahler, provides the basis to initiate a succession planning and management
system in an organization. The Acceleration Pool Model by Byham et al. (2002)
highlights the identification and development of a pool of candidates by providing
a step-by-step process of implementation. The Seven-Pointed Star Model by
Rothwell (2005) provides comprehensive procedures to develop a succession
planning and management program. These three models provide different per-
spectives and approaches for succession planning and management that can be
applied to nonprofit organizations with some tailoring and modification.
The Leadership Pipeline Model

The Leadership Pipeline Model (Charan et al., 2001) provides an approach
to overall leadership development rather than a systematic guide to develop a
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Figure 7.1 The Leadership Pipeline Model

Source: Adapted from Charan et al. (2001, p. 8).
succession planning and management program. This model formed the basis for
modern succession planning (Mahler & Graines, 1983, p. ix). Charan et al. (2001)
propose that in large decentralized organizations, career hierarchy can be
represented by six career passages or pipeline turns (Figure 7.1). The pipeline is
not a direct path and each bend represents a change in organizational hierarchy
and complexity, requiring attention to the HR process and how the individual
is managed at those different levels. At each level, a significant turn must be made
to reach a different level of complexity and leadership. Making these turns
involves large shifts in job requirements, new skills demands, and work values.
If an organization is unable to identify and recruit candidates at the top, it is likely
they will face difficulties at lower levels of leadership.
Based on this assumption, Charan et al. (2001) argue organization must fill the
pipeline with high-performing people to ensure every leadership level has
sufficient talent to draw from for current and future needs. In order to do so, they
propose a five-step plan for succession planning. In the first step, the organization
adjusts the Leadership Pipeline Model to the needs of their organization. In the
second step, the organization translates standards for performance and potential
that can be used to guide individuals in the positions and targeted for the positions.
In the third step, the organization documents and communicates the standards set
in the previous step. In the fourth step, organizations evaluate succession candidates
using a combined potential-performance matrix. The matrix used employs a nine-
box grid, which rates the potential of the candidate and their performance. In the
final step, the plans and progress in terms of talent pipeline are seriously reviewed
on a regular basis. The applicability of this model would vary for nonprofits based
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on the depth of their career ladders and the complexity of their organizations.
However, it could be useful for nonprofits where staff are making significant steps
in their development that would require some job shifts. For example, in a
nonprofit where expert front-line workers, such as teachers or social workers, are
moved into nonprofit management positions, this could help the workers be
identified and given targeted management development training before moving
into those positions. In addition, in nonprofits where workers may work in
lower levels of operations, such as development or financial management, and
are identified as possible future leadership, this could be used to develop them
gradually for those positions.
Acceleration Pools Model

Byham et al. (2002) suggested an approach to grooming executive talent known
as the “Acceleration Pools Model.” This model, rather than handpicking a few
people for each executive position, emphasizes the development of a pool of
high-potential candidates for executive positions. Development of individual
pool members is accelerated through stretch and taskforce assignments which
serve as learning experiences. Other development opportunities can include:
training, mentoring, coaching, special developmental activities such as university
executive programs and action learning sessions, and high visibility assignments.
The Acceleration Pools Model entails five phases (Byham et al., 2002). Figure 7.2
displays the phases of the Acceleration Pools Model and the sub-process involved
in each phase.
The Seven-Pointed Star Model

Rothwell (2001; 2005) proposes use of the “Seven-Pointed Star Model” for
systematic succession planning and management. The first step requires an
organization’s decision-makers to commit to the process of succession planning
and management. Then, decision-makers must clarify and evaluate the work
requirements and the competencies of the key leadership positions in the
organization. This allows the organization to assure individuals targeted for
advancement are doing so based on current rather than outdated or inaccurate
work requirements. The third step requires a critical evaluation of individual job
performance of targeted individuals before they can advance. At this stage, an
inventory of talent is developed to clarify the availability of human assets. The
fourth step requires a focus on competency needs of leadership positions in
the future. This step attempts to overcome the current status quo understanding
of the workforce needs in order to prepare the organization to cope with change.
In the fifth step, individuals are assessed and matched to projected requirements
and competencies.
The Seven-Pointed Star Model requires organizations to create a process to
assess the individual potential of employees. This process is separate from past
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Figure 7.2 The Acceleration Pools Model
Source: Adapted in part from Byham et al. (2002, pp. 20–21).
Yeonsoo Kim
and present employee performance appraisals. During the sixth step, organizations
create an ongoing internal program for leadership development. In order to
supplement leadership development, alternatives to traditional promotion-from-
within methods must be examined to meet succession needs. The seventh and
final step involves continual evaluation of effectiveness of the program. The results
of the evaluation refine the program and maintain commitment to the program
(Rothwell, 2001; 2005).
Lifecycles of Succession Planning and Management

Rothwell (2001; 2005) explained organizations cannot go from no succession
planning to a fully implemented program overnight. For this reason, he suggests
organizations should phase in succession planning. This phased-in approach guides
organizations through a lifecycle of development to gradually phase in succession
planning and management. Through each successive generation, organizations
acquire skills and knowhow to increase their ability to reach the next level of
implementation (Rothwell, 2005). He described the lifecycle of succession
planning and management in five generations, summarized in Table 7.1.
The fifth and most sophisticated level of succession planning and management
includes the creation of policies and procedures, and value statements to guide the
program; competency models for key employees; assessment efforts; individual
employee development plans; and skill inventories of talent pools inside and outside
the organization. The plan then examines how organizations can implement
systematic succession planning and management.
Succession Planning and Management in Nonprofit

Organizations
A single approach to succession planning and management cannot be applied to
all organizations and settings (Rothwell, 2005). While there are many similarities
in succession planning and management across the business, government, and
nonprofit sectors, there are some key differences to consider. As Rothwell (2005)
highlights, non-profit entities do share some characteristics and practices with
business and government. Therefore, effective succession planning and manage-
ment for nonprofit organizations will follow a hybrid model of successful strate-
gies in the private and public sectors. To be successful, succession planning and
management need support and sponsorship from leaders, executives, and senior
management of the organization.
In that respect, the nonprofit organization’s succession planning is similar to
the private sector. However, unlike the private sector, nonprofit organizations’
succession planning needs to consider the involvement of dedicated leadership
who have made their careers committed to the mission of the organization such
as the founder(s), the board of directors, and significant contributors (Allison,
2002; Froelich et al., 2011). The support and sponsorship needs for succession
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Table 7.1 Five generations of the succession planning and management lifecycle
Typical implementation
Lifecycle of SP plan Major components
Generation 1 A simple replacement • A simple replacement plan for CEO

plan for CEO
Generation 2 A replacement plan for • Simple replacement plan for CEO and
the CEO and his or her his or her immediate reports (the senior
immediate reports leaders, the senior executive team)
• Involvement of senior managers
Generation 3 A succession planning • Succession planning and management
and management program for middle managers
program for middle • Drafts of policies and procedures for
managers and perhaps succession planning and management
their key reports • Use of competency model
• Value statement
Generation 4 A talent pool approach • Focusing on development of internal
focused inside the talent pools
organization • Everyone in organization considered a
possible successor for key position
• Provide tool for career development for
future
• No-more organization chart
• Use of competency model, performance
appraisal, individual development plan,
full-cycle multi-rater assessment, and
other sophisticated methods for
development
Generation 5 A proactive talent pool • Include external talent pool
approach focused inside
and outside
Source: Adapted from Kim (2006, p. 26).
planning in a nonprofit organization are more complex than those for-profit

corporations. In this way, succession planning and management for nonprofit
organizations more resemble government entities (Rothwell, 2005). Indeed, one
of the unique challenges of succession planning and management in the nonprofit
sector is the nature of the relationship between the executive director and the
board of directors (Froelich et al., 2011), especially given how nonprofit
governance differs from for-profit governance (McFarlan, 1999).
In addition, the majority of nonprofits are small in terms of the number of
employees. While larger nonprofits may have the capacity to invest in long-term
strategic planning such as succession planning, it is hard for most small nonprofit
organizations to prioritize succession planning. In smaller nonprofits, staffing and
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resources are already stretched thin and most organizations cannot support
multiple managers for replacement planning. Due to the smaller size of these
organizations and few dedicated resources for leadership development, succession
planning for nonprofits focuses on the search outside the organization (Froelich
et al., 2011; Santora, Caro, & Sarros, 2007). It is important to note that small
nonprofit organizations are likely at more risk if they fail to plan for the future
in terms of leadership and other needs because their margin for error is so tight.
Nonprofits need to scale their succession planning based on their level of
management capacity, but this planning and management cannot be ignored if
nonprofits want to maintain their sustainability.
Current Status of Succession Planning in Nonprofits

Executive leadership is a component key factor in the success of nonprofit
organizations (Bell, Moyers, & Wolford, 2006; Stewart, 2016). The size of the
nonprofit sector has continued to grow in terms of the nature and complexity of
these organizations (Salamon, Sokolowski, & Geller, 2012). Surveys have shown
nonprofit organizations are aware of their leadership gaps, but struggle to address
those gaps by strengthening the leadership bench. Froelich, McKee, and Rathge
(2011) found that organizations struggle to replace long-serving leaders, but few
proactive steps have been taken.
One of the largest obstacles to addressing the issue of succession is actually the
failure of current leaders to make addressing the issue a priority. Often current
leaders and boards of directors wait to plan for leadership development until a
succession crisis is underway or imminent (Kramer & Nayak, 2013). At this
point, these actions may be too late or at least less effective than they could have
been. It is important to understand succession planning is not an episodic event
triggered by a departure of key leader(s). Instead, successful succession planning
is a practice—indeed it is management—that requires investment in building the
pipeline of leaders for a nonprofit at all levels.
Nonprofit organizations often hobble their own leadership development
efforts due to the unique resource challenges including limitations on allowable
overhead, and restrictions on the use of donor and contract funds (Pynes, 2013).
These restrictions leave few resources to invest in their people and infrastructure.
Therefore, experts suggest different approaches for succession planning and
management for nonprofit organizations. Several organizations provide guides
and best practices for succession planning by nonprofits focusing on executive
succession. Two prominent resources include a publication by CompassPoint,
which outlines three different approaches to succession planning (Wolfred, 2008)
and the Nonprofit Executive Succession-planning Toolkit by the Federal Reserve
Bank of Kansas City (Federal Reserve Bank of Kansas City, 2009). The Federal
Reserves’ toolkit provides a detailed method for planning and implementation
of succession planning. A third resource by the Bridgespan Group, Nonprofit
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Leadership Development (Kramer & Nayak, 2013), provides a detailed step-by-

step process for succession planning and management.
Considering Succession Planning in the Nonprofit Sector

CompassPoint Nonprofit Services and Transition Guides developed a guide
outlining three approaches to succession planning and management. These three
approaches speak to different resources levels, preparation, and lead time for
nonprofits facing or planning for leadership transitions.
• Emergency succession (or leadership) planning ensures that key leadership and
administrative functions, as well as agency services, continue uninterrupted.
This is meant for organizations facing an unplanned or temporary but
longer-term absence of a key leader.
• Departure-defined succession planning is recommended for organizations facing
the announced departure of a long-term leader with two or more years of
lead-time. This process involves identifying the agency’s future goals and
how the next leader should connect to those goals; determining the skill
needs of a possible successor; and building the capacity of the remaining
leadership team and systems to sustain the organization.
• Strategic leader development is recommended for organizations not facing the
imminent departure of a leader but who want to prepare for future leadership
needs. This practice engages the agency’s strategic vision to identify the
leadership and management skills needed to achieve those goals. It also
involves recruiting and retaining talented individuals who currently have or
have the potential to develop the needed skills (Wolfred, 2011).
Nonprofit Executive Succession Planning Toolkit of Federal Reserve

Bank of Kansas City
The toolkit by the Federal Reserve Bank of Kansas City, which serves a seven-
state region, was developed based on a district-wide assessment of nonprofit
organizations. The toolkit includes information about succession planning and the
roles of board members, executives, and key staff in succession planning, questions
assessing readiness, an overview of the succession planning process, and templates
and documents following the three approaches of succession planning suggested
by CompassPoint. The toolkit also contains links to other online resources for use
in the succession planning process.
Succession Planning Roles

Successful planning for nonprofit succession requires a collaborative effort
between the incoming executive, key staff, and the governing board. Table 7.2
outlines the key roles of each member in planning for succession in general.
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Table 7.2 The key roles of members in succession planning
Members Roles in succession planning
Board Members • Secure the organization’s future by clarifying direction and

ensuring strong leadership. A succession plan promotes the
availability of a strong executive when needed.
• Understand the complexity and responsibilities of the executive
role. Select, support and evaluate the executive on a regular
basis.
• Leverage board contacts and expertise, especially during periods
of leadership transition.
• Play a lead role in working with the executive to develop and
approve succession plans for various scenarios.
• Appoint a board committee to address transitional issues in the
event of an unexpected departure of the executive.
Executives • Provide a process for regularly reviewing and stretching the
board’s effectiveness.
• Ensure legacy and succession occur. Draft an emergency
succession plan and submit to the board for approval.
• Implement process to develop key staff members and promote a
culture that encourages professional development.
• Work with the board chair to schedule board meetings dedicated
to the succession-planning process.
• Evaluate their role in the organization, promote and encourage
the executive succession-planning process.
• Implement, upon board approval, and communicate the
succession plan with affected staff.
Key Staff • Support successful transition of new executive and provide
program and organizational information as requested.
• Continue to provide services to clients in absence of executive
and during transition.
• Ensure they are aware of the defined internal and external
communication plan so they can address public inquiries.
Source: Adapted from the Federal Reserve Bank of Kansas City (2009).
Types of Succession Planning by the Federal Reserve Bank of

Kansas City
The eight steps of emergency succession planning are:
1 Update the executive job description.

2 Define interim executive key responsibilities.
3 Define internal and external communication plan.
4 Process to appoint interim executive.
5 Cross-training plan for interim appointees.
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6 Board oversight and support of interim executive, including an information

system making critical information accessible to the board chair in the event
of an emergency.
7 Process to transition and assimilate new executive.
8 Approval of Emergency Succession Plan.
(Federal Reserve Bank of Kansas City, 2009, p. 10)
The seven steps of a departure-defined succession planning are:
1 Prepare for a smooth departure of the existing executive, including events

to recognize their service to the organization and assure they will support
their successor if needed (Wolford, 2011).
2 Update job description and the performance priorities to prepare the
organization for future success and sustainability.
3 Form a succession planning committee and clearly define their roles and
responsibilities in the process.
4 Create a communication plan to articulate clear messages about the process
and transition.
5 Conduct a sustainability audit by reviewing the factors most likely to impact
sustainability of the organization.
6 Promote successful transition of new executive by creating goals for their
first 90 days, identifying relevant professional development opportunities and
resources, and setting up meetings and feedback mechanisms for relevant
stakeholders.
7 Approval of the Departure–Defined Succession Plan is the final stage of the
process and it simply asks decision-makers to formally approve of the actions
and plans created.
The steps of strategic leader development planning involve an ongoing process

for organizations who wish to plan for future talent needs but are not facing an
immediate leadership transition. Implementation of the strategic leader development
planning is accomplished through the following nine steps:
1 Draft and approve a strategic plan that encompasses goals for leadership and
talent development needed to achieve identified strategies.
2 Implementation of an annual executive performance review including assess-
ment and feedback about performance relative to the strategic objectives.
3 A process for annual self-assessment of the board’s performance in key areas
including: quality of financial oversight, legal compliance, understanding and
assessment of programs, and feedback given to the executive.
4 Implementation of an annual staff evaluations system to ensure performance
on job duties and skills.
5 Promotion of ability of senior management to work as a team.
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6 Cultivation of relationships with stakeholders by staff, the board and

executive.
7 Creation of a six-month financial reserve for operating costs.
8 Examination of financial management systems to assure they comply with
industry standards.
9 Document and update operational manuals for administrative systems.
Nonprofit Leadership Development Toolkit by Bridgespan Group

Bridgespan’s Nonprofit Leadership Development Toolkit proposes a succession
planning tool they call Plan A (Kramer & Nayak, 2013). Plan A asks organizations
to plan and create a vision for the organization’s future leadership team, including
an examination of the capabilities and roles needed to achieve particular strategies
and the steps required to build that team. Plan A is a succession planning and
management system that differs from a simple succession plan in that it is focused
on comprehensively engaging the senior leadership and board in the process. Plan
A involves the following five steps:
1 Engage senior leaders: The CEO and senior leadership team need to be on the
same page about the importance of leadership development and succession
planning. This group should design the process, including expectations and
processes and ensure the organization moves forward with implementation.
The CEO’s role is critical here—the CEO needs to emphasize leadership
development as a priority, set clear expectations with associated accountability,
build (and develop) a senior leadership team, engage the board, and harness
the power of the nonprofit’s human resources (Kramer & Nayak, 2013,
pp. 24–25).
2 Map out a vision of the future leadership team: This kind of structured develop-
ment process requires thinking about what the future should look like. With
this understanding and associated strategic discussion, the organization can
assess the potential of current staff to become future leaders to meet emerging
needs. Kramer and Nayak (2013, p. 53) suggest these procedures:
Step 1: Define the critical leadership capacities needed to fulfill your

organization’s mission in the next three to five years.
Step 2: Assess the potential of your staff (current and future leaders) to
take on greater responsibility.
Step 3: Create your Plan A for what leadership teams within the
organization will look like in three years.
3 Develop future leaders: Future leaders need to be identified, with associated

development needs, and a plan to address those needs. Leaders often develop
on the job—nonprofits traditionally have been good about giving employees
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a wealth of experience and opportunities to learn. However, a systematic

process is needed. To do this effectively requires individualized attention to
development needs, with this being a joint effort between leadership and
employees, who should be deeply involved in crafting their individual
development plans. The steps to develop future leaders include identifying
“talent champions,” considering the needs of the organization, and working
with individuals to both design development plans and implement these
plans (Kramer & Nayak, 2013, p. 85).
4 Seek new talent to fill gaps (hiring externally to fill gaps): Internal promotions are
not always going to fill position gaps, no matter how much attention a
nonprofit places on succession planning. There will be times when future
positions cannot be filled by current staff, so the organization should have
strategic hiring and ongoing onboarding practices to integrate new leaders
into the organization. The steps involved in doing this align with model
HRM practices for effective recruitment and selection (Kramer & Nayak,
2013).
5 Monitor and improve the process of developing leaders: Like most processes,
leadership development is not a one-time process—it needs to be viewed as
iterative, with a focus on tracking performance and making adjustments
along the way. Successful nonprofits gather data to track their progress and
review what is working and what is not, with adjustments made to the
leadership development process. The detailed steps include: (1) revisiting
the objectives and actions that are being emphasized to make sure they are
still appropriate; (2) building steps into the process to emphasize and ensure
accountability; (3) assessing progress toward goals; and (4) identifying
possible problems or roadblocks and making adjustments where necessary
(Kramer & Nayak, 2013, p. 124).
Succession Planning and Management in Nonprofits:

The Future
Experts and seasoned professionals in nonprofit organizations agree leadership
change is inevitable for nonprofit organizations. As Froelich et al. (2011, p. 17)
conclude: “The reality is that many current executive leaders will leave the
workforce in the coming years; even if later rather than sooner, evidence suggests
that nonprofit organizations are not well prepared for this important transition.”
Lack of preparation for this change is present even when the current leader is
the founder. Founders, despite forming organizations that address important
societal needs, often have a hard time imagining the future of the organization
without them. However, at some point, the founder/leader should and will
move on from the nonprofit. Changes in leadership are rarely easy or smooth
and often present difficult challenges. Nevertheless, avoiding this inevitable
change or pretending that it will not happen could put an organization’s very
survival in jeopardy. It is more important to face this dilemma and begin to think
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strategically to ensure the organization will keep its agility and sustain its success
through the leadership transition.
As mentioned earlier, while there are many similarities in successful succession
planning programs, but there is no single approach to succession planning and
management which will work in all venues and organizations. Similar to the for-
profit sector, for each nonprofit organization, the most important part of succession
planning is to develop a realistic and effective succession planning with careful
consideration of constraints and resources available. As Rothwell (2015) mentioned,
organizations cannot jump from nothing to a state-of-art high succession planning
in a short time. As a systematic strategic planning process, succession planning is
a process that requires engagement of all aspects and people associated with the
organization.
Efforts to streamline and increase the effectiveness of leadership transitions
began as early as the 1960s. Succession planning and management started to gain
attention from leaders of organizations in the 1980s. It went on to become a
critical component of management in the 1990s. In the early years of succession
planning, the vast majority of attention was on top management and executives.
Currently organizations realize succession planning and management are not
only about executives and senior leadership positions but also the broader work-
force. To be effective and strategically contribute to the organization’s vitality
and sustainability, succession planning has evolved and broadened its scope to
all key positions, including professional, technical, and administrative positions
and the key knowledge needs of the organization. As Rothwell (2015) empha-
sizes, an organization cannot jump into a state-of-art succession planning in
a short time, it takes many years of collaborative efforts of leaders and members
of an organizations to plan, design, and implement a succession planning and
management program that fits into an organization. The unique challenges of the
nonprofit sector have led to the underdevelopment of succession planning
in nonprofit organizations so far. Many nonprofit organizations are still in the
early stages of succession planning development such as focusing exclusively on
executive succession. While the importance of effective succession planning
for executives should not be ignored or belittled, nonprofits still need to prepare
themselves to be more strategic and forward-thinking in terms of succession
planning and succession management to ensure the continuity of the organization
beyond current leaders.
As Froelich et al. (2011) pointed out, while nonprofit organizations often
strongly prefer their next leaders to come from within or from similar
organizations, the investment in leadership development activities in nonprofit
organizations is not high. In addition, many nonprofits are still not prepared to
implement succession planning as a strategic and systematic program rather than
due to an event of the chief officer’s transition. Furthermore, traditional leadership
development and succession planning do not provide the flexibility needed for
the rapidly changing environment facing organizations today (Gothard & Austin,
2013). The current literature calls for a fundamental shift from traditional
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replacement-succession planning toward a more comprehensive succession

management approach to meet the demands of the organization (Gandossy &
Verma, 2006). These call for additional research to better aid the ability of
nonprofits to navigate management succession by expanding the focus beyond
executive succession planning.
1 Examining the vignettes below (modified from Rothwell, 2015, pp. 3–4),
how would you address these succession problems?
2 What aspects of the nonprofit sector would make these situations challenging?
Vignette 1: Your nonprofit organization serves vast rural areas of Nevada. In

order to build bridges with decision-makers and other stakeholders in the
rural areas of the state, senior management often travels together to disparate
locations. As the director of human resources, you receive a call in the middle
of the night informing you a car with several of your top staff members and
the Board President was in a serious accident, leaving no survivors. You are
shocked and upset at the loss of life but also dismayed at the damage this may
present for your nonprofit organization. The next morning as you arrive at
work, you turn to your office manager and pose the question, “What do we
do? Do we even know who is in charge?”
Vignette 2: On the way to a meeting in Mexico, the CEO of a large

environmental nonprofit organization is seized and held for ransom by a gang
of criminals who engage in kidnapping for profit. They demand $1 million
within 72 hours for her safe return. The other executives in the organization
call a meeting to develop a plan on how best to resolve the situation for both
the CEO and the organization.
Vignette 3: Veronica, the distribution management supervisor for the food

bank, just called in sick after years without an absence. She handles all the
distribution and scheduling of delivery, as well as overseeing volunteers
for distribution. The manager of the department does not know how all the
distribution systems function, absent this individual. In part, this is because
Veronica is the only one who knows how all of the pieces fit together in
terms of operations. The manager is sure that distributions will not go well
because Veronica has no trained backup.
Vignette 4: Bill Well is preparing to retire as the Executive Director (ED) of

Clean Water for Everyone. For years, Bill has been working with Yen Chen
to take over as the next ED. Yen has held the post of executive vice president
and chief operating officer, and his performance has been exemplary in those
positions. Bill is convinced Yen will make an excellent ED. Not everyone is
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Yeonsoo Kim
as convinced, which begins to make Bill nervous as he nears his retirement

date. Several other executives and the board of directors have asked him
privately if Yen is really able to take on this role, since he is rumored to have
possible issues in his personal life and his relationship with some of the
women in the nonprofit is problematic. They do not think he can overcome
his personal issues to become an effective leader. Bill feels he owes the job
to Yen and hates to involve himself in the personal lives of his employees.
But he has started considering whether to initiate an executive search for a
ED candidate from outside of the organization.
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planning
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8
Talent Management
Introduction
Talent management is defined as “systematically and strategically picking the best
people and developing them to make them even more productive” (Rothwell,
2012, p. 33). Even though the nonprofit sector employs 10% of the US private
workforce (Bureau of Labor Statistics, 2014), talent management is often over-
looked as a viable option for organizational success. However, talent management
cannot be ignored by nonprofit organizations. A recent article by the Bridgespan
Group, “The Talent Development Deficit,” shows that nonprofits continually
struggle with developing their internal talent and as a result are dealing with the
“Turnover Treadmill,” which means nonprofits are losing their internal talent
(Landles-Cobb, Kramer, & Smith Milway, 2015). There is not necessarily a talent
deficit as previous studies have implied, but the problem lies with nonprofits not
developing their internal talent and, as a result, people are leaving to find better
opportunities where their skills are developed. This chapter discusses various talent
manage-ment components and models to help nonprofits develop their internal
talent. The chapter also provides resources and discusses barriers nonprofits face
in implementing talent management strategies.
Talent management is a competency-based approach comprised of acquiring
new talent, developing the talent you have, and retaining good talent. There are
three stages of talent management, which include personnel control, people
development, and talent multiplication (Cheese, Thomas, & Craig, 2007).
Personnel control is focused on administering people, making sure they are
doing the required tasks; whereas people development is about developing
your people; and talent multiplication is about using employees’ knowledge,
skills, and abilities as a collective and collaborative force to achieve the overall
strategy of the organization (Cheese et al., 2007). Most organizations tend to
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Talent Management
focus on personnel control and need to move toward talent multiplication. Lack
of time and money are the main reasons why organizations get stuck in the
personnel control mode, but they can make the move to talent multiplication by
employing the following strategies:
• improving the degree of alignment between talent management activities

and business strategies;
• achieving integration of all talent management activities;
• moving from adding value by managing talent efficiently and effectively to
creating extraordinary value for the organization by multiplying talent;
• shifting responsibility for talent management from the HR function and
getting the entire organization involved in multiplying talent (Cheese et al.,
2007, p. 86).
This chapter describes the key components of talent management as well as

strategies for managing talent effectively. Then it discusses talent management
models that have been developed in the nonprofit and for-profit sectors; the
resources available from infrastructure organizations to support talent in
the nonprofit sector, as well as the barriers nonprofits face in integrating talent
management strategies within their own organizations.
Components of Talent Management

Scholars have attempted to map the literature around talent management to
identify common themes and components, yet there is little empirical research
on the subject of talent management (Thunnisen, Boselie, & Frutieyer, 2013).
They found talent management practices vary according to the organization’s
external environment and type of work, as well as the internal circumstances
of an organization. Using the findings of Thunnisen et al. (2013), and Cheese
et al. (2007), this chapter describes the components of talent management that
can be used by nonprofit organizations, including identifying talent needs,
developing competencies, recruiting talent, investing in talent through training
and development, and retaining talent.
Identifying Talent Needs

The first common component of talent management is to identify an organiz-
ation’s talent needs, which is also known as workforce planning. In order to
identify talent needs, the organization must conduct a gap analysis and determine
what talent currently exists within the organization (Lavelle, 2007). Common
strategic planning processes can be used, such as identifying the personnel strengths,
weaknesses, opportunities, and threats, as well as tracking certain key workforce
statistics (Cotton, 2007). Cotton (2007, p. 58) recommends tracking the following
statistics:
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• General workforce measures. These measures examine demographic patterns in

the workforce and staffing trends.
• Recruitment measures. These indicators can be used to assess whether or not
the agency is hiring the right people—those who are qualified to do the job
and who are also a good fit for the organization.
• Employee retention measures. These indicators can be used to measure the
success of retention efforts, assess the work environment, and assess employee
morale.
The gap analysis and key workforce statistics should reveal talent gaps, areas
where the organization needs additional talent as well as talent surpluses and
shifting roles.
Developing Competencies
Once organizations have identified their talent needs, they should develop
the competencies to meet their strategic goals. Competencies are defined as the
knowledge, skills, abilities, and other characteristics (KSAOCs) that a position
must include in order to achieve those strategic goals (Pynes, 2009). Competencies
are often mapped to a proficiency level so employees know at which level to
perform the competency. Competencies have been discussed for many years as
being important in building a high performance team and a high performance
organization (Rodriguez, Patel, Bright, Gregory, & Gowing, 2002). Although
competencies are rarely discussed in the context of nonprofit sector employment,
Carpenter and Qualls (2015) identified a set of ten core social change competencies,
after an extensive review of scholarly and practitioner literature assessing the
training needs and general competencies nonprofit managers should possess.
The competencies can be used as a starting point for nonprofit organizations.
These ten core competencies1 include:
• Advocacy and Public Policy

• Communications, Marketing, and Public Relations
• Financial Management and Social Entrepreneurship
• Fundraising and Resource Development
• Grantmaking or Direct Service
• Human Resources Management and Volunteerism
• Information Management
• Leadership and Governance
• Legal and Regulatory
• Planning and Evaluation.
Nonprofits can then create sub-competencies specific to the strategic goals of

the organization, departments, and positions within the organization. These
sub-competencies may include components of emotional intelligence, or
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Talent Management
sub-components included in the ten core social change competencies. Emotional

intelligence is defined as “the ability to monitor one’s own and others’ feelings
and emotions, to discriminate among them and use this information to guide
one’s thinking and actions” (Salovey & Mayer, as cited by Tan, 2012, p. 10).
There are four quadrants of emotional intelligence as defined by Goleman
(2005) (Self-awareness, Self-management, Social awareness, and Social skills).
One or more of the quadrants could be an important sub-competency to an
organization, department, or an individual position. The competencies and sub-
competencies will help organizations develop their current talent as well as
identify talent that will be needed in the future.
Recruiting Talent
Once the competencies and sub-competencies are identified, they are added into
employee and volunteers’ job descriptions. There are different philosophies,
methodologies, and resources for creating and revising job descriptions, which will
not be covered in this chapter. However, experts emphasize the importance of
current job descriptions (Rothwell, 2012). Figure 8.1 presents the main components
of job descriptions.
Another aspect of recruiting top talent is providing marketing to get the right
individuals to apply for positions, offering competitive salaries to attract talent, and
developing candidates once they are hired (Kim et al., 2014). Since most nonprof-
its lack a human resource manager (Guo et al., 2011), recruiting top talent is often
a struggle. However, organizations that make efforts to recruit top talent have seen
lower turnover rates.
Investing in Talent through Training and Development

As described above, effective talent management involves developing staff
and volunteers from their first day on the job. This is a different way of thinking
and operating for many organizations that are personnel control-focused. Training
is defined as “the systematic approach to affecting individuals’ knowledge, skills, and
attitudes in order to improve individual, team, organizational effectiveness,”
and development is defined as “systematic effort affecting individuals’ knowledge
or skills for purposes of personal growth or future jobs and/or roles” (Aguinis &
Kraiger, 2009, p. 452). Training and development help improve employee job
satisfaction and retention (Lee & Bruvold, 2003). Organizations that are good at
talent management develop their internal staff and volunteers on an ongoing basis.
Often training and development involve performance management. In
performance management, organizations assess or review employees based on a
set of standards that usually connects to job description or specific job components.
A piece of performance management is employee evaluations. There are many
different employee evaluation formats and methods that will not be discussed in
this chapter. However, successful talent management involves using employee
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Figure 8.1 Components of a good job description

Source: Carpenter & Qualls (2015). http://pj.news.chass.ncsu.edu/2015/08/03/creating-job-
descriptions-that-work-for-you/
evaluations as opportunities for employee development and identifying talent

who can be given greater responsibilities within the organization.
When employees understand the competencies where they need to improve,
and have identified their development gap, then they can create a development
plan for the future (Rothwell, 2012). In addition, when top talent are recognized
for their accomplishments, they are more likely to stay with the organization
(CEB, 2015). Cheese and colleagues explain, “High performing organizations
have institutionalized methods for matching and moving the best internal and
external talent to the most critical positions for which they are well-suited, ensur-
ing sufficient organizational capability to face current and future challenges and
opportunities” (2007, p. 144).
Talent Retention
The last component of talent management is talent retention. Talent retention
involves rewarding employees for their work. Talent rewards, along with all the
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Talent Management
other components listed previously, will in return reduce employee turnover. It

is estimated that it costs an organization 75–150% of an employee’s annual salary
to replace them (Krause, 2014). Many people are attracted to work in the
nonprofit sector because of non-monetary factors (Word & Carpenter, 2013) and
there are many resources and methods through which nonprofits can provide
non-monetary benefits to their staff and volunteers. Intrinsically motivated staff
and volunteers are rewarded simply by doing the work they enjoy doing, whereas
extrinsically motivated staff and volunteers seek public recognition in the form
of certificates of achievement and acknowledgment in front of their peers.
Even though there are many intrinsically motivated employees, a recent study
shows the number one reason why employees left their jobs in the nonprofit sector
was due to low compensation followed by lack of employee development (Landles-
Cobb, Kramer, & Smith Milway, 2015). Therefore, extrinsic rewards such as
compensation, benefits, work environment, the type of work performed, and
employee development also influence talent retention. In conclusion, we have
discussed the major components of talent management and how nonprofits can
implement talent management components into their work. The next section will
discuss talent management models and ways to incorporate many of the talent
management components into effective talent management practices.
Talent Management Models

There is no one right way to manage talent. Kim et al. explain that talent differs
by organization, “What an organization considers ‘talent’ depends on the nature of
its work and is generally defined as those positions most integral to the success
of the particular organization” (2014, p. 111). With that said, five models of talent
development are discussed here. The five models covered are not exhaustive lists
of what is available to nonprofit and philanthropic organizations, but different ways
to approach talent management. The models are: (1) the Talent Development
Platform (Carpenter & Qualls, 2015); (2) Strategic and Tactical Talent Management
(Rothwell, 2012); (3) Technical Talent Management (Kim et al., 2014);
(4) Leadership Development Process (Kramer & Nayak, 2013); and (5) Nonprofit
Leadership Development (Bonner & Obergas, 2009).
The Talent Development Platform

The Talent Development Platform is a new model of managing talent manage-
ment in the nonprofit sector (Carpenter & Qualls, 2015). Figure 8.2 shows the
platform.
The Talent Development Platform addresses nonprofits’ time management
challenges by providing a practical guide to tying strategic goals to professional
development.
The first part of the platform is where organizations take an organizational
learning assessment to determine the learning culture, and if they are ready to
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Figure 8.2 The Talent Development Platform
Source: Carpenter & Qualls (2015).
Talent Management
undertake the other steps in the platform. The next stage of the platform is to
develop a talent map. The talent map is developed to support the organization’s
strategic goals and mission achievement. Through the talent mapping process,
organizations write and revise their job descriptions, create competencies (using
the ten core social change competencies developed by Carpenter and Qualls, and
identify proficiency levels that fit with the created competencies. The process
also involves developing organization, department, and position-based sub-
competencies, and then assessing employees against the competencies and
proficiency levels with the Individual Professional Development Assessment.
After the Talent Map has been developed, organizations administer the
Learning Styles Assessment. Then, based on the results of the Individual
Professional Development Assessment and Learning Styles assessments, organiz-
ations and individual employees develop professional development goals and
objectives that enhance the organization’s strategic goals. The professional
development goals are tied to on-the-job learning, mentoring, and training. The
next step is implementing the professional development activities in a year-long
time frame. The Talent Development Platform provides a variety of resources
including timelines, mentoring plans, budgets, and a return on investment
calculator to help with talent retention. The last stage of the Talent Development
Platform is evaluating professional development goals and employee performance.
A year into the professional development implementation, employees retake the
Individual Professional Development Assessment and evaluate the progress of
the talent development implementation. The Talent Development Platform is a
step forward for the nonprofit sector’s understanding of talent management. It
allows organizations to integrate talent management in their strategic planning
process.
Strategic and Tactical Talent Management

The Strategic and Tactical Talent Management Model was developed by
Rothwell (2012) for the corporate sector but can be used in the nonprofit
sector as well. Rothwell explains the difference between strategic and tactical
talent management as: “Strategic talent management is focused on integrat-
ing talent management efforts with the organization’s strategic business plan.
Tactical Talent Management is the process of driving talent management efforts
into the daily thinking and actions of organizational leaders” (Rothwell, 2012,
p. 6). Nonprofits struggle with thinking of talent on a daily basis, therefore the
Strategic and Tactical Talent Management Model can help organizations shift
their thinking and include talent in their daily mindset. The model involves
13 components or steps in identifying and developing top talent within an
organization, as well as considering the talent needed for the future.
The first step of this model is to get input from all stakeholders in the organiz-
ation; the second step is to consider all the ways work can be done; the third
step is to formulate a talent management strategy and link it to business strategy;
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the fourth step is to recruit and select the best people; the fifth step is to clarify
work performance and the best people to do the work; the sixth step is to
evaluate performance; the seventh step is to clarify future work to be performed
and the people needed to perform that work; the eighth step is to identify people
within the organization who have potential for promotion and help them
develop/or identify their career goals; the ninth step is to close development gaps
and build future competencies; the tenth step is to reward for talent; the eleventh
step is to help senior employees to transfer knowledge to junior employees;
the twelfth step is to plan for integrating talent management into daily work; the
thirteenth and final step is to evaluate talent management results. The model is
cyclical so once an organization gets through the 13 steps, they start the process
again (Rothwell, 2012). Since nonprofits struggle with developing internal talent,
retaining internal talent, and identifying the talent for the future (Landles-Cobb
et al., 2015) the Strategic and Tactical Talent Management Model cyclical steps
help organizations identify and develop talent planning, talent development, and
talent retention strategies into overall organizational planning.
Technical Talent Management Model

The Technical Talent Management Model was developed by Rothwell and his
colleagues (Kim et al., 2014) and is very similar to the Strategic and Tactical Talent
Management Model developed by Rothwell (2012) but with only 11 steps. The
Technical Talent Management Model is also focused on knowledge management,
which means the information that an employee possesses to be able to perform his
or her work (Cheese et al., 2007). The first step in the model is getting commit-
ment for technical talent management; the second step is formulating a talent
strategy; the third step is recruiting the best knowledge workers; the fourth step is
clarifying the competencies needed to be performed by the knowledge workers;
the fifth step is evaluating employee performance; the sixth step is clarifying future
competencies needed and the career paths that knowledge workers can take to
achieve the future competencies; the seventh step is identifying the future knowl-
edge workers within the organization; the eighth step is preparing the future
knowledge workers in the pipeline and addressing their talent gaps; the ninth step
is rewarding and retaining the knowledge workers; the tenth step is helping the
senior knowledge workers transfer information to employees in the pipeline; and
the eleventh and last step is to evaluate the talent program (Kim et al., 2014). The
Technical Talent Management Model is different from the model above because
it can be used to tap into the knowledge of individual employees to help with
mission achievement, rather than the strategic talent management practices.
Leadership Development Process

The Leadership Development Process was created by the Bridgespan Group
(Kramer & Nayak, 2013) to help nonprofits with talent management and talent
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Talent Management
Figure 8.3 Leadership Development Process

Source: Permission received from Kramer and Nayak (2013, p. 17).
development. They define leadership development as “identifying and developing

those individuals who will lead the critical functions of your organization, and
who, in partnership with other leaders, will be responsible for its overall health
and impact” (Kramer & Nayak, 2013, p. 12). Their model is not inclusive of all
employees within an organization but is meant to build what they call “future
leaders.” The first step involves engaging the senior leaders within the organization.
The second step is understanding the future talent needs of the organization; the
third step is developing future leaders; the fourth step is hiring externally to fill
gaps, and the fifth step is monitoring and improving talent practices (Kramer &
Nayak, 2013) (Figure 8.3).
The Leadership Development Process is important for nonprofit organizations
because of the challenges they face in succession planning. The process allows
organizations to identify future leaders in the organization and develop those
leaders for future positions. Therefore, organizations hire less from outside the
organization, which has been shown as more challenging and leads to higher
turnover (Martin, 2014), and can focus on employee retention and supporting
future leaders within the organization.
A Model for Nonprofit Leadership Development

Dewey and Kaye and the Looking Glass Institute created a model for leadership
development after interviewing 38 nonprofit leaders around the United States
(Bonner & Obergas, 2009). Their model involves eight steps. The first step is
“identifying the challenges and strategies that will impact the organization of the
next five years” (Bonner & Obergas, 2009, p. 3). The second step is creating a
set of competencies that will be used to accelerate the organization forward. They
identified key core competencies based on their research of the 38 nonprofit
leaders. The competencies include: client focused; decision quality; delegation
skills; ethics; integrity and trust; interpersonal skills; managing vision and mission;
motivating others; presentation skills; priority setting; strategic agility. The third
step is identifying “high potential” successors for each job. The fourth step
involves using performance assessments to assess the individuals against the com-
petencies the organizations have created. The next step involves identifying who
will be ready to fulfill positions now and in 2–4 years and how each individual
131
can contribute to the organization; the sixth step is creating a tailored develop-
ment program for each individual within the organization so they can become
ready for their new positions. The seventh step is measuring progress frequently
and providing feedback to their employees on their performance. The last step
is moving people to their new positions when they have achieved their devel-
opment goals (Bonner & Obergas, 2009). The model for nonprofit leadership
development is important for talent management within nonprofit organizations
because it also helps organizations identify high potential successors. The model
also combines nonprofit competencies, succession planning, and training and
development.
In this section, five talent management models were described that nonprofits
can use when implementing talent development strategies within their organiza-
tions. The next section discusses the efforts of infrastructure organizations in
supporting and developing talent within the nonprofit and philanthropic sector.
Efforts to Support Talent within the Nonprofit

and Philanthropic Sector
Various organizations (for the most part, foundations and infrastructure
organizations—organizations that provide professional development to non-
profit organizations) have created programs to help develop and retain talent
within the nonprofit sector. These initiatives include: the Talent Philanthropy
Project; the Initiative for Nonprofit Talent and Leadership through the
Independent Sector; the Nonprofit Talent and Leadership Toolkit for Emerging
Practitioners in Philanthropy (EPIP); the Talent Development Initiative; the
Nonprofit HR Talent Management Conference, and the American Express
Nonprofit Leadership Academy.
The Talent Philanthropy Project

The Talent Philanthropy Project, started by Rusty Stahl, advocates for foundations
to #fundthepeople, and more specifically talent philanthropy, which is defined
as “intentional philanthropic investment in grantee and nonprofit talent in order
to increase performance and impact” (Stahl, 2013, p. 40). The project is raising
awareness of the major lack of funding for talent management efforts within the
nonprofit sector. Stahl explains talent is different from capacity building and
general operating support and there are specific strategies funders can employ to
invest in the talent of their grantees. These strategies include:
1 Build talent within your grantmaking priorities and portfolio.

2 Build talent at all levels of the organization.
3 Don’t look at grantee staff as overhead; see talent as integral to organizational
success.
4 See talent investment leading to long-term impact.
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Talent Management
5
Invest in teams and systems beyond the C-suite.
6
Advance values and offer living wages to grantees.
7
Make advancing diversity among grantees a top priority.
8
See that talent philanthropy benefits staff, constituents and the community
as a whole.
9 View talent as integral at all levels of the organization.
10 Support talent within foundations as well (Stahl, 2013, pp. 41–42).
In more recent work, Stahl (2015) provides examples of funders who are investing
in their grantees. These examples include the Community Memorial Foundation,
providing a variety of support for talent philanthropy to their grantees including:
technical assistant grants, professional coaching to executive directors, educational
workshops on board leadership, leadership development for middle managers,
and memberships to professional organizations. Another example is the Evelyn and
Walter Hass Jr. Fund, which provides a consultant to grantees to implement talent
development, and hosts convenings to share the talent development successes
and challenges (Stahl, 2015). The Talent Philanthropy Project is one of the only
initiatives that focuses on the funding side of talent management and it provides
real case studies and solutions for funders to support talent within nonprofit
organizations.
Initiative for Nonprofit Talent and Leadership

The Independent Sector with support from the American Express Foundation
developed the Initiative for Nonprofit Talent and Leadership. Their theory of
change states “valuing nonprofit talent and leadership through a focused investment
of time, attention and resources is one of the most effective ways to catalyze
transformational results for thriving communities” (Independent Sector, 2012,
p. 3). The Independent Sector has a three-year plan of prioritizing leadership in
the nonprofit sector, and states “leadership isn’t about a person or position, it is an
ongoing practice exercised at all levels” (2012, p. 3). The three-year plan involves:
1 Rallying individuals across the sector to champion leadership as a means to

significantly increase the sector’s impact in our community.
2 Identifying a critical mass of organizations who will demonstrate a
commitment to best practices in leadership development.
3 Scaling a significantly increased number of sector leaders to engage annually
in high-quality leadership development that equips them to deliver significant
results.
4 Engaging public and private financial investments in philanthropic leadership
development (2012, p. 4).
The Independent Sector also provides a leadership development program for

12 emerging leaders each year through the American Express NGEN fellowship,
133
and their NGEN leadership award “honors one accomplished nonprofit or

philanthropic leader age 40 or under who has already demonstrated significant
impact in addressing society’s critical needs” (Independent Sector, 2015, para. 1).
The Initiative for Nonprofit Talent and Leadership is helpful for the sector
because it is raising awareness of the importance of leadership development. The
products the NGEN fellows create each year advance awareness of emerging
leaders and the ever changing leadership demographics in the sector.
Nonprofit Talent and Leadership Toolkit from Emerging

Practitioners in Philanthropy (EPIP)
The Emerging Practitioners in Philanthropy mission is to “develop emerging
leaders committed to building a just, equitable, and sustainable society” (EPIP,
2015, para. 1). EPIP offers a variety of programs to support philanthropic leaders
in their professional and personal lives. One of the programs is to invest in talent
development and retention within the philanthropic sector. They developed the
Nonprofit Talent and Leadership Development Toolkit focused on creating a
talent culture within organizations, and it features case studies of foundations
supporting talent development within nonprofit and philanthropic organizations.
The toolkit focuses on three areas of talent:
1 renewing leaders for long-term service;

2 creating succession and transition talent;
3 reengaging proven leaders as interim directors.
EPIP has also created a series of competencies that emerging leaders can strive
for and use to prepare for leadership within the nonprofit and philanthropic
sector. The Nonprofit Leadership and Talent toolkit is helpful to advancing
talent management practices within the sector because it provides solutions to
help prevent burnout of senior leaders within organizations. The toolkit also
helps organizations with succession planning efforts.
Talent Development Initiative

The Talent Development Initiative was started by Pathfinder Solutions in
collaboration with the Colorado Nonprofit Association and the Louisiana
Nonprofit Association in 2010. The goals of the multi-year initiative were to do
the following:
1 Introduce people to ways their energies and abilities can make a difference
and have a profound impact upon their own lives.
2 Bridge the gaps in the path to nonprofit leadership so that people from
all backgrounds can become involved in creating effective, dynamic
organizations.
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Talent Management
3 Increase individual job satisfaction and lower employee turnover by providing

quality training and professional development.
4 Create metrics focused on enhancing individual performance, organizational
effectiveness, and community outcomes.
5 Improve the impact of organizations and strengthen sustainability (Pathfinder
Solutions, 2016, para. 3).
During the Talent Initiative, Pathfinder Solutions worked with many foundations,
nonprofit associations, college classes, and groups such as AmeriCorp across the
United States and even in other countries. Two products were created as a result
of the Initiative. First, the work became the research underpinnings for the book
Compassionate Careers: Making a Living by Making a Difference (Pryor & Mitchell,
2015). Second, Pathfinder Solutions created a comprehensive talent assessment
and an online workbook to accompany the book. In all, the Talent Initiative
confirmed nonprofits are more sustainable when they prioritize talent management
and leadership development (Pathfinder Solutions, 2016).
Nonprofit HR Talent Management Conference

The mission of Nonprofit HR is to “partner with the country’s leading nonprofit
organizations in consulting, talent acquisition, executive search and education, all
with the objective of making the nonprofit workforce the best it can be” (Nonprofit
HR, 2015, para. 1). Nonprofit HR provides talent-related resources for nonprofit
organizations and workers. Its annual employment trends survey and national con-
ferences report on the most pressing workforce issues in the nonprofit sector. In
April 2016, it held the first ever Nonprofit Talent and Culture Summit and brought
together all the leading experts in talent management. The convenings and research
produced by Nonprofit HR show that talent management practices are gaining
importance within the nonprofit sector and cannot be ignored by organizations.
The American Express Nonprofit Leadership Academy

The American Express Nonprofit Leadership Academy was “founded in 2008 in
partnership with the Center for Creative Leadership, today the Leadership
Academy includes five nonprofit partners, encompasses nine separate programs,
spans four countries and impacts hundreds of high-potential emerging leaders
annually” (American Express, 2015, para. 1). There are three main components
to the American Express Leadership Academy:
1 targeting high potential emerging leaders for leadership development

opportunities;
2 curriculum blending personal leadership skills with business skills;
3 an assessment-based approach with coaching and feedback throughout
(2015, para. 1).
135
American Express has seen tremendous growth and success in the program since
its inception and most recently partnered with the Presidio Institute in San
Francisco to deliver online leadership development trainings to nonprofit
organizations.
The efforts described above were created to help develop and retain talent
within the nonprofit sector and continue to gain momentum each day. As more
nonprofits receive funding for their people, take leadership development training,
and implement succession planning best practices, they will reap the benefits of
lower turnover and increased sustainability, as indicated by the research. With
that said, there are still major barriers, which are listed below, that nonprofits
must overcome to implement talent management strategies.
Barriers to Implementing Talent Management Strategies

Even with all the efforts by foundations and infrastructure organizations, non-
profits face many barriers to integrating talent management practices. Experts
such as Dan Pallotta (2010) have written about the charity culture and the fact
the nonprofit sector largely emerged out of volunteer-run organizations. As a
result of this charity culture, donors and the general public still believe many
nonprofit workers should not be paid at all or be paid minimal amounts. The
no and low overhead culture is so prevalent that in 2013 infrastructure organiz-
ations such as Guidestar and the Charity Navigator had to write a letter to both
donors and nonprofits to get them not to focus on overhead ratios so much
(Overhead Myth, 2013). The letter is ironic because these same infrastructure
organizations have been rating charities for many years based on low overhead
percentages. While there are many barriers to successful talent management,
this chapter focuses on the major barriers to each talent management compo-
nent including barriers to: identifying talent needs, developing competencies,
recruiting talent, supporting talent through training and development, and
retaining talent.
Barriers to Identifying Talent Needs

The main barrier in identifying talent needs is lack of data about nonprofit
employees and volunteers. Since most nonprofits are focused on employees
and volunteers doing the work, few focus on the level at which employees and
volunteers perform the work. A recent study of the professional development
needs of Michigan nonprofits identified data-based decision-making as one
of the most pressing professional development needs (Carpenter, Clarke, &
Gregg, 2013). This professional development need translates into few nonprofits
knowing how to track important workforce metrics including but not limited to
such measures as their staff time, staff efforts, and turnover rates. Since this data
is rarely tracked, nonprofits struggle with identifying where they have the largest
talent needs.
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Talent Management
Barriers to Developing Competencies

Competencies, defined as the knowledge, skills, abilities and other characteristics
which one must have in order to perform the job duty (Pynes, 2009), is a popular
term among human resource management (HRM) professionals and well known
in the corporate sector. Since only a small percentage of nonprofits have paid
human resources staff (Guo et al., 2011), few organizations use competencies.
Since few nonprofits track their talent needs, they then face increased barriers
in knowing which competencies their employees should possess, and as a result
may have lower performing organizations with employees and volunteers
not necessarily in the right position, given the competencies the employee or
volunteer possesses.
Barriers to Recruiting Talent

In a recent nonprofit employment trends survey, 33% of respondents indicated
they had challenges recruiting staff and 52% stated they did not have a formal
recruitment strategy (Nonprofit HR, 2015). As stated above, since few nonprofits
have designated HR staff (Guo et al., 2011), as a result, recruitment is often a
last-minute, quick fill for an open position task. Therefore, another barrier is
nonprofits having adequate staffing or a strategy for recruitment.
Commongood Careers conducted a study to determine the challenges in
building and sustaining diverse organizations aimed at coming up with strategies
and solutions for overcoming obstacles in recruitment, retention, and prioritizing
diversity within nonprofit organizations. Out of the 1,638 current and former
nonprofit employees who completed the survey, “9 out of 10 of respondents
indicated their organizations value diversity and inclusiveness but 7 out 10 believe
their employer does not do enough to create a diverse and inclusive work
environment” (Schwartz, Weinberg, Hagenbuch, & Scott, 2011, p. 8). This lack
of a diverse and inclusive environment is another barrier to recruiting the best
and brightest talent.
Barriers to Training and Development

As stated above, once the best and brightest talent is hired, they must be developed
from day one. Research shows that nonprofits only spend approximately 2% of
their annual budgets on professional development (Carpenter, Clarke, & Gregg,
2013). Professional development support in nonprofits is often piecemeal. For
example, staff members may receive funding to attend a conference but there is
no effort to tie that professional development activity back to the individuals’
jobs or the strategic goals of the organization. One talent support organization
believes the barriers to implementing professional development include a lack of
seeing talent development from within, absence of a competency model to assess
talent, hoarding talent (e.g. worrying that good talent will leave the organization),
137
lack of critical feedback, and limited professional development support for staff
(Bonner & Obergas, 2009). Therefore, with small professional development
resources as well as not seeing the talent they currently have, talent management
efforts are stifled.
Barriers in Talent Retention

Studies show that many emerging leaders in the sector want professional
development (Dobin & Tchume, 2011) and will leave the sector if they do not
get the support they need. Younger leaders are not the only talent in need of
development; senior leaders need to be developed too. The average cost to
replace one employee is $13,996 (O’Connell & Kung, 2007). Small and large
nonprofits are facing a crisis from burnt out staff, staff who leave for better-paying
jobs, and staff who leave because they do not feel supported.
These barriers demonstrate that nonprofits have a long way to go in imple-
menting proven talent management strategies and reaching the multiplication of
talent. Nonprofits are not alone in their struggle to implement talent management
strategies. So far this chapter has discussed the talent management components,
models, resources for nonprofits to implement talent management strategies, and
barriers to implementing these strategies; next, it will discuss what the future
holds for nonprofits in regard to talent management.
What Does the Future Hold in Talent Management?

Experts believe the nonprofit sector cannot continue to operate under the charity
mentality (Palotta, 2010; 2012). It is losing high quality talent to other sectors
through the turnover treadmill (Landles-Cobb et al., 2015). Organizations need
to be flexible enough to integrate talent management practices throughout the
organization. Guo et al. (2011) found larger, more technology-savvy nonprofits,
younger nonprofits, and ones that did not have a dedicated HR staff were able
to integrate strategic HR practices (which includes talent management). The
nonprofit of the future needs to be flexible enough to perform simple procedures
such as tracking staff turnover and work on daily basis, and developing core
competencies. Foundations need to provide more funding to nonprofits to
support talent management efforts within individual organizations.
This chapter shows there are talent management components, talent manage-
ment models, and infrastructure organizations and funders who are working to
support talent within the nonprofit sector. However, there are still many barriers
nonprofit organizations must overcome to implement a talent management
multiplication strategy where talent is fully integrated within the mission of the
organization. Talent management will remain a struggle for many nonprofit
organizations until there are shifts in funding for talent management and people
are seen as an integral part of mission achievement. In the future, we envision
reduced staff and volunteer burnout, more time and money for professional
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Talent Management
development, as well as rewards and increased job satisfaction among nonprofit

workers.
1 If you were an executive director of a nonprofit organization, which talent
management model would you choose to implement and why?
2 What talent management resource(s) would be the most appealing to
emerging leaders or established leaders and why?
3 The chapter discussed barriers to implementing talent management strategies
within nonprofit organizations. What are they and how can nonprofits
overcome these barriers?
Note
1 Full descriptions of the social change competencies can be found at: www.talent
4socialchange.com/wp-content/uploads/2015/02/Competency-Descriptions1.pdf
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9
Compensation Practices in
Examining Practices Adopted by High
Performing Nonprofits
Introduction
Recruiting, retaining, and motivating employees in the nonprofit sector is critical
to an organization’s ability to accomplish its mission. A critical practice associated
with recruiting, retaining, and motivating employees is compensation. Few studies
have examined compensation practices comprehensively in nonprofits or in high-
performing nonprofits (Hallock, 2002). Most compensation studies in the non-
profit sector focus on executive compensation or differences in compensation
between the nonprofit, public, and private sectors (Barragato, 2002; Cortis, 2000;
Garner & Harrison, 2013; Grasse, Davis, & Ihrke, 2014; Faulk et al., 2012;
Nikolova, 2014; Oster, 1998; Roomkin & Weisbrod, 1999; Ruhm & Borkoski,
2003; Theuvsen, 2004). In order to design a compensation system that attracts,
retains, and motivates high quality employees, nonprofit managers need an under-
standing of how other nonprofit organizations leverage different compensation
strategies and which strategies are most effective.
The nonprofit sector, comprised of nearly 2 million nonprofit organizations,
employs more than 10.7 million people and produces more than $1.9 trillion in
revenue (Salamon, Sokolowski, & Geller, 2012). The Bureau of Labor Statistics
estimated that in 2012, nonprofits accounted for 11.4 million jobs, which is
10.3% of the U.S. private-sector workforce. Between 2000 and 2010, employment
in the nonprofit sector grew faster than the overall U.S. economy (Roeger,
Blackwood, & Pettijohn, 2012). During the Great Recession, the sector con-
tinued to add jobs as the need for nonprofit services grew. McKeever (2015)
estimated the nonprofit sector contributed about $905.9 billion to the U.S.
economy in 2013, which is around 5.4% of the gross domestic product (GDP).
In a 2015 survey of nonprofits, the most common retention challenge mentioned
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Compensation Practices
by 27% of nonprofits was competitive pay, which is consistent with the fact that
many nonprofits operate within a limited salary budget (Nonprofit HR, 2015).
Given the importance of the nonprofit sector to the U.S. economy and to the
delivery of human services, there is a strong need to understand compensation
and how to ensure effective compensation practices in nonprofits. As nonprofits
grow and employ a more professional human capital stock, these organizations
need to develop more capacity to manage these professionals to maintain them
in their roles and direct them toward the accomplishment of organizational goals
and nonprofit missions.
Although compensation has always been challenging for the nonprofit sector,
the period since the Great Recession has resulted in a particularly constrained
funding environment. While demand for services provided by nonprofits has
increased, the competition for funding has grown. Although we know that
individuals often do not elect to work in the nonprofit sector for high wages,
research has demonstrated that compensation impacts employee satisfaction and
performance (Selden & Sowa, 2014). Because nonprofits compete in a common
labor market, they need to understand the larger environment in which they
compete for labor and formulate strategic choices about compensation to help
them leverage their human capital. The differences in compensation in the
nonprofit sector reflect the competitive pressures they face in the labor market
where shifts in the supply and demand impact the market rate.
Alliances have developed within and across states to develop and conduct
compensation surveys, which provide guidance to nonprofits about setting wages.
While useful for setting levels of compensation, these studies are much less likely
to explore different compensation strategies that can be used to reward perfor-
mance or loyalty; they are generally focused on occupational and market rates,
which are discussed later in this chapter. Scholars and practitioners need to move
beyond studying rates of compensation and compensation comparisons to think
about how compensation connects to human capital acquisition and development,
overall sustainability, and performance in nonprofit organizations. This chapter
briefly reviews the regulatory context related to compensation, the literature
examining compensation in the nonprofit sector, and presents results from an
eight-state study of human service nonprofits, focusing on compensation strategies
adopted by high performing nonprofits.
Regulations Influencing Compensation in Nonprofit

Organizations
Before considering the larger strategic implications of compensation, nonprofit
organizations must comply with legal requirements related to compensation,
including the Fair Labor Standards Act (FLSA), administered by the Department
of Labor’s Wage and Hour Division, the Lilly Ledbetter Fair Pay Act of 2009,
the Employee Retirement Income Security Act, and the Internal Revenue
Service. Nonprofits must provide required benefits, including social security,
143
unemployment insurance, and Workers’ Compensation Insurance.1 Information

is readily available about assessing reasonableness of compensation as defined by
the IRS and as applied to executive compensation in nonprofit organizations
(e.g., Vogel & Quatt, 2015). Far less attention in the academic literature has been
devoted to compensation across organizational ranks and the implications of
changing federal regulations on nonprofits.
Nonprofits that are not exempt from the FLSA are grappling with how to
address the sweeping set of new regulations implemented on December 1, 2016.
According to the Department of Labor’s frequently asked questions webpage
(2016a),
Generally, employees of enterprises that have an annual gross volume of sales

made or business done of $500,000 or more are covered by the FLSA. In
addition, employees of certain entities are covered by the FLSA regardless of
the amount of gross volume of sales or business done. These entities include:
hospitals; businesses providing medical or nursing care for residents; schools
(whether operated for profit or not for profit); and public agencies.
The new regulation raises the minimum salary level that white-collar employees
must be paid (from $23,660 to $47,476) in order for them to be classified as
exempt from overtime pay, which is time and half of wages for hours worked in
excess of 40 in any week. Moreover, the new regulation increases the minimum
salary level for “highly compensated employees” from $100,000 to over $134,004
per year. The Department of Labor regulations exempt “highly compensated
employees” if these employees’ total annual compensation exceeds $134,004
and they “customarily and regularly perform at least one of the exempt duties
or responsibilities of an executive, administrative, or professional employee”
(National Council of Nonprofits, 2016).2
Nonprofits will be faced with determining whether to classify employees as
exempt from overtime given the new salary test, which is one of three required
conditions. The Department of Labor places the burden on the employer to
demonstrate that an employee is exempt from the overtime provisions by requir-
ing that an employee satisfy three tests. First, the salary basis test requires that
the employee be paid a predetermined weekly or annual salary not adjusted,
based on whether the person worked certain hours. In other words, they are paid
a salary rather than being paid and tracked by the hour. Second, the duties test
requires that the individual’s primary job duties involve executive, administra-
tive, and professional duties as defined by the Labor Department regulations.
Third, the salary level test requires that an employee be paid at or above the
minimum specified amount, defined as $47,476 per year (National Council of
Nonprofits, 2016).
The minimum wage and overtime provisions of the FLSA generally apply to
nonprofit organizations, which is not a change. The newly adopted regulations
may result in nonprofits reclassifying employees who were exempt to nonexempt
144
status if they are unable to meet the new salary threshold. Nonprofits are not
permitted to utilize compensatory time for salaried employees instead of paying
overtime. However, government agencies (including federal, state, and local
government agencies) are permitted to use compensatory time rather than paying
overtime (Department of Labor, 2016c). Nonprofits need to critically examine
their compensation structures and the design of jobs to make sure that they are
in compliance with these regulations, but also to ensure that they are designing
compensation systems that will support the well-being of employees and the goals
and sustainability of the nonprofit.
Summary of Compensation Research in Nonprofit Sector

In addition to ensuring that they are in compliance with federal and state regula-
tions with their compensation practices, nonprofits also need to consider what is
their overall approach to compensation and how that supports the goals and mission
of their organizations. However, this remains a gap in the nonprofit research base.
Although some research has examined executive compensation in the nonprofit
arena, few studies have examined compensation for other employees in non-
profit organizations outside of the healthcare and education industries (Benson
& Hornsby, 2002; Rhodes, Bechtle, & McNett, 2015). With a few notable
exceptions (Frumkin & Keating, 2001; Hallock, 2002; Jobome, 2006; Oster, 1998),
more research is needed on compensation as it relates to practices adopted for
nonexecutive employees.
As stated, a few studies have sought to explain executive compensation in terms
of levels and patterns, while others have examined the relationship between
executive compensation and nonprofit performance (Barragato, 2002; Cortis,
2000; Garner & Harrison, 2013; Grasse, Davis, & Ihrke, 2014; Faulk et al., 2012;
Nikolova, 2014; Oster, 1998; Roomkin & Weisbrod, 1999; Ruhm & Borkoski,
2003; Theuvsen, 2004). For example, Nikolova’s (2014) panel study of executive
compensation in human service nonprofits demonstrated that greater monitoring
—reporting, auditing, or director observation—of nonprofit executive behavior
was associated with lower compensation of the executive director. In a study
linking compensation and performance, Garner and Harrison (2013) found that
nonprofits that paid their executive director above average compensation had
lower performance as measured by program service expenses. A year later,
however, Grasse et al.’s (2014) study found a positive and significant relationship
between performance and compensation. Rather than examining performance as
the dependent variable, Grasse et al. (2014) included it as a predictor of executive
compensation and found it to be correlated with executive compensation across
different types of nonprofit. While these studies offer insights into the role and
influence of executive pay, little research has explored compensation for non-
executive employees. Therefore, in designing compensation systems, it is impor-
tant to be clear about the strategic principles underlying those systems and
how the design of these systems aligns with certain organizational characteristics.
145
The next two sections of this chapter address concepts that are directly applicable
for understanding, establishing, and implementing compensation systems in
Compensation Principles of Internal and External Equity

There are two compensation doctrines that apply to developing a sound,
principled pay system for any type of organization and that warrant examination:
internal and external equity. Historically, compensation focused on managing pay
from an internal, organizational perspective. This approach focused on internal
equity or consistency of pay, job evaluation, and satisfaction with pay (Dulebohn
& Werling, 2007). To determine internal equity, an organization compares
how jobs are compensated relative to their worth to ascertain the alignment
between job responsibilities and pay. In theory, internal equity exists when
employees in an organization perceive that they are being rewarded fairly accord-
ing to the relative value of their jobs within an organization. While there are a
number of different job classification/evaluation systems that can be employed
to determine relative worth, they often fall within two broad categories: whole
job and quantitative.
The quantitative approaches are more defensible but they are also much more
time-consuming and complex to implement. Traditionally, this approach has
focused on hiring people in entry-level positions and promoting employees within
well-defined job families with specified pay levels. Fair-wage theory, which is
consistent with Stacy Adams’ equity theory, suggests that employees compare
their wages to those of their colleagues to determine fairness (Burger & Walters,
2008). Employees who perceive that their wages are low are likely to reduce their
effort and miss work. Levine (1991) noted that perceptions of pay inequality or
pay compression may undermine relationships among employees and added that
wage inequality can negatively impact teams, undermining cooperation among
employees, and decreasing cohesiveness in teams. Organizations focused only on
internal equity do not tend to focus on external equity or pay relative to similar
jobs in the external market (external equity).
External equity, often referred to as market competitiveness, is the comparison
of an organization’s compensation for positions with similar positions in its
identified market. To determine this, a nonprofit would build a competitive pay
structure by conducting a market survey that would examine the pay levels of
incumbents in similar positions in selected organizations (including other
nonprofits and public or private organizations) in the identified labor market.
Jobs are then benchmarked to establish market wages. The selection of benchmark
jobs should include positions with a broad range of departments, pay grades, and
work duties. The organization can establish starting wages based upon the market,
but they can also examine current wages of employees, determining whether
they are below, at, or above market wages. External equity is achieved when
employees in an organization perceive that they are compensated fairly in relation
146
to those who perform similar jobs in other organizations in the local market. For
example, if a nonprofit human service organization employs licensed clinical
social workers (LCSW) to provide casework services to their clients, this nonprofit
should compare the pay rates of LCSWs in similar size nonprofits and in public
organizations and make a decision about where to position the salaries of the
employees in relation to those comparison groups.
It is sometimes difficult for organizations to maintain internal alignment and
external competitiveness, which can result in salary compression, whereas newly
hired employees may receive compensation nearly as large as their more senior
colleagues (Toutkoushian, 1998). More challenging is salary inversion when
compensation paid to newer employees is higher than the compensation of more
senior employees. Using a different approach to equity, Hamann and Ren (2013)
examined the impact of wage inequality on service quality and employee effort
in nursing homes. They measured inequality using two internal measures: the
80th/20th percentiles salary ratio and the ratio of the salaries of Registered Nurses
to Certified Nursing Assistants. The study showed that ownership—whether it
was a nonprofit or a for-profit nursing home—moderated the relationship between
wage inequality and service quality. Wage inequality negatively impacted service
quality in the nonprofit nursing homes, which was the opposite of the impact of
wage inequity in the for-profit sector. The study also showed that wage inequality
in the nonprofit sector had a more significant impact or influence on employee
discretionary action. They also found that wages in the nonprofit sector were
more compressed than in the private sector.
Faulk et al. (2012) found that gender gaps in the nonprofit sector were lower
than in the for-profit sector. Faulk et al. (2012, p. 1281), however, concluded
that “instead of intentionally compensating women more equitably in the non-
profit sector, relative gender pay equality appears to be a convenient consequence
of men accepting lower pay in traditionally nonprofit and female jobs.” But
Hallock’s (2002) study of nonprofit managers suggests that real pay disparity exists
between men and women in the sector. His research revealed that women in
the role of executive director earned approximately 20% less than men in the
same role. Lewin’s (2001) article highlighted a recent study by GuideStar, which
also demonstrated a significant gap in pay between women and men executive
directors both for large and smaller nonprofit organizations. Therefore, when
designing their compensation systems, nonprofits need to clearly understand
the underlying principles for effective compensation systems and settle upon
clear principles that will determine pay rates and allow them to promote a sense
of equity along multiple dimensions for their employees to the degree that they
have the available resources.
Key Elements of Compensation Structure

Nonprofits, like other organizations, may establish a philosophy or set of goals
and expectations that guide their compensation structure. The first element of
147
the compensation system is establishing base pay rates, which may be guided by
both internal and external equity, and establishing a salary structure. Once an
organization determines how to establish base pay, the second element is to
establish how to adjust compensation, which is most frequently done on an
annual basis. Historically, organizations adjusted salaries by rewarding longevity
by periodic step increases based upon years of service or adjusted for the changes
in the cost of living by implementing across the board cost of living adjustments
(COLA). Longevity and step adjustments signal that the organization values
employees who remain with the organization, whereas COLA awards recognize
that employees are impacted by changes in the cost of living.
Today, organizations tend to place more attention on linking pay adjustments
to performance than on tenure either individually or collectively as a team as a
bonus or added to the base salary, but the research on this topic in the nonprofit
human services and smaller nonprofits is limited. Some studies have examined
the application of pay for performance in the nonprofit sector (Brandl & Güttel,
2007; Chen, Ren, & Knoke, 2013; Jobome, 2006; Werner & Gemeinhardt,
1995). Because nonprofits have historically avoided paying bonuses even for
executive directors, introducing performance-based pay in the sector has been
controversial (Speckbacher, 2013). Speckbacher (2013) derived three “nonprofit
characteristics” that he theorized would impact the use and effectiveness of
incentive pay in nonprofits. The characteristics, which may vary across non-
profits, include the challenge of developing an overall measure of performance,
the difficulty of identifying factors that motivate nonprofit employees, and “the
trust-based social character.” Quatt Associates conduct an annual compensation
survey of large nonprofits, including public broadcasting, museums, performing
arts institutions, foundations, and others. In 2013, they found that of those large
nonprofits providing an annual bonus to executive directors, the middle 50% of
bonuses were, on average, between 11 and 36% of the executive director’s annual
salary (Quatt Associates, 2013).
Using a case study design, Brandl and Güttel (2007) explored why some
nonprofits adopted pay for performance and others did not. At the time of their
study, none of the nonprofits examined had fully implemented a pay-for-
performance compensation system. However, their findings suggested that non-
profits that perceived their environment to be more competitive were more
likely to adopt pay for performance. Chen, Ren, and Knoke (2013) found that
for-profit organizations were significantly more likely to employ bonuses or
profit sharing and gain sharing than public and nonprofit organizations. This
finding held whether the authors examined group or individual performance-
based pay. When examining pay for skill systems, however, the differences
between sectors were not significant (Chen, Ren, & Knoke, 2013). A recent
study examining the impact of high performance work systems on job satisfaction
and performance in human service nonprofits found employees who worked in
nonprofits with performance-based compensation elements were more satisfied
(Selden & Sowa, 2014). Johnson and Ng’s (2015) study of Millennials found that
148
young nonprofit workers are less likely to move from the nonprofit sector to the
for-profit or government sector due to pay. On the other hand, they found that
pay mattered to Millennial managers. Managers who were compensated more
were significantly more likely to remain within the nonprofit sector (Johnson
& Ng, 2015).
Studies have also examined the influence of organizational size on nonprofit
compensation (Chen, Ren, & Knoke, 2013; Gray & Benson, 2003; Hallock,
2002). In general, executive compensation increases with the size of the organi-
zation, which may be an indirect reflection of organizational complexity (Gray
& Benson, 2003). Thus, we might expect that larger human service nonprofits
would adopt more sophisticated employment practices related to compensation
than smaller nonprofit organizations with less complexity. Overall, the effect of
organizational size has also been supported by the literature (Brown & Medoff,
1989). Chen, Ren, and Knoke (2013) found that larger organizations were
more likely to adopt incentive, performance, and skills compensation systems.
Therefore, when considering the compensation practices of a nonprofit, it is
important to understand their size and complexity and how this may influence
the systems and practices that are both available to them and that they have the
capacity to implement.
This study adds to the emerging research on nonprofit compensation systems
by exploring the compensation practices of human service nonprofit organizations
and whether those practices differ between high performing nonprofits, between
nonprofits led by men and women, and between nonprofits of different sizes.
Research Setting: Multi-State Study of Human Service

Nonprofits
To examine compensation practices in nonprofit organizations, this chapter
uses data collected by a multi-state study (Selden & Sowa, 2014). First, the study
surveyed executive directors of human service nonprofits in eight states. Based
upon the survey data collected, the second stage of the study focused on
identifying a set of 16 high performing human service nonprofits and interviewing
the executive director of each and the staff member responsible for human
resources.3
The study surveyed executive directors of human service nonprofit
organizations in eight states across the United States between May and July 2012.
To account for possible regional variations, states were selected to encompass a
representation of the major regions in the United States, with states from the
Northeast, the South, the Midwest, and the West included in the sample.
Nonprofits in the following eight states were surveyed: New Hampshire,
Vermont, Michigan, Virginia, Idaho, Utah, New Mexico, and Wyoming. The
sample was constructed through a search of GuideStar on the selected NTEE
codes, with the sample restricted to organizations with budgets between $500,000
and $10,000,000.4 Completed surveys were received from 344 of the 872
149
executive directors surveyed for a response rate of 39.5%. However, approximately

289 completed the majority of questions included in this analysis for an effective
response rate of 33%. Although the original sample included nonprofits with
reported revenues between $500,000 and $10,000,000, 21 of the nonprofits
responding to the survey indicated that their current revenues were less than
$500,000.
Since this study was interested in examining the differences in compensation
strategies between high performing nonprofits, a performance score was calculated
as an index of the following measures (Cronbach alpha = 0.85; mean = 3.88; std
= 0.56):
How would you compare the organization’s performance over the past 2 years
to that of other nonprofit organizations in your local community of similar
size or that provide similar services and programs? (response: 5 point Likert
scale from a lot below average to a lot better than average):5
• Quality of services and programs
• Ability to raise money
• Ability to secure grants
• Ability to attract essential employees
• Ability to retain essential employees
• Satisfaction of customers or clients
• Relations between management and employees
• Relations among employees
• Relations with funders
• Relations with volunteers
To be considered a high performer, nonprofits had to score a 4.5 or above on

this index (n = 42). Beyond performance, the focus of this study is the human
resource management practices of these nonprofits. Of these 42, interviews were
completed in 16 nonprofits representing each of the states.
Compensation Practices of Human Service Nonprofits

As shown in Table 9.1, on average, nonprofits were slightly more likely to
examine internal equity than external equity (3.31, 3.18, respectively). Some 40%
of organizations consulted wage and salary surveys to determine external equity
(e.g., pay competitive to the market) to a great extent compared to 36.1% of
nonprofits that examined internal equity. As shown in Table 9.2, almost 30%
of the nonprofits surveyed considered both internal and external equity to a great
extent when establishing wages, whereas only 11.8% of nonprofits considered
neither internal nor external equity when establishing wages.6
Next, the analysis examined whether the patterns differed for nonprofits
identified as high performing. High performing nonprofits were significantly
150
Table 9.1 Internal and external equity practices
Standard
Practice N Mean deviation
Consultation of wage and salary surveys to

determine external equity (e.g., pay competitive to
the market) 289 3.1765 1.18145
Internal evaluations to determine internal equity
(e.g., pay levels are consistent across the
organization) 284 3.3099 1.06458
Scale: 1 (not at all) to 5 (to very great extent)
Table 9.2 Cross-tabulation of organizations exploring internal and external equity
Consultation of wage and

salary surveys to determine
external equity (e.g., pay
competitive to the market)
To a
Little to To some great
none extent extent Total
Internal evaluations Little to Count 33 12 5 50

to determine none % of Total 11.8 4.3 1.8 17.9
internal equity To some Count 23 54 24 101
(e.g., pay levels are extent % of Total 8.2 19.3 8.6 36.1
consistent across To a great Count 14 32 83 129
the organization) extent % of Total 5.0 11.4 29.6 46.1
Total Count 70 98 112 280
% of Total 25.0 35.0 40.0 100.0
more likely to engage in both practices (see Table 9.3). In total, 57.9% of high
performing nonprofits consulted wage and salary surveys to determine external
equity (e.g., pay competitive to the market) to a great extent and 61.1% of
nonprofits examined internal equity to a great extent. High performing nonprofits
were more likely to assess internal equity when compared to the entire sample of
nonprofits, 61.9% and 46.1%, respectively. Similarly, high performing nonprofits
were more likely to assess external equity when compared to the entire sample of
nonprofits, 57.0% and 40.0%, respectively.
One executive director of a high performing nonprofit observed that she
participates in nonprofit wage surveys so she can have access to the data to help
establish wages. She recognizes the need to think systematically about the
151
Table 9.3 Difference of means tests for internal and external equity consideration: High
performing nonprofits
Std.
N Mean Deviation T test
Consultation of wage and salary surveys 247 3.09 1.14 2.80

to determine external equity (e.g., pay
HP 42 3.64 1.30 p=.005
Internal evaluations to determine internal 242 3.23 1.06 3.02
equity (e.g., pay levels are consistent
across the organization)
HP 42 3.76 .96 p=.00
compensation in her organization and compare it with outside organizations to

promote a stable and competitive workforce.
The first time I ever did one of these . . . probably eight years ago . . . part of
that I was (like) you know . . . this is the person’s level of responsibility . . . it
should follow this way because if I need somebody else to take that job, I
want it to be appealing, and so on. When it got to the surveys and I realized
I’m going to have to pay someone who has a Master’s level in Social Work
. . . to keep them, I’m going to have to pay them more competitively. I have
more competition in the area than I have for a receptionist. I can find another
receptionist. It’s going to be harder to find that person . . . But I also can look
and say the hospital pays their Social Workers this . . . schools pay this . . .
other non-profits pay this. Where do I want to fall? I want to fall somewhere
in the middle of that so that when someone leaves me, we’re still competitive.
They’re only going to make a few thousand more and I say that they’re not
going to get a $15,000 jump because we pay so pathetically. That’s where I
don’t want to be. I want to be (kind of) in the middle and that’s a discussion
with the Executive Committee.
As shown in Table 9.4, almost half (47.6%) of the high performing nonprofits
(HPN) used both internal and external equity studies when setting salaries,
compared to 29.6% of the total sample of nonprofits. This helps the nonprofits
to be more strategic in relation to particular positions in their organization. For
example, one executive director observed:
We, probably, focus more on internal equity than external equity because
being a non-profit, it’s difficult for us to compete with the marketplace. Over
the years we’ve tended to raise particular job groups up when we were
152
Table 9.4 Cross-tabulation of organizations exploring internal and external equity for high
performing nonprofits
Consultation of wage and

salary surveys to determine
external equity (e.g., pay
To a
Little to To some great
none extent extent Total
Internal evaluations Little to Count 3 0 0 3

to determine none % of Total 7.1 0 0 7.1
internal equity To some Count 4 5 4 13
(e.g., pay levels are extent % of Total 9.5 11.9 9.5 31.0
consistent across To a great Count 2 4 20 26
the organization) extent % of Total 4.8 9.5 47.6 61.9
Total 9 9 24 42
% of Total 21.4 21.4 57.1 100.0
struggling with recruitment, [such as with nurses]. It was . . . very difficult to

recruit nurses when we can’t afford to pay what they can make out in the
hospitals and more acute nursing care settings. So we would decide this year
we’re going to increase the nursing wages. Then, maybe, a few years later it
was the social workers or the case workers that we hadn’t looked at in a
while. So we tended to do targeted job position increases but we set (kind
of) pay ranges for the different positions, again, in terms of how we value
those jobs within the company.
As illustrated by this data, good compensation strategies maintain a balance

between internal equity and external equity or competitiveness.
In addition to balancing internal and external equity when establishing wages,
nonprofits may employ other compensation strategies. As shown in Table 9.5,
the most often used compensation strategy is to tie pay increases to knowledge,
skills, or competencies (2.85), followed by high performance (2.76). However,
over 34% of nonprofits in the sample did not or did in a very limited way connect
pay increases to knowledge, skills, or competencies. Similarly, 39.2% of nonprofits
did not increase or did so only to a little extent increase compensation related to
high performance. Even fewer nonprofits connected compensation and group
or team awards with any regularity; 78.2% responded not at all or to a limited
extent. Because nonprofits have been less likely to connect compensation and
performance, this study examined whether or not nonprofits used nonfinancial
rewards to recognize high performers. Over 55% of nonprofits did not use
153
Table 9.5 Compensation strategies adopted by nonprofits
Std.
N Mean Deviation
Increased compensation for high performers 283 2.76 1.16

Pay increases tied to group or team performance 284 1.81 .95
Pay increases tied to knowledge, skills, or
competencies 283 2.85 1.13
Significant nonfinancial rewards for performance
(e.g., parking, extra days off, gift certificates) 283 2.45 1.18
Pay increases tied to tenure or seniority 284 2.25 1.11
nonfinancial rewards as an incentive for high performers or did so in limited

ways. Finally, the study explored the extent to which nonprofits used traditional
methods of compensation, which are tied to tenure and seniority. Some 59% of
the nonprofit executive directors shared that they did not or did only to a limited
extent link compensation and seniority. Therefore, based on the data in this
study, nonprofits have room to grow the current package of compensation
strategies used and need to think critically about the tools available to use
compensation strategically to reward and motivate their employees.
As shown in Table 9.6, when compared to other nonprofits, high performing
nonprofits (HPN) were significantly more likely to connect compensation to
knowledge, skills, or competencies (2.73, 3.56 for HPN) and to high performance
Table 9.6 Difference of means tests: High performing nonprofits
Std.
Increased compensation for high

performers 241 2.68 1.11 2.32
HP 42 3.19 1.33 p =.02
Pay increases tied to group or team
performance 242 1.78 .91 1.71
HP 42 2.05 1.15 p =.09
Pay increases tied to knowledge,
skills, or competencies 242 2.73 1.05 3.82
HP 41 3.56 1.32 p =.00
Significant nonfinancial rewards for
performance (e.g., parking, extra
days off, gift certificates) 241 2.39 1.14 2.59
HP 42 2.81 1.37 p =.03
154
Table 9.6 Difference of means tests: High performing nonprofits (continued)
Std.
Pay increases tied to tenure or

seniority 242 2.21 1.09 1.31
HP 42 2.45 1.17 p =.19
(2.68, 3.19 for HPN). High performing nonprofits were also significantly more
likely to use nonfinancial rewards to recognize high performing employees (2.39,
2.81 for HPN). Their patterns of using seniority-based pay and group performance
rewards did not vary.
Interviews with executive directors of the high performing nonprofit
organizations hinted that across the board small raises were often used rather than
merit or performance-based pay. One director noted that he had supported
giving smaller across-the-board increases but planned to return to the merit pay
system. This decision was driven, in part, because managers had not been
consistent with providing performance reviews and, in part, because there were
concerns about the budget. Every decision about compensation requires larger
discussions about where these nonprofits are going to find the funding, so they
are not decisions made lightly. Another organization shared that rather than a
percentage, they award $1,000 per year and periodically adjust salaries based upon
market rates. This same nonprofit had a policy that limits the executive director’s
salary to no more than 30% of the lowest paid person in the organization. In
general, high performing nonprofits are more likely to link compensation to high
performance and to leverage nonfinancial rewards to recognize performance.
Previous studies have explored differences in pay for women and men executive
directors, demonstrating that male executive directors are paid, on average, higher
than female executive directors (Faulk et al., 2012; Hallock, 2002; Lewin, 2001).
This study, however, focuses on whether adoption of different compensation
system differs depending upon whether the executive is male or female. In this
sample, 71% of the human service organizations had a female executive director.
As shown in Table 9.7, patterns of adoption of compensation strategies did not
differ significantly between nonprofits led by women and men.
Previous studies have examined the relationship between organizational size and
compensation systems. As illustrated in Table 9.8, this study examined whether
organizational size was associated with different adoption patterns. Only two of the
seven compensation practices were significantly related to size: examination of
market rates and increased compensation for high performance. Larger nonprofits
were significantly more likely to consider market competitiveness or external
equity. Similarly, larger nonprofits were more likely to leverage compensation to
recognize high performance.
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Table 9.7 Difference of means tests: Male and female executive directors
Std.
Consultation of wage and salary surveys Male 68 3.24 1.17 .74

to determine external equity (e.g., pay Female
competitive to the market) 166 3.11 1.20 p =.46
Internal evaluations to determine Male 69 3.39 1.02 .86
internal equity (e.g., pay levels are Female
consistent across the organization) 166 3.11 1.20 p =.39
Increased compensation for high Male 69 2.90 1.20 1.11
performers Female 167 2.71 1.16 p =.27
Pay increases tied to group or team Male 69 3.39 1.02 1.11
performance Female 168 3.26 1.07 p =.27
Pay increases tied to knowledge, skills, Male 69 2.90 1.20 .25
or competencies Female 167 2.71 1.16 p =.80
Significant nonfinancial rewards for Male 69 2.26 1.07 1.50
performance (e.g., parking, extra days Female
off, gift certificates) 167 2.52 1.23 p =.13
Pay increases tied to tenure or seniority Male 69 2.90 1.16 1.14
Female 167 2.86 1.14 p =.26
Conclusion
The data presented in this chapter demonstrated that the adoption of compensation
practices varied across the studied nonprofit organizations. Interviews with execu-
tive directors of 16 high performing nonprofits revealed that they were reflective
and strategic in their thinking about rewards, often mentioning the need to align
pay with the market and to develop benefits packages that could make employment
more attractive. High performing nonprofits leveraged both compensation and
nonmonetary rewards to recognize employees for high performance and to demon-
strate how much the organization values their contributions. One executive
director reflected:
I think there are certain things we do here, like, we have a staff picnic every
year, we have staff appreciation in June and for the last number of years, if we
have had a good fiscal year, and we know in June, we’ve given out staff
bonuses. Then, the other fun thing we do, is our board authorizes $3,000.00
to be utilized through various gift cards.You come to this thing, or if you are
on duty, your name is put into the hat, and the top two people get $300.00,
and it goes down from there. We are doing stuff and then we do some fun
team building things together and you know, crazy stupid kind of stuff and it
gets back to that old [XXX] family.
156
Table 9.8 ANOVA: Size and use of compensation systems
N Mean Std Dev F test
Consultation of wage and salary surveys to determine Between $100,000 and $500,000 21 2.62 1.02 7.30
external equity (e.g., pay competitive to the market)
Between $500,001 and $1.5 million 103 2.90 1.16 p =.00
Between $1.51 million and $5 million 76 3.32 1.17
Above $5 million 36 3.78 1.10
Internal evaluations to determine internal equity Between $100,000 and $500,000 21 2.95 0.97 1.86
(e.g., pay levels are consistent across the organization)
Increased compensation for high performers Between $100,000 and $500,000 21 2.67 0.97 3.41
Pay increases tied to group or team performance Between $100,000 and $500,000 21 1.90 0.94 p =.96
Between $500,001 and $1.5 million 105 1.72 0.90 .41
Pay increases tied to knowledge, skills, or competencies Between $100,000 and $500,000 21 2.86 1.11 1.75
Between $500,001 and $1.5 million 105 2.77 1.06 P=.16
(continued)
Table 9.8 ANOVA: size and use of compensation systems (continued)
N Mean Std Dev F test

Significant nonfinancial rewards for performance (e.g., Between $100,000 and $500,000 21 2.38 1.07 p=.18
parking, extra days off, gift certificates)
Between $500,001 and $1.5 million 105 2.41 1.25 .91
Pay increases tied to tenure or seniority Between $100,000 and $500,000 21 2.00 1.14 .47
Between $500,001 and $1.5 million 105 2.26 1.09 p=.78
Another executive director noted that she had explained to her staff:
We weren’t able to give you a raise but this is a way we can say thank you.
I know it would be so much better if I could give you a dollar an hour more
but I can’t. But, here’s something at the end of the year the Board can do.
And, sometimes, it looks like $200 but sometimes it’s been $1000 and I’ve
heard staff say, wow, I got to buy that recliner I’ve always wanted . . . or I got
to buy . . . or I was able to pay for my . . . pay off some of my student loan
. . . I’m not somebody who considers the financial management as strongly
as I consider caring for [XXX]. So my first inclination is to be (like) . . . give
it to her. I care so I want her to be here. And my second thing . . . that I don’t
act on the first one before I consider is . . . how does that affect the
organization? It’s slowly becoming where they are equal.
As compensation is often restricted in many nonprofits and budget growth is

typically constrained, nonprofit executive directors were required to think
creatively about compensation and recognition, employing many different strategies
and focusing on more than money. One interviewee posited:
No amount of money is going to keep an unhappy person in play but the

truth is, if they are otherwise happy, feel valued, feel like they are making
decisions, feel critical to the team, feel that the team is succeeding—it’s ‘fun’
to be on a Superbowl team and you’re getting paid well . . . retention and
performance will not be a concern.
Theuvsen (2004) would agree that nonprofits are not likely to attract employees
who primarily seek extrinsic rewards and seek income maximization. In an
empirical study, Leete (2000) found that nonprofit employees were not primarily
motivated by financial rewards. Because the dominant type of employees attracted
to and working in the nonprofit sector historically has not been focused on
contingent rewards, this may account for the limited use of performance pay in
this study of human service nonprofits (Beyer & Nutzinger, 1993; Rawls et al.,
1975). However, as more people are seeking to serve the public and give back
through nonprofit organizations as their primary career venue, well-designed,
supportive compensation systems that support these nonprofit professionals cannot
be ignored by nonprofits and are worth the necessary capacity investment.
Brandl and Güttel (2007) found differences between groups of nonprofits
that had not adopted pay for performance and those that were beginning to adopt
pay for performance. For nonprofits that had not adopted a pay for performance
system, Brandl and Güttel observed that the nonprofits emphasized the incompat-
ibility of monetary incentives with their culture and the potential negative
impact of awarding monetary rewards for employees performing similar tasks
and holding similar positions. They further reflected that nonprofits who had
not adopted pay for performance perceived that the “NPO’s mission, objectives,
activities, and values form the core stimulation for intrinsic motivation. The
159
intrinsic motivation is activated by the organization’s ‘spirit’ (which is also called

‘‘NPO-bonus’’ due to its immaterial character)” (Brandl & Güttel, 2007, p. 187).
In contrast, nonprofits who adopted pay for performance sought to attract high
performing employees, which they perceived would improve the nonprofit’s
competitiveness and ability to acquire needed funds. Because these nonprofits
sought employees with a high performance orientation, they believed this value
needed to be reflected in monetary rewards. This study’s findings reinforce
the linkage suggested by Brandl and Güttel (2007). High performing nonprofit
organizations were more likely to increase compensation for high performers,
link pay to team performance, and tie pay to knowledge, skills, and competencies.
Moreover, these nonprofits were also more likely to use nonmonetary incentives
to reward high performance.
The most often employed compensation system in the total sample and for high
performing organizations was pay increases tied to knowledge, skills, or competen-
cies. Chen, Ren, and Knoke’s (2013) research found no significant differences
between nonprofit, government and for-profit organizations in their adoption of
pay for skills. They reasoned that this finding “might mean that, with the devel-
opment of technology, training for skills is as important within for-profit organi-
zations as it is outside the for-profit sector” (Chen et al., 2013, p. 301). Their work
might suggest insight into why this was the most often adopted practice. This
compensation practice is premised upon the assumption that new knowledge,
skills, and competencies contribute to the nonprofit’s ability to execute its mission
and reach its goals. As employees gain new capabilities, they become more flexible
resources for the organizations. Managers can more easily shift employees to dif-
ferent areas as needs and conditions change. Paying employees for new capabilities
encourages them to change behaviors and to advance the nonprofit’s goals.
Nonprofit managers and executive directors would be well served to examine their
compensation systems and practices and consider how well these practices are
supporting the goals of the organization.
Figure 9.1 presents a framework for nonprofits to use to organize their approach
to compensation strategies. A nonprofit’s compensation philosophy and objectives
should align its mission and goals and then, in turn, should influence decisions
related to base pay, internal and external equity, nonmonetary recognition and
rewards, and pay adjustments. Possible compensation objectives include:
• Providing a fair wage

• Providing wages that keep pace with the cost of living
• Providing incentives for employees to remain with the organization
• Rewarding high performance at the individual and/or group level
• Aligning employee goals to organizational goals
• Being competitive with other nonprofits
• Recruiting top talent to the organization
• Providing special recognition to employees
• Ensuring gender equity
• Building team bonds
160
Figure 9.1 Strategic Compensation Model to guide nonprofit decision-making
• Making employees feel valued

• Sharing prosperity
• Addressing generation-specific reward preferences.
For example, based upon Johnson and Ng’s (2015) recent studies, nonprofits may
want to consider their objectives as it relates to generational need, expectations,
and reward preferences.
Because nonprofit budgets are typically limited, executive directors and their
leadership team will need to make difficult decisions about how to allocate
resources. Nonprofits should consider how they will balance benefits and com-
pensation. By implementing a strategic compensation and recognition philosophy
that is consistent with their mission, nonprofits will be better able to inculcate a
culture that includes their philosophy and guides resource allocation. Whether to
devote resources to attracting the best candidates or to retaining existing employ-
ees will continue to be a critical question for nonprofits to address. At the same
time, a strategic approach will encourage nonprofit leaders to be intentional about
the creative ways in which they can recognize employee performance and can
make employees feel that they are valued by the organization.
1 For those of you currently employed in the nonprofit sector, locate a salary
survey and see where your position falls in relation to that salary survey.
What do the results tell you about what compensation principles are held
by your organization?
161
2 Why should nonprofits consider aligning pay with performance? What are
some of the positives and negatives of this?
3 What are some ways that nonprofit organizations can be creative with their
compensation strategies, especially when they have limited resources?
4 How should nonprofit organizations adjust pay during a recession or a
period of economic stress?
5 How does budget size influence compensation?
Notes
1 While compensation includes pay and benefits, this chapter does not cover benefits in
great detail due to space constraints. For further discussion of benefits in nonprofit
organizations, see Pynes (2013).
2 After a federal judge’s decision in Texas against delayed the implementation of the
Obama administration’s new overtime rule regarding the Fair Labor Standard Act’s
salary threshold. The judge placed a temporary injunction against the overtime rule,
placing employers in the United States in legal limbo (Miller, 2017). The decision has
been appealed to the 5th Circuit Court, but the case had not been heard as of the
writing of this chapter.
3 The author would like to thank the Society for Human Resource Management
(SHRM) Foundation for the grant that supported this research.
4 The National Taxonomy of Exempt Entities (NTEE) is a classification system for tax-
exempt organizations that was developed by both practitioners and scholars. The NTEE
codes were designed to create a common language for reporting on organizational pur-
pose and are used by the IRS on the 990 form and by the National Center for Charitable
Statistics to classify organizations (Lampkin, Romeo, & Finnin, 2001). The NTEE codes
used in the sampling strategy for this study were the following: E32 E40 E42 I70 I71
I72 I73 K30 K31 K34 K35 K36 O20 O21 O22 023 030 031P20 P21 P22 P24 P26P
P27 P28 P29 P30 P40 P42 P43 P44 P45 P46 P60 P61 P62 P70 P72 P73 P74 P75 P80
P81 P82 P83 P84 P85 P86 P87.
5 This study used the approach employed by Dess and Robinson (1984) modified for
the nonprofit sector.
6 The measures used to assess compensation were drawn from the following sources:
Datta et al. (2005); Jensen et al. (2011); Messersmith and Wales (2011); WorldatWork
and Towers Watson (2010).
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10
Labor Relations in Nonprofit
Organizations
Joan E. Pynes
Due to an inability to reach a contract agreement, The Atlanta Symphony

Orchestra (ASO) was locked out by its management. Other recent labor manage-
ment contract disputes in the arts could be found with the Indianapolis Symphony
Orchestra, Minnesota Orchestra and the Metropolitan Opera. Employees of New
York’s Museum of Modern Art (MoMA) protested at its “Party in the Garden”
gala with protest signs reading “MoMA, don’t cut our health care,” “Modern art,
ancient wages,” “Average MoMA senior staff salary: $349,00 Average MoMA
employee salary: $49,000: MoMA staff deserves a fair contract.”
(Brooks, 2015; Cooper, 2014a, 2014b; Eddings, 2014;
Maloney, 2014; Pousner, 2014)
Doctors working at the student health clinics on University California (UC)

campuses of Berkeley, Davis, San Francisco, Santa Cruz and Merced participated
in a rolling strike accusing UC of unfair labor practices.
(Gordon, 2015)
Unite Here is the union that represents food service workers at the National
Museum of the American Indian and the National Museum of American History.
(Fletcher, 2013)
Centro de los Derechos del Migrante (CDM) is a nonprofit that has recovered
more than $5 million in stolen wages from migrant workers. Many employment
and labor laws are regularly violated impacting the low wage and often immigrant
labor force.
(Erickson, Jr, 2015)
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Labor Relations in Nonprofit Organizations
Introduction
These are examples of current activities of employees working for nonprofit
organizations and attempts to have some influence over their work life. In the
first two examples, the employees were locked out of work or went on strike.
During the recession, nonprofits faced significant economic pressures; a number
merged with other nonprofits and some closed, due to significant reductions in
public funding, a loss of donations, fees for services, subscriptions and memberships
resulted in stagnant wages. In addition to no pay increases, in many cases employees
were tasked with contributing more of their salaries toward their fringe benefits.
Once the economy improved and organizations’ revenues increased, employees
were looking to regain what they lost during the recession and unions became
more assertive. The third example is one where employees working for a for-
profit firm contracted to provide services to a large nonprofit organization joined
a union to raise their wages and improve their benefits. The last example indicates
a newer strategy by nonprofit organizations to assist non-unionized employees
and make sure they are not being exploited.
According to the U.S. Bureau of labor Statistics, in 2014, the unionized
private workforce was 7.4 million workers, which is 6.6% of the private sector
workforce (U.S. Bureau of Labor Statistics, 2015). There has been a consistent
decrease in the number of employees belonging to unions.
Despite the overall downward trend in union membership, an increasing
number of professional and service industry employees have joined unions.
Professional union members account for 54% of union members in March 2015
(Department of Professional Employees, AFL-CIO, 2015a, p. 6). Professional
employees such as medical doctors, social workers, graduate students, lawyers,
musicians, and nurses, are examples of some professional/occupational groups that
have unionized in nonprofit organizations (Department of Professional Employees,
AFL-CIO, 2014a, 2015a). There has also been an increase in the number of
technical workers and paraprofessional workers such as nursing assistants, labora-
tory technicians, and other service workers joining unions. This chapter discusses
the legal environment of labor relations, threats to union organizing activities, the
ambivalence of support of unions and collective bargaining, why workers join
unions, and changes in social policy.
The Legal Environment

Labor-management relations in the nonprofit sector have been covered under
the National Labor Relations Act of 1935 (NLRA) since 1976. The NLRA
permits employees to organize and join unions. Under this law, employers
must bargain in good faith with employee unions and could be cited for unfair
labor practices if they attempt to interfere with the establishment of unions.
The NLRA established the National Labor Relations Board (NLRB) as the
administrative agency responsible for enforcing the provisions of the act. Similar
to a for-profit organization, the board would have jurisdiction over a nonprofit
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Joan E. Pynes
employer if the organization was sufficiently involved in the flow of money or

goods across state lines and a labor dispute would interrupt that flow of commerce.
The board established a jurisdictional standard of $250,000 annual revenue for all
social service agencies other than those for which there is another specific standard
application for the type of activity in which the organization is engaged (Feldacker,
1999; NLRB, 2015). Most small nonprofits may not meet the NLRB’s jurisdictional
standards.
The NLRB holds jurisdiction over nonprofit service organizations that
provide services to or for an exempt governmental agency supported by state or
federal funds (Feldacker, 1999). These agencies are covered by the Act, even
though they are government funded, as long as they retain independence in
labor-management matters, such as establishing the wages, hours, and working
conditions of their employees. The sole standard for taking jurisdiction is whether
the contractor has “sufficient control over the employment conditions of its
employees to enable it to bargain with a labor organization as its representative.”
The board looks closely at the nature of the relationship between the government
institution and the contractor.1
Changes in the Landscape: Threats to Unions

Unions promote the “interests” of employees often expressed as salaries and
benefits. We often forget that unions are responsible for the 40-hour work week,
facilitating the provision of employer-provided health, retirement, education,
employee training and development, and other benefits. Unions also help guarantee
or protect the “rights” of employees in regard to how they are treated and how
rules are administered.
Management officials often oppose unions because they are perceived as
raising costs and restricting management discretion. The recession of 2007–2009
led to increased attacks against unions. In many service-related industries, as well
as the public and the nonprofit sectors, the biggest expense is typically the cost
of labor. Data from 2014 indicates the median weekly earnings of full-time wage
and salary workers belonging to a union was $970 per week compared to $763
for workers not in a union (U.S. Bureau of Labor Statistics, 2015, Table 41
Median weekly earning of full-time wage and salary workers by union affiliation
and selected characteristics 2015). The unionization of employees is perceived to
inflate wages and benefits and create administrative inefficiencies. As a result, the
collective bargaining rights of employees have come under attack in a number
of states.
“Right to Work” laws have been passed by 28 states (National Conference
of State Legislatures, 2017). These laws prohibit individuals from being forced
to join or pay dues to a labor union nor are they required to join a union to
acquire or retain employment. States may also outlaw various forms of union
security provisions. The “Right to Work” states are: Alabama, Arizona, Arkansas,
Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi,
168
Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina,

South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming. In
the nonprofit and private sectors, Section 14(b) of the LMRA permits states to
outlaw various forms of union security provisions:
Nothing in this Act shall be construed as authorizing the execution or

application of agreements requiring membership in a labor organization as
a condition of employment in any State or Territory in which such execution
or application is prohibited by State or Territorial law.
This provision means an employer can reject a union’s demands for the recogni-
tion of union security arrangements illegal under state law. Union security regula-
tions address the degree to which unions can require or mandate the payment
of dues to support activities related to collective bargaining. Most collective
bargaining contracts contain some kind of union security provision. Employers
typically deduct the payments from the employees’ pay and give them to the
union. This reduces the administrative costs unions have in collecting the funds
and also ensures payment from employees who might prefer to be free riders. This
is a way to reduce the financial resources of unions and ultimately their strength
when opposing management.
Originally, most “Right-to-Work” states were found in southern or Sunbelt
states, but the three most recent states to pass legislation, Michigan, Indiana, and
Wisconsin, are Midwestern states with long traditions in collective bargaining.
Missouri almost became the 26th state to have enacted “Right-to-Work”
legislation. Most of the Republican legislature voted to pass the Bill but 24
Republicans broke rank and voted against making Missouri a “Right-to-Work”
state citing support for unions by their constituents who may be socially
conservative but who belong to unions. The Republicans who broke rank based
it on the following: Unions can attract employers because they provide a trained
workforce that corporate leaders need to do business; There are plenty of
nonunionized employers that individuals who are opposed to unions can work
for; and that debates over “Right-to-Work” legislation distract from other issues
that need attention, such as taxes, education, and infrastructure (DePillis, 2015).
The split opinion in regard to the value of unions and collective bargaining
in the Republicans that dominated state legislature appears to reflect the mixed
views the general public holds in regard to unions and collective bargaining.
Mixed Views on Unions and Collective Bargaining

Despite the decrease in the number of workers who belong to labor unions and
attempts to weaken them, a Pew Research Center poll conducted in 2015 found
the public has mixed views on union membership. Some 52% of the respondents
believe the drop in union representation has negatively impacted working people
compared with 40% who say it has been mostly good. When asked whether certain
169
Joan E. Pynes
occupational workers should be able to join unions, respondents had different

responses. Some 82% supported manufacturing and factory workers’ right to join
unions, 74% public transportation workers, 72% police and firefighters, 71%
public school teachers, 68% supermarket and retail sales workers and 62% fast-
food workers (Pew Research Center, 2015). There were differences among
Democrat and Republican respondents in their opinions about allowing workers
to unionize. Among Democrats, the support ranged from 77% for fast-food
workers, 86% public school teachers, 83% supermarkets and retail sales workers,
88% public transportation, 83% police and fire and 92% manufacturing and
factory workers.
Republicans supported the right of employees to form unions but the
percentages were lower: 71% said factory and manufacturing workers should be
able to unionize, 59% said police and firefighters, 58% public transportation
workers, 52% supermarkets and retail sales workers and 54% public school
teachers. Among Republicans and respondents identified as Republican leaning,
the younger respondents (18–31 years of age) and those with a high school
education had more favorable views of unions than older respondents and those
with a college degree and higher income.
Differences existed in union support across ages; of those 18–29 years of age,
55% were in favor of unions and 29% not in favor, and among those older, the
results were mixed. For respondents between the ages of 30–49, 46% held a
favorable view of unions compared to 40% with an unfavorable view. Of those
between the ages of 50–64, the percentages were 46% favorable and 43%
unfavorable, and for respondents aged 65 and older, 46% held a favorable view
of unions compared to 42% with an unfavorable view.
Sixty percent of Blacks surveyed had a favorable view, 49% for Hispanics and
45% for Whites (Pew Research Center, 2015). While the survey was not specifi-
cally addressing occupations in the nonprofit sector (teachers, retail/service and
transportation workers can be found in both sectors). Many nonprofit occupations
are often under-paid and often deal with vulnerable populations in difficult
circumstances. Women tend to be concentrated in community, social service,
healthcare, and healthcare support and technical occupations, and provide support
to individuals, families, and communities. In 2013, 20.7% of social workers, 20%
of counselors and 21.4% of other community and social service workers were
union members (Department of Professional Employees, AFL-CIO: 2014b, p. 3).
A recent survey of Michigan residents supported passing a law entitled “the
Safe Patient Care Act,” establishing minimum staffing levels of registered nurses
in Michigan hospitals. The law, if passed, would require hospitals to have staffing
plans for each unit that follows minimum nurse-to-patient ratios based on profes-
sional standards (Michigan Nurses Association, 2015; Anonymous 2015). In 2030,
it is projected that 20.3% of the population will be 65 years and older as compared
to 13.7% in 2012 (Ortman, Velkoff, & Hogan, 2014). As the U.S. population
continues to age, there will be an increase in the need for community, social
service, healthcare, and healthcare support occupations.
170
Projected Occupational Growth—Much Is in the

Nonprofit Sector
Some of the fastest projected occupations between 2012 and 2022 are in the
health and personal care service sector (U.S. Bureau of Labor Statistics, Employment
Projections, 2013a). Additional data show the projections of employment by
major occupational group industry 2012–2022. Many of those occupations
have a large presence in the nonprofit sector. Occupations in the life, physical and
social sciences; community and social service occupations; education, training
and library occupations; healthcare practitioners and technical occupations; health-
care support occupations, food preparation and serving-related occupations;
personal care and service occupations; and office and administrative support occu-
pations all have a large presence in nonprofit organizations (U.S. Bureau of Labor
Statistics, Employment Projections, 2013b).
These professions/occupations often work for nonprofits that are partially or
fully dependent upon some government funding. A breakdown of public charities
shows that Human Service nonprofits are 35.5% of public charities, followed by
Education, 17.1%; Health, 13%; Public and Social Benefit, 11.6%; Arts, culture
and humanities, 9.9%; Religion-related, 6.1%; Environmental and animals, 4.5%;
and International and foreign affairs, 2.1% (McKeever, Brice, & Pettijohn, 2014).
In 2012, the combination of government contracts and grants comprised nearly
one-third (32.2%) of nonprofit revenue (McKeever, Brice, & Pettijohn, 2014).
Despite the nation’s economic recovery, a survey conducted by the Nonprofit
Finance Fund found the largest nonprofit subsectors are still facing challenges.
The top challenges are financial sustainability, staff retention, a lack of unrestricted
revenue, reductions in government funding, meeting the demand for services,
having fewer employees than needed, the inability to develop cash reserves, and
lacking a reliable cash flow (Nonprofit Finance Fund, 2015). Many of the find-
ings are consistent with previous research conducted by the Urban Institute.
An Urban Institute study on nonprofits that receive government contracts and
grants found some problems for nonprofit recipients. Often payments did not
cover the full cost of contracted services, the application and reporting processes
were complicated and time-consuming; government funders made changes to
the contracts or grants during the execution, and there were late payments.
Other problems include limits on program administration or overhead costs; and
sometimes the contracts and grants required cost sharing (Pettijohn, Boris, &
Farrell, 2014).
Another characteristic of nonprofits is that there are typically more women
employees than men working in nonprofits (Preston & Sacks, 2010). One theory
suggests that because of the mission of nonprofits and the intrinsic nature of much
of the work, women are more likely to donate their labor. Another reason may be
that many of the services provided by nonprofits consist of what is considered to
be women’s work. Tasks consisting of caring, negotiating, empathizing, smoothing
troubled relationships, and working behind the scenes to enable cooperation, and
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Joan E. Pynes
sometimes referred to as emotional labor can be found in nonprofit organizations

(England, Budig, & Folbe, 2002; Guy & Newman, 2004; Guy, Newman, &
Mastracci, 2008; Mastracci, Guy, & Newman, 2012).
Many individuals view unionization as a mechanism to defend professional
autonomy, improve working conditions, and maintain or improve economic
security. Employees who feel vulnerable are more likely to join unions. Given the
uncertainty of government funding and often the lack of respect for emotional
labor and care work, it is possible that social and community service employees
will follow the lead of nurses and healthcare employees and choose to join unions.
In fact, early research on labor unions in social service agencies provides evi-
dence that unions have expanded the scope of bargaining to include such issues
as agency-level policymaking, agency missions, standards of service, coverage
for malpractice and professional liability insurance, legal representation of workers,
workload issues, the provision of in-service training, financial assistance for licens-
ing examinations, and remuneration for enhanced education (Hush, 1969; Karger,
1988; Pynes, 1996; Tambor, 1973, 1988a, 1988b). These issues continue today
and as information and communication technologies (ICT) keep employees teth-
ered to their workplaces when not physically at work through smartphones and
tablets, email and groupware, topics such as what is considered overtime and the
workday have become part of the standards of service and working conditions.
Worker Interests
Today, the most active union-organizing activity among nonprofit subsectors is
in healthcare. The Service Employees International Union (SEIU) has a unit, SEIU
Healthcare, that specializes in unionizing employees working in healthcare organi-
zations. It represents doctors and nurses, home care, and nursing home workers,
lab techs, environmental service workers, and dietary aides. Its members can be
found working in hospitals, health centers, nursing homes, in-home care and in
the community (SEIU Healthcare; www.seiu.org/seiuhealthcare/). CIO, AFSCME
also organizes healthcare workers. The National Union of Hospital and Health
Care Employees mission can be found at www.nuhhce.org/Mission. Priorities
in its mission include protecting all its workers, promoting and safeguarding the
economic interests of its members and families, and protecting and advancing
the technical status of its members in all types of healthcare institutions.
Market-based healthcare reforms are having a negative impact on the work
environment of registered nurses. These reforms, aimed at cost savings, means
they have been replaced with less qualified and less expensive personnel, such as
licensed practical nurses and technicians. Reforms have also meant an increase
in patient-staffing ratios. Many nurses believe some of the reforms threaten the
quality of patient care. Many nurses are now seeking union membership as a
means to gain greater control over patient care. Under collective bargaining,
professionals are able to demand the standards of their profession be respected
and enforced. Often the decision to vote for unionization is done under the
172
threat of losing control over their professional work environment (www.

uannurse.org). Registered nurses (RNs) in a hospital in Michigan agreed to a
lower percentage pay increase in favor of the hospital hiring 25 additional nurses
so that patient care could be delivered in a more effective manner (Department
of Professional Employees, AFL-CIO, 2015b).
It is not just hospitals and other healthcare nonprofits that are reacting to
market-based reforms. There has been an increase in alternative employee work
arrangements, an increase in part-time work and the use of a contingency
workforce. Nonprofits are also contracting out services once provided by employ-
ees working directly for nonprofits. An important National Labor Relations
Board (NLRB) decision in regard to contract and temporary workers was made
in August 2015. In a 3-2 ruling, the NLRB revised its “joint employer” standard
for determining when one company shares responsibility for employees hired by
another. The ruling will make it easier for unions to negotiate wages and benefits
for contingent workers. The majority on the Board stated the NLRB has not kept
pace with an evolving workplace in which increasing numbers of U.S. workers
are employed through temporary staffing agencies, or when organizations misclas-
sify their employees as independent contractors to avoid paying taxes, overtime,
and benefits. This change may have an impact on contracting out services, hiring
independent contractors, or using a contingent workforce. It is too soon to tell
(DePillis, 2015; Trottman, 2015).
Confronted with an increase in the demand for services, increased competition,
reductions in funding, and general economic instability, this has in some cases
resulted in mergers among nonprofits providing similar services or organizational
restructuring. Union contracts have called for employers to notify employees of
impending layoffs and to offer voluntary leaves of absences to employees before
reducing their hours. Unions have sought to expand the scope of bargaining to
include standards of service, and professional judgment.
Union contracts with nonprofit agencies recognize that new issues have
emerged and that labor-management understanding and cooperation are impor-
tant. Labor market and workplace changes have increased insecurity and under-
mined the belief that wages are competitive and jobs are secure. There has been
a decrease in employee benefits, an increase in the use of a temporary workforce,
and reduced or lost pensions. These changes, along with sometimes arbitrary or
unfair management, often lead employees to unionize when they feel threatened.
Employees have also joined unions to defend their professional autonomy and
improve working conditions. While unions are still concerned with “bread
and butter” issues such as wages, hours, and working conditions, new topics have
emerged.
Newer employee benefits include mental health and substance abuse benefits,
childcare benefits, employee individual development plans, incentive awards, and
alternative work schedules. Workplace safety precautions have also become part
of the collective bargaining agreement. These precautions include: guidelines
covering the use of video display terminals (VDTs), protective clothing, violence
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Joan E. Pynes
protection programs, and indoor air quality (Department of Professional

Employees AFL-CIO, 2014a, 2015a, 2015b; SEIU, 2015; National Nurses
United, 2015; UFCWIU, 2015).
Worker Rights
In addition to bargaining for the interests of employees, unions help guarantee
or protect the “rights” of employees in regard to how they are treated and how
rules are administered. When a union believes that management has violated the
terms of a labor contract and files a grievance, a neutral third party is asked to
resolve the disagreement that could not be settled by the union and management.
This is referred to as grievance arbitration. A hearing is held and the arbitrator
renders a decision based on the merits of the case. The decision tends to be final
and legally binding on both parties.
Grievance arbitration is expressly authorized by statute in the nonprofit and
for-profit sectors. The NLRA/LMRA requires that all contracts contain a griev-
ance resolution procedure. It is believed that grievance arbitration is necessary to
protect employees from unfair, discriminatory, unsafe, and arbitrary treatment by
employers.
Why Protect Employees?

One argument is that protection “pays for itself” through increased productivity.
Research has demonstrated that employees develop a psychological contract
which is the unwritten expectations employees and employers have about the
nature of their work relationship. Tangible items such as wages, benefits,
employee productivity and attendance and intangible items such as loyalty, fair
treatment, and job security exist. In times of pay freezes, workforce downsizing,
the elimination of or increased cost of employer-provided benefits, employees
need to feel that they have some control and perceived rights in the organization
(Kehoe & Wright, 2013; Ko & Hur, 2014; Pierce, Kostova, & Dirks, 2001). The
second argument is that there is an ethical imperative to treat employees fairly.
Many believe that employees are entitled to or ought to be entitled to fair
treatment, respect, and safe working conditions. Research indicates that higher
levels of organizational justice are related to job satisfaction, trust in management,
greater productivity, and lower turnover intentions (Choi, 2011; Greenberg,
1996; Rubin, 2011).
Social Policy: Beyond Members’ Bread-and-Butter Issues

Labor unions have not always been thought of in the best of light. There are many
reasons for this. A number of labor unions have had a history of discrimination
against women, racial and ethnic minorities, and Lesbian, Gay, Bisexual and
Transgendered (LGBT) workers. They have been reluctant to welcome new
174
members into their unions. There have been union leaders found guilty of corrup-
tion and stealing from the union and its members for their personal gain. Unions
have been associated with organized crime and have been criticized for being
reluctant to change and adapt to new technologies and flexible work rules (Bielski
Boris, 2010; Crain, 1995; Jacobs & Peters, 2003; Kelly & Lubitow, 2015; Leymon,
2011; Riccucci, 1990; Zullo, 2012).
While that is accurate, some progressive unions have been at the forefront of
social policy issues (Craver, 2011; Clawson & Clawson, 1999; Fletcher & Gapasin,
2011). Craver (2011) notes that many of the social movements of the 1960s
utilized union tactics and civil rights organizations like the NAACP often worked
closely with sympathetic unions leaders to oppose segregation policies (p. 9).
Liberal trade union leaders protested with anti-war groups to end the involvement
of the United States in the Vietnam War (DeBenedetti & Chatfield, 1990, cited
in Craver, 2011). In other locations, unions also provided support to rent strikers.
Joint Council 13 of the Teamsters Union in St. Louis, MO, helped low cost
housing residents form the Civil Alliance for Housing to protest rent increases
that the tenants could not afford. The Southern Christian Leadership Conference,
the Black Coalition, CORE, Action, the Zulu 1200s, the Black Liberators, and
African American politicians, churches, fraternities, and sororities, along with
white organizations, supported the strike including church groups, the St. Louis
Post Dispatch, the National Tenants Organization and the New Democratic Party.
Members were from a broad coalition of religious, civic and business organizations
(Corr, 1991, pp. 155, 166).
In an effort to remain viable, many unions shifted their focus to public policy
concerns that went beyond the wages and benefit self-interests of their member-
ship. They began to focus on workforce diversity and the promotion of equal
job opportunities, equal access to the allocation of benefits such as training and
career-enhancing opportunities, commitment to workforce productivity, the
need for affordable and safe daycare, maternal and family leave benefits, an
increased ability to work flexible hours, the elimination of sexual harassment and
discrimination in the workplace, and eliminating the exploitation of immigrant
workers (Brown & Peters-Hamlin, 1989; Craver, 2011; Milkman, 2012; Pynes,
1996).
Due to changes in family structures and society, some union contracts included
flexible benefit programs that include coverage for childcare, eldercare, and
domestic partners. Public sector unions were at the forefront of advocating for
comparable worth for job positions typically occupied by women and developing
upward-mobility training programs for lower-skilled members. Some union
contract provisions included newborn care leave, family care leave, dependent
care reimbursement accounts, professional family care resources, referral services,
adoption assistance, flexible work hours and on-site child care to dependent care
financial assistance (Cowlee, 1993; Watts, 1983; York, 1993).
Unions have also been significant in advancing education and training oppor-
tunities. Going back to the 1950s, unions have negotiated career advancement
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Joan E. Pynes
opportunities in the industrial and craft sectors. More than 40 years ago, there
were training and education programs in the healthcare sector in New York City
and across New York State and efforts have continued to expand across the
country (Klingel & Lipsky, 2010). Recognizing the limited ability of low-wage
workers in the healthcare industry to move into higher-paying occupations due
to the lack of education and training credentials, unions and management have
developed multi-employer joint labor-management healthcare training programs
(Klingel & Lipsky, 2010). According to Klingel and Lipsky, the joint labor-
management multi-employer training partnership and fund model is different
from other models of workforce training because it relies on the cooperation
of labor and management and different employers within a region as its main
organizing principle. Education is linked to employment opportunities through
a labor-management partnership. Employers benefit by linking training invest-
ments to the retention and development of incumbent employees. The multi-
employer approach combines employer investments with those of other employers
to fund programs that would be cost-prohibitive or might not attract enough
participants at a single location or employer. Training needs can be targeted to
the needs within a specific geographic area and the strategic human resource needs
of an employer.
Union members benefit because they are provided with educational oppor-
tunities ranging from obtaining a GED to college preparation courses, college
and university degree programs, continuing education and certification programs,
and other skill training programs. This often leads to higher-paying positions.
Partnering with unions and their members assisted in identifying obstacles to
participating in career advancements. As a result, classes began to be provided
on-site and at non-traditional hours for the convenience of the employee stu-
dents who had alternative working hours. Improved morale and retention
have been an outgrowth of the joint multi-employer programs. Nonprofits and
foundations have often been criticized for not investing in the training and
development of nonprofit employees and for funding infrastructure and technol-
ogy improvements (Bridgespan Group, 2011; Dorfman, 2015). As executives and
managers retire, and greater accountability from funders becomes the rule, non-
profits and unions can partner to develop new training programs for internal
talent and develop longer-term objectives to address impending changes.
Most of the national unions have revised their platforms to emphasize issues
dealing with the growing inequality and instability, such as wage stagnation,
employment insecurity, and the increasing economic inequality between workers
and owners. Unions are attempting to address issues such as corporate responsi-
bility, democracy in the workplace, and worker rights. Unions have begun to
emphasize the need for greater racial, gender, and class equality and improving
the political and economic status of workers and their communities. However,
employer responsibility, democracy in the workplace and worker rights, health-
care, and providing wages at levels where families can support their families need
to be addressed. These are issues that affect a broader population beyond union
176
members. Unions have attempted to address these issues by forming coalitions

with local and national nonprofit community groups and advocacy groups.
Under Issues on its website, the AFL-CIO (www.aflcio.org/Issues) notes the
importance of affordable healthcare, retirement security, quality education for
our children, job safety, and civil and workplace rights as being essential for all
working people.
Some of the groups allied with the AFL-CIO include: American Rights at
Work; American Center for Labor Solidarity (Solidarity Center); Alliance for
Retired Americans; American Center for International Labor Solidarity (Solidarity
Center); Community Services Network; International Labor Communications
Association; Jobs with Justice; Labor Heritage Foundation; Lawyers Coordinating
Committee; National Day Laborer Organizing Network; National Domestic
Workers Alliance; National Guestworker Alliance; United Students Against
Sweatshops; Working America; and Working for America Institute. Similar issues
and allied organizations can be found on most of the national labor union
websites.
In a report entitled “Broken laws, unprotected workers: Violations of employ-
ment and labor laws in America’s cities,” Bernhardt et al. (2009) found employment
and labor laws are regularly violated, impacting low wage workers in large cities.
There were minimum wage violations, overtime violations, off the clock violations,
meal break violations, pay stub and illegal deductions, illegal employer retaliation,
and workers’ compensation violations. Violations varied by occupation, childcare
workers had high minimum wage and overtime violation rates, women were more
likely than men to experience minimum wage violations, and foreign-born workers
were twice as likely as U.S.-born employees to have minimum wage violations.
Foreign-born Latino workers had the highest minimum wage violations, African-
American workers had violation rates triple that of their white counterparts (2009,
pp. 2–5).
Recommendations from the study include the need to strengthen government
enforcement of employment and labor laws. Partnerships with immigrant worker
centers, unions, service providers, legal advocates and responsible employers
need to be encouraged and facilitated. Social media has been used to provide
access to information about employers who violate labor and employment laws.
The states, local governments, and the U.S. Department of Labor have been slow
to respond to wage theft and misclassification violations. There has been some
movement by public authorities, and wage theft prevention acts have been pro-
posed and passed in some local governments and states, but nonprofits were first
in calling attention to the issues (Leffert, Goodman, Zaimes, & Newman, 2015;
National Consumers League, 2015).
Rachel Micah-Jones created a nonprofit agency, Centro de los Derechos del
Migrante (CDM), to assist employees who have been taken advantage of by
unethical employers. The group recovered more than $5 million in stolen wages.
CDM developed Contratadors, a system called the “Yelp” for migrant workers
because it allows workers to tell their stories and draw attention to abuses.
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Joan E. Pynes
Employers and their recruiters are evaluated anonymously. It allows workers to

share their experiences. It also informs workers of common job-market hazards
and how to seek help. Visitors to the website can listen to audio and explore
comic-book style illustrations. They can also print out informational posters to
post around their job sites (Ericson, Jr., 2015, p. 30).
This is important because while many workers feel insecure, the immigrant,
low-waged, and less-educated are the most vulnerable and are often in industries
that are the hardest to unionize. Fine (2006) notes that it is difficult for labor
unions to win union-organizing drives, so worker centers have evolved providing
services like CDM. They are community-based organizations that target occupa-
tions such as daycare or home health/domestic service where workers are
employed in decentralized locations. Some worker centers are based on ethnic
or national identities, while others have a geographic or neighborhood focus.
Some target workers who are not covered by labor law like street vendors or taxi
drivers (Fine, 2006; Milkman, 2012, p. 54). They sometimes have different names
and provide different services. Their activities often involve organizing workers
at the grassroots level. These grassroots efforts provide assistance to workers expe-
riencing labor law violations or campaign against workplace injustices. Some
worker center nonprofits offer social and education services, and engage in policy
and legislative advocacy to improve labor law enforcement. Some focus on a
medial outreach approach to expose employer abuses to the public through direct
appeals to consumers. Many of the worker centers are aligned with community
development agencies and churches to provide workshops on worker rights and
some provide job training, English language lessons, or social services. In some
cases they have volunteers, professional staff or attorneys who file legal claims to
remedy labor law violations. For a comprehensive review of worker centers
and how they advocate for workers, their origination, their differences, the other
types of nonprofits and religious institutions they often collaborate with and
examples of the services they provide, see Fine (2006). Even where nonprofits
may not have unionized workforces, other nonprofits have stepped in to advocate
for and in some cases partner with unions in providing worker protections and
defending employee rights.
Conclusion
There has been a change in the social contract between workers and employers.
As noted by Baines (2010, p. 10), the nonprofit services sector has been affected
by neoliberal and pro-market restructuring and alternative forms of service
delivery. It is not just public agencies that have been affected by the new public
management approach to redesign agencies to operate more like the private
sector with an emphasis on cost-effectiveness. Market mechanisms have been
integrated to the nonprofit sector as well. Competition, reducing costs, and
greater productivity have become more important. As a result, organizations
often are restructured and jobs are lost. Retained employees are often expected
178
to do more with less. Wage and salary increases tend to be infrequent and benefits
are often reduced. There has been an increase in alternative work arrangements
such as part-time work, project-based work or temporary work; strategies often
used to decrease costs. On the positive side there has been recent recognition
that American workers are falling behind. A number of the candidates running
for President of the United States have called attention to the decline in the
middle class. There have also been statewide and citywide successes in raising
the minimum wage to be above the federal minimum wage. Unions have
mobilized workers and joined with other nonprofit advocacy groups to call
attention to low wages, and a number of health and safety and other workplace
issues.
In the Spring 2015 edition of the Nonprofit Quarterly, an article written by Jon
Pratt and Ruth McCambridge offers seven practices for nonprofits to adopt. They
suggest: (1) nonprofit employees be paid a livable wage; (2) the ethnic and racial
diversity in its leadership and staff should be reviewed; (3) leaders should advance
the organization’s mission and the people they serve; (4) Board members should
be recruited who represent the organization’s constituents; (5) each organization
should assess its own equality footprint to examine whether it has an effect on the
equality of conditions; (6) organizations should assess their diversity both in leader-
ship and other parts of the organization; and (7) executive compensation should
be proportionate (Pratt & McCambridge, 2015, pp. 1, 20, 21).
Providing an environment free from discrimination, offering healthcare and
other benefits, providing training and career opportunities to staff, and offering
wages and salaries where workers can support their families should exist. If not, we
may see an increase in the unionization of nonprofit organizations. For nonprofit
organizations that are not yet unionized, it is important to have a progressive human
resources management system in place that respects employees. Often, whether
workers join unions depends on their perceptions of the work environment and
their desire to participate in or influence employment conditions.
The Department for Professional Employees (DPE)

http://dpeaflcio.org/
The Department for Professional Employees (DPE) is a coalition of 22 national
unions affiliated with the AFL-CIO which represents highly skilled professional
and technical workers. DPE unions include professionals in healthcare and edu-
cation; science, engineering and technology; journalism, entertainment and the
arts; public administration; and law enforcement.
1 Go to the DPE website and look under public policy. What are the issues
that the DPE is concerned about?
2 Identify and explain the two issues that are most important to you and why.
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Joan E. Pynes
3 Explain why you think or do not think professional employees should

belong to a union. Provide specific examples.
American Postal Workers Union (APWU)

Go to the APWU link www.apwu.org/news/deptdiv-news-article/social-
movement-unionism-much-needed-new-model. Read about Social Justice
Unionism.
1 Explain what you think about the need for social justice unionism. What
are the issues that are most important to you?
2 How can unions, other nonprofits, individuals, and the community benefit
from social justice unionism?
The Semi-Annual Labor Activity in Health Care Report

The Semi-Annual Labor Activity in Health Care Report prepared by the American
Society for Healthcare Human Resources Administration (ASHHRA) found
the issues important in healthcare organizing to include pay, staffing levels,
benefits, having input in decisions, job security, leadership “interpersonal skills,”
leadership “ management practices,” quality of patient care, workload/distribution
of work, safety/security/ and situational staffing coverage. The National Nurses
Union filed a grievance against the James A. Haley Veterans’ Hospital in Tampa
which it said is 100 registered nurses short of the minimum staffing levels
mandated by the Department of Veterans Affairs. The understaffing of hospital
staff is a criticism in healthcare organizations in the nonprofit, for-profit and
public sectors.
1 Assume you are a member of the collective bargaining team for a healthcare
union. What would be the contract terms/language you would seek to place
in the contract for the following issues?
i staffing levels
ii quality of patient care
iii workload distribution
2 Do you believe the above contract issues are interrelated? Do you believe
that employees should have some influence on them? Explain your reasoning
with specific examples or data.
Note
1. This has been covered previously (Pynes, 1997, 2004, 2009, 2013; Pynes & Lombardi,
2012).
180
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11
Engagement, Satisfaction,
and Nonprofit Organizations
Kunle Akingbola
Introduction
There are many things an archetypal nonprofit is supposed to represent, actualize,
and advocate as an organization. In addition to their basic characteristics such as
providers of public goods, harbinger of the values of society, protector of social
justice, channel for addressing the problems and opportunities not addressed by
the government and for-profit organizations (Quarter, Mook, & Richmond,
2003; Salamon & Anheier, 1998) and many more highlighted characteristics in
this book, nonprofits are also expected to be a progressive type of organization
for employees. Irrespective of the size and type of nonprofit, the progressive
orientation is assumed to play out in the human resources (HR) policy and
practices of the organization (Akingbola, 2013). To achieve this orientation, a
number of behavioral antecedents are imperative. The behavior of employees and
volunteers is the essential ingredient that nonprofit organizations must facilitate
and influence to achieve this orientation. In this chapter, we explore two of the
behavioral antecedents: engagement and satisfaction.
The chapter starts with a background of the concept of engagement and
satisfaction. This is followed by a discussion of the varied definitions of engagement
from the perspective of management practitioners and the academic literature.
Next, the chapter offers a review of the existing research on engagement and
briefly discusses the link between engagement and satisfaction. It ends with an
examination of research on engagement in nonprofits and what this portends for
human resource management in the sector.
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What Is Engagement?
Similar to many recent concepts in human resource management and organizational
behavior, employee engagement is a relatively new concept that draws upon and
combines many existing concepts (Wefald & Downey, 2009a). Beyond the relative
newness of the concept, employee engagement has gained significant currency
among management practitioners to the extent that research is playing catch-up
to provide empirical evidence to explain its meaning, dimension, contributory
antecedents, and its impact on employees and the organization (Macey & Schneider,
2008). Hence, it is logical to start with an overview of the definition and deter-
minants of employee engagement offered by management practitioners.
Management Practitioners
For management consultants, engagement appears to be all about discretionary
effort. Towers Perrin defines engagement as the “employees’ willingness and
ability to help their company succeed, largely by providing discretionary effort
on a sustainable basis” (Towers Perrin, 2003a). Their second report explained
that engagement could be seen as “the extent to which employees put discretionary
effort into their work, in the form of extra time, brainpower, and energy”
(Towers Perrin, 2003b, p. 3). In a literature review for the Conference Board,
Gibbons (2006) defines employee engagement as the connection an employee
has to their job, organization, manager, or co-workers, a connection that should
lead to the application of additional discretionary effort in their work. The
discretionary effort narrative has been further simplified in recent reports by
consultants, emphasizing the discretionary effort of employees to go beyond their
job expectations (Towers Watson, 2014). The Towers Watson report noted that
there are three measurable elements that are essential to sustainable engagement:
• traditional engagement—employees’ willingness to expend discretionary

effort on their job;
• enablement—having the tools, resources, and support (typically through
direct-line supervisors) to do their job effectively;
• energy—having a work environment that actively supports physical,
emotional, and interpersonal well-being (Towers Watson, 2014, p. 3).
The definitions offered by management practitioners appear to emphasize the

connection of the employee to the job, the work environment, and the organization.
They suggest that employees rely on this connection to determine their level of
engagement.
Determinants of Employee Engagement

The management practitioner literature has also been quick to highlight the impor-
tant factors or drivers of employee engagement in organizations. The Towers
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Engagement and Satisfaction
Perrin (2003b) report identified the following as key drivers of employee engage-
ment: challenging work; senior management’s sincere interest in employees’
well-being; employees have appropriate decision-making authority, customer
satisfaction, employees work well in teams; employees have resources needed to
perform jobs in a high-quality way; employees have appropriate decision-making
input; career opportunities; company’s reputation as a good employer.
Over time, the number of drivers has since been extended to include more
dimensions, especially the role of managers and the learning environment. The
two examples below from the management practitioner literature incorporated
these additional drivers. Key drivers of engagement are (Schmidt, 2009):
• Leadership and management

• Learning and development and career growth
• Rewards and recognition
• Work environment, encompassing teamwork and relationships with
coworkers.
Lowe (2012) proposed a list of top 10 work environment drivers of engagement,

rank-ordered by their net influence on engagement scores. This includes
perceptions of trust in the organization, the opportunity to improve one’s work,
the perception of the value of one’s work by the organization, clear goals,
commitment of senior leadership, team connections, and work-life balance, and
sufficient resources and supervisor assistance to do the work.
The definitions and the large body of survey reports on the construct by
management practitioners have contributed significantly to the application of
employee engagement in management practices. In particular, the work by
management consultants has not only fostered the understanding of the basic
premise of employee engagement, it has encouraged managers to seek how they
can use engagement to enhance employee and organizational outcomes. However,
many of the available management practitioner literature have linked engagement
to outcomes which are yet to be validated by research. As a result, although
empirical research on engagement has also increased significantly in recent years,
there appears to be a gap between management consultants and academic scholars.
Research
For all its popularity with management consultants, employee engagement is
rooted firmly in empirical research. The original coining of the concept has been
traced to the work of Kahn (1990) in which he introduced the concept of personal
engagement. Kahn defines personal engagement as “the simultaneous employ-
ment and expression of a person’s ‘preferred self’ in task behaviors that promote
connections to work and to others, personal presence (physical, cognitive, and
emotional), and active, full role performances” (p. 700). In this initial perspective
on the concept, engagement is about how much of the physical, cognitive, and
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emotional energy or resources individuals are willing to draw upon from their
personal selves in order to perform in their work roles.
A subsequent work that operationalized the concept of engagement with
empirical measures defines it “as a positive, fulfilling, work-related state of mind
that is characterized by vigor, dedication, and absorption” (Schaufeli, Salanova,
Gonzalez-Roma, & Bakker, 2002, p. 74). They noted that engagement involves
an ongoing and persistent state of mind that shows a disposition towards relentless
effort, a high level of energy, and a drive for the job role. It also includes affective
behavior such as enthusiasm, attachment to the job and the ability to overlook
difficulties in the work role. In this definition, engagement includes presence of
mind and an unencumbered focus on the job.
Saks (2006) introduced a multidimensional approach to the definition and
conceptualization of engagement. He defines employee engagement as “a distinct
and unique construct consisting of cognitive, emotional, and behavioral compo-
nents . . . associated with individual role performance” (p. 602). He emphasized
that there is a difference between job engagement and organization engagement.
The importance of the organizational dimension was clear in a subsequent
definition that described employee engagement as “an individual employee’s
cognitive, emotional and behavioral state directed toward desired organizational
outcomes” (Shuck & Wollard, 2010, p. 103). This suggests that employees who
are engaged will demonstrate attentiveness and mental absorption in their work
and at the same time, they will have a high level of emotional connection to the
organization (Kahn, 1990; Saks, 2006). Recently, it has been suggested engage-
ment can manifest at an organizational level through social processes that facilitate
shared perception and a degree of homogeneity in terms of characteristics and
values of employees (Barrick, Thurgood, Smith, & Courtright, 2015). This
conceptualization raises important questions especially for nonprofit organiz-
ations where value congruence and the relationship between employees and
the organization are part of the fundamental characteristics of the sector. This
perspective is discussed further later in the chapter. It also reinforces the position
of theorists who have suggested that engagement includes legacy organizational
behavior concepts such as job satisfaction.
What Is Job Satisfaction?

Job satisfaction is one of the legacy constructs that preceded and is incorporated
in employee engagement. It refers to “a pleasurable or positive emotional state
resulting from the appraisal of one’s job or job experience” (Locke, 1976,
p. 1300). Job satisfaction explains whether an employee likes or dislikes their job,
people they interact with at work, and the work environment. We perceive and
express job satisfaction through our feelings, behaviors, and the connections we
establish and attach to our job and all the components of the job. Thus, research
has shown that job satisfaction manifests through the cognitive, emotional, and
affective responses to the characteristics and dimensions of the job (Judge & Ilies,
2004; Rich, Lepine, & Crawford, 2010).
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Since the idea of job satisfaction has been around for a long time, there is
abundant research on factors that could contribute to whether employees
experience job satisfaction or not. Similarly, research has also provided valuable
insight on the impact of job satisfaction for the employee and the organization.
The summary below outlines some of the factors that have been identified as
determinants of job satisfaction (Melnik, Petrella, & Richez-Battesti, 2013).
Determinants of Job Satisfaction

• Individual characteristics (gender, family responsibilities)
• Relationships with supervisors
• Working conditions
• Job characteristics (autonomy, stress, intrinsic interest of the job)
• Relationships with board of directors
• Working environment (trust, perceived ethical climate, and equity).
In terms of impact, research has linked job satisfaction to the following outcomes
for employees and the organization (Gould-Williams, 2003; Lum, Kervin, Clark,
Reid, & Sirola, 1998; Wall, Clegg, & Jackson, 1978).
Impacts of job satisfaction are:
• Reduced turnover
• Reduced absenteeism
• Increased employee performance
• Improved employee wellness and life expectancy.
Similar to most micro organizational concepts, there is an element of reciprocity

and interdependence in the process of job satisfaction. When an organization
facilitates employees’ job satisfaction through working conditions, HR practices
and the overall organizational climate (Hellriegel & Slocum, 1974; Schneider &
Snyder, 1975), the organization creates an enabling condition for the employees
to repay the organization through increased commitment and organizational
citizenship behavior. As discussed below, due to their organizational character-
istics, nonprofits are especially likely to be expected to foster employee commit-
ment through their HR policies and practices. Job satisfaction in nonprofits
is related to the individuals’ perceptions of the work environment, the mission,
and values of the nonprofits (Melnik, Petrella, & Richez-Battesti, 2013). The
notion of reciprocity is central to the theories that have been used to explain
employee engagement.
Employee Engagement: Conceptualization and Research

As noted above, the interest in employee engagement among management
practitioners and scholars has increased significantly in recent years. This spike in
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interest has brought about a considerable body of application, theoretical and

empirical work on engagement. For nonprofits, the interest is to be expected. The
centrality of human capital and the emphasis on non-financial intrinsic reward
(Akingbola, 2006; Borzaga & Tortia, 2006) signal the need to research engagement
in order to understand employees, volunteers, and their relationship with the job
and nonprofit organizations. Beyond the definition, there appears to be a broad
pattern discernible in many of the published works. Drawing from the literature
(Macey & Schneider, 2008; Shuck, 2011), this chapter provides an overview of
the explanation and research on employee engagement organized into two themes:
(1) engagement and organizational outcomes; and (2) theoretical approaches in
employee engagement.
Engagement and Organizational Outcomes
Management consultants and managers have been particularly concerned about
the need to explain the impact of employee engagement on organizational out-
comes (Wefald & Downey, 2009b). The numerous reports have suggested there
is a relationship between employee engagement and organizational outcomes
at employee, team, and organizational levels. For example, at the employee level,
a meta-analysis of dozens of different studies by the Gallup organization indicated
that a positive employee engagement environment is consistently associated with
decreased employee turnover and higher employee productivity (Harter, Schmidt,
& Keyes, 2003). For teams, a study of a case organization found teams that are
highly engaged achieved better business sales results than less engaged teams with
a difference of $2.1 million dollars in total sales (Vance, 2006).
It is perhaps at the organizational level that most of the practitioner studies have
tried to highlight the impacts of employee engagement. In addition to the findings
of the meta-analysis above, which also included positive association between
employee engagement and increased customer satisfaction, the findings from the
study by Towers Perrin (2003a) pointed out the positive relationship between
employee engagement and organizational outcomes such as product quality, better
cost control, and financial performance. The findings on financial performance
were consistent in the Watson Wyatt Worldwide (2007) study which also indi-
cated the link between the nature of management communication practices and
employee engagement. The communication finding suggests employee engage-
ment was associated with better organizational communication practices. In their
survey on employee engagement in nonprofit organizations, Accenture suggested
that the correlation between engagement and organizational performance could
explain why retention is a significant challenge in nonprofits (Accenture, 2014).
They found that 25% of engaged employees—those with the highest measured
levels of engagement—were “likely” or “extremely likely” in the next year to be
actively pursuing other job opportunities.
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Research
The benefits of employee engagement for the employee and the organization
have also been central in the discourse among scholars. This has specifically been
prominent in many subsequent definitions of the concept. For example, Shuck
and Wollard (2010) proposed that employee engagement involves “an individual
employee’s cognitive, emotional, and behavioral state directed toward desired
organizational outcomes”(p. 15). Similarly, Robinson, Perryman, and Hayday
(2004) define engagement as “a positive attitude held by the employee towards
the organization and its values. An engaged employee is aware of the business
context, works with colleagues to improve performance within the job for the
benefit of the organization” (p. 2). From this standpoint, employee engagement
is explained not only in terms of driving the relationship between the employee
and the work role but also how this relationship contributes to organizational
outcomes. This perspective is increasingly dominating the discourse among
scholars who research engagement. However, as discussed below, the limited
research on engagement in nonprofit organizations is basically at the onset phase
and is yet to discuss the organizational outcomes angle of engagement. Moreover,
one should expect this line of research to be limited because of the multidimensional
indicators of performance of nonprofit organizations.
For the employees, research has found a relationship between engagement and
many individual employee outcomes. First, engagement has been linked to the
enhanced quality of experience at work (Kahn, 1992). When employees are
engaged, the individuals are likely to derive better experience from their work
life than others who are not engaged. Second, research has also showed that
employee engagement could help to mitigate burnout (Maslach, Schaufeli, &
Leiter, 2001). The link to burnout was one of the early findings that demonstrated
how engagement is inversely associated with a negative psychological outcome
of the job for the individual employee. Third, engagement encourages employees
to invest the self more in the work they deem and find challenging (Leiter &
Bakker, 2010). Engaged employees know and are better able to put in effort and
skills because the work is independently challenging to them. Fourth, engaged
employees are better placed to access positive emotions (Yalabik, Popaitoon,
Chowne, & Rayton, 2013), attitudes and behavior that are desirable to them
(Bakker & Schaufeli, 2008). The research on the impact of engagement on
employees continues to highlight the different dimensions of how engagement
enhances critical individual outcomes that could contribute to organizational
performance.
At the organizational level, the research interest in the outcomes of employee
engagement mirrors similar efforts in the management practitioner literature.
Thus, it is no surprise that the consequences of employee engagement have
become a dominant research focus for academic scholars. The specific conse-
quences of employee engagement for the organization that have been suggested
in empirical research include profit, customer satisfaction, productivity, and
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employee turnover (Bakker & Schaufeli, 2008; Harter, Schmidt, & Hayes, 2002).
A brief overview of the key findings is discussed below.
• Engagement and profit. Based on the findings from a meta-analysis, Harter

et al. (2002) suggested that there is relationship between business unit profit
and employee engagement. Luthans and Peterson (2002) also linked
employee engagement to profitability. Their findings suggested that the
manager self-efficacy scores have a positive relationship with employee
engagement depending on how managers rate employee effectiveness and
employees rate their manager’s level of effectiveness positively.
• Engagement and customer outcomes. A study by Salanova, Agut, and Peiro
(2005) finds that employee engagement mediates the relationship between
organizational resources and service climate. The study showed that engage-
ment contributes to service climate—how employees relate to customers—
which is associated with customer loyalty.
• Engagement and turnover. The relationship between employee engagement
and employees’ turnover intention has been suggested in the findings of
several studies (Saks, 2006; Shuck & Wollard, 2010; Shuck, Reio, & Rocco,
2011). Specifically, the findings from Saks (2006) indicated that job and
organization engagement are associated with turnover intention. Both types
of engagement mediated the relationships between antecedents such as job
characteristics, perceived organizational support and the intention to
turnover. Since research has suggested that turnover intention is a better
predictor of actual turnover than job satisfaction (Steel & Ovalle, 1984),
employee engagement is associated with turnover.
Beyond the specific examples highlighted in the brief overview, research has also
suggested that employee engagement is associated with other organizational out-
comes such as workplace accidents, organizational commitment and organization
citizenship behavior (Rich et al., 2010; Shuck & Wollard, 2010). Furthermore, it
has been suggested that employee engagement could play a role in organizational
change (Reissner & Pagan, 2013). The continuously growing body of research
has reiterated how the deployment of cognitive, emotional, and behavioral energy
by employees could have an impact for the outcomes of the organization.
Although the nonprofit context would add unique and additional dimensions
to the research on engagement, the concept is yet to elicit significant inquiry
among nonprofit management scholars. The summary of research presented
below highlights the beginning of empirical work on engagement in nonprofit
organizations.
Theoretical Approaches in Employee Engagement

To examine the theoretical approaches used to conceptualize employee engage-
ment, it is necessary to briefly explain how the construct is related to well-known
192
concepts, some of which have been compared to engagement in the literature.

The debate on how engagement is similar or different from other well-known
constructs such as motivation, commitment, and job satisfaction has led to the
suggestion that engagement is basically a broader multidimensional construct that
incorporates related concepts to explain the connection employees have to their
job and their organization (Macey & Schneider, 2008; Salanova, Agut, & Peiro,
2005). Due to their close link to employee engagement and the context of
nonprofits, we should highlight commitment and job satisfaction. An overview
of the theoretical approaches of employee engagement is presented after this
overview.
Commitment and Employee Engagement

Commitment signifies the deep relationship between an employee and the
organization. Employees show commitment to the organization when they deploy
behaviors that are consistent with attachment, bonding, and belongingness
(Mowday, Porter, & Steers, 1982). It has been suggested that the conceptualization
of organizational commitment has three components: affective; continuance; and
normative commitment (Meyer & Allen,1991). Affective commitment is charact-
erized by an “emotional attachment to, identification with, and involvement in
the organization” (Meyer, Stanley, Herscovitch, & Topolnytsky, 2002, p. 21)
while continuance commitment is based on the calculation of the cost of losing
membership which influences the decision of the employee to remain with the
organization (Meyer & Allen, 1991). Normative commitment has to do with
the sense of obligation to the organization (Meyer & Allen, 1991). The obligation
could develop from a sense of duty to repay the organization for the investment
in the employee.
Although there is a consensus that commitment is not the same as employee
engagement, the literature has consistently explained that commitment is embed-
ded in employee engagement (Shuck & Wollard, 2010; Wefald & Downey,
2009a). Commitment is conceptualized as a general attitude or psychological
state which is imbued in the level of engagement of the employee to the job
performance (Saks, 2006). Moreover, in management practice and research,
commitment has been linked as an antecedent to various organizational outcomes
including employee engagement (Macey & Schneider, 2008). The three forms
of commitment were found to be related to employee and organizational
outcomes (Meyer, Stanley, Herscovitch, & Topolnytsky, 2002). The research
indicated that commitment could be an antecedent of work engagement (Shuck
et al., 2011) or an outcome that is mediated by job and organization engagement
(Saks, 2006). The findings suggest that when employees have organizational
commitment, they are likely to be engaged. The questions addressed in the
findings are particularly relevant in nonprofit organizations and are evidenced in
the research reviewed below.
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Job Satisfaction and Employee Engagement

Similar to commitment, research has examined the relationship between job satis-
faction and employee engagement. Again, the literature suggests that job satisfaction
is related to work engagement (Saks, 2006). The findings indicated that job and
organization engagement mediated the relationships between the antecedents
and job satisfaction. While other studies have indicated that job satisfaction is
an antecedent of employee engagement (Shuck & Wollard, 2010; Wefald &
Downey, 2009), Simpson (2009) suggested that job satisfaction is a major predictor
of employee engagement. This finding gives weight to the importance of job
satisfaction in employee engagement. From a slightly different lens, Rich et al.
(2010) suggested that the indirect relationships through engagement between the
antecedents and the outcomes that they examined were also similar with job
satisfaction as a mediator. Their finding seems to indicate that job satisfaction could
have a similar indirect mediating relationship between antecedents and outcomes.
The different findings suggest three key points about the relationship between job
satisfaction and engagement. First, job satisfaction is associated with employee
engagement. This could mean employees who have job satisfaction are more
likely to be engaged than others. Second, the findings also appear to suggest
that the relationship between antecedents and job satisfaction could depend on
employee engagement as a mediating factor. Third, the literature has indicated
that employee engagement appears not to predict job satisfaction, which suggests
the relationship between the two constructs may not be vice versa.
Theoretical Approaches
Research on employee engagement has evolved alongside the examination of the
theoretical explanation of the construct. Scholars have offered theories to elucidate
the theoretical background and how engagement is related to relevant organiz-
ational behavior concepts. The chapter highlights five theoretical approaches that
explain the state of employee engagement: (1) Kahn’s (1990) need-satisfying
approach; (2) Maslach et al.’s (2001) burnout-antithesis approach; (3) Harter et al.’s
(2002) satisfaction-engagement approach; (4) Saks’s (2006) multidimensional
approach; and (5) Barrick, Thurgood, Smith, and Courtright’s (2015) collective
engagement approach. Shuck (2011) provides a detailed overview of four of the
five approaches.
Kahn’s (1990) Need-Satisfying Approach

In the original conceptualization of engagement, Kahn (1990) explained that in
order to be engaged, employees have to fully apply the personal self in terms of
the physical, cognitive, and emotional energy in the performance of their work
roles. In contrast, employees are disengaged when there is disconnection of the
personal self from work roles (Kahn, 1990). To determine whether to be engaged
194
or disengaged, Kahn (1990) suggested that employees unconsciously asked

themselves three questions: (1) How meaningful is it for me to bring myself into
this performance?; (2) How safe is it to do so?; and (3) How available am I to
do so? (p. 703). The presence of these three conditions—meaningfulness, safety,
and availability—influence employees’ engagement, and their absence conversely
causes employees to be disengaged.
Meaningfulness is explained as the perception of the individual about the value,
relevance, and importance of the work role in relation to the physical, cognitive,
and energy invested by the individual (Kahn, 1990). Safety has to do with the
perception of support and comfort to freely invest the self within a social system
“without fear of negative consequences to self-image, status or career” (Kahn,
1990, p. 708). For psychological availability, the individual has self-perception and
self-consciousness of adequate physical, emotional, and psychological resources
required to complete the work role. Although Kahn’s (1990) framework is the
foundation of employee engagement, the approach was not widely used in
empirical research until recently (Shuck, 2011).
Maslach et al.’s (2001) Burnout-Antithesis Approach

The burnout-antithesis approach was the second perspective that emerged
after the original conceptualization of employee engagement (Shuck, 2011). The
core idea of this approach is that employee engagement is the positive antithesis
of burnout (Maslach et al., 2001). In other words, engagement is the positive and
direct opposite of burnout. Maslach et al. (2001) noted that two trends emerged
in burnout research at the time: (1) the link between burnout and human services
professions in which employees interact directly with people such as healthcare
and education was extended to include all professions; (2) burnout research has
shifted towards its opposite, job engagement. The shift suggested that burnout
research was extending its focus to the positive role of workers’ well-being in
engagement rather than focusing only on the negative domain (Maslach et al.,
2001). This shift was supported by positive psychology which emphasizes positive
characteristics and human strengths (Seligman & Csikszentmihalyi, 2000).
Positive psychology has been found to be relevant in examining supported
social enterprises in the nonprofit sector (Akingbola, Phaetthayanan, & Brown,
2015).
Maslach et al. (2001) explained that burnout is a negation of engagement in
that, “what was once important, meaningful, and challenging work became
unpleasant, unfulfilling, and meaningless” (p. 416). For example, their findings
suggest that a lack of support from supervisors is a particularly important factor
linked to burnout (Maslach et al., 2001). The framework was operationalized
and extended with empirical measures (Schaufeli, Salanova, Gonzalez-Roma, &
Bakker, 2002). The latter conceptualization also added affective behavior such as
enthusiasm, attachment to the job, and the ability to overlook difficulties in work
role to the meaning of engagement. Schaufeli, Bakker, and Salanova (2002) drew
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Kunle Akingbola
on relevant burnout research to extend the measures and to develop the Utrecht
Work Engagement Scale (UWES), a popular measure of engagement (Shuck,
2011).
Harter et al.’s (2002) Satisfaction-Engagement Approach

Harter et al.’s (2002) satisfaction-engagement approach is based on a meta-anal-
ysis of the Gallup Organization data. As discussed above, the findings linked
employee engagement to business unit profit. Also, the researchers used a positive
psychology framework to emphasize that satisfaction, involvement, and enthusi-
asm are the core components of employee engagement. Luthans and Peterson
(2002) extended Harter et al.’s (2002) research to link employee engagement
to profitability. Their findings on the relationship between manager self-efficacy
and employee engagement contributed to the theories of engagement reviewed
in this section (Kahn, 1990; Maslach et al., 2001). The body of research that
used Harter et al.’s (2002) approach has been updated over the years (Shuck,
2011).
Saks’s (2006) Multidimensional Approach

As discussed above, Saks (2006) drew on social exchange theory (Blau, 1964)
to specifically differentiate between job engagement and organizational engage-
ment. He extended Kahn’s (1990) model and Schaufeli et al.’s (2002) model
of engagement by introducing a multidimensional approach to engagement. Job
engagement is characterized by the degree to which the individual employees
exert or invest the self in their work role (Rich et al., 2010; Saks, 2006), while
organization engagement could be conceptualized as the greater investment
of the self for higher job performance in response to organizational factors or
decisions (Saks, 2006).
He explained that the antecedents and consequences of job and organiz-
ational engagement are different in a number of ways. In other words, the psycholog-
ical prerequisites that must be at play for job and organizational engagement
to exist and the outcomes of the two types of engagement are not necessarily
the same.
Social exchange theory highlights the norm of reciprocity of action between
parties, which are not set in any contractual framework to define the nature of
the payback obligation (Blau, 1964; Gould-Williams & Davies, 2005). In relation
to engagement, Saks (2006) suggested the more economic and socioemotional
resources employees receive from the organization, the more obliged they feel
to repay the organization by bringing more of the self into their work role. In
effect, the cognitive, emotional, and physical energy employees bring to their
work roles is dependent on the level of resources and support the organization
provides to employees (Saks, 2006). In other words, engagement flows from
employees’ perception of organizational support and commitment. The findings
196
of Saks (2006) suggest that employee engagement is associated with perceived

organizational support and mediates the relationship between the antecedents and
outcomes such as job satisfaction and organizational commitment.
Barrick et al.’s (2015) Collective Organizational Approach

The collective organizational approach is a new approach that has recently been
proposed in the research literature. Barrick et al. (2015) suggest that engagement
can manifest at an organizational level through social processes that facilitate
shared perception and a degree of homogeneity in terms of characteristics and
values of employees. They specifically noted that Kahn’s (1990) conceptualization
of engagement is a more complete description of the construct and extended the
framework by integrating engagement theory with the resource management
model. Barrick et al. (2015) define collective organizational engagement as “the
shared perceptions of organizational members that members of the organization
are, as a whole, physically, cognitively, and emotionally invested in their work”
(p. 113). The collective organizational engagement is different from the aggre-
gated individual-level engagement conceptualized by Saks (2006). The shared
perception of engagement that is central to collective organizational engagement
is developed and maintained in part through the various affective and social
processes in the organization (Barrick et al., 2015; Hofmann & Morgeson, 1999)
and the attraction–selection–attrition processes (Barrick et al., 2015; Schneider,
1987). The latter could lead to employees with similar characteristics and values
which could contribute to engagement (Barrick et al., 2015).
The organizational engagement conceptualization implies that employees
invest their whole selves collectively in their work roles. In effect, the collective
organizational engagement is an organizational capability (Barrick et al., 2015).
The antecedents of this engagement are therefore the resources of the organization.
Barrick et al. (2015) proceeded to test the relationship between three organi-
zational resources as antecedents: motivating work design; human resource manage-
ment practices; and CEO transformational leadership. The findings suggest that
collective organizational engagement has a mediating relationship between these
organizational resources and performance.
The theoretical approaches in employee engagement illustrate the evolving
theorization and application of the concept. Although the evolution and discourse
of engagement have followed different but interrelated theoretical pathways
(Shuck, 2011; Shuck et al., 2011), there is a sustained overriding assumption in
research and management practice, engagement is a recipe for positive organi-
zational outcomes. However, there remains a need to better understand different
elements and operationalization of the concept including the contextual dimen-
sion, process, and organizational factors that contribute to, or that result from,
engagement (Macey & Schneider, 2008; Rich et al., 2010; Truss, Shantz, Soane,
Alfes, & Delbridge, 2013).
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Engagement and Nonprofit Organizations

One area in which the research on engagement is playing catch-up with the
understanding of the context of the organization is the nonprofit sector. Although
a few studies have included nonprofit employees in their samples, including
Kahn’s (1990) original work and Schaufeli, Bakker and Salanova (2002), the
focus of existing research in the nonprofit context has been tangential at best.
This appears to be the case in both the practitioner literature and scholarly
research. Again, management practitioners seem to have shown early interest
in the dimension of employee engagement in nonprofit organizations long before
the very recent and limited research by academics.
In a comparison of engagement level across different industries, the Towers
Perrin (2003b) study found that employee engagement is substantially higher in
the nonprofit sector than in every other sector they examined. The report noted
that the higher level of engagement should be expected in nonprofits because
employees are attracted to the sector due to the mission of the organization and
not based on the compensation (Towers Perrin, 2003b). They contended that
the findings on the nonprofit sector could be an indication that an organization
cannot buy engagement with compensation.
The consulting firm, Accenture, has focused specifically on how to increase
employee engagement in nonprofit organizations (Accenture, 2014). The Accenture
report found that nonprofit employees are likely to evaluate the importance of their
work based on their perceived connection between their job and the mission of
the organization. They suggested that it is more common for nonprofit employees
who are disengaged to choose not to quit because they strongly identify with the
mission of the organization (Accenture, 2014). This could point to the importance
of the context of nonprofits in explaining engagement in the sector.
Research
Empirical research on employee engagement that is specifically focused on
nonprofit organizations is very rare. To date, Selander (2015) is one of only two
of such empirical research. Selander applied the job demand-resources (JD-R)
model to examine work engagement in a survey of Finnish third-sector employees.
The JD-R model is an upshot of the Maslach et al. (2001) burnout-antithesis
approach discussed above. Selander emphasized the importance of nonprofit
contextual factors and characteristics of employees such as public employees’
ideological orientation and funding in relation to work engagement. The findings
indicate that nonprofit employees reported higher work engagement than other
employees in similar work engagement studies (Selander, 2015). Also, the study
found a relationship between work engagement and value congruence as well
public service motivation. However, the focus on work engagement is limiting.
198
As noted by Rich et al. (2010), Kahn’s (1990) conceptualization represents a

more comprehensive and holistic view of engagement.
In another recent research, Akingbola and van den Berg (2016) draw on Kahn’s
(1990) theory of job engagement and Saks’s (2006) multidimensional approach to
examine the relationship between antecedents and consequences of engagement
in nonprofit organizations. We emphasized that the unique characteristics of the
nonprofit context and the behavioral orientation of their employees underlie
the research. The study collected data from a sample of nonprofits in Ontario,
Canada. The findings suggest that the consequences of job and organization engage-
ment are the behavioral outcomes—job satisfaction, commitment, organization
citizenship behavior—that nonprofits consider as critical to their organization
and the employees emphasize. Perhaps the strongest evidence of the impact of
engagement is the finding that nonprofit employees are more likely to experience
these consequences and less likely to have intention to quit even if antecedents
such as job characteristics and value congruence are less likely. Consistent with the
literature, the findings also suggest that value congruence is a major determinant
in the relationship between nonprofit employees and their jobs as well as with the
organization. On antecedents of engagement, our findings provide evidence that
while the characteristics of nonprofit jobs predicted job engagement, rewards
and recognition appear to be of less importance to the employees. The research
presents one of the first findings that result from empirically validated measures of
engagement in nonprofits.
Conclusion
The issue of employee engagement is fundamental in nonprofits at the individual,
organizational, and community levels. It is therefore imperative for nonprofit
managers, employees, and board members to understand the concept and how it
could impact the outcomes of the organization. This chapter provides an overview
of employee engagement from the literature by management practitioners and in
research. It highlights engagement as an umbrella construct that incorporates other
well-known concepts such as organizational commitment and job satisfaction.
The chapter also offers a detailed insight into the evolution and the theoretical
approaches that showcase the state of employee engagement. Although research
on employee engagement in nonprofits is limited, the available evidence points
to the importance of understanding the context of the sector in relation to
engagement. The findings from the research and management practitioner
literature emphasize the need for human resource management in nonprofit
organizations to pay particular attention to employee engagement.
1 You have been hired as a consultant to a small nonprofit organization. The
board of directors has invited you to explain why the organization should
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Kunle Akingbola
be concerned about employee engagement. What are the major points you
will highlight in your presentation?
2 Jane has told you that she is satisfied with her job. However, she is not sure
whether she is truly engaged. She wants you to explain the difference
between the two concepts.
3 To be engaged involves the use of the physical, cognitive, and emotional
energy in the performance of an individual’s work role. Drawing on your
experience, describe examples of when you showed you were engaged or
disengaged.
4 Employee engagement impacts individual and organizational outcomes.
Discuss some of the specific ways engagement could impact employee,
volunteer, and organizational outcomes in nonprofit organizations.
5 In a recent management team meeting, a manager explained that employee
engagement is the latest buzz word that is not supported by research. You
offered to present a summary of the research on employee engagement at
the next meeting. In bullet form, outline the key points and the research
you will include in your presentation.
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12
Volunteer Management
It All Depends
Introduction
According to the U.S. Bureau of Labor Statistics, in the year ending in September
2015, 62.6 million Americans volunteered at least one time for an organization.
In 2014, the U.S. Corporation for National and Community Service reported a
total of 7.9 billion hours of volunteer service worth an estimated $184 billion.
This “volunteer energy” (Brudney & Meijs, 2009) is critical in meeting the needs
of our communities through service in public and nonprofit organizations.
Managing this enormous repository of volunteer labor effectively is an essential
skill for nonprofit leaders and managers.
The great majority of literature surrounding volunteer resource management
presents a “universal” approach for the management of volunteer programs.
Universal volunteer management holds that a single set of managerial principles
works well, or at least well enough, to achieve results that meet organizational
goals and fulfill volunteer needs. However, others argue that no one “best” way to
manage volunteers works in every situation (for example, Meijs & Ten Hoorn,
2008; Paull, 2002). In this chapter we first review the universal approach to elaborate
the fundamental elements of volunteer program management. Although the field
does not question its general validity, we advise that to achieve best results the
application of the universal model should be contingent on the varying circumstances
facing the manager or administrator of volunteers. The key to volunteer management
is to recognize these contingencies and adapt the precepts of the universal model
accordingly.
We begin this chapter by presenting the various interpretations of the universal
approach offered by scholars and practitioners. We then turn to the conditions
and circumstances that influence how the various aspects of the universal approach
can and should be applied. We ask, under what circumstances does the coordinator
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or administrator of the volunteer program (hereinafter, the “volunteer coordinator”

or “volunteer administrator”) need to tighten or loosen the universal model of
volunteer administration to adapt to these contingences? We pose and answer this
question with the analogy of the “ratchet” tool or mechanism, as we propose that
volunteer management should emulate the flexibility, subtlety, and adaptability of
a ratchet or socket wrench to mechanical tasks. We show that application of the
universal model depends on such factors as: intervals of volunteering, client
population served, organization lifecycle, organization size, volunteer proximity,
organization type, organizational scrutiny, as well as various human elements. We
explain how these contingencies affect volunteer program administration and
conclude with implications and best practices for volunteer administrators given
particular situations.
In this chapter we show that successful volunteer management entails three
major competencies:
1 Successful volunteer administration hinges on knowledge of the fundamental

building blocks or “tool kit” provided by the universal approach to volunteer
management.
2 Volunteer administrators must be able to adapt the universal approach to
volunteer program management according to the requirements of the various
conditions or contingencies that confront them in practice.
3 Finally, and more specifically, volunteer administrators must develop skills in
recognizing when the principles of the universal approach should be applied
more strictly or tightly to meet the needs of the organization for productive
volunteer labor, or more flexibly or loosely to meet the needs and aspirations
of volunteers as participants in public and nonprofit organizations.
A Universal Approach to Volunteer Management

The concept of volunteer management remains relatively new, with the first
widely recognized model of volunteer administration developed by Harriet Naylor
in 1967. Since Naylor and others inaugurated the field in the late 1960s and early
1970s, the academic and practitioner literature has typically treated volunteer manage-
ment according to a “one-size-fits-all” or “universalistic” approach (Brudney &
Meijs, 2014). The universal approach recognizes both the value of volunteers to
organizational mission achievement and the importance of volunteer leadership
to successful citizen involvement in nonprofit and public organizations. This litera-
ture conceives that volunteer management necessitates a volunteer administrator
in place (paid or unpaid) who works to assure that volunteers provide reliable and
critical human resources toward organizational goal achievement, and at the same
time, feel that their contribution to the organization is valued. As we describe
below, the prevailing models of volunteer management recommend similar com-
ponents or requisites for the volunteer program (Safrit & Schmiesing, 2012).
Although the literature certainly reveals nuance and adaptability, it does not usually
205
consider systematically how variations confronting the volunteer administrator—

for example, different organizational missions, policy areas, volunteer characteris-
tics, economic sectors, and many other possible contingencies—may affect the
volunteer management task.
Instead, and to its credit, much like a tool kit, the universal approach provides
fundamental elements for overall implementation and operation of a volunteer
program. Understanding the elements of the universal approach to volunteer
management is essential both in its own right and because the model provides
the foundation to the conditional approach discussed later in this chapter. The
following models introduced by leading scholars and practitioners exemplify
the universal approach to volunteer management as we have come to know it
over the last half-century.
Harriet Naylor (1967): The Beginnings of Volunteer Administration

Naylor (1967) authored the first known treatment that conceptualized volunteer
management as a professional field of study and practice. Naylor focused on
leadership of volunteers who worked alongside paid staff to achieve a common
organizational mission. Naylor provided many of the central principles of the
universal approach, including:
• Keeping a record of all volunteer jobs and volunteer skills.

• Focusing on recruitment and selection of volunteers.
• Careful placement of the volunteer with a paid staff person.
• Training for both the volunteer and the paid supervisor.
• Guidelines for volunteer evaluation and grievance procedures.
• Opportunities for volunteer mobility and advancement within the volunteer
program.
Naylor was concerned that
[t]here are far too many ex-volunteers, able and conscientious people who
have withdrawn from being personally involved, because of negative feelings
about volunteer work. Some feel they were not appreciated, some feel that
they were not making an important contribution, some that they cannot
manage responsibilities that conflict with other interests and obligations.
She offered her model to address the situation (1967, p. 9).
Milton Boyce (1971): The ISOTURE Model

According to Safrit and Schmiesing (2012), the ISOTURE model developed by
Boyce (1971) has been used in the development of most, if not all, of the
(universal) volunteer management models that have followed. Boyce drew on
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contributions to the field of adult education to develop the model known by the
acronym ISOTURE, which entails the following processes:
• Identification. To assure the recruitment of volunteers with the correct skills

and abilities.
• Selection. To encourage potential volunteers toward the opportunity to
impact the organization mission by filling a specific role that is believed
to be a best fit.
• Orientation. To make volunteers aware of organizational expectations
surrounding their involvement.
• Training. To increase the volunteer’s knowledge, skills, and abilities to
perform in organizational positions.
• Utilization. To provide volunteers with jobs that will allow them to utilize
knowledge, skills, and abilities to the fullest within the position.
• Recognition. To acknowledge and reward volunteer efforts.
• Evaluation. To offer feedback and assess volunteer performance.
Jeffrey Brudney (1990): Volunteer Programs in the Public Sector

In a 1990 study Brudney extended earlier universalistic models by recognizing
the importance of volunteers to the mission of public sector agencies, in addition
to nonprofit organizations. Brudney highlighted the centrality of the volunteer
administrator or manager to provide leadership in a volatile public sector. The
manager should inform paid staff and volunteers of their respective roles in
the agency; role clarification should aid the organization in alleviating potential
conflict that could arise with paid staff apprehensive that volunteers may
replace them, and volunteers equally concerned about their acceptance by the
organization. Brudney emphasized that government agencies should evaluate
volunteer programs from a cost-benefit perspective. He concluded that volunteers
can add value to an organization by furthering its mission and services, and
enhancing its impact—especially in the public sector where funding is typically
limited. Brudney (1990) suggests the following as requisites for the volunteer
program:
• The volunteer program must have a designated leader or manager.

• The organization must identify and establish positions for volunteers, i.e. job
descriptions for volunteers.
• The volunteer manager must have employee buy-in to increase the
effectiveness of the volunteer program and promote its legitimacy.
• The agency must develop an organizational structure for the volunteer
program and link this structure to its operations.
Brudney’s (1990) model also supports important aspects of the volunteer program
described in the other models described above, such as recruitment, screening
and interviewing applicants for defined volunteer positions; carefully placing
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volunteers; educating and training volunteers and employees for their respective
work roles; evaluating volunteers to avoid poor performance that could hinder
the effectiveness of the organization; and recognizing volunteers for their effort
and performance.
Susan Ellis (2010): Volunteer Programs from the Top Down

Susan Ellis (2010) presents a widely accepted overview of best practices of the
universalistic approach to volunteer management. Focusing on the roles of organi-
zation executives in creating successful volunteer programs as noted by her book
title From the Top Down, Ellis urges these officials to recognize that volunteer
personnel are valuable human resources, and to structure the volunteer program
so that they can make a difference. Like Brudney (1990), Ellis (2010) proposes
that the volunteer program have a mission, vision, goals, and objectives, as well
as a formal place in the organizational structure or hierarchy. She recommends
paid staff understand the roles of volunteers so they do not feel threatened, but
also utilize volunteers to maximize impact for the organization. Ellis was one of
the first to recognize that volunteer programs have costs and are not “free” to host
organizations and observed that resources must be allocated to support program
expenses, such as paid leadership, office supplies, travel, insurance, training, etc.
Ellis also estimates a monetary value for the time donated by volunteers to
the organization to calculate a return on investment. Table 12.1 summarizes the
universal approach to volunteer management as outlined by Ellis (2010).
Table 12.1 Ellis’ major elements of volunteer management
Major element Best practices
Planning and Vibrant mission

Resource Define need of organization
Allocation Establish volunteer program leadership
Employee supervisory training
Budgeting
Cost-benefit analysis of the program
Risk management
Succession planning
Designing Be specific in written job descriptions
Volunteer Work Create a variety of job descriptions
Involve volunteers at all levels
Design innovative jobs
Give consideration to individuals or groups, ongoing or episodic, one
time and off-site
Recruitment and Market the volunteer program
Public Relations Be active in the community with recruitment
Make volunteers advocators through empowerment
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Major element Best practices
Screening and Not all volunteer candidates are a fit

Selection All volunteers should have the same screening process
Perform background checks, health assessments
Keep hiring policies, nondiscrimination policies, and others the same
for paid and nonpaid staff
Orientation and Assure volunteers receive job-specific training
Training Have continuing education opportunities
Conference attendance for administrators and leaders
Volunteer- All employees trained on volunteer engagement
Employee Motivate staff
Relations Define staff role as volunteer supervisor
Supervising and Create a culture where staff value and assist volunteers
Partnering with Volunteers should expect to connect with paid staff
Volunteers Include volunteers on the organization chart
Coordination Being sure all staff are aware of this complexity
Each department should have a liaison to the volunteer manager
Communication is critical in coordination
Recordkeeping Outcomes over outputs
and Reporting Mention volunteer impact in all department reports
Data collection is key to funding opportunities
Cost-benefit is important to the donor
Evaluation Measurable goals and objective
Have volunteers give organizational feedback
Recognition Day-to-day recognition is highly valued
End-of-year recognition is standard
Tangible, ongoing recognition is key and as simple as thanking the
volunteers
Volunteer Input Develop ways for volunteers to give input
Allow them to help build community collaboration
Encourage volunteers to become involved on a committee
Volunteers as Give marketing materials for volunteers to distribute
Supporters Write to funders, legislators, media, etc.
Organize one-time volunteer opportunities to attract new volunteers
Source: Ellis (2010).
Cracks in the Bedrock of the Universal Model

The universal model is the most widely accepted and utilized model of volunteer
administration. Despite the common reference to elements and “best practices”
of this model, however, contemporary research tends to dispute its general
application, and has begun to identify important contingencies requiring adaptation
209
of the universal model (for a full discussion see Brudney & Meijs, 2014). As Meijs
and Ten Hoorn (2008, p. 29) summarize, “volunteering, volunteers and the way
they are organized and managed differs from context to context.”
Studer and von Schnurbein (2013) offer the most prominent example. Based
on an extensive, theoretical qualitative analysis of the voluminous research in the
field (N = 386 publications), found that
volunteer coordination . . . is concerned with gaining, orienting, retaining,

and organizing volunteers in a formal organization to provide a public good
. . . successful volunteer coordination demands that the organizational settings
are not only carefully assessed and aligned to the needs of volunteers but also
to those of the organization and society at large.
(p. 406)
Their analysis yields three primary clusters that influence effective volunteer
administration: (1) volunteer coordination practices and human resource
management influences; (2) volunteer coordination attitudes and social processes;
and (3) organizational features affecting volunteers and volunteer coordination.
The authors found that volunteer management practice varied according to these
three sets of factors.
Contingency Approaches
The literature advances several contingency approaches. For example, Rochester
(1999) elaborates four models of volunteer administration: service delivery,
support role, member/activist, and co-worker. The service delivery model
implies that volunteers are recruited based on knowledge, skills, and abilities.
In the service delivery model, volunteers are supervised in a hierarchical structure.
The support role focuses on how the volunteers can supplement paid staff in the
organization; oversight in the support role ranges from collaborative-participatory
to hierarchical. The service delivery and the support role models of volunteer
management resemble a part-time employment approach. Conversely, the
member/activist model illustrates a volunteer program where all roles within
the organization are held by volunteers who support a shared cause, with no paid
staff present to provide oversight. The co-worker approach encompasses a fluid
relationship between the volunteer and the paid staff member. Volunteers identify
their purpose or goals in the organization, as well as their desire to learn new
skills. The member/activist model, with exclusively volunteer participation, and
the co-worker model with volunteers often considered counterparts to paid-staff,
are examples of participatory volunteer management. Rochester’s (1999)
approach illustrates the range of appropriate volunteer administration models that
would align with the types of organization hosting the volunteers.
Meijs and Ten Hoorn (2008) propose a different contingency approach. They
argue that the universal approach to volunteer management reflects too narrow a
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Table 12.2 Management adjustment to contingencies in volunteer programs
Organizational members
Type of organization Volunteers only Paid staff and volunteers
Mutual Support Membership Management Program Management

Service Delivery Program Management Program Management
Campaigning Membership Management or Program Management with
Program Management with Membership Management
Membership Management for for Decision-making
Decision-making
Source: Adapted from Meijs and Ten Hoorn (2008, p. 41).
view of the volunteer administrator’s job and fails to appreciate the contingencies
affecting volunteer management. These authors present a contingency approach to
volunteer management, focusing on three types of organization: service delivery,
campaigning, and mutual support (compare Handy, 1988). Service delivery organiz-
ations tend to use volunteers as if they were part-time, paid staff. By contrast,
campaigning organizations are unique as they seek numerous supporters as
volunteers but also exclude many individuals who do not share the same ideological
or issue preference. Given the strong emotions that are aroused in campaigning
organizations, tensions tend to arise between volunteers and paid staff (Meijs &
Ten Hoorn, 2008). Mutual support organizations form as a result of a common
cause. Although they often have scarce resources, they are fueled by the affiliation
and membership of volunteers with the organization. For mutual support
organizations, the volunteer management task is reduced to a coordinator role that
organizes the efforts of members to support a shared goal but lacks the hierarchical
structure or authority among members to enforce task assignments (Meijs & Ten
Hoorn, 2008). Table 12.2 identifies the mutual support, service delivery, and
campaigning models.
In her contingency approach, Rehnborg (2009) presents two dimensions that
affect volunteer management. The first is the volunteer’s connection to service,
and the second is the volunteer’s time commitment to service. Connection to
service considers whether the volunteer is motivated by the mission of the
organization, i.e., affiliation focused, or by the need to acquire a skill or fulfill a
requirement, i.e., skills focused. A volunteer’s time commitment considers
whether the volunteer’s contributed time to the organization is episodic or
ongoing. Crossing the categories of connection to service and time for service,
Rehnborg (2009) derives four contingencies that require different models of
volunteer management (for a complete discussion see Rehnborg, 2009).
The universal model of volunteer management offers a valuable toolkit volun-
teer administrators must know and master. Although this approach normally
appears without qualification in the literature, based on the research on
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contingencies of volunteer management and our own observation, we suggest that

like any set of tools, it must be applied flexibly to meet the requirements of the
situation at hand confronting the volunteer administrator. We introduce a new
approach to accommodate these contingencies in the “Ratchet Model” below.
Confronting Contingency: The Ratchet Model

of Volunteer Management
The critical challenge of volunteer management consists of meeting the needs of
host organizations for productive labor, while at the same time meeting the needs
of the volunteer for a satisfying experience. To address this challenge, volunteer
administrators need to adapt the principles of the universal approach to the
situations confronting them. Although contemporary research suggests that no
single approach works effectively in all management situations, contingency views
propose that certain techniques are more (or less) effective given the various
circumstances or contingencies at hand. Existing universal models of volunteer
administration can serve as a toolbox and useful reference for volunteer managers,
but we encourage them to recognize conditions affecting their organizations
and “loosen” or “tighten” their management of the volunteers accordingly to
accommodate the situation. We refer to this approach as the “ratchet model” of
volunteer management.
In our view, the universal model should be applied most strictly when certain
conditions are met in public and nonprofit organizations. First, when volunteer
work assignments are analogous to those of paid employees, the volunteer role
can be seen as a part-time position without pay. In this instance, organization
leaders may even name or describe the positions occupied by volunteers with
this designation as, for example, “volunteer” secretary or “volunteer” intake
specialist, to indicate that the only practical difference in the job to be performed
by the volunteer is the compensation category (paid versus unpaid). Second,
when the volunteer program is subsumed under the hierarchical authority
structure of the organization (as specified, for example, in the formal organization
chart or structure), the volunteer occupies a position, albeit unpaid, within the
normal ranks of the organization and is expected to carry it out as a part-time
employee (again, the only practical difference is the compensation category).
Under these circumstances, a strict interpretation of the universal approach can
be utilized to manage the volunteer program effectively. In these situations the
volunteer is effectively a part-time employee, and the needs of the organization
for productive labor are predominant. Strict adaptations of the universal model
toward employment work well when volunteer positions are incorporated in
the hierarchical structure of the organization, and volunteer positions are
conceptualized as part-time jobs.
In other situations, though, the needs of the volunteers become paramount. In
volunteering their time, citizens bring not only labor to an organization but also
their motivations and aspirations as participants. From this participant standpoint,
212
volunteers seek, for example, personal growth and development, a sense of solidar-
ity and belonging, friendships and networks, job experimentation and experience,
an opportunity to pursue a desired vision or goals, or a feeling of self-confidence
or mastery. These aspirations cannot be met solely through performing specific
part-time “jobs” as in the employment model. Instead, the volunteers must be
viewed from the participant perspective as citizens motivated to achieve their own
goals through helping the organization. Thus, the volunteer administrator cannot,
and should not, apply the universal model so strictly that the volunteer experience
resembles part-time paid employment that “anyone” could fill but must leaven
or loosen volunteer involvement so that the volunteer also feels like a valued and
unique participant.
Yet, the administrator must not reduce volunteer involvement to focus
exclusively on the needs of volunteer participants either, lest the organization
be distracted from pursuing its own goals—which require the employment
(productive labor) of volunteers as well. To us, recognizing the poles of the
universal approach toward the employment perspective on the one end and
the participation perspective on the other, and tightening the balance between
them toward the employment model when necessary or loosening it toward
participation as required by organizational circumstances (contingencies),
constitute the essence of volunteer management.
Some evidence for this perspective emanates from statistical trends and
commentary. According to the Bureau of Labor Statistics (2015) the number of
volunteers and time spent volunteering in the United States has declined over
the past decade; the rate of volunteering stood at 26.7% in 2006 and by 2015
had dropped to 24.9%. Volunteer retention continues to falter according to
Yanay and Yanay (2008) due to failure in volunteer management to meet the
needs, desires, motivations, and experiences sought by volunteers as participants.
Similarly, Brudney and Meijs (2009) maintain that the decline in volunteers
results, at least in part, from the continued application of universal volunteer
management toward the traditional workplace model that conceives of the
volunteer as a part-time employee. Brudney and Meijs (2009) are concerned that
this application of the universal model is not always well-suited to the circum-
stances confronting volunteer managers. Because volunteers are a valuable human
resource to nonprofit organizations, accounting for an estimated 65% of total
philanthropic resources (Salamon & Sokolowski, 2001), volunteer administrators
must strive to ensure that volunteers are fulfilled in their work for host organiza-
tions. If volunteers are not fulfilled, they may show a lack of concern for their
work, or even discontinue their service to the organization. Thus, adapting the
universal model of volunteer management to embrace the needs of volunteers,
for participation, as well as the organization, for employment, is a priority.
Brudney and Meijs (2009) have introduced a “regenerative approach” to volun-
teer management, which encompasses the asset-based community development
model (Kretzmann & McKnight, 1993). Regenerative volunteer management is
centered on meeting the needs of the community, the volunteer, and the
213
organization, and it encourages managers to give volunteers a stake in the organi-

zation. The regenerative model emphasizes the importance of a cultural shift in
the perception of contemporary volunteering with a focus on renewable, long-
term, and life-time valued volunteer involvement. This model of volunteer man-
agement allows for a more comprehensive approach to volunteer recruitment by
suggesting that organizations offer volunteers a variety of job and role options, the
ability to discuss and advocate for a preferred volunteer work assignment, and
the opportunity to fulfill their own needs and meet organizational demands at the
same time (Brudney & Meijs, 2009).
The universal model of volunteer management does not vary according to
circumstances, such as the size of the organization, clientele served, volunteer
location, volunteer and employee needs etc., details of the application of the
model are not relevant, or at least not addressed, for varying circumstances. By
contrast, the goal of the contingency approach is to adapt the administration and
management of volunteers to the important conditions or circumstances facing
the organization and its volunteer program.
A New Approach to Volunteer Management: The Ratchet Model

The ratchet model proposes that volunteer management varies between two poles:
On one extreme rests the “employment model” that conceives of volunteers
as quasi-employees, i.e., a relatively strict or tight application of the universal
principles discussed above. The emphasis centers on the needs of the organization
to generate productive labor from volunteers. At the other extreme lies the
“participation model.” Here the ratchet must be loosened to meet the needs of
the volunteer, for example, for fulfilling and stimulating involvement, personal
exploration and growth, skill development and networking, or a sense of solidarity
and belonging. Using the ratchet model requires the volunteer administrator to
adjust the balance or tension between these two extremes to accommodate the
circumstances at hand. The critical questions are:
1 What are the conditions or contingencies that necessitate adjusting the

ratchet?
2 In what direction—tightening to focus on organizational needs versus loosen-
ing to respond to volunteer priorities—should the volunteer administrator
adjust the ratchet to meet the critical contingencies confronting the volunteer
program?
We refer to our approach to volunteer management as the “ratchet model.” The

analogy draws attention to balancing or adjusting the tension between tightening
versus loosening volunteer administration to accommodate both organizational
and volunteer needs, and applying finesse or a light touch rather than force or a
heavy hand to the task of volunteer management. As every mechanic learns, the
ratchet mechanism or tool locks onto a hexagonal screw or nut, such as the spark
214
plugs on an automobile engine or the lug nuts that secure the wheels. The ratchet
can access places that lie obscure or are difficult to locate and fix; these places
correspond to the contingencies facing the volunteer program that need
addressing. The ratchet device is designed so that the force needed by the
operator to move or maneuver the screw or nut is greatly reduced. As with
volunteer management, it takes just a supple twist of the wrist, i.e., a deft
managerial intervention, to move the screw or nut to either tighten it (toward
employment) or loosen it (toward participation) according to the tension
(balance) required.
Analogous to the management craft, the ratchet device places the emphasis
on finesse rather than power. It does most, though not all, of the work: The
ratchet responds subtly and immediately to the wishes of the operator. As in
management, the ratchet provides feedback to the operator as he or she tightens
or loosens the tension. The role of the volunteer manager is to adjust the tension
between strict or tight application of the universal model toward employment or
a more relaxed or loose application toward participation.
Table 12.3 shows the ratchet model as it relates to the employment and
participation models of volunteer management. The full turning of the ratchet
Table 12.3 The ratchet model of volunteer program management
“Loosen” “Tighten”
Volunteer management
element Participation model Employment model
Recruitment and public Undifferentiated calls for Based on organizational tasks

relations “help” to be completed
Screening and selection of Minimal Based on organizational tasks
volunteers to be completed
Orientation of volunteers Minimal, brief Longer, more detailed
Training for volunteers Minimal Specific to the job
Structure of volunteer Flat, less hierarchical Detailed, more hierarchical
program
Job descriptions for General (provide “help”) Specific (perform tasks)
volunteers
Record-keeping and Minimal Greater
reporting
Evaluation of volunteers Informal, if any Formal
Recognition of volunteers Minimal (“thank you”) Specific to the job or longevity
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to either extreme will not benefit the volunteer program or the organization. A
program based solely on the employment model will likely encounter a volunteer
deficit leading to hasty recruitment, volunteer retention problems, and an
organization that has to enlist more paid employees. Conversely, if the program
is fixed solely on the participation model, the volunteers would likely not have
the direction or the ability to achieve the desired goals or results sought by the
organization—or their own individual goals.
Applying the Ratchet Model

The volunteer manager must adjust the organization’s volunteer program to
achieve a balance between the employment and participation models of volunteer
management. The challenge to the administrator is to adjust the balance based
on the contingencies confronting the volunteer program. The volunteer admin-
istrator must determine how tightly or loosely the volunteer program should
be adjusted toward the employment or participation models. The important ques-
tions are: What are the crucial contingencies according to which the volunteer
manager should adjust the program? What are best practices for how these contin-
gencies should be addressed? Although volunteer management begins with the
universal model, depending on the contingencies volunteer administrators will
need to loosen elements of management toward the participation model or
tighten them toward the employment model. We focus on the following major
elements as primary contingencies: intervals of volunteering, client population,
organizational lifecycle, organization size, volunteer proximity, organization
type, organizational scrutiny, as well as human elements. Table 12.4 summarizes
these contingencies and their implications for volunteer management.
• Intervals of volunteering: Many organizations sponsor events that are short-term

or episodic, such as 5K runs and fundraising galas. For such episodic volun-
teering the organization does not require elaborate structure or procedures
that link the volunteer permanently to the organization. This contingency
suggests that the organization “loosen” the scope of volunteer management
toward the participation model. A fun experience in short-term episodic
volunteering may assist recruitment, but the trappings of the employment
model are wasted and likely counter-productive. Though episodic events
may require significant planning and preparation, as well as many volunteers,
recruiting and placing ongoing volunteers in quasi-employment roles are not
required. Instead, the organization need only provide modest orientation
or training that will allow the volunteer to be successful in completing
mundane tasks, such as greeting attendees and distributing snacks, as opposed
to in-depth instruction. By contrast, regular, ongoing volunteer involvement
necessitates a tightening of volunteer management toward the employment
model. As opposed to episodic participants, these volunteers will continue
to be connected to the organization, so that the organization needs to
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Table 12.4 Management adjustment to contingencies in volunteer programs
Management adjustment
The Participation The Employment

Model is best suited Model is best suited
to the following to the following
Contingency Description contingencies contingencies
Intervals of Episodic vs. Ongoing Episodic Ongoing

volunteering
Client population Vulnerable vs. Non- Non-Vulnerable Vulnerable
Vulnerable
Organizational New vs. Established New Established
lifecycle
Volunteer proximity Virtual vs. Traditional Traditional Virtual
Organization size Larger vs. Smaller Smaller Larger
Organization type Public vs. Nonprofit Nonprofit Public
Organizational Normal Operations vs. Normal Operations Scrutiny
scrutiny Scrutiny
Human elements Morale Lower morale Higher morale
Employee Complaints Few complaints Many complaints
Cohesiveness Low cohesiveness High cohesiveness
exercise greater oversight and monitoring through the standard elements of

the employment model.
• Client population: Organizations that deal with vulnerable populations, such
as children, the elderly, and medical patients, require more provisions for
protecting these clients. Additionally, stronger precautions must be in place
by the organization to attend to risk management and liability. The
organization will be held accountable for protecting the rights and well-being
of vulnerable clients. Thus, in an organization that deals with vulnerable
populations volunteer management should be “tightened” to invoke the
employment model. In organizations that serve non-vulnerable populations
as primary clientele, such as patrons of museums and cultural arts programming
or participants in adult recreation leagues, volunteer management can be
loosened toward the participation model.
• Organizational lifecycle: New organizations typically have fewer staff, both
paid employees and unpaid volunteers. The organization, as well as the
volunteer program, must remain fluid and supple to grow and mature.
The demands of organizational survival require personnel to be flexible and
adaptive. This contingency would suggest relaxing the volunteer program
toward the participation model of volunteer involvement to respond to
the pressures of survival and growth and to maintain flexibility. By contrast,
more established organizations generally have more personnel and
217
standardized procedures, as well as a need for clarification and classification

of work roles. Thus, a nudge toward the employment model is called for
and appropriate.
• Organization size: Often accompanying organization longevity is organization
growth. Larger, more structured organizations with multiple divisions,
departments, and other subunits require increased coordination and control.
The volunteer program must be part of this structure and explicitly linked
to organization operations. Thus, the volunteer program must move toward
the employment model. Although volunteer participation is valued, larger
organizations tend to divide the work to be done more finely than smaller
organizations. To maintain not only accountability, but also work flows
and coordination, paid staff and volunteers alike must understand who is
responsible for which tasks. The employment model establishes these
relationships.
• Volunteer proximity: Increasing virtual or online volunteering off-site is
becoming an alternative, or at least a complement, to traditional on-site or
in-person volunteering. Cravens and Ellis (2014) suggest if a successful
volunteer program is in place, the organization should be able to implement
virtual volunteering relatively easily to increase organizational capacity.
In volunteer programs with virtual volunteers assisting at a distance in the
absence of direct organizational supervision, the employment model is
advisable to provide oversight and control. An organization with substantial
online, virtual volunteering requires classic features of the employment
model, especially careful recruitment, screening, follow-up, and evaluation,
to ensure accountable performance. Without personal oversight and
supervision, volunteer administrators must rely on such procedures.
• Organization type: Government agencies have comparatively more rules,
procedures, and regulations than nonprofit organizations. Because public
funding and accountability are at stake, governments tend to be more formal
and insist on more clearances and sign-offs and a clearer chain of hierarchy,
command, and coordination than nonprofits. In addition, they tend to be
older and larger. All of these factors suggest that volunteer managers in
public organizations will need to lean strongly toward the employment
model of volunteer administration.
• Organizational scrutiny: When things go wrong in any organization, the
response of most leaders is to seize the reins of authority. Responsible leaders
want to show that they are aware and in charge, the problems have been
resolved, and lapses will not recur. The easiest, most convincing way to
regain the confidence of the public and other stakeholders is to demonstrate,
and publicize, the adoption of standards, rules, and procedures to address
and surmount the problematic issue, and even to invite further scrutiny to
establish accountability. Following the lead of organizational officials
to tighten things up, in such situations the volunteer manager will need to
turn the ratchet toward the employment model.
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• Human elements: Human elements, including morale among volunteers, atti-

tudes of paid staff toward the volunteer program, and overall cohesiveness
and understanding of volunteer versus paid staff roles, present critical contin-
gencies to the volunteer program that ebb and flow over an organization’s
life cycle. Based on the ratchet model, we advise that if volunteer morale is
low, the volunteer manager will want to loosen the program toward the
participation model to engage citizens more fully. By contrast, if paid staff are
suspicious or unsatisfied about volunteer involvement, the volunteer manager
would need to tighten the program toward the employment model to shore
up organizational achievement. Finally, if cohesiveness or collaboration does
not take hold between volunteers and paid staff, savvy volunteer managers
will want to investigate and assess the underlying issues and adjust manage-
ment toward either the participation model or the employment model based
on their experience in the job and observation in the organization.
We have summarized some of the major contingencies likely to confront the

volunteer administrator. Part of the job consists as well in identifying other
contingencies that require an adjustment in the balance between the employment
and the participation models. We suggest as other contingencies meriting further
consideration by the volunteer administrator: whether or not paid employees have
a union; whether volunteers constitute a relatively small versus large personnel
component of the organization; whether or not the organization enlists youth
volunteers; whether or not the organization is competing with other agencies for
the services of volunteers.
Conclusion
In this chapter we have presented a new approach to volunteer administration
and management that applies the universal model to contingencies volunteer
administrators are likely to confront on the job, and provides direction for
adjusting the volunteer program accordingly. We label this approach the ratchet
model. We use this name because the ratchet tool offers analogies to management
with respect to tightening or loosening organizational control over work processes
and behavior, and relying more on finesse than force to accomplish desired
organizational ends or goals. With respect to volunteer management, tightening
the ratchet refers to adjusting the volunteer program to resemble more closely
part-time paid work or employment to meet the goals of the organization. By
contrast, loosening the ratchet means adjusting the program toward a more
flexible, open participation style that helps volunteers meet their own needs,
for example, for stimulation, interesting work, solidarity, networking, self-
expression, or career exploration. The ratchet model encourages the volunteer
administrator to achieve a balance between the two poles of employment versus
participation in managing the volunteer program based on the key contingencies
confronted.
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The ratchet model entails four steps. Volunteer administrators should:
1 Begin by learning the elements of the universal approach.

2 Be aware and sensitive to the contingencies in the workplace that would
suggest that the balance between the employment model and the participation
model must be adjusted.
3 Know how to change their volunteer management style to adapt to the
contingencies identified, and be comfortable making these changes.
4 Follow up by monitoring the volunteer program to evaluate whether the
adaptations made are appropriate to fit the situation, and implement new
adaptations should they prove necessary.
This chapter elaborates a framework for the volunteer administrator to use for
successful adaptation of the volunteer program to various circumstances or con-
tingencies. Two models of volunteer management—the Preparation Engagement
and Perpetuation (PEP) model (Safrit, Schmiesing, Gliem, & Gliem, 2005) and
the volunteer administrator guidelines of the Council for Certification in Volunteer
Administration (2015)—likewise acknowledge that contingencies exist that may
impact volunteer program administration.
The authors of the PEP model (Safrit, Schmiesing, Gliem, & Gliem, 2005)
assert that theirs is the first empirical model of volunteer management. The model
is based on findings from a study of volunteer administrators and experts in the
field and highlights three categories: personal preparation, volunteer engagement,
and program perpetuation. Across the three categories, the PEP model for volun-
teer administration derives seven “domain topic areas” (pp. 21–22): professional
development, volunteer selection and recruitment, volunteer orientation and
training, volunteer recognition, program maintenance, resource development,
and program advocacy. The researchers maintain that the PEP model addresses
the primary topics identified since the inauguration of the volunteer administra-
tion field (Safrit et al., 2005). Similarly, the Council for Certification in Volunteer
Administration (2015) recognizes that the position of the volunteer administrator
is multifaceted. CCVA (2015) alludes to the influence of contingencies on the
effective performance of the job, which encompasses several different roles:
strategic architect, articulate ambassador, relationship builder, talent cultivator,
data manager, champion of quality, and passionate leader. The many roles of
the volunteer administrator signify the importance of adapting management to the
contingencies confronted in the volunteer program.
To make these adaptations, we recommend that both new and experienced
volunteer administrators strive to seek a balance between the needs of the
organization for productive work, as captured in the employment model, and
the needs of volunteers for meeting their own aspirations, as articulated in the
participation model. In our view, understanding these poles and creating an
effective balance form the essence of the volunteer administration task.
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1 What are the contingencies that you think would impact the volunteer
administrator’s job?
2 As a normal way of doing business (the “default option”) on an everyday
basis, how should the volunteer administrator go about doing his or her job?
3 What skills would be most useful to you in recognizing important contingencies
in the workplace or among volunteers so that you would know when to
tighten, or loosen, administration of the volunteer program?
References
Boyce, M. (1971). A systematic approach to leadership development. Washington, DC: USDA,
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Brudney, J. L. (1990). Fostering volunteer programs in the public sector. San Francisco,
CA: Jossey-Bass.
Brudney, J. L. & Meijs, L. C. P. M. (2009). It ain’t natural: Toward a new (natural)
resource conceptualization for volunteer management. Nonprofit and Voluntary Sector
Quarterly, 38(4), 564–581.
Brudney, J. L. & Meijs, L. C. P. M. (2014). Models of volunteer management: Professional
volunteer program management in social work. Human Service Organizations Management,
Leadership & Governance, 38(3), 297–309.
Bureau of Labor Statistics. (2015). Volunteering in the United States, 2015. Available at:
www.bls.gov/news.release/volun.nr0.htm (accessed March 9, 2016).
Carroll, M. & Harris, M. (1999). Voluntary action in a campaigning context: An
exploratory study of Greenpeace. Voluntary Action, 2(1), 9–18.
Corporation for National & Community Service. (2015). The state of volunteering in America,
2015. Available at: www.volunteeringinamerica.gov/infographic.cfm (accessed March
9, 2016).
Council for Certification in Volunteer Administration. (2015). CCVA body of knowledge
and competency framework. Available at: http://cvacert.org/wp-content/uploads/2015/
09/2015-CVA-Competency-Framework-FINAL-2015-Sep-03.pdf (accessed October
15, 2015).
Cravens, J. & Ellis, S. J. (2014). The last virtual volunteering guidebook: Fully integrating online
service into volunteering. Philadelphia, PA: Energize, Inc.
Ellis, S. J. (2010). From the top down: The executive role in successful volunteer involvement.
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Kretzmann, J. P. & McKnight, J. L. (1993). Building communities from the inside out: A path
toward finding and mobilizing a community’s assets. (3rd ed.). Chicago: ACTA.
Meijs, L. C. P. M. & Ten Hoorn, E. M. (2008). No “one best” volunteer management
and organizing: Two fundamentally different approaches. In M. Liao-Troth (Ed.),
Challenges in volunteer management (pp. 25–90). Charlotte, NC: Information Age
Publishing, Inc.
Naylor, N. H. (1967). Volunteers today: Finding, training, and working with them. New York,
NY: Dryden Association Press.
Paull, M. (2002). Reframing volunteer management: A view from the West. Australian
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Rehnborg, S. J. (2009). Strategic volunteer engagement: A guide for nonprofit and public sector
leaders. Austin, TX: University of Texas, RGK Center for Philanthropy and Community
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Service. Available at: www.volunteeralive.org/docs/Strategic%20Volunteer%20

Engagement.pdf
Rochester, C. (1999). One size does not fit all: Four models of involving volunteers in
voluntary organizations. Voluntary Action, 1(2), 47–59.
Safrit, R. D. & Schmiesing, R. J. (2012). Volunteer models and management. In
T. D. Connors (Ed.), The volunteer management handbook (2nd ed.; pp. 3–30). Hoboken,
NJ: John Wiley and Sons, Inc.
Safrit, R. D., Schmiesing, R. J., Gliem, J. A., & Gliem, R. R. (2005). Core competencies
for volunteer administration: An empirical model bridging theory with professional
practice. Journal of Volunteer Administration, 23(3), 5–15.
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from 24 countries (Working Papers of the Johns Hopkins Comparative Nonprofit Sector
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13
Training and Development in
Toby Egan
Across sectors, training and development (T&D) is a vital individual and career
concern, as well as an important dimension in the life of organizations.
Workforce learning has become a fundamental need for organizations that

face a quick-changing world growing more complicated by the day . . . For
many decades, employee training has been viewed as an effective way to
maintain and develop organization members’ work capacity.
(Chang, Huang, & Kuo, 2013, pp. 25–26)
Introduction
As varied organizations have identified employee and managerial training and
development needs, multiple approaches to learning at and about work emerged,
with T&D situated in the broader contexts of human resource development and
organizational learning.
Employee and managerial T&D is viewed as an essential ingredient to
improved nonprofit organizational effectiveness and performance outcomes
(Hodgkinson & Nelson, 2001; Riddoch, 2009). Over the past three decades,
T&D-related practitioners and scholars have increasingly come to see training
from a “systems view”—important from individual, group/team, organizational,
community, and sectoral perspectives (Jacobs, 1989). While nonprofit leaders and
employees require training on a variety of topics and have continuous learning
needs, it has become progressively clear that nonprofit training and development
is firmly situated within the context of a larger organizational learning culture
and system (Ebrahim, 2005; Egan, Yang, & Bartlett, 2004; McHargue, 2003).
T&D-related theory, practice, and research overall, and then with a focus on
the nonprofit sector, are examined in this chapter. Over time, T&D professionals
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have utilized and shared related concepts and practices across sectors in a variety
of professional roles. In many cases, the underlying T&D assumptions and
practices share more similarities than differences; however, the nonprofit sector
has distinct characteristics that can require unique T&D approaches. In addition,
organization size plays an important role in determining the appropriate T&D
strategy, and this dimension is particularly salient in the context of nonprofit
organizations. This chapter is organized in the following way: exploring a brief
history of T&D; defining and situating T&D in the larger context of organizational
learning; examining related theories and professional practices; contrasting
nonprofit training from other sectors; and elaborating on challenges faced by
different sized nonprofits.
A Brief History of Work-related Training and Development

As organizations across sectors continue to develop an understanding of the
significance of workplace learning, appreciation of the importance of T&D
has also grown. The oldest form of work-related training in most parts of the
world is the apprenticeship system (Tracey, 1974). Apprenticeship, usually a one-
on-one training approach organized around a specific set of skills and related
acquisition, was common among scribes in early Egypt and during the Middle
Ages, but began to decline during the 1500–1600s (Snell, 1996). Further declines
in apprenticeship practices occurred during the industrial revolution. Large-scale
training, both on-the-job and in “classroom training,” emerged during the latter
part of the 19th and continued throughout the 20th centuries as cities, industries,
organizations, and military forces all expanded—requiring new approaches
to work-related learning and development (Swanson & Holton, 2001).
Apprenticeships, though less prevalent, remain a part of workforce training
worldwide, with about 450,000 apprenticeships annually in the United States
(U.S. Department of Labor, 2015). As described in more detail below, other
methods to facilitate workplace learning have evolved over the past 50 years on
a larger scale.
In the United States, one of the earliest charities involved in large-scale
training was the American Red Cross. Under founder Clara Barton, the Red
Cross developed training programs that were first aimed at facilitating wartime
medical field services and later at public health and wellness programs (Pryor,
1987). Dooley (2001) led, and later wrote about his efforts to form the World
War II era Training Within Industry (TWI) programs in the United States. These
wartime efforts involved the vocational training of tens of millions of U.S.
citizens in factories and related efforts to support the United States from “the
home front.” These newly trained workers revolutionized understanding in the
United States regarding T&D. These efforts involved the development of T&D
programs on a previously unfathomable scale, with systematic instruction to
thousands of trainees on a daily basis. The scope and scale required of paid and
volunteer human resources required by World War II production needs provided
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a natural laboratory born out of necessity and brought forth more opportunities
to design, test, and refine T&D than ever before.
Social scientist Elton Mayo (1933) and colleagues conducted the Hawthorne
Studies exploring the role of working conditions and stimuli, other than financial
compensation, on worker productivity. Later research would support the hypoth-
esis that T&D positively influenced employee productivity (Bartlett, 2001).
Frederick Herzberg, Kurt Lewin, Abraham Maslow, David McClelland, and Max
Weber each contributed research that influenced thinking about T&D practices
through related fields of study such as industrial-organizational psychology,
organizational behavior, human resource management, and human resource
development.
At this time a rich interplay between practice and academia began to emerge
that stimulated the professionalization of T&D. Several T&D-related professional
associations formed in the first half of the 20th century. One of the oldest,
identified professional human resources associations, the Chartered Institute of
Personnel Development (CIPD), opened in 1913 and was originally named the
Welfare Workers’ Association of England. The post-TWI of the 1940s war effort
brought about the formation of several key HR-related developments in the
United States, including the establishment of the American Society for Training
and Development, now known as the Association for Talent Development or
ATD, in 1944 (Koppes, 2006); the Society for Human Resource Management
(SHRM) in 1948; and Cornell University’s early industrial and labor relations
higher education program in 1945. Soon after, the academic fields of industrial
organizational psychology, industrial relations, industrial education, and vocational
education emerged, with more recent advent of human resource development,
organization development, and T&D specific academic programs.
As the 20th century progressed, so did training and human resources efforts
in a great diversity of other national contexts. Workplace complexities, increased
use of technology, and evolving organizational strategies led to greater appreciation
in all sectors for the employee as a key asset. The work of U.S. economists
Becker (1962) and Harbison and Myers (1964) advanced the importance of
human capital and human resource development for individual, organizational,
community, and even national impact.
As human capital was better understood as a key aspect of organizational
success, T&D took center stage as a core element of human resource development
(HRD) practice. Environmental complexity intensified in the 1980s with the
emergence of new technologies and steady growth of global organizations, and
continues unabated today. These complexities mandated agility by employees
and more adaptive management. As a result, in the for-profit arena, investment
by business and industry in T&D steadily increased over the last 30 years. ATD
estimated that large U.S. companies spent $164 billion overall in 2013,
approximately $1200 per employee, on training. As T&D practices evolved,
related job roles became better defined and some aspects of professionalization
and formalized training have emerged. Those working in T&D and related areas
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of workplace learning have a variety of titles including: Chief Learning Officer,

Vice-President of Training, Instructional Designer, Leadership Development
Professional, Technical Trainer, Training Coordinator, Learning Program
Manager, Training Evaluator, Performance Improvement Specialist, and many
more. In the U.S. context, organizations commonly create their own titles for
training related roles. Although training related licensure and governmental
oversight have been required of psychologists, social workers, public school
teachers, medical doctors, and lawyers, T&D remains a professional role that is
rarely government certified or licensed.
According to Hall (1994), while religious and charitable organizations are
thousands of years old and have their own formalized apprenticeships and training
systems to provide for their distinctive organizational needs, it took until the
1970s for the concept of a unified “nonprofit sector” to emerge as a discrete and
widely recognized concept and institution in the U.S. (and even later in many
other parts of the world). Approximately 90% of all nonprofit and nongovern-
mental organizations (NGOs) have emerged worldwide in the last 60 years (Hall,
2010). With the formation of over 1.5 million U.S. nonprofits today (NCCS,
2015), and uncounted numbers of NGOs worldwide, a recent acceleration of
training and academic programs emphasizing the nonprofit sector has emerged
(Mirabella, 2007).
While specific statistics regarding workplace training in the nonprofit sector
appear not to be aggregated, nonprofits make up approximately 10% of the U.S.
workforce, or approximately 12.5 million employees (U.S. Department of Labor,
2016). Along with sector-specific knowledge, nonprofit managers and employees
require many of the same types of abilities and skills as the U.S. workforce
overall. Without the benefit of statistics similar to ATD’s study of for-profit
training, we cannot accurately estimate U.S. nonprofit investment in training
overall. While there is no evidence that U.S. nonprofits do not spend comparable
amounts per worker to for-profit companies, even one half of the T&D invest-
ment made by large U.S. corporations per worker by U.S. nonprofits would
likely top $7.5 billion. Whether nonprofits spend similar amounts of money on
employees has not been adequately assessed; however, the overhead constraints
experienced by many nonprofits, particularly smaller organizations, and the
frequent emphasis on lowering administrative spending means investment in
T&D may be neither a permanent, nor renewable line item in annual budgets.
Framing Training and Development

What immediately comes to mind regarding the definition of training and
development is likely based on one’s experience. While one may have an intuitive
understanding of training and development, a closer look demonstrates a variety
of viewpoints regarding the definition. In a recent set of interviews, 25 nonprofit
leaders described training and development in a variety of ways—from class-
room groups facilitated by a trainer to online videos, on-the-job learning, and
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self-directed employee learning (Egan & Adkere, 2015). Definitional and

conceptual literature began to strongly emerge in the 1960s and then expanded
over the past 50 years (Egan, 2016), with the following serving as representative
definitions of T&D from a number of leading scholars and practitioners:
• a human capital investment that raises the worker’s productivity (Becker,

1962);
• a process that provides conditions in which individuals gain knowledge,
skills or ability (King, 1964);
• a maintenance subsystem, intended to improve organizational efficiency by
increasing routinization and predictability of behavior (Katz & Kahn, 1978);
• learning provided by employers to employees related to their present jobs
(Nadler & Nadler, 1989);
• the teaching of specific knowledge and skills required on the individual’s
present job. The term development refers to the growth of the individual
and preparations for higher-level jobs (Kirkpatrick, 1993);
• a process of systematically developing work-related knowledge and expertise
in people for the purpose of improving performance (Swanson & Holton,
2001);
• a planned effort by a company to facilitate employees’ learning of job-related
competencies. These competencies include knowledge, skills, or behaviors
that are critical for successful job performance (Noe, 2010).
In Somasunduram and Egan’s (2004) review of T&D definitions, four overarch-

ing aims of T&D were identified: (1) to develop or acquire knowledge; (2) to
cultivate or gain skills; (3) to improve performance/productivity; and (4)
to improve organizational efficiency/effectiveness. While definitions of T&D in
the literature may be aimed at breadth, evidence suggests that organizations
customize their definitions to fit their needs, assumptions, situations, and context.
For instance, Somasunduram and Egan observed extant definitions of T&D often
did not describe classrooms, trainers, curriculum, technology, or modalities of
how training happens in a manner similar to nonprofit leaders (Egan & Adkere,
2015). This is likely because of the challenges in framing the variety of approaches
to T&D. Many contextual issues are challenging to situate within a single T&D
definition, including organization-specific and customized goals, resources, and
approaches taken by training professionals, and the variety of individual learning
styles and preferences. The evolution of technology, distance learning, tutoring/
coaching, and other learning modalities has led organizations and individuals to
try varied T&D-related approaches.
At times, the goal of T&D may be intended to advance awareness or growth
with anticipated, but less tangible workplace outcomes (Deming, 1986). Based
on a thorough exploration of definitions, and for the purposes of this discussion,
T&D is defined as: Work-related learning experiences aimed at knowledge and skill
advancement for the purposes of improving awareness, expertise, performance and
organizational impact.
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It is also important to note that most T&D definitions assume trainees to be

employees, managers, and executives (or even consultants and contract workers).
Unlike for-profit and governmental sectors, some nonprofit organizations rely
heavily on volunteers. In many cases, volunteer workers in nonprofit organizations
require training to increase volunteer retention and effectiveness (Hager &
Brudney, 2011). While executive and board-related training could also be
included, particularly given its importance to nonprofit organizations, it is not
addressed extensively in the extant literature on T&D. Although scholars of
nonprofit governance emphasize the importance of systematic board orientation,
training, and evaluation (Brown, 2007), the literature on both corporate
governance and nonprofit governance is largely decoupled from that focused on
T&D. Though this is certainly an area for future reflection and research, this
chapter centers on nonprofit manager and employee training.
Situating Training and Development in Organizations

Because of the aforementioned lack of professionalization of the T&D field and
related roles in a single sector or industry, T&D is situated and interpreted within
many organizational contexts and under a variety of organizational monikers includ-
ing: human capital management, organization management, people management,
talent management, personnel management, human resources, or manpower man-
agement. Depending on organization size, these names most often refer to human
resources functions that serve as an umbrella over T&D. Basically, for-profit, public
and nonprofit organizations can, and do, assemble endless combinations of human
resources related functions together and label them almost any way they desire
within their organization; therefore, the underlying assumptions of these organiza-
tional units or divisions reflect different types of considerations strongly influenced
by the organizational context and history. At the same time, collective efforts have
been made to consider T&D more holistically and systematically.
Perhaps the most comprehensive framing of organization-based learning is
human resource development (HRD), which scaffolds learning at individual,
group, and organization levels (Werner & DeSimone, 2012) in modalities
including: career development, executive and other types of coaching and
individualized learning (individual level); T&D, action learning (an approach
where ideas are tested and put to work, examined, refined, and put back in use
in a cycle oriented toward learning), and team building (group level); and
organizational learning and organization development (organization level). HRD
has also been framed in contexts larger than the organization level, including such
domains as workforce development, community development, state/provincial,
and national development (McLean & McLean, 2001). In part, HRD emerged
simultaneously with the incorporation of systems theory (von Bertalynffy, 1968;
described in more depth below) and the learning organization (Argyris & Schön,
1974) perspectives, as both serve as a critique and as a complement to T&D.
Systems theory analyzes a phenomenon as a whole—not as the sum of essential
228
parts. The key is the interrelationships between parts in order to better understand
how an organization is structured, its inputs, functioning, and outcomes. It
requires changes in points of view from holism to reductionism. Systems theory
can be found in a variety of contexts including science, nature, economics, and
organizations. The learning organization concept uses a systems perspective to
consider learning across an organization. In this context, T&D is viewed as one
part of the system. Systems can be found in nature, in science, in society, in an
economic context, and within information systems. A distinctive characteristic
of systems theory is that it developed simultaneously across various disciplines,
with scholars working from a systems theory perspective building on the
knowledge and concepts developed within other disciplines.
HRD viewpoints serve as a critique in that systems and learning organization
perspectives demonstrated the work of trainers and trainees were insufficient if
not well aligned with the larger organizational and stakeholder systems. At the
same time, the systems perspective inherent in HRD incorporated T&D as an
essential ingredient to organizational effectiveness. In effect, HRD introduced a
systemic, strategic approach that shifted training as the central approach to work-
place learning to one of a set of important tools to be utilized in the deployment
of a learning organization strategy. The implications for this repositioning of T&D
were strongly influenced by McLagan’s study of for-profit HR, but with impli-
cations (and evidence of adoption) for nonprofit and governmental organizations
as well (Kim, 2012).
With the incorporation of systems theory (described in more detail below)
into social science scholarship and organizational HR and learning organization
functions, the growth of HR and T&D related professional roles naturally led to
the formation and growth of related professional associations, specified academic
programs, and policymaking. Based on her study of HR practices in a number
of large organizations, McLagan (1989) developed the HR Wheel (Figure 13.1).
This model represents the larger organizational Human Resources System divided
into three major subsets: (1) Human Resource Management (HRM); (2) Human
Resource Development (HRD); and (3) Human Resources Information Systems
(HRIS). Based on McLagan’s study, T&D is situated within HRD and is
interrelated with two other HRD areas—Organization Development (OD) and
Career Development (CD).
McLagan’s findings not only differentiated HR functions more clearly than
before, they also provided key insights into managerial and employee development
strategies and functions and their interrelationships within HRD. McLagan’s
study ran parallel to the emerging popularity of Peter Senge’s (1990) work on
learning organizations. As organizations in all three sectors began to experience
increased dynamism and rapid change, Senge emphasized learning as key for
organizational resilience and success. He also viewed systems-oriented, or holistic,
approaches to learning as central to the survival and advancement of every
organization. Senge adherents (along with predecessors like Argyris and Schön,
1980) elevated the importance of learning to boardroom and managerial levels
that, until then, had not regularly occurred. This rising learning organization tide
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Figure 13.1 Human Resource Wheel

Source: Reprinted with permission of the Association for Talent Development.
reinvigorated the importance of T&D, while pointing to the care needed to

reflect on the interrelationships between T&D and other HR functions. While
the HR Wheel helps T&D professionals to situate their work with other of
considerations, it is also important that T&D and HR professionals explore and
synthesize a ‘systems view’ with other parts of their organizations as well—from
operations and finance-to-customer service and marketing. Though foundational
to conceiving a cohesive framing for HRD, this framing was largely agnostic
with regard to sector or assumed a universality of applications across sectors. This
has implications and imposes challenges for applying these frames to nonprofit
contexts and for nonprofit leaders.
Nonprofit Challenges
There are several challenges and opportunities when considering nonprofit train-
ing and development. A key starting point is the size of the nonprofit organization
230
engaging managers and employees in training. This nonprofit challenge is an

overlapping issue for small businesses in the for-profit sector and for local
government in townships and small municipalities. According to the U.S.
Department of Labor (2015) businesses are considered “small” when employees
number fewer than 500. While most medium-to-large sized businesses do not
invest in more than a handful of training and development specialists, budgetary
constraints and greater income volatility among many comparably small nonprofits
make maintaining an internal training function quite challenging (Millesen &
Bies, 2005). Following a more specific overview of T&D in the nonprofit sector
and related theories and models, the differences in nonprofit size on T&D policies
and training implementation are examined further.
Training and Development in Nonprofit Contexts

Over the past 40 years, learning and development has emerged as a central feature
for organizational success. Nonprofit organizations have been included in
ongoing discussions regarding the importance and impact of learning and learning
systems in relation to practices in the sector (Millesen & Bies, 2005). In its
broadest forms, T&D may occur in a variety of organizational contexts—for-
profit, governmental and nonprofit—and may involve a variety of modalities
(e.g., in-person training courses, online courses, group or individually oriented
training programs, etc.). The emergence of learning technologies and systems-
level approaches to learning have added richness and complexity to the exploration
of T&D in nonprofit contexts.
While training-related professional associations (such as ATD) clearly empha-
size for-profit contexts, members come from all sectors because of the common-
alities of training efforts. In general, T&D emphasizes change or improvement
in trainee knowledge, skills, and attitudes—with workplace-related training most
often aimed toward specific tasks or jobs. The cumulative effect of training and
other learning and performance improvement activities over time supports the
long-term advancement of employees or managers, allowing both for impact in
the near term and for future work responsibilities (Swanson & Holton, 2001).
A common initial T&D experience comes in tandem with an employee’s entrance
into a new organization with employee orientation and introduction to key
knowledge and skills being the inaugural experience into the new work setting.
New employee orientation often consists of interactions and series of exchanges
with those in the organization who have beneficial information and perspectives
regarding what is required in the new role (Egan, 2016). In larger organizations,
a T&D staff member and hiring supervisor work together to design and imple-
ment the orientation process. Related skills and technical training are often
tailored in ways that best fit the employee’s new role. Following integration
into a work role, T&D-related activities often focus more on developmental
aspects—utilizing managerial coaching, mentoring, developmental teams, work-
shops, and professional conferences (Millesen & Bies, 2005). Those in managerial
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and supervisory roles may be provided specific management training, seminars,

academic courses, or professional association-sponsored programs.
Nonprofit Training and Development Literature

Although each context has unique characteristics, the framing of T&D in non-
profits is often highly influenced by for-profit literature. A relatively early article
on nonprofit training by Levinson (1987) highlighted the breadth of nonprofits
and their unique training needs—including fundraising board relations, proposal
writing, and volunteers—along with a number of topics important to organiz-
ations in any sector; financial management, leadership development, human
resources administration, management techniques, communication, risk manage-
ment, change management, and legal issues. Overall, the available literature on
nonprofit T&D is very limited.
Much of the cross-sector training discussions focus on the intersections
between for-profit and nonprofit training approaches—with the preponderance
of literature pointing to the transferability of for-profit approaches to nonprofit
practices. Paton, Mordaunt, and Cronforth (2007) contextualize nonprofit
managerial training in the UK by pointing out governmental stimulus toward the
use of for-profit training approaches in nonprofit contexts. Many nonprofit
leaders perceive that a business oriented approach to training and the application
of private sector business practices to be a priority (Milway & Saxton, 2011). The
presence of for-profit leaders on nonprofit boards and cross-sector exchange
between T&D professionals and managers make for natural comparisons,
knowledge transfer and duplication in nonprofit contexts. Additionally, Peter
Drucker (2006) and other management scholars have often emphasized the
similarities between for-profits and nonprofits.
According to Chang et al. (2013), there are three major trends in nonprofit
training-related research: (1) the aforementioned emphasis on utilization of
business training paradigms in nonprofit contexts; (2) an emphasis on training
volunteers and nonprofit academic programs; and (3) patchy, inconsistent, and
asystematic training approaches. Chang et al. emphasize nonprofit training in the
United Kingdom as a key example of how even government promoted nonprofit
“enterprise culture” through the formation of policies encouraging nonprofit
adaption of for-profit training practices. As previously identified, scholars such
as Drucker (2006) and the common practice of utilizing for-profit leaders on
nonprofit executive boards (Meehan & Jonker, 2015) led to a push to adapt for-
profit training practices in nonprofits. Chang et al. also identified the preponderance
of nonprofit training literature to emphasize the training of volunteers (e.g.,
Eisner, Grimm, Maynard, & Washburn, 2009; Gesthuizen & Scheepers, 2012)
and formal academic programs (e.g., Dolan, 2002; Paton et al., 2007). Finally,
nonprofit training practices are often descripted as asystematic (Chang et al.,
2013) and are assembled in a sporadic fashion often emphasizing brief,
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non-sequential training events (Paton et al., 2007). As part of their investigation,

Chang et al. were interested in practices used by nonprofits and the extent to
which adaptation of practices from business and industry are applied. It was
determined that nonprofit size and other key factors led nonprofits to emphasize
on-the-job training more than the systematized training approaches often found
in large for-profit organizations.
The T&D motivation for every organization relates to the need to recruit,
retain, maintain, and advance talented employees who have key competencies
that will align toward organizational success (Poell & van Woerkom, 2011).
According to Chang et al. (2013), “employee training has been used as an impor-
tant means to maintain organizational effectiveness” (p. 27). Egan et al. (2004)
determined organizational cultures that support learning are associated with
increased employee motivation, satisfaction and retention. Even in economically
challenging times, U.S. organizations have invested substantially in T&D (ATD,
2014). On average, employees of organizations participating in the ATD learning
survey received 31.5 hours of formal T&D annually. These numbers have
increased over time and, although from the private sector, reflect a growth
trend consistent in nonprofits as well (Chang et al., 2013). T&D-related data
collection is usually focused on corporate investments in formal learning—
defined as structured learning activities normally designed, implemented, and
sponsored by employers—versus informal learning that is most often instigated
and advanced by employees/managers individually. Learning and development
occurs across sectors. Additionally, T&D involving volunteers—as trainees and
trainers—is most common in nonprofit contexts. The relatively small amount
of nonprofit T&D literature and research available will hopefully make it an
attractive topic in an emerging nonprofit scholar and practitioner population.
Training Theories
Whether one is cognizant of the underlying influence of training theories in an
overt way, or if such influences are the unnamed or underlying ‘theories-in-use’
(Argyris, 2000), assumptions about what T&D is for and how it works are
important considerations. Similar to the aforementioned similarities and differences
in T&D definitions, underlying theories of T&D elaborate and position key
concepts such as training design and delivery assumptions, key outcomes,
mechanisms underlying training transfer, and the ways in which trainers and
trainees construct meaning and use power and influence. According to Noe
(2010), while there are a number of training and development-related theories,
there are a few highlighted more often. As emphasized by Lewin’s (1945) oft-
repeated statement “nothing is so practical as good theory” (p. 169), “it is important
to examine these theories not only from a scholarly perspective, but from a practical
perspective as well. Training and development and learning theories should have
clear implications for practice” (Egan, 2009, p. 130).
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Action Learning
Well aligned with the important intersection between theory and application,
action learning theory emphasizes the core idea action and learning are firmly
intertwined. The founder of action learning (Revans, 1980, 1983) regularly
underscored that there cannot be action without learning, nor learning without
action. As a theory and model associated with workplace training, action learn-
ing is viewed from a process perspective that includes: (1) focus problem or
issue; (2) action learning team or group; (3) questioning and reflective listening
process; (4) action to address the problem or issue; (5) focus on learning
throughout; and (6) action learning coach/facilitator (Marquardt, 2004).
Revan’s representative expression of action learning’s underlying theory is
P + Q = L—where P is programmed knowledge, Q is thoughtful questioning
and L is learning.
Action learning-oriented training and development often blends existing or
prepared learning materials (P) with a large amount of time for questioning and
reflective listening (Q). Learning exchange is important because the action
learning process (L) requires a commitment by participants to learn from each
other in a manner aimed at accepting one another’s points of view and offering
constructive feedback and critiques (Zuber-Skerritt, 1996). Effective T&D
facilitators utilizing action research emphasize participation and the expertise and
experiences of trainees. It is most common for action learning trainers to support
action-oriented learning through facilitated interaction between participants
and invite experts and new information into the learning environment—rather
than primarily engaging in PowerPoint presentations, or ‘platform’ training
performances. The challenge of the action learning approach is that it may be
very difficult to apply when highly technical or complex—requiring related
subject-matter expertise from members, more time, or both. Conversely, the
strength of this approach is that the participatory orientation to learning increases
trainee buy-in and can lead to context/organization relevant outcomes and
innovations. Revans and others have provided narratives and anecdotal support
for the use of action learning in nonprofit organizations, the majority of action
learning literature outside of the for-profit sector focuses on K-12 education.
Andragogy
Often juxtaposed in relationship to pedagogy, andragogy is defined as a learning
approach aimed at adults and effective approaches to adult learning—which are
considered to be unique as compared to pedagogy (Knowles, Holton, & Swanson,
1998). Like action learning theory, the theoretical viewpoint underlying
andragogy is a humanist approach (Cooper & Henschke, 2007). However, unlike
action learning theory, andragogy is often used to emphasize a more individually
oriented approach to each training participant. While focusing on adult learning,
andragogy does not identify a desired age for participation, rather it emphasizes
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behaviors associated with the capacity to be self-directed learners (Knowles,

1980). Additionally, andragogy-oriented training focuses on trainee-centered
experiences oriented toward practice, collaboration, and problem solving as
central to adult learning.
While this adult-learner-centered theoretical approach has grown considerably
over the past 30 years, trainers not utilizing this approach may take a more
uniform or top-down approach to trainees. The strength of andragogy is the
importance it places on individually driven learning and independent motivation.
In particular, the focus on adults’ intrinsic learning needs and opportunities to
support their learning styles and interests is a distinguishing element. Concurrently,
a critique of andragogy is its focus on individuals in a manner that could position
organizational or community needs secondarily, be more challenging when
dealing with highly technical areas, or may eliminate or minimize trainer input
and support. A focus on individualized adult learning can help develop individual
approaches to dynamic work environments that make them more resilient and
able to find their own learning approaches that adjust to collective needs. Zsiga’s
(2008) exploration of nonprofit leaders engaged in self-directed learning is one
of very few studies exploring andragogy in nonprofit contexts.
Critical Action Research

Sharing several similar components to action learning, critical action research is
a learning-training theory rooted in the critical philosophical tradition called
critical theory (Carr & Kemmis, 1986) wherein the close examination of power
dynamics and emancipatory interests are centered. Critical action research is most
relevant when trainers have a strong interest in understanding trainees’ specific
contexts. Rather than emphasize individual learning goals, common to many
training theories, this approach focuses on social and/or organizational problems—
particularly inequity. Such an approach is not only helpful within organizations,
it can be very beneficial to both understanding organizational intersections with
communities and supporting organizational insight regarding how to have the
best aligned impact.
Outcomes from critical action research can include resource sharing, policy
change, organizational mission re-alignment, and empowering persons struggling
with the imposition of social, physical, and/or financial obstacles. Facilitating
critical action research, participants are asked to form learning groups that
elaborate on inequities and social problems and, eventually, to determine their
collective commitment to taking action toward change (Carson, 1990). In many
cases, these adult learning focused groups become a team of change agents
interested in altering the power dynamics or power relationships (Stringer, 2007).
Dealing with resistance to change and attempts to ignore the recommendations
and proactive behaviors of the critical action research are common.
In an effort to clarify the steps taken in critical action research in work and
community contexts, Zuber-Skerritt (1996) presented the CRASP acronym:
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(1) critical collaborative enquiry that is also self-critical and; (2) reflective framing
learners as co-researchers and reflective practitioners aimed toward (3) account-
ability in making group outcomes and results public; (4) self-evaluating practice
and engaged in (5) participatory problem solving and continuous professional
development. As with action learning, participants’ learning process is active and
rooted in the experiences of each participant. Those critiquing this approach have
indicated that trainers/facilitators of this type of learning must be careful to not
be seen as coercive.
Additionally, while critical action research activities may lead to change, some
worry the upheaval involved in the change process may lead to a different set of
problems with similarly negative impacts. Conversely, “although organizations
may not be interested, or may resist critical action, the breaking down of
unnecessary or prohibitive power structures is beneficial in a variety of contexts:
from corporate to NGO or other development related efforts” (Egan, 2009
p. 134). Critical action research can make great strides in development of greater
awareness of organizational and community diversity, the formation of more just
working environments, and commitments to redressing policies and decisions
that perpetuate unfairness or that are implemented inequitably.
Facilitation Theory
Facilitation theory situates the trainer in a position to form and maintain a
learning context in which trainees are able to explore new ideas. Training
undergirded by facilitation theory supports trainees sharing their individual
reactions in a nonthreatening environment. Facilitation theory is informed
by psychologist Carl Rogers’ one-on-one counseling approach called client-
centered therapy (CCT). Rogers’ (1970) CCT concepts of unconditional positive
regard and empathic understanding are central for trainers enacting facilitation theory
based training. As with Rogers’ one-on-one approach with clients, training
facilitators convey attitudes that are non-judgmental and are listening oriented.
Time is built into such training for in-depth, trainee generated discussion that
gives trainees the opportunity to discuss reactions, disclose feelings, and elaborate
on their ideas and experiences. As with CCT, Kahn (1999) suggested the
facilitator/trainer is unable to be entirely nondirective as her/his ideas will
influence the direction of participants. Another major critique of training framed
by facilitation theory is the dependence on learners to establish their own interests
making the training sessions seem to some as lacking direction, clear objectives,
and structure.
At the same time, recent developments in emerging fields such as positive
psychology (Sheldon & King, 2001) and an infusion of appreciative inquiry
practices in organization development (Bushe & Kassam, 2005; Cooperrider &
Whitney, 1999) clearly support the foundations of facilitation theory. Those
supporting this approach indicate a greater likelihood for productive learning
outcomes and that, similar to andragogy, adults are ultimately made more
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responsible for (and perhaps are even enlightened to) the formation of their own
learning and learning outcomes. Finally, such a facilitative approach can benefit
multicultural contexts and diverse learning environments by formulating a way
for all participants to voice their experiences and expand their sense of self-
direction and influence through the openness and empathy of the facilitator.
While literature directly connecting facilitation theory to nonprofits is uncommon,
facilitative approaches to nonprofits, undoubtedly aligned with facilitation theory,
can be found in case study narratives (Cooperrider & Whitney, 1999) and
examination of leadership practices (Yukl, 1999).
Individual Learning Styles

The general concept underlying learning style theory is that individuals vary
in the ways they learn. These different ways of learning can be called styles, types,
or modes. Kolb (1976) and others popularized the theory of individualized
learning styles in the 1970s. Since then, the concept of learning styles has been
embraced by many teachers and trainers. The most common recommendation
from those who favor the use of learning style theory is to assess each learner’s
style in the process of forming classroom methods and customizing the manner
in which training is led. A more holistic approach, not involving individualized
assessment, is to design training content and processes in a manner that reflects
careful consideration and incorporation of each style.
Although several frameworks have emerged from a generalized theory of
learning styles, Kolb’s (1984) experiential learning cycle has been one of the most
enduring. His four-part construct includes two areas of exchange—perception and
processing. Within these there are both active (experimentation and doing)
and reflective (observing and examining) processing along with abstract (discern-
ment and thinking) and concrete (experience and feeling) perception. In Kolb’s
view, these types of perceptions and processing interacted with more or less
dominant patterns for each individual. These patterns of preferences were
assembled into four categories called learning styles, including:
• Activist Accommodating—A dynamic, intuitive learner oriented toward doing

and feeling; a person with this preference is said to value experiences
intrinsically.
• Reflective/Diverging—An imaginative learner oriented toward feeling and
watching; a person who emphasizes reflection and reviewing as central to
learning.
• Theorist/Assimilating—An analytical-theoretical learner oriented toward
thinking and watching; a person who is comfortable extracting ideas and
making inferences from experiences, including experiences.
• Pragmatist/Converging—A common-sense practical learner oriented toward
thinking and doing; a person who enjoys thorough thinking and engaged
planning.
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By assessing, planning, and developing training and curricular designs that

accommodate each of these learning styles, trainers are said to be better able to
apply the most appropriate learning approaches and trainees to approach their
own learning in a manner that creates the best likelihood for learning and
performance. While there is a large body of evidence supporting that individuals
express preferences for how information is conveyed and internalized, there is
little empirical support for the application of learning style based approaches in
training. As new research taking advantage of brain scans and biotechnological
assessment become more widespread and accessible to researchers, the validity of
the learning styles frameworks will be more clearly determined (Sousa, 2011).
Until then, many teachers and trainees continue to identify with Kolb’s and
others’ learning style inventories and related concepts. At the same time, it is
important to note that Kolb and others have emphasized that the most important
element regarding learning styles is that individuals take time to reflect regarding
their own strengths and weaknesses. While inventories of all kinds, and awareness
of learning styles, have emerged as a common aspect of T&D across sectors, there
is a dearth of literature related to learning styles in nonprofit contexts.
Systems Theory
As described above, systems theory has been incorporated into our understanding
of organizational learning and T&D. Most often credited to biologist von
Bertalanffy (1969), systems theory was also adapted to the social sciences. Systems
theory takes a transdisciplinary approach to examining the abstract, broad
configurations of phenomena. This theory often situates a system as containing
four aspects: (1) the elements, variables, or parts within a system; (2) attributes,
properties, and/or qualities of a system and its objects; (3) the interrelationships
between objects within a system; and (4) the environment in which the system
is situated (von Bertalynffy, 1969). Brought together, these four aspects comprise
a set of elements that impact one another within the context of the surrounding
environment from which a unique set of interactions occurs.
Systems theory takes the notion of “the whole being the sum of its parts” and
adds interaction, context and/or environment to describe the very unique way
the parts interact within the whole. Systems theory transcends disciplines and
applied fields of practice, including chemical and biological sciences (autopoietic
elements; Maturana & Varela, 1975); natural sciences (equifinality, organic
elements and homeostasis; Hannan & Freeman, 1977); information technology
(cybernetic elements; Beer, 1985); and sociology and psychology (cognitive
elements; Clark, 1993). Within organization and human resource development
sciences, Senge (1990), Swanson (2001) and others incorporated the fundamental
systems-interactive paradigm of organizational analysis (inputsàthroughputsà
outputs) to explicate the manner in which learning exchanges occur naturally and
organizational structures and processes (like T&D) can be shaped with the
intention of impacting employee learning and performance.
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The interactive perspective determines whether a system is open (receives and

exchanges information), closed (neither receives nor exchanges information) or
some subset (open-in, receiving information; or open out, sending information).
Generally, social scientists interested in human organizations focus on the
relevance of open systems to things like effective learning, communication,
responsiveness, and even survival. In organizational contexts, systems perspectives
are helpful in pointing out interdependencies, chains of influence, the need for
balance/homeostasis, and the importance of adapting to change. A good example
of T&D situated within a system is the HR Wheel. While we can frame T&D
as an independent activity, we benefit from thinking about the ways it is situated
both within and between the development of the organization and the individual
as well as how it is situated in relation to HRM. T&D efforts are more likely to
have greater impact and to support ongoing organizational change when
contextualized within the HRD, HRM and HRIS interdependencies. Systems
theory has been identified as a relevant theory for nonprofit organizations both
generally (Toepler & Anheier, 2004) and as central to exploring nonprofits as
“learning organizations” (Gill, 2009).
Ideally theoretical perspectives serve to inform T&D practice in a manner
whereby scholars and practitioners exchange perspectives, and work to identify
and adapt theories (and/or theories-in-use). The interchange that can serve T&D
best is the formation of a virtuous exchange between T&D practitioners and
scholars engaged in praxis (or an ongoing cycle of action-and-reflection). While
there is no doubt that T&D-related theory has impacted T&D practice, it is often
difficult to see or surface T&D action rooted in underlying theoretical traditions
or viewpoints. In many cases, theories and models interact to influence practice.
T&D models for the development and implementation of training often interact
with or are the byproducts of T&D related theories.
Developing Training: The ADDIE Approach

One of the most enduring models within workplace learning, the ADDIE
(Assessment, Design, Develop, Implement, and Evaluate) approach to developing
T&D content and deploying T&D programs has been utilized for decades. The
largest, most concentrated, training efforts in the 20th century were facilitated in
national military organizations that were the result of U.S. Training within
Industry (TWI) programs (Dooley, 2001). According to Swanson and Holton
(2001), the first in-depth work on approaches to creating T&D programs began
with the U.S. military’s Instructional System Design models and were further
advanced through TWI and as business and industry determined the importance
of T&D for organization success. These large-scale training efforts fostered the
establishment and evolution of the five-step—Assessment, Design, Develop,
Implement, and Evaluate—ADDIE model. ADDIE frames a systematic process
for the establishment of “training needs, the design and development of training
programs and materials, implementation of the program, and the evaluation of
the effectiveness of training” (Allen, 2006, p. 431).
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Although ADDIE emerged from the abovementioned large-scale training

efforts, the originator of the approach has yet to be identified (Molenda, 2003).
Nonetheless, ADDIE is the most commonly utilized approach to the creation
of T&D programs today. According to Allen (2006), “there are more than 100
different variations of the ADDIE model; however, almost all of them reflect
the generic ‘ADDIE’ process” (p. 430) including, but not limited to, the U.S.
Air Force manual (U.S. Department of the Air Force, 2001). The earliest goals
associated with this process were to maximize educational efficiency and
effectiveness of training by aligning instruction to job descriptions and tasks that
ensured trainees acquired the requisite knowledge and skills to execute a majority
of job-related tasks. Training content emphasized the most critical areas central
to the performance of the job.
When utilized effectively, ADDIE prescribes a set of procedures and decision
points addressing how best to teach the knowledge, skills, and attitudes required
to execute each job related task selected for instruction (Table 13.1). Each step
in the proper application of ADDIE demands ongoing evaluation in relation to
the job requirements assure that design and development decisions are made with
supporting inputs regarding the performance requirements of the job. An
instructional designer or trainer will carefully follow each step.
The ADDIE system is a five stage process. The first step in the ADDIE process
is Analysis during which the learning needs are identified. This stage also identifies
existing knowledge, goals, objectives, and audience needs. During the Analysis
phase of ADDIE, the learning environment, content delivery options, and
timeline for the project are also examined. If training is specific to the job, job
task may also be examined and job performance standards either established or
evaluated. The second phase of the ADDIE process is the Design phase; this
involves a systematic process of clarifying and elaborating learning objectives.
During this stage, detailed outlines, storyboards and/or prototypes are often
developed along with look and feel of content. If tests are part of the training
process they are also developed at this stage. The third stage of the ADDIE is
Development during which content and learning materials are produced. This
includes development of learning activities and instruction delivery and
management plans. The fourth phase of ADDIE is Implementation. During the
Implementation phase plans are put into place and delivered to the trainee group.
The final phase of ADDIE is Evaluation. The Evaluation consists of both
formative and summative evaluations to provide opportunities for feedback from
participants and to revise materials and processes.
The conceptual steps of systematic T&D formation outlined by ADDIE have
endured years of utilization and scrutiny—making it one of the most enduring
T&D frameworks. Revision and adaptation have contributed to the resilience of
ADDIE and to many interrelated variations. Key critiques of ADDIE include its
complexity, resource demands to execute well, and the need to adjust the process
to fit some variants in jobs or tasks. “When properly implemented, ADDIE has a
proven record of creating training that results in learners acquiring specified
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Table 13.1 ADDIE Training Model: Steps, tasks and deliverables
I I SAMPLE TASKS I SAMPLE DELIVERABLES

I I Performance analysis I Learner profile
Education
Training needs assessment Needs/problem statement

Job analysis Training task analysis report
Task analysis Learning space assessment
Performance measure determination Elaboration report of training in
Analysis of related training context of larger curriculum
Determine instructional setting
SAMPLE TASKS SAMPLE DELIVERABLES

Write objectives Goals and objectives
Structure and sequence training Content outline
Education
Select methods Design plan

Plan evaluation overall TestingJFormalevaluation plan
Develop tests/performance measures Possible activitieslactive learning
Determine content sequence approaches outlined
Determine content Structure
Innovate with related examples/
activities
r u
C SAMPLE TASKS SAMPLE DELIVERABLES
Q
Develop training materials Lesson plans
- Develop relevant training activities
Develop approaches to assess learner
Training materials
Training activities
g knowledge Evaluation instruments
0
SAMPLE TASKS SAMPLE DELIVERABLES

Alternative
Conduct training Learner outcomes

Conduct learner based activities Learner perceptions of content
Test ongoing learner knowledge relevance
development Learner overall feedback
Evaluation data
Education
V
( C
-0 SAMPLE TASKS
Collect more evaluation data
SAMPLE DELIVERABLES
Evaluation report
Analyze and report the results Revised curriculum and program
>
YI
Source: Adapted from Toby Egan (2009).

Toby Egan
expertise, [and] a foundation for performance” (Allen, 2006, p. 440). In addition

to the demands models like ADDIE can make on T&D professionals and their
organizations, the size of nonprofit organizations also impacts policies and strategies
for delivering T&D. Without a dedicated T&D staff, nonprofit organizations must
rely on external entities for T&D support. Although limited, a small amount of
literature examines the use of ADDIE in nonprofit contexts (Chang et al., 2013).
How Nonprofit Organization Size Impacts Training and

Development
There are a number of ways in which to frame and differentiate nonprofit
organizations, including financial resources, board involvement, mission, scope,
volunteers, and stakeholders (Urban Institute, 2015). Comparing differently sized
organizations can be used as proxy for other organizational features such as
general resources and capacity (Schmidt & Zimmerman, 1991). Approaches by
different sized nonprofits to training is useful to understanding similarities
and differences and drawing inferences regarding their T&D-related strategies.
Like many nonprofit efforts, T&D is often deployed based on capacity and
resource-based challenges and opportunities. In order to compare different sized
organizations, a database of nonprofits in the central United States containing
2013 IRS Form 990 documents along with additional specific information
regarding nonprofit organization size. Lists from five large metropolitan areas in
the central U.S. nonprofit data were combined and then divided into seven size
categories—Micro (<10 employees); Mini (10–50 employees); Smaller (50–250);
Small (250–500); Medium (500–1000); Large (1000–5000); Extra Large (5000+).
Organizations were selected at random from each of these categories until
33 organizations (N = 231) in each of the seven categories responded. A total of
469 organizations (just under a 50% response rate) were contacted in order to
receive 231 responses.
Nonprofit organizations were asked to report several areas related to their use
of T&D: (1) their training policies; (2) the types of T&D activities in which they
engage; (3) training modalities most commonly used; and (4) the distribution of
types of training used. Table 13.2 outlines responses for organizations in each
of the seven size categories regarding training policy. The data present a clear
relationship between nonprofit size and the level of established training policy
with larger organizations being far more likely to have a written training policy.
Within this sample, smaller organizations are likely to be less structured and
systematic regarding their training policies. Based on this sample, it is logical to
conclude that size matters in terms of T&D-related policy and structure. One
key reason for this is that smaller organizations have fewer people to train and
are unlikely to have the resources to dedicate a full-time person focused on T&D
and related learning programs.
One question that emerges from this difference in underlying training policy
structure is the types of T&D activities these organizations support: internal or
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Table 13.2 Training policy: Level of formality
250– 500– 1000– #

<10 10–50 50–250 500 1000 5000 5000+ Responding
Written Training
Policy (%) 5 15 33 45 63 65 78
Informal Training
Policy (%) 38 44 40 40 26 23 15
None, need-based
approach (%)
37 30 22 11 8 10 6
No system
at all (%) 20 11 5 4 3 2 1
# Responding 33 33 33 33 33 33 33 231
Table 13.3 Training deployment: Internal versus external
<10 10–50 50–250 250–500 500–1000 1000–5000 5000+
External
Courses (%) 36 47 66 72 70 74 78
Internal
Courses (%) 22 41 69 82 85 88 89
External
Consultants/
Advisors (%) 22 25 37 40 42 41 58
Internal Mentors/
Apprenticeships (%) 54 49 34 33 35 39 40
Job Rotation (%) 19 26 31 40 42 44 52
# of Organizations
Responding 33 33 33 33 33 33 33
external (Table 13.3). Overall, larger organizations were more likely to offer
T&D developed and delivered by T&D-related staff internal to the organization
and externally delivered courses developed and delivered by T&D-related staff
external to the organization. Additionally, larger nonprofits were more likely to
contract with T&D-related consultants and advisors. The smallest organizations
in this study were most likely to offer internal mentors—with half the organiza-
tions with between 5 and 50 employees supporting internal mentoring and
apprenticeships. Given that smaller organizations are likely to depend on many
employees serving generalist roles, it was perhaps not surprising that larger organi-
zations provided more job rotation as part of their employee T&D than smaller
organizations.
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Table 13.4 Training delivery: In-person versus online
50– 250– 500– 1000–

<10 10–50 250 500 1000 5000 5000+
In-Person Training
Delivery (%) 45 48 51 55 53 54 48
Online Training
Delivery (%) 40 32 31 24 23 19 20
Combined Training (both
Online & In-person
Delivery) (%) 15 20 18 21 24 27 32
# of Organizations
Responding 33 33 33 33 33 33 33
Persistent advances in online T&D have led to expanded employee participa-

tion in all sectors. When it comes to in-person T&D (delivered face-to-face by a
T&D professional), there appears to be few differences across organizations
of different sizes. What does appear to be different is that employees in smaller
organizations do more ‘stand-alone’ online training, while employees in larger
organizations are offered more T&D programs that combine online and in-person
delivery (Table 13.4). It is, again, likely that the fewer T&D resources available
to smaller organizations make offering online training, without additional support,
a less resource intensive option.
For the purposes of understanding the types of training offered, organizations
were divided into two groups (Smaller = 5–500 employees; Larger = 500 or
more employees) to determine the training topics they emphasize (Table 13.5).
In general, smaller and larger organizations were similar in the amount of T&D
offered across various types. Smaller organizations, focused slightly more on job
specific and basic skills training while larger organizations focused more on
compliance, employee orientation, and customer service.
Given the broad array of nonprofit organizations and their sizes, approaches
to T&D are clearly influenced by the number of employees. The smallest of
nonprofits were more likely to rely on individualized and apprenticeship/
mentoring approaches as the best option, while the largest nonprofits were more
likely to have a combination of internal T&D staff dedicated and contracted
external T&D support. Without far greater numbers of reports from nonprofit
organizations, we cannot know if the above trends are generalizable; however,
these study results are largely consistent with suggestions from the limited
available literature on this topic. Organizational size considerations are essential
in the development of the best aligned T&D strategies.
By considering T&D in the context of organizational size, we gain some
insights regarding important similarities and differences across nonprofits.
Although too small a sample to generalize, the data collected across these 231
244
Table 13.5 Training topics emphasized
Smaller Larger
5–500 employees (%) 500 or more employees (%)
Job Specific 16 13
Managerial/Supervisory 10 12
Work Processes 12 10
IT & Technology 12 11
Other (including grant writing) 11 9
Compliance 5 9
Basic Skills 11 7
Communication 6 8
Fundraising/Sales 6 7
Employee Orientation 5 7
Customer Service 4 6
Training Volunteers 3 2
Executive Leadership 2 5
Executive Board Training 1 <1
nonprofit organizations suggest, when it comes to T&D, organizational size

matters in terms of training policy, deployment, modes of delivery, and training
topic. T&D is a resource-intensive, and therefore a resource dependent, activity.
Smaller organizations, most often, require managers and employees to be gener-
alists in a number of areas, including T&D, while larger nonprofits often support
T&D specialists with the ability to set T&D policy and deliver ongoing employee
and managerial training more consistently.
Conclusion
T&D is a foundational need for nonprofit organizations as the development of
the nonprofit sector is inextricably tied to the effectiveness of its managers and
employees. The systematic examination of nonprofit T&D is at a very early stage.
While we are just beginning to map the history and future of nonprofit T&D, it
has been strongly influenced by past T&D-related events and current T&D trends
across sectors. T&D theory, practice and research are beginning to emerge more
strongly in the nonprofit context. Across sectors many of the underlying T&D
assumptions and practices share more similarities than differences. At the same
time, the nonprofit sector has distinct characteristics requiring sector-specific
T&D approaches. In addition, the framing of T&D within a broader learning
system and the varieties of nonprofit organizations in terms of size, plays an
important role in determining the T&D strategy to be used. The relatively early
history of the nonprofit sector, and even more recent focus on related organizational
learning and T&D, create opportunities for further cross-sector integration of
245
Toby Egan
related T&D applications. There is ample opportunity for further consideration

and application of nonprofit specific T&D practices and content in the contexts
of HRM and HRD.
1 To gain a better understanding of your learning style go online to www.
personal.psu.edu/bxb11/LSI/LSI.htm
2 What does your learning style suggest about the types of training/learning
methods you should use? How is your style different from your classmates?
3 What are some of the challenges to training and employee development in
the nonprofit sector? What are some ways organizations can deal with those
challenges?
4 What was the last training you attended as part of work? In what ways was
it effective? In what ways could it have been improved?
5 McLagan's model (Figure 13.1) suggests HR has many interrelated parts.
What theory(ies) support the idea that T&D is interdependent? What are
some examples where T&D can be made most effective through integration
with other parts of Hr and/or the organization?
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14
Making Nonprofits
More Effective
Performance Management and
Performance Appraisals
Introduction
Human resources are regarded as the most critical asset contributing to the
success and mission achievement of nonprofit organizations. Nonprofit organi-
zations are increasingly confronted with pressures to become more competitive,
thus, knowledge concerning how to effectively and efficiently manage human
resources is vital. The implementation of performance management systems is
regarded as a valuable way to demonstrate the continuous performance of
employees to the organizations’ stakeholders (Akingbola, 2015). Performance
management also helps employees to identify their roles and responsibilities
in mission achievement (Pynes, 2013). As such, performance management in
nonprofit organizations is of both individual and organizational importance.
In this chapter, we follow Akingbola’s (2015) definition of performance manage-
ment as encompassing “all the activities, systems and processes that are deployed
to enable and support employees to contribute the maximum of their knowledge,
skills and abilities to the organization” (p. 164). Performance management is
characterized as a continuous process that identifies, measures, and develops
individual and team performance aiming to align performance with the strategic
objectives of the organization (Aguinis, 2009a). Performance appraisals are regarded
as a key component of any performance management system (Akingbola, 2015;
Selden & Sowa, 2011).
Performance management and performance appraisals have long been regarded
as key for effective strategic human resource management (SHRM) in the for-
profit sector (Devanna, Fombrun, & Tichy, 1984) and have been widely researched
in for-profit contexts (Cawley, Keeping, & Levy, 1998; Fletcher & Perry, 2002;
Levy & Williams, 2004). As part of SHRM, performance management attempts
250
Performance Management and Appraisals
to increase the fit between human resource (HR) practices to enhance individual
performance with the objective of maximizing organizational outcomes (Den
Hartog, Boselie, & Paauwe, 2004). Well-designed performance management
systems have been found to positively affect employees, managers, and organiza-
tions (Aguinis, 2009a; Thomas & Bretz Jr, 1994). For instance, performance
management systems help employees to comprehend how their behaviors affect
the results required of their work, boost their self-esteem, and identify their
strengths and mitigate their weaknesses. Performance management systems enable
managers to learn about their subordinates, to develop their subordinates’ perfor-
mance awareness, and to better differentiate between good and poor performers.
Through the introduction of performance management systems, organizations
emphasize greater goal clarity, enable organizational change, and increase employee
commitment and engagement (Aguinis, 2009a; Thomas & Bretz Jr, 1994).
Performance appraisals, now a key element of performance management, have,
over time, evolved from being an annually reoccurring administrative require-
ment where individuals’ strengths and weaknesses are discussed (Aguinis, Joo, &
Gottfredson, 2011) and their past performance is documented (Lee, 2006) to a
more strategic function within performance management (Den Hartog et al.,
2004). Consequently, performance appraisals are now conceptualized as a process
“including establishment of performance standards, appraisal related behaviors of
raters within the performance appraisal period, determination of performance
rating, and communication of the rating to the ratee” (Erdogan, 2003, p. 556).
As such, performance appraisals today fulfill a broader, more holistic, function
that is tightly integrated into the organizational strategy in form of performance
management systems.
The mere existence of performance management systems might not be
sufficient to increase organizational performance. To ensure a positive effect of
performance management systems on organizational performance, the rating
systems used should be reliable and valid to effectively discriminate between
certain levels of performance (Twomey & Feuerbach Twomey, 1992). Moreover,
scholars recommend a communicative process between managers and their
employees (Den Hartog et al., 2004). It is important that the communication
with the employee focuses on the organization’s strategic objectives and the
employee’s contributions to achieve these while also being fair (Erdogan, 2003).
Having bilateral processes in place facilitates the evaluation of employees, but
also gives them a voice in the process (Erdogan, 2003; Roberts, 2003). Participative
performance management systems that—by design—offer opportunities for
regular feedback and ensure employee ownership in the evaluation of their
performance, are more effective in attaining improved organizational performance
(Roberts, 2003).
When implementing and evaluating performance management systems,
scholars caution to pay attention to differences of employees’ experience with
performance management practices, how these practices are enacted by managers,
and the initial intention when instituted by organizational leadership (Nishii &
251
Wright, 2008). For instance, Farndale and Kelliher (2013) find that employees
are willing to reciprocate benefits through increased organizational commitment
if they perceive performance appraisals to be enacted fairly by their managers.
As such, organizational performance is only likely to increase when employees’
perceptions and evaluation of performance management practices are acknow-
ledged (Nishii, Lepak, & Schneider, 2008). Similarly, in another study employees’
satisfaction with performance appraisals was found to contribute to organiza-
tional commitment and to reduce employees’ intentions to leave the organization
(Kuvaas, 2008).
Similar to the for-profit context, a variety of functions of performance manage-
ment systems in nonprofit organizations have been identified, such as the trans-
lation of organizational goals to individual activities, evaluation of employee
engagement, legal mitigation, job design, and career planning (Akingbola, 2015)
as well as strategic decision-making on employee promotion, development and
training, compensation, and retention or separation (Pynes, 2013). Despite the
known merits of performance management systems, including appraisals (Aguinis,
2009b; Den Hartog et al., 2004), the extent of which these systems are imple-
mented in nonprofit organizations varies widely (Pynes, 2013), both domestically
(Selden & Sowa, 2011) and internationally (Walk, Schinnenburg, & Handy,
2014).
Given the specific set up of nonprofit organizations, tools for performance
management from the for-profit sector might not be easily applicable to nonprofit
organizations (Speckbacher, 2003). For instance, employees in nonprofit organiz-
ations tend to be highly intrinsically motivated and identify with the mission of
the organization. As such, their preference structure differs from those of for-profit
employees, who tend to be characterized as extrinsically motivated. From an
organizational perspective, nonprofit organizations cannot easily reward employee
performance with financial incentives such as salary raises or bonus payments,
given their organizational characteristics (e.g., the non-distribution constraint)
(Devaro & Brookshire, 2007; Speckbacher, 2003). Therefore, our objective is to
summarize context-specific research on performance management and perfor-
mance appraisals in nonprofit organizations and, based on this summary, to propose
a comprehensive model of performance management and performance appraisals
for the nonprofit context.
Methods
We searched the academic literature to identify studies for our review. In
particular, we searched Google Scholar and EBSCOhost databases using terms
such as performance & management, performance & appraisals, performance
& evaluation, employee & evaluation, employee & performance, employee &
appraisal followed by the classifier nonprofit organizations/nonprofits. We also
manually searched four journals (Nonprofit Management & Leadership, Voluntas:
International Journal of Voluntary and Nonprofit Organizations, Nonprofit Voluntary
252
Sector Quarterly, and Human Service Organizations: Management, Leadership &

Governance [formerly Administration in Social Work]) that we knew had published
research on performance management and appraisals. Our search of the literature
yielded 108 articles. This survey of the literature does not include unpublished
papers (e.g., dissertations and conference papers) or books, but focuses on articles
published in journals and, thus, is not exhaustive.
As nonprofit organizations are pressured to become more efficient and effective,
our search resulted in a compilation of articles on a variety of performance-related
topics such as organizational performance, performance measurement, performance
accountability, financial performance, board performance, network perform-
ance and pay for performance. Given our focus on organizational procedures that
enable employee performance (Akingbola, 2015), we discarded articles that did
not specifically focus on performance appraisals and performance management.
The final number of articles that form the basis for this review is 22. An overview
of all included papers can be found in Table 14.1.
As we were interested in a comprehensive overview of the past research on
performance management and performance appraisals in the nonprofit context,
we engaged in an inductive coding process whereby codes emerged as we went
through the articles. We modified categories when new articles were added. We
decided on our final coding scheme after having coded six articles.
Findings
In a first step, we identified four distinct clusters of studies when sorting the
review articles. The first set focuses on performance appraisals as a stand-alone
technique. Notably, three of four studies falling into this category were also the
oldest studies in our sample (Millar, 1990; Pecora & Hunter, 1988; Potter &
Smith, 2009; Wiehe, 1981). The second set of articles looked at performance
management as a strategic tool to assess employee performance (Becker, Antuar,
& Everett, 2011; Curran, 2002; Davenport & Gardiner, 2007; Helmig, Michalski,
& Lauper, 2008; Selden & Sowa, 2011). These authors conceptualize performance
appraisals as part of a broader performance management system. In the third set
of articles, performance appraisals are integrated into human resource manage-
ment strategies such as strategic human resource management or high perform-
ance work systems (Guo, Brown, Ashcraft, Yoshioka, & Dong, 2011; Ridder,
McCandless Baluch, & Piening, 2012; Ridder, Piening, & McCandless Baluch,
2012; Robineau, Ohana, & Swaton, 2015; Rodwell & Teo, 2004, 2008; Selden
& Sowa, 2015; Walk et al., 2014). In the final fourth set, neither performance
appraisals nor performance management is the main focus of the respective studies,
but aspects pertaining to either are discussed in relationship to other organizational
constructs (Beem, 2001; Deckop & Cirka, 2000; Ebrahim, 2005; Packard, 2010;
Rivas, 1984).
A clear trend emerges when looking at the first three clusters of articles. As
three of the oldest articles in this review are forming the first category followed
253
Table 14.1 Article review sample
Authors Year Journal name Category Methods
Wiehe 1980 Administration in Social Work Technique Quantitative

Pecora, Hunter 1988 Administration in Social Work Technique Conceptual
Millar 1990 Administration in Social Work Technique Conceptual
Potter, Smith 2009 International Journal Management in Technique Qualitative
Education
Curran 2002 Journal for Nonprofit Management Strategic tool Conceptual
Davenport, Gardiner 2007 Total Quality Management Strategic tool Qualitative
Helmig, Michalski, Lauper 2008 German Journal of Research in Human Resource Strategic tool Mixed Methods
Management
Becker, Antuar, Everett 2011 Nonprofit Management and Leadership Strategic tool Mixed Methods
Selden, Sowa 2011 Public Personnel Management Strategic tool Mixed Methods
Rodwell, Teo 2004 Public Management Review Human resource Quantitative
strategy
Rodwell, Teo 2008 International Journal of Human Resource Human resource Quantitative
Management strategy
Authors Year Journal name Category Methods
Guo, Brown, Ashcraft, 2011 Review of Public Personnel Administration Human resource Quantitative
Yoshioka, Dong strategy
Ridder, McCandless Baluch, 2012 Voluntas Human resource Conceptual
Piening strategy
Ridder, Piening, McCandless 2012 Human Resource Management Review Human resource Qualitative
Baluch strategy
Walk, Schinnenburg, Handy 2014 Voluntas Human resource Qualitative
strategy
Selden, Sowa 2015 Human Service Organizations: Management, Human resource Mixed Methods
Leadership & Governance strategy
Robineau, Ohana, Swaton 2015 The Journal of Applied Business Research Human resource Qualitative
strategy
Rivas 1984 Administration in Social Work Miscellaneous Conceptual
Deckop, Cirka 2000 Nonprofit and Voluntary Sector Quarterly Miscellaneous Quantitative
Beem 2001 International Journal of Nonprofit Miscellaneous Quantitative
and Voluntary Sector Marketing
Ebrahim 2005 Nonprofit and Voluntary Sector Quarterly Miscellaneous Conceptual
Packard 2010 Nonprofit and Voluntary Sector Quarterly Miscellaneous Quantitative
by newer studies in the next two categories, we can assume that, over time,
performance appraisals were integrated into more holistic systems of either
performance management or human resource management (Potter and Smith
(2009) is an exception). This trend might be related to the increase of scholarly
attention to effective practices in nonprofit organizations and the importance of
bundling individual practices (Ridder, Piening, et al., 2012), conceptualizing
performance appraisals as one tool among a larger set of practices that—when
well aligned—contribute to the strategic goals of the organization. Corresponding
to this trend, we noticed the conceptualization of performance appraisals was
evolving overtime. Whereas earlier works defined “employee performance as
an annual event” (Wiehe, 1981, p. 1), recent studies applied a more comprehen-
sive view defining performance appraisals as “a formal and systematic process
for reviewing performance and providing oral and written feedback to staff
about performance at least annually” (Selden & Sowa, 2011, p. 253). These
findings are well-aligned with trends in the for-profit context (Den Hartog
et al., 2004).
As a second step, we engaged in an inductive analysis of the 22 articles. We
particularly looked for patterns across clusters and identified six distinct categories:
Purpose of performance appraisals, design and implementation of performance
management and performance appraisals, integration into the organizational
context, personal characteristics and manager/employee interactions, individual
perceptions, and individual and organizational outcomes. Based on these
categories, we developed a model of performance management in nonprofit
organizations. As shown in Figure 14.1, some of these categories operate at the
individual level, some at the organizational level, and one (outcomes) on both
levels. We discuss the individual parts of the model and the relationship between
the six categories below.
Purpose of Performance Appraisals

Starting on the upper right-hand side of the model, we identified that a variety
of studies focused on the purposes of performance appraisals as a management
tool (Curran, 2002). Oftentimes, performance appraisals are implemented because
they serve individual as well as organizational level purposes. Individual level
purposes centered around increasing and sustaining employee motivation
(Davenport & Gardiner, 2007; Ridder, Piening, et al., 2012), enabling employees
to reflect on their work by making work expectations explicit (Millar, 1990) and
through formal feedback (Ebrahim, 2005; Selden & Sowa, 2011), and increasing
employee learning through development opportunities (Becker et al., 2011;
Selden & Sowa, 2011). Moreover, appraisals afford employees the opportunity
to influence their own job design (Potter & Smith, 2009; Walk et al., 2014)
and provide them with the possibility to comment on performance results
(Beem, 2001). Looking from an organizational standpoint, performance appraisals
are also used to identify employee’s training needs (Ridder, Piening, et al., 2012;
256
Figure 14.1 Performance management in nonprofit organizations
Robineau, Ohana, & Swaton, 2015), to improve employee job satisfaction

(Ridder, Piening, et al., 2012), to reward employees for their performance
(Deckop & Cirka, 2000; Millar, 1990; Potter & Smith, 2009; Selden & Sowa,
2011; Wiehe, 1981), to determine the continuation or discontinuation of
employment (Deckop & Cirka, 2000; Millar, 1990; Rivas, 1984; Wiehe, 1981),
and to function as a tool for quality control (Potter & Smith, 2009).
Some studies discussed the purposes of performance management and
performance appraisals in relationship to strategic planning and organization
development. For instance, performance appraisals were targeted to facilitate
organizational learning (Ebrahim, 2005), to enhance organizational performance
and to create a competitive advantage (Potter & Smith, 2009). Similarly,
performance management was implemented to cope with rapid growth and to
ensure greater accountability (Becker et al., 2011).
While the reasons for implementing performance management systems were
diverse, the overall aim was to facilitate organizational success, while being
cognizant about the individual employee needs, the potential positive outcomes
that performance management has for them and, ultimately, for the organization.
Depending on the purpose, organizations might integrate performance
management systems differently into the organizational strategy (see below).
257
Design of Performance Management Systems

and Technical Implementation
Some of the studies discussed the specific design of performance management and
performance appraisals. Since performance management aims to support employees
in their work and to help them improve their performance, performance
management systems should be designed around employee motivations as well
as factors that potentially demotivate them (Davenport & Gardiner, 2007).
Simultaneously, it is important to ensure alignment of organizational intent,
managerial enactment and employee perceptions (Selden & Sowa, 2011). The
design of effective systems, however, is difficult as human judgments and bias are
likely to produce results that do not accurately reflect reality and since those who
are evaluating individual performance (most often managers) tend to have different
motivations as those who they evaluate (Deckop & Cirka, 2000).
A handful of studies addressed the specific procedures and instruments used as
part of the performance appraisal process pointing to the importance of having
reliable and valid instruments in place that are able to differentiate performance
levels properly (Millar, 1990; Pecora & Hunter, 1988; Wiehe, 1981). Some of
the older publications discussed the advantages and disadvantages of (behavioral
vs. trait-based) rating scales, checklists, and result-oriented approaches that provide
the reader with a toolkit and “how to” advice (Millar, 1990; Pecora & Hunter,
1988). Newer studies continue to mention rating scales as effective tools and the
importance of having reliable and valid instruments in place (Becker et al., 2011;
Potter & Smith, 2009), but the emphasis lies on the importance of collecting data
from co-workers for a more holistic evaluation (Potter & Smith, 2009). Aligned
with the trend to a more holistic and process-oriented performance management
approach, it seems that the nonprofit field has moved from a rather technical stage
to an integrated phase that emphasizes the importance of alignment with and
integration into the organizational strategy. Overall, it is expected that the design
and implementation of performance management systems impact how these are
integrated into the organizational context (see Figure 14.1).
Personal Characteristics and Manager/Employee Interactions

Switching to the left-hand side of the model, an area that has received considerable
attention among the reviewed papers are the individual characteristics of managers
and employees as well as the interactions between managers and employees that
serve as a precondition for successful performance management. Employee
intrinsic motivation is the most salient personal characteristic and related to
fairness perceptions of (Deckop & Cirka, 2000) and positive attitudes toward
(Helmig et al., 2008) performance appraisals. To increase the performance
appraisal and performance management experience, managers’ skills have been
identified as another important predictor (Davenport & Gardiner, 2007).
Particularly, their communication skills and goal-setting strategies ensure proper
258
implementation of performance management systems (Curran, 2002; Davenport

& Gardiner, 2007; Potter & Smith, 2009). As both managers and employees
engage in the performance management process, a considerable amount of studies
have looked at the relationship and interaction between these two groups.
Employees indicate a more positive evaluation of performance appraisals if they
have the opportunity to evaluate their leaders (Helmig et al., 2008), if the
communication between managers and employees is open (Becker et al., 2011;
Curran, 2002; Pecora & Hunter, 1988), and if feedback occurs in regular intervals
(Becker et al., 2011; Curran, 2002).
The employee-manager relationship seems to be key when looking at the
quality of performance appraisals, whereby this relationship is not unidirectional
but works in both directions. Ultimately, it is expected that personal characteristics
as well as manager-employee interactions impact the individual perceptions of
performance management and influence how these systems are integrated into
the organizational context.
Individual Perceptions Toward Performance Appraisals/Performance

Management
Mirroring previous research in the for-profit context (Farndale & Kelliher, 2013;
Kuvaas, 2008; Nishii et al., 2008; Nishii & Wright, 2008), employee and manager
perceptions of the performance appraisal process have received some attention
in the nonprofit context as well. Positive attitudes toward performance appraisals
are generally related to individual and organizational level antecedents as well
as outcomes (Helmig et al., 2008). These relationships are particularly salient
if employees perceive possibilities for personal growth (Helmig et al., 2008), if
they are satisfied with how they were treated during performance appraisals
(Becker et al., 2011; Curran, 2002), and if this treatment is perceived to be fair
(Deckop & Cirka, 2000; Helmig et al., 2008). Otherwise feelings of discomfort,
anxiety, dislike, and hate are likely to surface among managers and employees
alike (Becker et al., 2011; Curran, 2002; Millar, 1990; Wiehe, 1981) potentially
leading to active resistance to the performance appraisal process (Rivas, 1984).
Whereas these feelings are common among both managers and employees,
Helmig et al. (2008) find that managers tend to be more positive toward perfor-
mance appraisal systems as compared to their employees. Managers in other
studies, however, tend to be concerned about the additional time commitment
that a thorough performance appraisal process constitutes (Becker et al., 2011;
Deckop & Cirka, 2000). Corresponding to Nishii and Wright (2008), nonprofit
scholars observed differences between employee and managerial perceptions
of performance management tools (Beem, 2001; Selden & Sowa, 2011). Following
Ridder, McCandless Baluch, et al. (2012), it is likely that employee perceptions
will subsequently influence organizational level outcomes, and, therefore, indicate
the importance of paying attention to employee and manager perceptions of
performance management systems.
259
Integration into Organizational Context

The role of performance appraisals and/or performance management in relation
to the wider organizational context has also attracted some recent research
attention and can be divided into operational and strategic aspects. Operational
aspects that are essential on a day-to-day basis include transparent communication
of the performance appraisal goals and the process of performance assessment
(Helmig et al., 2008), possibilities for employee participation in the process
(Davenport & Gardiner, 2007), and the buy-in of senior management and
immediate managers into the goals and processes (Becker et al., 2011). However,
scholars caution the feasibility of these aspects as there might be other, more
immediate, issues that require managerial attention besides performance manage-
ment, especially if it is not tightly integrated into the strategy of the organization
(Selden & Sowa, 2011).
Strategic aspects have a long-term focus and aim toward a consistent integration
of performance management into the organizational strategy. An alignment to
the organizational mission and culture is especially important; scholars particularly
emphasize the driving force of the mission, which oftentimes serves as a guide
for the development of performance management practices (Becker et al., 2011;
Curran, 2002). Some studies refer to the specific integration into strategic human
resource management (Guo et al., 2011; Ridder, McCandless Baluch, et al.,
2012; Rodwell & Teo, 2004, 2008) or high performance work systems (Robineau
et al., 2015; Selden & Sowa, 2015), while highlighting the fit between the
HR function and the organizational strategy. For instance, Guo and colleagues
(2011) propose a strategic HRM Index consisting of 13 core HR practices.
Performance management was reflected in two of these practices through the
evaluation of employees through multiple performance assessment strategies and
the provision of opportunities for systematic employee feedback. When surveying
229 nonprofit organizations, the authors, however, find that performance manage-
ment related practices were less likely to be implemented in practice than others
(i.e., using the organizational mission to attract employees). Studies looking at
performance management as a stand-alone practice emphasize a similar fit to the
organizational strategy (e.g., through strategic planning) to achieve competitive
advantage (Becker et al., 2011; Curran, 2002; Davenport & Gardiner, 2007). The
research evidence in the nonprofit field to date points to the importance of an
integration of performance management into the organizational strategy in order
to provide it with legitimacy and to emphasize the long-term focus needed to
achieve sustained organizational performance.
As indicated earlier, performance appraisals fulfill a variety of purposes. These
purposes might vary in their implementation depending on the underlying HR
architecture in nonprofit organizations. HR architecture is defined as a coherent
human resource management system consisting of internally consistent pract-
ices (Becker & Huselid, 2006). Four prevalent types have been identified in
the nonprofit context: administrative, motivational, strategic, and values-based
(Ridder & McCandless, 2010). Nonprofits applying an administrative HR approach
260
tend not to implement performance appraisals (Ridder, McCandless Baluch, et al.,

2012); those nonprofits with a motivational approach to HR use performance
appraisals as a tool to identify employee needs and to increase employee motivation
(Ridder, Piening, et al., 2012), organizations with a more strategic orientation
towards HR tend to conceptualize performance appraisals as strategic investment
(Ridder, Piening, et al., 2012), and organizations with a values-based approach
align performance appraisals with other HR practices to form specific bundles that
will help to achieve the organizational mission.
Given this evidence, the specific HR architecture influences the value given
to performance appraisals and, thus, impacts individual and organizational level
outcomes (as discussed below). Ultimately, then, the particular use of performance
appraisals along with other HR practices leads to differences in both individual
and organizational performance (Ridder, Piening, et al., 2012). Therefore, it is
important for organizations to be reflective about the individual HR practices
offered as part of their HR architecture and the influence on subsequent outcomes.
Outcomes
A fair number of studies investigated the relationship between performance
management/performance appraisals and subsequent outcomes. Besides serving
as an antecedent, employee intrinsic motivation has also been identified as an
individual-level outcome (Davenport & Gardiner, 2007; Millar, 1990; Potter &
Smith, 2009). In particular, motivation is likely to increase if employees hold
positive attitudes toward performance appraisals (Helmig et al., 2008) and if the
process is perceived to be fair (Deckop & Cirka, 2000). Employee retention and
voluntary turnover form a second category that received considerable research
attention. Findings, however, are inconclusive. Selden and Sowa (2011) find a
significant relationship between employees’ perceptions of the performance
management process and intentions to stay as well as levels of voluntary turnover
in the organization. Similarly, Becker et al. (2011) identify increased levels of
turnover for dissatisfied employees after a new performance management system
was initially implemented. Contrary, Selden and Sowa (2015) find no relationship
between performance appraisals and voluntary turnover, but caution the
importance of the quality of implementation and the influential role of employee
perceptions during the appraisal process. Scholars have also focused on increases
in individual and organizational performance (Becker et al., 2011; Rodwell &
Teo, 2004, 2008). For instance, data collected from nonprofit executives indicate
a positive relationship between perceptions of performance appraisals and
organizational performance (Rodwell & Teo, 2004, 2008). Scholars also identify
links to other outcomes such as organizational commitment and quality of
collaboration with colleagues (Helmig et al., 2008), job satisfaction, enjoyment
of work, job commitment, and intentions to stay (Selden & Sowa, 2011), as well
as less uncertainty and more collaborative problem solving (Potter & Smith,
2009).
261
Conclusion
Our aim in completing this review was to contribute to a better understanding
of the current research on performance management and performance appraisals
in the nonprofit context. We searched the literature and identified 22 articles
published in academic journals over a time span of 35 years (1980–2015). First,
we noticed that the articles fell into four distinct sets: (1) those focusing on
performance appraisals as a stand-alone technique; (2) those looking at performance
management as strategic tool to assess employee performance; (3) those integrating
performance appraisals into human resource management strategies; and (4) those
whose main focus was not on performance appraisals/performance management
but discussed aspects pertaining to either in relationship to other organizational
constructs. In a subsequent step, we inductively reviewed all articles. By going
back and forth between the articles, we identified six categories: Purpose of
performance appraisals, design and implementation of performance management
and performance appraisals, personal characteristics and manager/employee
interactions, integration into the organizational context, individual perceptions,
and individual and organizational outcomes. Based on these categories, we built
a model that illustrates the relationship between these categories (see Figure 14.1)
as emerging from the articles and provides an overview of the current research
on performance management/performance appraisals in the nonprofit context.
We particularly want to highlight two findings. First, over time, performance
appraisals have become more integrated into performance management or human
resource management strategies. Whereas some earlier works focused on practical
aspects of performance appraisals (“how to do it?”), most of the more contemporary
research focuses on performance appraisals in relation to distinct sets of antecedents
and outcomes (“what is the significance?”). Second, this review shows that the
individual actors (employees, managers) and their interactions as well as the
organizational context are important determinants of individual perceptions of
performance appraisals and performance management systems. Operating on
multiple levels, it seems, requires multilevel approaches to the study of performance
management and performance appraisals.
A few other observations are worthy of elaboration. Given the number of
research articles that we discarded during the analysis phase (n = 86), we can say
that performance management—at least how we conceptualize it in this chapter—
is not a widely researched field in the nonprofit context. When discarding
articles that did not fit our definition of performance management, we realized
that there is no uniform way in which the term performance management is used
in the nonprofit research literature yet. For instance, performance management
was used in relationship to organizational performance, effectiveness and account-
ability; concepts that mainly operate on the organizational level. Here, scholars
defined performance management as “a specification of the processes that gener-
ate firm performance and hence a specification of how management decisions
can control firm performance” (Speckbacher, 2003, p. 268). We also noticed the
262
language that scholars used in the articles originates in the for-profit context
(e.g., inputs, accountability, effectiveness, efficiency, strategy). As such, research
in performance management follows the overall trend of mirroring policies and
procedures of for-profit companies (Maier, Meyer, & Steinbereithner, 2014). The
trend of becoming more businesslike might be eventually harmful to nonprofits’
ability to efficiently and effectively provide services while still maintaining a bond
to civil society (Eikenberry & Kluver, 2004).
As indicated earlier, the relationship between employees and their managers
seems to influence the perceptions of performance appraisals and the evaluations
thereof. But the relationship between managers and employees is by no means
unidirectional, since employees value being able to evaluate their manager
(Helmig et al., 2008). Therefore it is striking that the nonprofit literature to date
is relatively silent when describing the characteristics of the two-way relationship
between leaders and followers, or the quality of leader-member exchange (LMX),
a construct that is widely researched in the for-profit context (Graen & Uhl-Bien,
1995). Similarly, with the exception of Deckop and Cirka (2000), perceptions
of justice and trust between managers and employees have not been the center
of attention in the nonprofit research on performance appraisals, but have been
widely discussed in the for-profit context (Erdogan, 2003). These would be
important areas for future research (especially focussing on the leader-follower
dyad) that nonprofit scholars might want to consider.
A variety of research methodologies were applied across the 22 papers
(see Table 14.1). Six papers were conceptual in nature, 5 were qualitative, 7 used
quantitative methodologies and 4 studies were based on mixed methods. We
noticed several shortcomings across methodological categories. For instance,
some of the qualitative papers do not adequately report data collection procedures
and data analysis strategies. The quantitative papers tend to base their findings on
small sample sizes (range: 22–228), achieve varying, mostly low, response rates
(range: 18%–42%), use scales with questionable psychometric properties (e.g.,
low reliability) and most of the research uses only one source of data for
information gathering. Moreover, it was surprising to notice that only one study
was based on longitudinal research (Deckop & Cirka, 2000), even though most
of the scholars claim causal effects between performance appraisals and/or
performance management and individual and/or organizational outcomes.
Furthermore, we were intrigued by the fact that there currently is no multilevel
research on performance management in nonprofits, despite the importance
of individual perceptions. Given the lack of methodological rigor, the lack of
longitudinal research and multilevel approaches, we are currently not able to fully
disentangle the causal mechanisms between antecedents, performance appraisals/
performance management, and outcomes. Since performance management is
mission critical and the “most important system link between employee perform-
ance and organizational performance” (Akingbola, 2015, p. 189), we echo others
(Selden & Sowa, 2011) and conclude that there still is a lack of comprehensive
research in the context of nonprofit organizations. Based on our evaluation, we
263
especially encourage future research: (1) to replicate previous findings while

ensuring the application of statistical and methodological rigor; (2) to utilize
longitudinal research approaches; and (3) to specifically consider multilevel
dynamics between employees and their manager within and across nonprofit
organizations.
Future research could also investigate the differences in HR architecture in
relationship to the implementation of performance appraisals, especially related
to a potential variation within nonprofit subsectors and organizational size.
Moreover, as we were not able to identify studies that looked at the prevalence
of performance appraisal or performance management systems as currently used
in the nonprofit sector, future studies might investigate the extent to which these
practices are used and how they are implemented to help further clarify the
importance in contemporary nonprofit practice.
Recent performance management scholarship in the for-profit context
addressed the importance and feasibility of narrowing the gap between academic
research and practice (Aguinis, 2009b). Aguinis (2009b) particularly argues that
performance management systems can only be used effectively and efficiently by
practitioners, if performance management is viewed as more than just an annual
administrative necessity, but regarded in alignment with other HR strategies and
the overall organizational goal. Similar to the for-profit context, performance
management systems are rarely used in the nonprofit sector (Selden & Sowa, 2011;
Walk et al., 2014) or fall behind in importance when comparing to other HR
practices (Guo et al., 2011). Overall, we seem to know a lot about performance
management/performance appraisal techniques from the general literature, but do
not have a sufficient evidence base on how effective these are in the nonprofit
context. An increased dialogue between nonprofit researchers and practitioners
might help to find feasible approaches to implement and subsequently evaluate
performance management systems.
Most nonprofit organizations are highly reliant on their workforce as they
constitute the main potential for competitive advantage (Akingbola, 2006; Frumkin
& Andre-Clark, 2000), scholars and practitioners might therefore put more
attention to performance management as it relates to providing employees with a
supportive structure that allows them to contribute their full potential to the
organization. However, even though we acknowledge the benefits of performance
management, we would like to caution that over-engineering of job roles and
responsibilities might limit individuals’ autonomy in the workplace (Schwartz,
2015), thus, potentially inhibiting proactive employee behavior (Wrzesniewski
& Dutton, 2001).
1 Have you had experiences with performance appraisals? How would you
evaluate these?
2 Given that nonprofit employees are predominantly motivated intrinsically,
what would be good incentives in your opinion?
264
3 How can nonprofit organizations ensure that employees perceive performance

management systems in general and performance appraisals in particular
as beneficial and valuable tools and not just as another requirement dictated
by HR?
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Part III
Emergent Challenges in
Nonprofit Human Resource
Management
15
Interchangeability of Labor
Managing a Mixed Paid and
Volunteer Workforce
Allison R. Russell, Laurie Mook, and Femida Handy
Introduction
A strong tradition of volunteerism is one of the defining characteristics of the
nonprofit sector. Nonprofit organizations are more likely than other organiza-
tions to recruit and utilize volunteers, often alongside paid staff. But the involve-
ment of volunteers brings about a unique set of human resource management
challenges and raises questions about the best way to manage a diverse paid and
unpaid workforce. How should an organization go about finding the optimal
balance of paid and volunteer employees? Which tasks should be delegated to
volunteers, and which reserved for paid staff? How can nonprofit managers foster
positive and productive relationships and avoid conflict between paid staff and
volunteers? In times of financial hardship, tensions can arise if paid staff see
themselves being replaced by volunteers; when, if at all, is such replacement
optimal?
The answers to these questions vary considerably by country, by service
domain, and by organizational characteristics. Although many types of nonprofit
organizations involve volunteers, from hospitals to human services, from arts to
advocacy, organizations utilize volunteer hours differently in the production and
delivery of their services. The number of hours contributed by volunteers, and the
types of tasks reserved for them, are dynamic and often undefined—or, perhaps,
defined too broadly (Handy, Cnaan, Brudney, Ascoli, Meijs, & Ranade, 2000).
In some organizations, volunteers take on a central role as essential personnel,
delivering services to clients and serving in managerial roles, while in others,
volunteers support the work of paid staff. Most nonprofits rely on volunteers for
governance. For example, in the United States and Canada, nonprofits are
required to make use of a voluntary board of directors for governance as a
condition of getting nonprofit status. But the function of the board members
271
Allison R. Russell et al.
fluctuates greatly from organization to organization in terms of time commit-

ment, involvement in other organizational activities, and interactions with paid
staff. Some boards are hands on, while others meet at regular intervals and make
policy decisions only. Regardless of these differences, nonprofit organizations
that choose to utilize paid staff and volunteers face the challenge of managing
volunteer-paid staff interchangeability, and of deciding how to optimize their
workforce.
This chapter focuses on the topic of volunteer-paid staff interchangeability in
the context of nonprofit human resource management (HRM). In reviewing the
extant literature, this chapter both describes the factors that influence the develop-
ment of a mixed nonprofit labor force and highlights some common challenges
nonprofit managers face in managing their diverse human resources.
The Economics of the Nonprofit Labor Force
Why Have a Volunteer Workforce? The Legacy of Volunteerism

in the Nonprofit Sector
According to the Corporation for National and Community Service, roughly one
quarter of the adult population in the United States volunteers at least once per
year (Corporation for National and Community Service, 2013). In Canada, this
rate is approximately 44% of the adult population, as reported by the 2013 General
Social Survey on Giving, Volunteering, and Participating (Turcotte, 2015). Often,
volunteers are called upon specifically in times of financial hardship to fill a critical
gap in the organization, performing daily administrative and programmatic tasks
required to keep the organization open. But in many cases, volunteers fulfill roles
that would be inappropriate or not feasible for paid staff, such as serving on boards
of directors, acting as mentors to youth, visiting with the elderly in hospitals and
nursing homes, and many others (Ellis, 2010; National Council of Nonprofits,
2016). Although cost considerations is one of the most frequently cited reasons
for continuing to involve volunteers, nonprofits find volunteers valuable in other
ways as well; for example, volunteers act as a link between the organization and
the community that it exists to serve or as a signal of the nonprofit’s legitimacy
(Pynes, 2011). For some nonprofits, the social networks and community ties
forged by their employment of volunteers can be just as valuable to their missions
as the possibility of cost savings as found in a study of hospital volunteers (Handy
& Srinivasan, 2005).
Because they do not get paid for their labor, volunteers are often thought of
as “free.” However, nonprofit organizations incur several costs as a result of their
use of volunteers, including administrative costs, recruiting and training costs,
and the cost of space and materials devoted to volunteer tasks (Mook & Handy,
2011). Likewise, volunteers also face costs as a result of their decision to volunteer,
including transportation, childcare, and the opportunity cost of foregone earnings
or leisure time. Thus, as Handy and Brudney (2007) point out, “Volunteer labor
272
is best used when the net-benefits of using volunteer labor are positive to the
organization, and the net-costs to the volunteer are minimized” (p. 2).
The costs and relative productivity of volunteers as compared with paid labor
vary according to the type of volunteering utilized by the organization, from
service learning or mandated volunteering; short-term or episodic volunteering;
virtual volunteering; and long-term or traditional volunteering (Handy &
Brudney, 2007). Decisions about how many and which type of volunteers to
involve in organizational activities must therefore be weighed carefully by non-
profit managers looking to maximize the benefits of their volunteer programs
and minimize the overall costs of production both to the organization and to the
volunteers.
What Is Interchangeability?
Interchangeability refers to the extent to which nonprofit organizations exchange
paid and unpaid labor in their workforce. The degree of interchangeability in a
given organization depends on various considerations, such as mission of the
organization, management strategies, cost of operations, and workplace regulations
regarding the use of volunteers (Handy, Mook, & Quarter, 2008). As these
considerations fluctuate over time, the optimal mix of paid and unpaid employees
will also change. Ultimately, it is a question of economics: “The use of labor,
volunteer or paid, will depend on its productivity, its price, and other available
substitutes . . . . Organizations will eschew volunteer labor as its price increases
. . . and turn to substitute inputs with lower prices” (Handy, Mook, & Quarter,
2008, p. 2). Thus, the concept of interchangeability introduces a much greater
degree of complexity to nonprofits’ decisions to employ volunteers than the classic
characterization of volunteer labor as “free” would imply.
In many cases, nonprofit organizations choose to substitute volunteers for paid
staff, such as in times of financial constraints. However, they may also choose
to substitute paid staff for volunteers in an effort to professionalize their labor
force (Handy et al., 2008; Lipsky & Smith, 1993). But interchangeability does
not refer only to a decision by nonprofit organizations to replace paid staff with
volunteers, or vice versa, based on cost considerations. As volunteers can be either
substitutes for or complements to paid staff, interchangeability may also involve
more complex and nuanced decisions about how to structure the workforce
of an organization to support the continued presence of volunteer employees
whose work plays a unique but integral role in the day-to-day operations of the
organization. For example, hospital volunteers perform a distinct function that is
separate from—but also complementary to—the work of paid staff; these volun-
teers cannot be interchanged easily, but are integral to service delivery (Handy
& Srinivasan, 2005; Hotchkiss, Fottler, & Unruh, 2009). A study conducted by
Haski-Leventhal, Hustinx, and Handy (2011) at Ronald McDonald House
also found volunteers took on several specific roles that supported, but did
not supplant, the work of paid co-workers, and in the absence of volunteers, the
273
services, such as their “guest chef” program, were not offered through replacement
by paid staff.
Thus, an examination of the phenomenon of interchangeability, and any
efforts to optimize the mixture of paid and unpaid staff in an organization, must
consider that the two do not always serve as perfect substitutes in every case.
Handy et al. (2008) highlight in their work that it is an open question whether
volunteers substitute for or complement paid staff, and to discern this relationship,
consideration must be paid to the nature of the service, the organization’s mission,
union regulations, and other factors.
Modeling Interchangeability: A Look at the Existing Literature

Recognizing the practical importance and complexities of managing a mixed
workforce, scholars have begun to explore the factors that contribute to the
interchangeability of paid and unpaid staff in nonprofit organizations. In a survey
of over 600 Canadian nonprofits, Handy et al. (2008) found that interchange-
ability between volunteers and paid staff was not unidirectional and in some
cases happened in both directions in the same organization, at the same time. For
example, 25% of organizations surveyed reported volunteers replacing paid
staff, and over 50% indicated paid staff had replaced volunteers. The former case
occurred primarily as a result of budget cuts and fiscal constraints, whereas
the latter case arose when a growth in funding enabled professionalization of the
staff—a trend the authors found carried over not only to paid staff but also to
volunteers, who were called upon to perform increasingly complex and sophisti-
cated roles as the organization professionalized. Organizations reporting inter-
changeability in both directions offer evidence to suggest some nonprofits switch
back and forth between volunteers and paid staff, indicating the two types of
labor may be complementary of one another in certain settings. The authors used
two case studies of Canadian hospitals to corroborate these findings; however,
although about 68% of nonprofits indicated some interchangeability took
place, they also reported the phenomenon pertained to only about 12% of all
organizational tasks.
To test the generalizability of Handy et al. (2008), Chum, Mook, Handy,
Schugurensky, and Quarter (2013) conducted a second survey of over 800
Canadian nonprofits employing both volunteers and paid staff to examine the
extent and direction of interchangeability between paid staff and volunteers.
Overall, 80% of respondents reported some degree of interchangeability. As
consistent with prior findings, the authors found evidence that interchange-
ability occurs in both directions, with 29% of organizations surveyed reporting
replacement of volunteers with paid staff, and 22% reporting replacement of
paid staff with volunteers. Perhaps most importantly, Chum et al. (2013) found
several variables act as significant predictors of the extent and direction of
interchangeability, including organizational size, field of activity, and factors
contributing to organizational stress. In the latter case, organizational stress can
274
produce interchangeability in either direction: a shortage of paid employees, a

sudden increase in new tasks, and cost considerations can all contribute to
interchangeability from paid staff to volunteers, while a shortage of volunteers,
budget fluctuations, and certification and skill levels required for task completion
can lead to interchangeability from volunteers to paid staff. Moreover, the authors
found that increasing workloads due to organizational growth contributed to
interchangeability in either direction, suggesting the direction and extent of
interchangeability depend significantly on each organization’s specific approach
to human resource management in times of transition or stress (Chum et al.,
2013).
In examining the phenomenon of interchangeability, the organizational
perspective is overwhelmingly the focal point of scholarship. However, in an
effort to understand more fully the nature of interchangeability at the individual
level occurring in both nonprofit organizations and other sectors, Mook and her
colleagues (2014) randomly surveyed 2,100 Canadian volunteers to obtain their
perspectives on whether or not they had replaced, or were replaced by, paid staff
in their host organizations. Findings suggest about 11% of volunteers surveyed
had replaced paid staff, while almost 8% reported being replaced by paid staff.
Volunteers infrequently reported a permanent replacement, with only 3% indicat-
ing they had permanently replaced a paid staff member, and only 2% reporting a
paid staff member had permanently replaced them. Responses on interchange-
ability were influenced somewhat by the service domain of the organization,
the size of the organization, and the skill level of the volunteers. For instance, the
authors found that larger organizations (with more than 50 paid staff) were less
likely than smaller organizations to replace paid staff with volunteers, and that
organizations in the domain of health services were the least likely to replace volun-
teers with paid staff. Additionally, Mook et al. (2014) noted that higher-skilled
volunteers were more likely to report replacing paid staff and vice versa, suggesting
skill level may influence the extent of interchangeability between paid and unpaid
employees. Overall, their findings were consistent with those of previous studies
(Chum et al., 2013; Handy et al., 2008). The authors write:
[T]he fact that both of these practices [i.e. interchangeability in both

directions] were reported and not at dissimilar rates may suggest that nonprofit
organizations, in particular, view their human resources, whether paid or
unpaid, as interchangeable, and move these human resource components
about according to organizational need.
(Mook et al., 2014, p. 81)
Both Chum et al. (2013) and Mook et al. (2014) identified religious organizations
as examples of nonprofits with high levels of interchangeability in both directions.
A study of the roles of paid staff and volunteers in faith-based programs carried
out by Netting, O’Connor, Thomas, and Yancey (2005) provides additional
evidence. According to Netting et al. (2005), a shared faith and commitment to
275
a religious mission contributed to frequent and significant overlap between the

roles of volunteers and the roles of paid staff among the organizations surveyed.
Likewise, they report a high instance of internal interchangeability, as many
volunteers later assume paid positions in the agency. The authors conclude, “We
are discovering that [in these cases] it is almost impossible to separate out paid staff
and volunteer roles” (Netting et al., 2005, p. 199). It is possible that the relatively
small size of many religious organizations may also contribute to the higher rates
of interchangeability described in these studies (Chum et al., 2013; Mook et al.,
2014). This indicates that certain factors such as the mission of the organization,
and the size of the organization, and the nature of the services provided influence
the rates of interchangeability, nevertheless, the potential for interchangeability
imposes a complexity of human resource management unseen in organizations
that use only paid labor or only volunteers.
Optimizing the Nonprofit Labor Force: Determining Nonprofit

Demand for Volunteers
Because many nonprofit organizations utilize both paid and unpaid labor, nonprofit
human resource management involves complex decisions about how to manage
a diverse workforce, and how to ensure all staff—whether paid or volunteer—
contribute to the mission of the organization. These decisions relate in part to
the economics of interchangeability, and the question of how many volunteers
and paid staff to recruit to maximize production of services. The answer to this
question depends on a variety of factors and considerations that are particular to
each organization. As a result, we still lack a principle for optimizing the levels of
paid staff and volunteers in an organization.
Nevertheless, a growing body of literature has begun to look at the composi-
tion of the nonprofit labor force from the lens of economics, and from the
perspective of the organizations themselves. In the past, the framing of nonprofit
demand for volunteer labor was oversimplified, with the implication that because
volunteer labor is a “cheap” alternative to paid labor, nonprofits will choose to
take on as many volunteers as are offered or supplied in the market (Handy,
Mook, & Quarter, 2006). If this assumption were true, then nonprofit demand
for volunteer labor would equal the supply of volunteer labor available to them,
determined by individuals who are willing to offer their time and talent as volun-
teers. This assumption also encouraged the literature to continue to focus on the
volunteer supply perspective, and the conditions that encourage individuals to
serve as volunteers in the nonprofit sector.
However, economists in the field of nonprofit studies began to take a closer
look, and the resulting research “challenges the assumption that organizations are
willing to use all the volunteer labor available to them” (Handy & Srinivasan,
2005, p. 1). As Emanuele (1996) argued, volunteer labor is not free, therefore
nonprofit organizations will make choices about how many volunteers to use
based on cost considerations, resulting in a “downward sloping demand curve
276
for volunteer labor” (p. 195). This implies that the number of volunteers an
organization uses will depend on the costs incurred to the organization for using
volunteers. These costs involve recruiting; training, retaining, and rewarding
their volunteers—in general costs involved in HRM for volunteers. These costs
are not insignificant, if volunteers are not managed well or are unsatisfied they
can vote with their feet and leave with little cost to themselves, but significant
costs to the organization.
The higher the cost of volunteers to the organization, the fewer they will use,
which is implicit in the downward slope of the demand curve. Using survey data
from the Urban Institute’s Nonprofit Sector Project, Emanuele (1996) found
evidence to support the presence of a consistent, downward sloping demand
curve for volunteer. This lends evidence to the fact that nonprofits’ choices about
how many (and which volunteers) to use depend on the costs of using volunteers
and these costs are both direct and indirect costs; the latter can vary whether or
not volunteers act as substitutes or complements for paid labor. In their review
of economic research on volunteering, Govekar and Govekar (2002) highlight
the findings from Emanuele (1996) and call for additional research on nonprofit
demand for volunteers. The authors contextualize the issue in terms of welfare
reform and the increasing prevalence of “third party government,” that is, the
provision of public goods and services by non-governmental organizations,
especially nonprofits (Brinkerhoff, 2002, p. 19). Arguing for the importance of
focusing on the challenges and choices nonprofit organizations face in determining
the composition of their labor force, they write, “We cannot simply assume that
nonprofit organizations will use all the volunteer labor that is available. If the
government is going to transfer more responsibility to nonprofit organizations,
it is important to understand the limits of such transfer” (Govekar & Govekar,
2002, p. 44).
Handy and Srinivasan (2005) investigated the question of nonprofit demand
for volunteers more closely in a study of hospital volunteers. Using the work of
Emanuele (1996) and others as a point of departure, the authors model the
demand curve for volunteer labor. The costs of providing services include three
critical factors: the productivity of volunteer labor, the cost of volunteer labor,
and the cost of available substitutes for volunteer labor (i.e. paid labor). They
write, “[W]e expect the utilization of volunteer labor to be positively influenced
by its productivity and negatively influenced by its costs” (Handy & Srinivasan,
2005, p. 4). Thus, in cases where volunteers act as substitutes for paid labor, a
nonprofit may choose to interchange paid staff for volunteers, or vice versa,
depending on the relative costs of each input. The authors’ empirical evidence
supports the existence of the downward sloping demand curve for volunteer
labor, but they also find that organizations’ decisions to use volunteer labor is
based on their belief that volunteers bring something unique to the table that
may not be supplied by paid labor alone: a “link to their communities” (Handy
& Srinivasan, 2005, p. 12). Again, these findings point to the complex relationship
between the roles of paid and unpaid staff in nonprofit organizations, and offer
277
insight into why nonprofits continue to use volunteer labor: Despite the
challenges of managing a more diverse workforce, nonprofits also stand to gain
greater perspective on the communities that they serve from working with
volunteers who live within that community, in addition to the possibility of
experiencing greater savings on the costs of labor inputs.
To continue to develop the model of nonprofit demand for volunteer labor,
Handy, Mook, and Quarter (2006) expand the focus from one service area
(hospitals) to a survey of 661 Canadian nonprofit organizations from various
domains. They argue that because of the prevalence of volunteers, and the
widespread historical legacy of volunteerism in the nonprofit sector, the decision
about the type of labor to use—whether paid, unpaid, or some mixture of both—
is a critical one faced by the majority of nonprofit organizations. The authors find
not only that organizational age is a positive and important predictor of demand
for volunteers but also that nonprofits utilizing volunteer labor do not view it as
a simple substitute for paid labor. Instead, “they [nonprofit organizations] see
positive indirect benefits over and above the direct tasks performed” by the
volunteers and “are prepared to spend resources to manage them efficiently” by
putting in place professional management for volunteer resources, just like they
do for other human resources (Handy et al., 2006, p. 34–35). As nonprofits age
and become more entrenched in the communities around them, they therefore
may continue to seek out volunteer labor, and perhaps at an even higher rate than
before, as increased financial stability makes it possible for them to hire volunteer
managers and other staff to support their volunteer programs even more effectively.
As stated above, volunteer labor is not free, neither for the organization nor
for the volunteer. Handy and Mook (2011) investigate the specific costs of
volunteering from both the individual and organizational perspective and weigh
these costs against the benefits of volunteering. They argue a cost-benefit analysis
of volunteering is critical for organizations to make the most informed decisions
about how much volunteer labor to utilize. Because organizational demand for
volunteers is a function of the costs of volunteers and other factors (Handy &
Srinivasan, 2005), both costs and benefits of volunteering should be considered
to measure the cost of volunteer labor as an input in the production process.
These costs and benefits will vary according to the roles volunteers perform and
the type of volunteers utilized (Handy & Brudney, 2007). If the costs exceed the
benefits of volunteering and if paid labor acts as a cheaper substitute for volunteer
labor, then nonprofit organizations will be less likely to choose volunteer labor
as an input.
Ultimately, nonprofit managers must make economic decisions about the
best use of labor in their organizations. These decisions involve whether or
not to use volunteer labor, how much volunteer labor to use, and the role of
nonprofit labor in the organization. They also consider the relationship between
volunteers and paid labor, and whether the two are complements, substitutes, or
both, as well as the extent and direction of interchangeability. Taken together,
these factors contribute to an understanding of how nonprofit human resources
278
develop distinctly from other sectors. In the next section, we turn to a discussion
of common challenges associated with interchanging paid and volunteer labor in
the context of nonprofit human resource management, as it would be unwise to
ignore the negative aspects of interchangeability, such as tensions that may arise
between volunteers and paid labor.
Confronting the Challenges of Managing a Mixed Workforce:

Interchangeability in the Context of Nonprofit Human
Resource Management
Because so many nonprofit organizations use both volunteers and paid staff, many
nonprofit managers will confront the challenges of managing a mixed workforce.
These challenges could involve many aspects of human resource management,
including team building, skills development, and employee motivation for both
paid staff and volunteers. Other chapters in this volume describe many of these
challenges in detail; in this section, we focus on the specific challenges that may
confront organizations that engage in the interchange of paid staff and volunteers.
Volunteers and Paid Staff: Comrades or Competitors?

Interchangeability of paid and unpaid staff may provide nonprofit organizations
with a flexible approach to human resource management (Mook et al., 2014).
However, nonprofit managers should be aware of possible tensions between
volunteers and paid staff, especially in organizations with frequent and high levels
of interchangeability. Paid staff may view volunteers as potential competitors for
their positions, and vice versa, resulting in an atmosphere of mistrust and com-
promising organizational goals. Likewise, in organizations with a strong union
presence that also utilize volunteers, human resource managers may also be
required to consider the legal implications of interchanging paid staff with volun-
teers (Handy et al., 2008). The limitations of what volunteers can and cannot do
in unionized environments is often outlined in collective agreements.
Regarding paid staff perceptions of interchangeability, Brudney and Gazley
(2002) reported no evidence of perceived antagonism or competition between
paid staff and volunteers in a longitudinal study of the integration of the Service
Corps of Retired Executives (i.e. volunteers) into the activities of the U.S. Small
Business Administration. Although their study focused on a public sector agency,
the findings challenge the assumption that an influx of volunteers will be viewed
in an inherently negative manner by paid staff at existing agencies and pro-
grams. In the case examined by the authors, volunteers were looked at favorably
by paid staff, and the longitudinal analysis showed that the volunteers’ presence
corresponded with a growth in paid employment in the agency (Brudney &
Gazley, 2002, p. 549). Their findings indicate that in some scenarios, a growth
in the volunteer workforce at an organization may contribute to a growth in
overall employment—a net positive for both paid and unpaid staff.
279
From the volunteers’ perspective, however, results have differed. For instance,
Milligan and Fyfe (2005) reported feelings of concern among volunteers in local
human service organizations in Glasgow, Scotland, who felt “pushed out” and
“disempowered” by the increasing professionalization and bureaucratization of
voluntary associations (pp. 427–428). In their study of volunteers’ perceptions
of interchangeability, Mook et al. (2014) reported about 18% of volunteers who
had been replaced by paid staff on either a permanent or temporary basis felt their
replacement was either unfair or very unfair. By contrast, only 7% of volunteers
who reported they had replaced paid staff felt this replacement was unfair or very
unfair.
Taken together, these findings suggest perceptions about interchangeability
vary among different groups in an organization’s workforce and may be favorable
or unfavorable, depending on who benefits from the change and a host of other
factors. As Netting, Nelson, Borders, and Huber (2004) suggest, “[The] level of
resistance [in the relationship between paid staff and volunteers] will vary,
depending on cultural norms” (p. 86). For instance, nonprofits that simultaneously
celebrate and clarify the roles of both paid staff and volunteers, and which provide
volunteers with the same avenues for voicing concerns to management as paid
staff, may have more success addressing and alleviating any tensions that arise.
Likewise, Rogelberg, Allen, Conway, Goh, Currie, and McFarland (2010) report
paid staff perceptions of volunteers vary according to workload and overall levels
of employee stress, such that tensions between the two groups may be exacerbated
by times of transition. Because the interchange of paid staff and volunteers in
either direction could arguably be identified as a significant transition for a
nonprofit agency, employee concerns, whether founded or unfounded, and their
potential impact on organizational performance must be considered in discussions
of nonprofit human resource management.
Interchangeability as Part of Human Resource Management

Despite the challenges associated with managing a mixed nonprofit labor force,
many scholars have highlighted the numerous benefits of volunteering for both
the volunteer and the organization. For example, nonprofit organizations that
utilize both paid staff and volunteers may enjoy added value to the price of labor,
as well as a competitive advantage. The integration of paid staff and volunteers
increases workforce diversity and enhances organizational skills and knowledge
(Liao-Troth, 2001). According to Akingbola (2013), “Volunteer participation
. . . increases the quality and diversity of the human resource pool. Nonprofits
that are able to effectively deploy these operational resources . . . will facilitate
coproduction of outcomes” (p. 220). Interchangeability as a concept represents
the very real practice in which nonprofits engage to build a more productive and
cost-effective labor force, given the unique forms of social capital available to
them, and given resource constraints. This flexibility allows the organization
to react quickly and ensure that their work is not disrupted.
280
To improve productivity, mitigate tensions, and cut costs, nonprofit managers

must be willing and able to look closely at their volunteer programs to assess the
relationship between paid and unpaid staff, as well as the function and costs of
volunteers. An honest assessment of the costs and benefits of volunteer programs
may lead nonprofit managers to conclude that volunteers are not being used
effectively, or that they are costing the agency too much money (Handy &
Mook, 2011). In cases where paid staff and volunteers act as substitutes for each
other, interchanging a poorly organized or inefficient volunteer program by a
program run by paid staff may be beneficial for improving service delivery and
promoting the organization’s mission. However, because of their unique contri-
bution to nonprofit agencies, volunteers are viewed frequently as complements
to, rather than substitutes for, paid labor (Studer & von Schnurbein, 2013).
In many cases, paid labor cannot deliver the same benefits as volunteers, even
when they provide similar services. This finding is well illustrated by Haski-
Leventhal et al. (2011) in their research on the multidimensional impact of
volunteers for the Philadelphia Ronald McDonald House (PRMH). They write:
Volunteers . . . gave financial and in-kind donations to PRMH. Volunteers

. . . were goodwill ambassadors . . . and sent positive signals to donors and
others on the trustworthiness of PRMH. PRMH thus received human,
in-kind, and financial resources, as well as publicity that aided in fundraising
in the community . . . They help create a better image of the organization
and the community.
(Haski-Leventhal et al., 2011, pp. 156–157)
Thus, it is often not viable, or advisable, for nonprofit organizations to abandon

their volunteer programs, even if they could afford to replace the services using
paid staff. Ellis (2010) suggests we ask the question “Why do we want volunteers?”
in considering whether or not to involve volunteers in the organization (p. 27).
If the answer is “because we do not have sufficient resources (money, staff or
whatever) to do our job without the help of volunteers,” then their use should
be questioned (Ellis, 2010, p. 13). If, on the other hand, volunteers bring unique
benefits to the organization, then volunteer involvement is appropriate.
Increasingly, scholars of volunteer administration and nonprofit human
resource management have encouraged nonprofit managers to approach volunteer
management in the same way they would approach the management of paid staff.
For instance, Brudney and Meijs (2014) argue, “preparing job descriptions for
volunteers, matching volunteers’ interest and capabilities to unpaid organizational
positions, training and orienting volunteers, and having policies and procedures”
for volunteer programs could both clarify volunteer and paid staff roles in the
agency and improve the outcomes of volunteer programs (p. 297). These steps
could also provide nonprofits with a better understanding of how their volunteers
and paid staff complement one another, and under what circumstances they may
be substituted, if necessary. Similarly, the strategic human resource management
281
approach for nonprofit organizations described by Guo, Brown, Ashcraft,

Yoshioka, and Dong (2011) could be applied to all nonprofit employees,
including paid staff and volunteers.
Brudney and Meijs (2014) argue that to manage volunteers most effectively,
nonprofit managers must first consider whether volunteers perform similar roles
to paid staff, or whether their functions are distinct within the organizational
structure. By recognizing and clarifying the roles of all employees—whether paid
or unpaid, permanent or temporary—nonprofit managers position themselves to
maximize the benefits of a diverse workforce, allay staff concerns, and make the
most informed decisions about the interchangeability of their paid and unpaid
staff.
Conclusion
The interchangeability of paid staff and volunteer labor is an emerging topic in
nonprofit studies as more and more organizations in all sectors rely on a mixed
pool of human resources, from volunteers to unpaid internships. To the extent
that human resource managers must make economic decisions regarding the
development and management of a diverse workforce, interchangeability also
impacts the study of human resources and the ways in which organizations go
about maximizing their productivity and minimizing the cost of labor inputs.
The scholarship reviewed in this chapter highlights the importance of examin-
ing the phenomenon of the engagement of volunteers in the nonprofit sector
not only as a function of an individual’s willingness to contribute uncompensated
time to an agency but also as a function of the relationship between paid and
unpaid labor, the availability of substitutes and complements, the mission of the
organization, the prevailing benefits of a mixed labor force, and the costs of labor.
Together, these factors contribute to a nonprofit’s demand for volunteers and,
consequently, the extent and direction of interchangeability between paid and
unpaid staff in their workforce.
1 What are the benefits and challenges of working with a mixed labor force?
2 Why might nonprofit organizations interchange paid staff and volunteers?
3 How do economic considerations about labor inputs, volunteers, and paid
workers overlap with decisions and challenges related to nonprofit human
resource management?
4 How do labor union policies impact decisions about interchangeability?
5 What benefits do organizations receive from professionalizing their volunteer
management strategies?
6 When should an organization not incorporate a volunteer labor force?
7 If an organization incorporates volunteers, can it be argued that they are
exploiting people?
282
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16
Managing Human Resources
in International NGOs
Carrie R. Oelberger, Anne-Meike Fechter,
and Ishbel McWha-Hermann
Introduction
The “associational revolution” and the ongoing proliferation of nonprofits
translates to increasing numbers of individuals working within the third sector
across the globe (Salamon, 1994). International aid is a multi-sited, multi-level
phenomenon that cannot be fully understood based on how it appears in any one
location or particular level (Gould, 2004). The “aid industry” includes both long-
term international development work that attempts to address structural inequalities
like poverty, corruption, or environmental degradation, as well as shorter-term
humanitarian relief work that serves communities in need following natural or
civil disasters (Hancock, 1989; Van Rooy, 1998). The industry exists largely in
lower-income contexts, and is comprised of individuals from a wide range of
occupations (e.g. education, agriculture, health). Aid is carried out through non-
profit, non-governmental organizations (NGOs) that range in size from small
community-based organizations (CBOs) to multi-national international NGOs
(INGOs), both secular and faith-based, as well as multilateral and government
agencies (e.g. United States Agency for International Development [USAID], the
United Kingdom’s Department for International Development [DFID]) and
for-profit companies (e.g. Chemonics, Development Alternatives Incorporated).
Within the spectrum of NGOs, INGOs represent the most transnational aid
organizations, and are the focus of this chapter. INGOs are formal organizations
with operations in more than one country, the majority of which are headquartered
in the United States or Western Europe, and which work on projects within
lower-income contexts. Examples of INGOs include Oxfam, CARE, and Save
the Children. This chapter focuses in particular on the human resource manage-
ment (HRM) issues INGOs face, especially with respect to the diversity of the
INGO workforce. The most obvious dimension of staff diversity is nationality,
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Carrie R. Oelberger et al.
but as we will explain, employment status also varies considerably between inter-
national staff and national staff, as well as between those with at-will employment,
multi-year contracts, short-term consultants, and interns/volunteers. As this chapter
illustrates, a key challenge for HRM in this sector arises from the fact that nationality
and employment status do not always map onto other relevant dimensions,
such as experience, local and linguistic knowledge, and pay. This chapter sheds
light on some of the fissures and tensions arising from this situation, which
have implications for both employee motivation and successful implementation of
INGO work.
The term “expatriate” describes staff working outside their country of origin,
but is often used in a limited way to refer to European or American workers who
are employed on international-level contracts with commensurate salaries. It is
useful to bear in mind that within the aid workforce, a key distinction is made
between those who are “national staff” (that is, employed in their passport country
on “national” contracts) and those who are considered “international staff” (that
is, originating outside of the country where they work). In the context of INGOs,
international staff may include workers from the wider region, such as Kenyans
working in Sierra Leone, or from other parts of the Global South, such as Brazilians
working in Mozambique. We utilize the terms “national staff” and “international
staff” within this chapter. Furthermore, effective management demands an under-
standing that the positionality and experience of employees is not easily captured
by these formal classifications.
Such fuzziness of categories also holds for other central concepts in this chapter.
For example, as discussed below, “headquarters” often refers to an office located
in the United States or Western Europe, and “field” to a “Southern,” “developing,”
or “lower-income” country. In the context of middle-income countries such as
India, however, headquarters may well be in the capital city, while the field is
defined as geographically remote, rural areas. It is important, therefore, to be alert
to internal differentiations within a category—such as the poorer parts of a
country’s population in contrast to its urban middle class—to avoid overly simplistic
perceptions of both the national workforce and recipient groups. Furthermore,
such nuanced understandings help identify the variable and heterogeneous
motivations of INGO employees across multiple differentiations, not only national
and international staff, but also volunteers, interns, and contract-hired consultants.
Across all categories, while the desire to support resource-poor populations is often
present (either from a sense of solidarity or personal experience), this may be
combined with professional career aspirations. For international staff, it may also
include the desire to live and work abroad in culturally diverse contexts (Fechter,
2012; Roth, 2015), while members of the national workforce may need to make
a livelihood in countries that often lack a diversity of formal employment options.
As suggested above, however, belonging to a particular national or employment
category does not imply a fixed set of motivations or interests.
This chapter provides an overview of the role of INGOs in international aid
and, specifically, the human resource considerations for those organizations.
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Managing Human Resources: International NGOs
We first provide a historical overview of organizational approaches to inter-

national aid provision, focusing on the division of knowledge within the sector,
where the work occurs, and how it occurs, with a focus on the division of labor.
The second part of the chapter then highlights the specific human resource con-
siderations for INGOs, with attention to challenges with staff selection, the
complicated nature of compensation, perspectives on performance management
and professional development, the delicate nature of staff well-being, and the
intricacies of managing staff with frequent travel and expatriation.
INGOs and International Aid
History
The current organizational and institutional structure of international aid origi-
nated in the aftermath of World War II, when major multilateral agencies involv-
ing three or more countries, such as the International Monetary Fund and the
World Bank, were established to carry out reconstruction. World society scholars
have also noted the ideological underpinnings of international aid are rooted in
this period, when a world culture emphasizing progress and justice was on the
rise, contributing to a rationalizing discourse about international aid (Chabbott
& Ramirez, 2000). As reconstruction ended and the Cold War period began in
the 1950s, international aid organizations turned their efforts towards the Global
South, otherwise known as the “developing world” (Gardner & Lewis, 1996).
Since that time, a growing number of faith-based and secular NGOs have partici-
pated in international aid, with well over 35,000 NGOs involved in international
development and relief efforts today (Lindenberg & Dobel, 1999; UIA, 2008).
This blossoming of NGOs has been accompanied by two simultaneous processes:
one of professionalization, i.e. the increasing formal structuring of these organiza-
tions (Bromley, 2010; Chabbott, 2003; Hwang & Powell, 2009) and another
of localization, i.e. an attempt to shift the design of activities from international
actors to those within the local context. In addition to these two processes of
differentiation, INGOs are being challenged by three interrelated sets of changes
in the external environment: (1) economic globalization; (2) the reform of foreign
aid; and (3) the evolution of NGOs indigenous to the developing world (Edwards,
Hulme, & Wallace, 1999). As a result, some scholars claim INGOs defend social
change values at the same time they operate inside a framework that drives
an increasingly formalized, professionalized field further into the marketplace
(Edwards, 1998).
INGOs are also subject to more general trends affecting the entire global
landscape of work. Our analysis of international aid is rooted within the under-
standing that contemporary work across all industries is increasingly technical,
transnational, and temporary (Oelberger, 2014). Work is increasingly scientific
and professional, focused on abstracted, portable technical solutions (Habermas,
1970). This portability of skills combines with processes of globalization to result
287
in a transnationally transferable workforce increasingly accustomed to bridging

geographic distance with both physical travel and technology (Dicken, 1998;
Levitt & Jaworsky, 2007; Schiller, Basch, & Blanc, 1995; Waldinger & Fitzgerald,
2004). Given the portable nature of work commitments, work relationships
are also increasingly temporary, with short-term contracts prevailing over career-
length organizational commitments (Barley & Kunda, 2006; Barley & Kunda,
2011; Kunda, Barley, & Evans, 2002). Taken together, these features result in a
highly mobile, portable modern workforce within a structure of work that favors
connections with occupations and skills over connections with organizations
and places.
Division of Knowledge
Within international aid, a variety of knowledge and skills are necessary to plan,
manage, and implement complex work. Prior to professionalization, this need
was predominantly filled by American or European staff who took on generalist
roles. The cost of air travel prohibited frequent international flights, and even
until the new millennium the ability to communicate by phone or email was
extremely limited, resulting in isolated staff who were largely based “in the field”
(i.e., within country offices). With rising professionalization, skilled “national”
staff, born and raised in the country in which they are working, began undertaking
pivotal roles within local, national, and (eventually) international organizations.
Their labor costs far less than that of international staff, they often have better
cultural and linguistic knowledge, and they make inroads into assuaging the
criticism of international aid as white and neocolonial (Escobar, 1994).
The involvement of international staff, however, has not declined. On the
contrary, their participation has both grown and shifted (Comoretto, Crichton,
& Albery, 2011). Rather than employing international cultural experts familiar
with a particular region, aid organizations increasingly hire international staff
based on their technical expertise (e.g. scientific or legal expertise) for short-term
contracts to design technical solutions to social problems (Moke & Stoll, 2010;
O’Flaherty & Ulrich, 2010; Walker, 2004; Walker & Russ, 2010). International
staff are largely represented within headquarters positions, doing technical or
managerial work that can be applied across geographic settings. They use internet
technology, smartphones, and frequent travel to support programs around
the globe. Headquarters positions often have leadership responsibilities for
communication with donors, as well as providing financial, administrative, and
technical support to field offices. Rather than posting international staff in the
field for long periods of time, organizations are more likely to use short-term
consultancies, trainings, workshops, and visits in order to convey information
from the central artery to the field. Against this backdrop, only a few international
staff continue to be field-based, often in managerial roles as country directors, or
grant writers who remain in one position for three or four years before moving
on to another assignment. International staff also work within INGOs on
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volunteer contracts through volunteer-sending organizations like United Nations

Volunteers, the British Voluntary Service Overseas, the United States Peace
Corps, or independently through direct relationships with the organization. These
volunteer or internship positions are often support or advisory roles, sometimes
to facilitate the process of localization, and other times to assist with a particular
project or strengthen skills in a particular area.
Recent scholars have argued that international aid has moved beyond the
traditional dichotomy of Western international staff and staff native to the Global
South. Rather than the conventional North-South axis of development
partnership, a distinct and potentially impactful model is that of South-South
cooperation (Chisholm & Steiner-Khamsi, 2009; de Renzio & Seifert, 2014).
This concept is based on the assumption that Southern actors, including emerging
donors and residents of the “BRICS” (Brazil, Russia, India, China, and South
Africa), are able to relate differently and more effectively to INGO clients than
traditional Northern donor staff. This belief is partly based on a sense of shared
colonial history, greater social and political mutual understanding, and Southern
solidarity (Mawdsley, 2014). The extent to which these assumptions are justified
and produce improvements in aid delivery remains to be seen.
Place of Work
In light of these trends, critics have discussed the relative distance between inter-
national staff and the “field,” geographically as well as culturally and linguistically.
Kothari (2006), for example, notes how the colonial officers of the past often possess-
ed greater cultural and linguistic knowledge than contemporary development
professionals, whose periods of stay in a particular place are often much shorter,
and thus whose familiarity with the social context is less extensive than their
colonial-era predecessors (on the role of cultural knowledge, see also Pottier,
Bicker, & Sillitoe, 2003). It has been argued such distance may have detrimental
effects on the conceptualization and delivery of aid. As one possible antidote, some
have proposed “immersions,” that is, short periods in which aid workers are
exposed to the living conditions of the resource-poor communities they aim to
support (Irvine, Chambers, & Eyben, 2004). The underlying rationale is that first-
hand exposure to the realities of poverty provides aid workers with a renewed sense
of urgency, as well as a better understanding of the problems they seek to solve.
Immersions have traditionally been advocated for international staff who may rarely
leave their office in the United States or Western Europe, but could easily be
argued to be useful for country nationals who have lived a middle-class lifestyle in
their country’s capital, with little understanding of what life is like in the rural areas
where many projects are based. While immersions have been implemented by
some agencies (e.g. ActionAid, 2010), it remains to be seen to what extent these
remain a symbolic rather than a substantial exercise (Fechter, 2012).
The issue of distance from the field, and its effects on aid work, has been
articulated especially in relation to humanitarian crises and conflict zones.
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Collinson and Duffield (2013) point out that the tendency towards a “bunkeriz-
ation” of aid has significant implications for the way aid is carried out in these
high-risk contexts. Such a bunkerization is a response to the increased insecurity
faced by aid agencies and their staff operating in volatile environments. It becomes
manifest in the higher prevalence of fortified aid compounds, for example, as
well as in ‘remote management’ practices. Among other challenges, however,
such distance can lead to a less-informed workforce whose analysis and decision-
making may be impaired as a result of their remoteness from the affected popula-
tions. Furthermore, they argue being spatially separated as well as heavily
guarded—often by private security firms—weakens social relations between aid
workers and local communities, leads to mistrust, and ironically may actually
contribute to a lack of security for the workers (Autesserre, 2014). In addition,
such “bunkerization,” especially where it provides security measures for inter-
national but not national staff, reinforces structural inequalities between staff
categories. Such a “dual security” system becomes particularly visible in the
context of emergency evacuations, prompting the question of whose lives are
considered more valuable. As Bettina Scholz discusses in the case of Médécins
sans Frontières, the organization does not always fulfill the moral obligations to
its national staff that may be expected of them. While international staff are often
committed to informally ensure the safety of national staff, in many instances,
such as fleeing Rwanda or Darfur, national staff are left behind, to be massacred
at the hands of local militia (Scholz, 2015, p. 123).
The concept of mobility, then, is a key lens through which hierarchies among
differently categorized aid workers become visible, not just by employment
type, but also by nationality, ethnicity, personal migration history, education, and
international status. Warne Peters (2013) highlights that some aid workers, in
her case, in Angola, who may be employed as “local” staff, may have a complex
personal migration and education history, and therefore might strategically present
themselves as “international” or “expatriate” in some contexts and as “local” or
“national” in others. Presentation allows them to manage perceptions of their
expertise, conveying cosmopolitan or local knowledge respectively. Some research
also suggests that international workers on a “national” contract, including
volunteers, might be better positioned to build relationships with local colleagues
and communities, and in turn might facilitate more effective aid outcomes
(Devereux, 2008; McWha, 2011).
International staff may also experience malleable categorization related to their
positionality and mobility, especially in light of varying definitions of the “field”
where they work. Oelberger’s (2014) study of international aid workers found
that international staff who are “in the field” may feel just as disconnected from
their project beneficiaries as those working in headquarters positions in the
United States. For example, Ajay is an Indian citizen on an international contract
who is technically “field-based” in the urban setting of Lilongwe, Malawi, but
his daily interactions are all with other office-based staff. He often feels just as
disconnected from the “actual work on the ground” as headquarters staff based
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in Washington, D.C. might feel. Therefore, when he speaks about going “to the
field,” he may be referring to travel in remote villages. By contrast, when Julie,
a headquarters-based employee of the same organization, speaks about going “to
the field,” she may be traveling to Bangkok, Thailand, for meetings with staff
based in that office (Oelberger, 2014). The work of INGOs occurs across all of
these settings: U.S.-based headquarters, urban offices around the world, and
more remote, rural offices where projects are based. As a result, INGO staff are
located across these various locations, with patterns within the division of labor.
It is to this topic that we now turn.
Division of Labor
Within international aid, there are a multitude of types of workers and a hierarchy
of tracks. At the top of hierarchy are managerial and policy advising positions.
Second in line are technical positions, increasingly including those with
methodological training, expertise in monitoring and evaluation, and the ability
to conduct experimental analyses. Third in line are those with operations,
logistics, or middle-management skills. Finally, at the bottom of the hierarchy
are those with geographic, linguistic, or cultural expertise. Importantly, this
hierarchy overlays with typical expertise of international versus national staff, in
effect conferring greater value to international staff.1 McWha (2011) found the
labels given to workers (volunteer, consultant, expatriate, and local) were
implicitly underpinned by power and status, wherein expatriate workers were at
the top of the hierarchy with the most respect and status, consultants next, still
with status but less respect, then volunteers, and locals at the bottom. These
perceptions held regardless of the professional experience the workers brought
to the assignment.
Mirroring the overall rise in the use of consultants and contractors in modern
work (Barley & Kunda, 2004), many leading INGOs have reorganized to include
outsourcing, subcontracting, and short-term organizational positions as key
features of international aid staffing (Stubbs, 2003). With the rise in these practices,
international aid workers avoid the emotional commitments to other people,
communities, projects, and places that develop with long-term work, focusing on
service delivery, rather than partnership. Initial research in this area notes that
long-held, trust-based partnerships remain vital for development, and that the
contract-based relationships implicit in consultancies make this trust more difficult
to achieve (Fowler, 1998). Moreover, the impact of these practices on both the
private lives of aid workers, as well as the organizations in which they work,
remains understudied. Following global trends towards contract relationships, it
will be interesting to investigate the future impact of this reorganization towards
an increasingly technical and decreasingly relational approach to the work.
Alongside professionalization and the increasingly technical and temporary
nature of the work, the “international” component of “international aid” is
simultaneously becoming “nationalized” and “transnationalized,” representing a
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bifurcated approach to the human resourcing of international aid. Nationalization

refers to the increasing practice of delegating contextualized knowledge to
national staff with appropriate local linguistic skills, as well as possessing
international linguistic skills and the necessary formal training to act as
intermediaries between projects and donors. This practice is an attempt to
respond to the critique of aid work as being externally driven, and even
neocolonial. It is crucial to note that cultural knowledge is undervalued and
underpaid when it is embodied by national staff, in the same way that many
professions have become undervalued and underpaid with feminization (Bolton
& Muzio, 2008). Moreover, national staff are often members of the elite within
their country, posing an additional challenge of overcoming social class barriers
while they strive to assist communities without the nuanced knowledge of local
culture, power dynamics, and politics necessary to do so.
Parallel to this nationalization, international aid has also been transnationalized
as international staff take on shorter-term technical assignments overseas. The
projects are accomplished through two main routes: expatriation (and repatriation),
and frequent international travel. Both relocation and work-related travel
influence the personal lives of aid workers, as they bring both their personal and
professional selves with them to other continents.
HRM Considerations for INGOs

Given the context of international aid work just outlined, organizations working
in this sphere face numerous human resource (HR) issues, issues which are
different from organizations operating within the domestic nonprofit sector, for
example within the United States or Europe. One of the key differences is the
multitude of different staff within INGOs from a variety of cultural, economic,
and social backgrounds. These different workers bring their own expectations,
support needs, and personnel challenges, which HR managers need to balance.
These personal differences interact with another challenge: the context in which
they work—typically categorized as resource poor, often high-risk, and sometimes
dangerous. In this section we review some traditional aspects of HRM within
the context of INGOs, illustrating various ways that the HR decisions of INGOs
can impact their workforce.
The international HRM (IHRM) literature discusses the distinction between
universalist and contextualist paradigms, the former advocating a standardized
global approach to HRM, and the latter arguing for adaptation to local context
and conditions (for more discussion on the distinction, see Sheehan, Fenwick, &
Dowling, 2010). However, the majority of IHRM research has been undertaken
within the for-profit, often “Western-style” context of multinational corporations,
with the result that much of what is known about IHRM may be inapplicable
to the NGO context. We caution INGOs against (1) applying principles of
IHRM that have been developed in the context of multinational corporations;
(2) applying concepts that have been developed in higher-income countries; and
292
(3) assuming that HR systems that function well at headquarters, or in one country
office, will transfer seamlessly into another. Instead, in this chapter, we encourage
INGOs to find a way to balance global standardization with consideration of local
contexts and the reality of working in a complex nonprofit setting.
Investing in HRM structures can be a source of tension for INGOs. Many
NGOs have low budgets and are therefore constrained in their ability to invest
in sophisticated HRM. Often there is a challenge for NGOs around how to use
limited funding, with the understandable desire to invest in service delivery and
“getting the job done” rather than in a strategic function of the organization. As
a result, HRM is often interpreted as dealing with everyday personnel issues,
rather than as an important component of developing human capital in line with
the long-term vision of the organization (Brewster & Lee, 2006). That said, large,
well-resourced INGOs are more likely to have a commitment to HRM structures.
CHS Alliance (formerly People in Aid) and Association for Human Resource
Management in International Organizations are two umbrella organizations that
assist INGOs in developing effective HR practices.
Staff Selection
It is critical for INGOs to be able to attract and recruit the best talent. However,
this is a complex process. Project sites are regulated by different legal compliance
frameworks, and there may be complications depending on whether staff are
hired under a national or international contract. International staff can be
recruited on national contracts, and, though perhaps less common, national staff
can be recruited on international contracts. Some research suggests that recruiting
comparatively highly-paid international staff has the potential to undermine
the skills of national staff, and may lead to capacity stripping, i.e. a reduced feeling
of empowerment and belief in one’s skills to do the job and an increased depend-
ency on outside assistance, rather than capacity building, which many would
argue is a fundamental goal of INGOs (Carr, McWha, MacLachlan, & Furnham,
2010). In response, some organizations have aimed to recruit locally, or at least
regionally (e.g. see, for example, the Catholic Agency for Overseas Development).
It is essential that HR managers reflect on the context in which these jobs exist,
ensuring the desired competencies and behaviors are appropriate for the culture
and context of the role.
Compensation
Compensation is closely related to the issues underpinning staff selection. The
challenge here is balancing the need to compete with other INGOs for talent
with the desire to adapt to local contexts. INGOs commonly use a dual salary
system in which national and international staff are tracked onto different pay
scales. Typically, the international pay scale is benchmarked globally, with various
added benefits (e.g. extra compensation for workers in high-risk zones or private
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school tuition for accompanied posts in “family-friendly” areas). By contrast, the

local pay scale is benchmarked within the national market, and is therefore much
lower. This system is highly divisive, and perpetuates a perception of international
staff as experts and locals as novices, when in reality national workers often hold
considerable institutional knowledge, as well as contextual knowledge of the area
in which they are working.
The dual compensation system is often justified with the claim that high
salaries are needed to attract talent internationally. However, research suggests
that it is not uncommon for colleagues with similar qualifications and experience
to work in similar roles, the only difference between staff being country of origin
and compensation. This has been found to be demoralizing for national staff, and
possibly also international staff (Carr, McWha, MacLachlan, & Furnham, 2010).
Some INGOs have begun to explore different pay systems, such as pay for per-
formance, unified regional pay scales, and single pay scales with some additional
benefits for international staff based on need (see for example, WaterAid,
ActionAid, and other members of CHS Alliance’s Fair Pay Forum). Still other
INGOs have applied the principles of localization to their compensation struc-
tures. In this approach, international employees can earn an international salary
for a limited length of time, at the end of which they can either choose to move
to another country office, or to remain where they are, but under the national
salary scale. This approach continues to prioritize the technical, temporary, and
transnational approach to international aid work.
The dual compensation system can negatively impact relationships among
staff. Good relationships are essential for capacity building initiatives specifi-
cally, and aid organizations more generally (Eyben, 2006; Girgis, 2007; McWha,
2011), and feelings of injustice and unfairness tend to result in disengagement,
dissatisfaction, and potentially turnover (often returning home, for international
staff) (Carr, McWha, MacLachlan, & Furnham, 2010). For national staff, global
mobility is often constrained by citizenship, and organizational turnover is often
not an option given socioeconomic circumstances. As a result, there is some
evidence that counterproductive work behaviors such as “moonlighting” (e.g.
taking a second job), or practices that may be viewed by outsiders as “corrupt,”
are a response to feelings of injustice (MacLachlan, Carr, & McAuliffe, 2010). In
a review of moonlighting and corruption within the public health sectors of
lower- and middle-income countries, Ferrinho & Lerberghe (2002) suggest that
individual coping strategies such as absenteeism (including as a means to enable
moonlighting), under-the-counter payments for “free” services, drug use, and
other seemingly “corrupt” behaviors, are a response to the significantly lower
salaries afforded to national workers.
Moreover, research suggests national workers play a key role in the socialization
of international workers, a process that ultimately contributes to the success or
failure of the international assignment (Toh & DeNisi, 2007). Socialization
occurs when international staff arrive at the site of their new assignment, and this
is a crucial time for adjustment to the national context. The efforts of national staff
294
to help international staff to adjust may be very important, and national workers’
feelings of unfairness regarding a dual salary system can reduce these socialization
efforts and may undermine the international assignment (Toh & DeNisi, 2005).
Careful design of rewards systems is therefore crucial not only for the engagement
and empowerment of national workers, but also for the success of international
assignments.
Performance Management and Professional Development

Performance management is particularly challenging for organizations working
across national and cultural boundaries. The impact of culture on performance
appraisal has been well documented (e.g. Vance, McClaine, Boje, & Stage, 1992;
Fletcher, 2001). Different countries and cultures define good performance in
different ways, based on proclivities including power distance, uncertainty avoid-
ance, and therefore, horizontal and vertical individualism-collectivism (Hofstede,
1980; Triandis & Gelfand, 1998). As a concept, performance management origin-
ated in the United States, and at a very basic level it may not be appropriate in
the context of other countries (e.g. countries that are highly collectivist). The
issue becomes even more complicated when individuals from multiple countries
are employed in one office. Managers should question whether a formal, standar-
dized performance management system is appropriate given cross-national
differences in what is considered good performance, as well as cultural biases in
responses to rating scales, such as avoiding extreme ratings or choosing all ratings
above the scale’s midpoint to “save face” (Hui & Triandis, 1989).
HR managers should also consider ongoing training an integral part of
performance management. Within the INGO context, there is a keen need for
training in cross-cultural diversity and urgent response to humanitarian disasters.
Much training is outsourced to organizations like RedR, International NGO
Training and Research Centre (INTRAC), Bond, and others. Training is
important for improving the quality of service delivery, as well as maintaining
safety, preventing accidents, and avoiding cultural conflicts (Chang, 2005). There
are also entrenched issues concerning the language capacities of international
staff. Though critics have long bemoaned the lack of local language skills of the
majority of international staff, in practice, language training has never been
particularly emphasized or enabled by sending agencies. Given the availability in
many aid contexts of capable local translators and assistants, it appears that such
skills have in practice usually been considered expendable by aid institutions,
notwithstanding any lip service paid to their importance.
The continued relevance of cultural differences to development has received
substantial attention in academic research, if not necessarily in development
practice. Yet, differences between INGO staff (both international and national)
and “clients” (often referred to as “aid recipients” or “beneficiaries”) have also
been framed in other terms. For example, Rossi (2006) reminds us not to
“compartmentalize” aid workers and recipients into separate worlds of knowledge,
295
arguing for much greater overlap. Further, Heaton-Shrestha (2006) points out
while there may be significant differences between national staff and clients that
run along the lines of class as well as an urban/rural divide, national staff may still
pride themselves on being able to “mix” much better with local clients than
international staff can due to language, culture, and national identity.
In the context of these differences, engagement between INGO staff and
clients has been considered central to successful aid delivery (Eyben, 2006). This
concern has underpinned the “participatory approach,” which holds that clients
of INGOs should be significantly involved in program design and implementa-
tion. However, the paradigm of participation and the ways in which it has been
applied may already be based on an inherently paternalistic approach to develop-
ment (Baaz, 2005), and therefore the approach has often failed to live up to its
democratic promise.
Staff Well-Being
While traveling for work or living overseas, staff experience a blurring of the
physical domains that separate work from home life (Shaffer, Kraimer, Chen, &
Bolino, 2012). In addition, technology bridges the domains such that personal
news can easily arrive at work, and work demands can punctuate what was
traditionally considered leisure time. This breakdown of traditional boundaries
between work and home results in increasing inter-role influence across domains.
The impact of work-family conflict is increased in international work arrange-
ments, which often involve some combination of physical relocation away from
one’s social support network, intensive travel, and long hours. In such cases, the
boundaries between work and home become blurred and there is often disruption
of traditional family roles, causing increasing stress (Caligiuri, Hyland, & Joshi,
1998). Taken together, these features interfere with aid workers’ personal lives
and often result in poor physical and mental health. Given the overlap between
gender and family roles, this work-life conflict is especially acute for women
(Harris, 2004). As such, research has shown that in addition to formal organizational
support, informal support, such as when employees have a sense that their
manager and the broader organization is concerned with their healthy personal
life, is important for success in HRM (Grant-Vallone & Ensher, 2001).
The accumulated effects of working in a range of cultural and social
environments, including high-risk locations, may significantly affect engagement,
job satisfaction, and turnover among INGO staff (e.g. Korff et al., 2015). As
Roth (2015) and others note, the aid sector is characterized by a considerable
rate of burnout and dropout. As a result, HR practitioners are beginning to
address the issue of staff well-being (see also Bjerneld, 2009 and Pigni, 2014),
joining broader efforts including initiatives by agencies such as CHS Alliance,
InterHealth, and the Headington Institute. Well-being is particularly important
in environments where the physical safety and security of staff is endangered
(Fast, 2014). While the sector previously tended to classify employee stress as
296
“post-traumatic stress disorder,” it has now been recognized that stressors

encompass a much wider spectrum than witnessing conflict and violence among
clients. Awareness has emerged only recently, for example, of sexual harassment
and violence experienced by, but also carried out by, staff from INGOs and
multilateral agencies. Appleby (2010) documents the experience of sexual
harassment among female international staff in East Timor at the hands of other
international staff, as well as locals. As Csaky (2008) shows, the issue of child
sexual abuse by United Nations Peacekeepers is only very slowly being recognized,
let alone addressed. In relation to safety and security, as in other areas, a particular
sensitivity to gender-related issues is therefore mandatory (Wille & Fast, 2011).
More generally, even though the paradigm of “gender and development” has
been a key component of many aid initiatives over the last few decades, the
pervasive focus on clients has somewhat occluded issues of gender-related policy
and practice among INGO staff. While there have been calls by practitioners for
INGOs to “get their own house in order” by promoting gender equality among
staff as well as in client-facing programs, relatively little academic attention has
been paid to these issues (see, however, de Jong, 2009, for the particular posi-
tionality of female staff in Northern INGOs; Eyben & Turquet, 2013 on feminist
bureaucrats; and Fechter, 2015 on the relevance of gender among “development
people” more generally). One interesting question arising from this context is
whether female INGO staff, in their capacity as “internationally mobile profes-
sionals,” may benefit professionally and personally from the increased mobility
that their work entails. There are indications that the availability of (often female)
domestic workers in the countries where they are posted, as well as the flexible
nature of consultancy work, for example, enables dual-career households, com-
bining professional opportunities with raising a family for both male and female
staff (Fechter, 2013).
Travel and Expatriation

Efforts to situate projects within the world’s poorest regions, and staff them with
highly educated workers, necessitate a significant level of staff mobility and travel.
National staff are often based in large cities, and frequently travel within the
country and region to visit their INGO’s projects. Simultaneously, staff based in
Western headquarters will often travel to various international locations, both
in the urban capital as well as occasionally to more rural project settings. Both
shorter and longer trips are pursued for a number of reasons, including account-
ability, monitoring and oversight, assessments and evaluations, training and skills
transfer, trouble-shooting or problem-solving, and filling staffing gaps. Maintaining
a travel portfolio is crucial for continued advancement in the international
aid world. Individuals who do not “get out” on a regular basis are branded as
“disconnected.” Given the evolving nature of the sector, international staff main-
tain a career advantage through their technical specialization and geographic
flexibility.
297
Travel and expatriation are a prime mechanism by which professional and per-
sonal domains intersect and conflict. For national staff with families, it is often
difficult to find jobs for both individuals in rural areas, so families are apart, often
for long periods of time. Alternatively, families may live together in national capi-
tals, but must travel frequently to rural areas for work. For international staff, similar
processes are in play, though the distances between “home” and “work” are often
greater. International staff engage in cycles of expatriation (and repatriation) as well
as frequent international travel. For both national and international staff, relocation
and travel dually influence home life and professional life as staff move both their
personal and professionals selves simultaneously between geographic spaces
(Harvey, 1997). Travel and expatriation can therefore pose additional challenges
to staff well-being.
Conclusion
Strong HRM is pertinent to all organizations within the global development and
humanitarian relief sector, from the largest INGOs to the most local CBOs. This
chapter has provided an overview of the context of INGO work, including the
history of international aid work, its division of knowledge, division of labor,
and physical context. Moreover, the chapter has illuminated how these features
impact both traditional aspects of domestic HRM (e.g. staffing, compensation,
well-being, and training), as well as features that are more common in an IHRM
context (e.g. travel, expatriation, and pay discrepancies). These concerns are
all the more complex given the innumerable cultural and national differences
across the various countries in which a single INGO works. The resulting HR
considerations in global workforce management are influenced by myriad fea-
tures of both the external environment, broadly, as well as the internal environ-
ment of the organization. We emphasize that it is the complexity involved in
operating in different countries and employing people from different national and
cultural backgrounds that differentiates INGO HRM from domestic nonprofit
HRM, more than any major differences between the HR activities performed
(Dowling, Festing, & Engle, 2008). Moreover, as international aid moves more
fully into a transnationalized and nationalized model of workforce constitution,
these issues will continue to evolve and change. As managers and employees
wrestle with continuing global challenges, a responsive, strategic, and thoughtful
approach to HRM is crucial to ensure the well-being and performance of staff
and the fulfillment of their organizations’ crucial goals.
1 What are the differences between a community-based organization
(CBO), a non-governmental organization (NGO), and an international non-
governmental organization (INGO)? How would staffing look similar or
different across these organizations?
298
2 What types of knowledge are necessary for international aid work? How
would you engage in staff selection to ensure you had all the necessary skills
for a particular project?
3 Define the key actors working within the international aid sector, e.g.
international and national, long-term contract, short-term consultant, and
intern/volunteer. How clear are these different categorizations and what are
the areas of overlap between different categories? Given that these categories
are related to the type of contract an employee is offered, how would you
categorize a Kenyan national working in Rwanda or a Chilean national
working in Peru?
4 Explain the processes of professionalization and localization within the NGO
sector.
5 Consider the practical and ethical issues facing HR managers when designing
a reward system for an organization with offices in multiple countries.
Design a compensation system for a small office in Krong Bavet, in eastern
Cambodia near the Vietnam border. They have hired: (1) a single 60-year-
old director from London; (2) a 34-year-old technical advisor who is from
Vietnam with her husband and two children; (3) a 23-year-old Cambodian
civil engineer from Phnom Penh; (4) a 42-year-old Cambodian project
manager who is living apart from his wife and children, who are based in
Phnom Penh; and (5) a 31-year-old woman from Krong Bavet, who acts as
office administrator.
6 You are an HR manager at a medium-sized INGO with offices in 14
countries. Your organization employs mostly national staff, but some senior
management roles in each country office are currently filled by international
staff. Design a system for staff well-being, considering the varying needs of
different staff members.
Note
1 The most critical analysis of the professionalization of international aid work argues
that scientization of the sector is a rebranding attempt, so that those who have invested
their lives in this industry can finish careers that would otherwise hold little opportunity
to transfer to another industry. The reaction is in line with the research on threatened
employment due to immigration trends, and with Michels’ (1911 [2009]) analysis of
social change organizations.
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17
Managing Generational
Differences in Nonprofit
Organizations
Jasmine McGinnis Johnson, Jaclyn Schede
Piatak, and Eddy Ng
Introduction
Ensuring employees are satisfied with their jobs, committed, and engaged to the
organizations for which they work are some of the most salient issues facing
managers today. Despite a large amount of research describing the importance of
managing all employees with strategic human resource practices, there have been
increasing concerns about managing employees across all generations. For
example, a number of popular press articles (Alsop, 2008; Lancaster & Stillman,
2009) bemoan the difficulty managers will likely face managing Millennials
(individuals born between 1980 and 1995) who have different work values than
previous generations, technology preferences, and ideas about work-life balance
that are divergent from Baby Boomers (individuals born between 1946 and 1964)
and Generation X’ers (individuals born between 1965 and 1979). Yet, many
managers continue to grapple with how best to manage employees of all
generational groups and many lack knowledge about whether or not learning
about generations makes any difference in the workplace. Additionally, very little
research on managing across generations is being conducted specific to the
nonprofit sector (exceptions include Kunreuther, Kim, & Rodriguez, 2008;
McGinnis, 2011; McGinnis Johnson & Ng, 2016; Ng & McGinnis Johnson 2015),
and nonprofit managers may believe research on generations does not apply to
them because nonprofit employees are inherently different from employees in
other sectors.
In this chapter, we present a selection of theoretical and empirical research
on work values within and across generations, describing the similarities and
differences. We also summarize existing research specific to managing Millennial
nonprofit employees. We then describe a strategic human resources (HR)
304
Managing Generational Differences
approach to managing nonprofit employees of all generations and conclude by

offering additional resources for those interested in managing Millennials in the
nonprofit sector.
Work Values and Attraction to Nonprofit Work

Across Generations
In nonprofit research, there have been many investigations of the relationship
between an individual’s work values (relatively stable preferences or needs around
particular values in an occupational setting) and an individual’s choice of
occupation (e.g., Ng, Schweitzer, & Lyons, 2012). This is largely because nonprofit
employees are willing to ‘donate’ their labor (Leete, 2001) and accept lower wages
for comparable work performed in other sectors, since they receive some benefits
from a nonprofit job consistent with their work values. This idea has been
explained by person/environment fit or person/organization fit (Schneider, 1987).
Person/environment and person/organization fit models theorize that all
employees have preferences for different work values. Individuals will select
occupations and sectors that are congruent with their work values and provide
the work-related rewards they prefer (Lyons, Duxbury, & Higgins, 2006; Ros,
Schwartz, & Surkiss, 1999). Researchers group work values into several categories;
extrinsic (the external rewards employees accrue from work, such as pay, security),
intrinsic (the rewards employees accrue from work that are related to the nature
of the job, such as interesting, challenging work), altruistic (a desire to help others,
such as making a contribution to society, importance of social justice), social
(relations with supervisors, coworkers, and others, such as coworker relations, a
fun place to work), and prestige (status, influence, and power, such as prestigious
work; employer is leader in the industry) (De Cooman, De Gieter, Pepermans,
& Jegers, 2009; De Graaf & van Der Wal, 2008; Lyons et al., 2006). Wright and
Christensen (2010) find that when employees work in occupations consistent with
their work values, they will have higher job satisfaction and greater organizational
commitment (Wright & Christensen, 2010).
However, there are mixed findings in empirical research regarding the work
values of employees that self-select into the nonprofit sector (Devaro &
Brookshire, 2007). On one hand, a subset of research finds nonprofit employees
prioritize the intrinsic and altruistic values of the nonprofit sector (Benz, 2005;
Kim & Lee, 2007). Consequently, nonprofit employees self-select into occupations
that are found in the nonprofit sector because they receive intrinsic and altruistic
rewards from the overall nature of nonprofit work (Faulk, Edwards, Lewis, &
McGinnis, 2012). Since the nonprofit sector, as compared to for-profit and
public sector organizations, places greater importance on the intrinsic and
altruistic benefits of work, as opposed to extrinsic rewards such as pay or
promotion opportunities, individuals who prefer these work values will self-
select into the nonprofit sector (De Cooman et al., 2009; Lee & Wilkins, 2011).
Studies confirm these findings, noting that nonprofit employees have work values
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inherently different from employees in other sectors. Lyons et al. (2006) find that
nonprofit employees value career advancement less than their for-profit
counterparts, which is also supported in Hansen et al.’s (2003) and Devaro and
Brookshire’s (2007) research on nonprofit employees. Studies of nonprofit
employees paid overtime (Lanfranchi, Narcy, & Larguem, 2010) find that this
reduced job satisfaction because the extrinsic rewards did not match the work
values of nonprofit employees.
Moreover, studies of the pay differentials between comparable employees in
the nonprofit sector and other sectors provide some evidence that nonprofit
employees value extrinsic rewards less than employees of other sectors. Pay
differentials between nonprofit and for-profit employees tend to show small, but
statistically significant wage penalties for nonprofit employees, which again
demonstrate that nonprofit employees may have different work values than
employees in other sectors (Benz, 2005). For example, Onyx and Maclean’s
(1996) study of nonprofit professionals found that pay was not a significant
predictor of why employees changed jobs, and in this study, 34% of the job
changes nonprofit employees made resulted in a reduction in salaries. Moreover,
70% of the employees that changed jobs left because of a promotion or opportunity
to gain new skills (Onyx & Maclean, 1996).
Contrary to these studies, other research has found that the work values of
nonprofit employees may be more complicated than simple explanations of a
desire for intrinsic and altruistic benefits (Chen & Bozeman, 2013). For example,
some studies indicate that turnover in the nonprofit sector is consistently related
to extrinsic rewards, specifically compensation (McGinnis Johnson & Ng, 2016;
Mobley, 1982). In Issa and Herman’s (1986) study of 26 nonprofit executives,
although none selected low pay as the primary reason they were leaving, 88%
indicated that pay was the second reason they were leaving their nonprofit
positions. Brown and Yoshioka’s (2003) research suggests that nonprofit employees’
dissatisfaction with pay may override the intrinsic and altruistic benefits nonprofit
employees expect to receive from their nonprofit employers.
For a subset of the nonprofit workforce, Millennials’ compensation may be
even more of a prominent factor in understanding work behaviors. Studies of
Millennials in the nonprofit workforce (McGinnis, 2011; McGinnis Johnson &
Ng, 2016) find that Millennials are more likely to leave their job due to low
compensation. McGinnis (2011) found that across for-profit, public, and non-
profit sectors, nonprofit industries have the highest proportions of employees
with graduate degrees, but nonprofit employees receive the lowest returns to
graduate education. Likewise, McGinnis Johnson and Ng (2016) found the
sector-switching intentions of Millennial nonprofit managers were predicted by
an employee’s pay and education. Therefore, concerns have emerged that
previous human resource strategies based on the expectations that nonprofit
employees may donate their labor in exchange for intrinsic and altruistic benefits
from nonprofit work may not be consistent with the new generation of young,
nonprofit leaders. In fact, a 2008 Ready to Lead study surveyed a sub-sample of
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young, nonprofit leaders, and many young leaders were concerned, not just
about staying in their nonprofit job, but committing to the nonprofit sector due
to low compensation (Cornelius, Corvington, & Ruesga, 2008). A 2011 TIAA-
CREF Institute and Independent Sector study similarly found that young,
nonprofit leaders were concerned about their ability to retire if they stayed
employed in the nonprofit sector (TIAA CREF/Independent Sector, 2011). In
light of this emerging research, nonprofit human resource scholars and
practitioners must become more knowledgeable about the generational differences
in work values. The differences and similarities in work values across generations
are critical to understanding other topics such as an employee’s organizational
commitment, job satisfaction, and eventual organizational performance.
Generational Differences and Work Values

Smola and Sutton (2002) first established a link between generational differences
and work values, which leads to differences in desired work outcomes. Their
early findings suggest Generation X employees report less loyalty to the employer,
are less committed to work, but are impatient to be promoted. However, as the
workers age, they are more likely to express greater work centrality. Since
the Smola and Sutton study, a number of other studies have also documented
generational differences across personality and work values (see Ng & Parry, 2016
for a review).
Twenge, Konrath, Foster, Campbell, and Bushman (2008) examined
85 samples of college students between 1979 and 2006 and concluded that self-
esteem and ego are on the rise. In another study, Gentile, Twenge, and Campbell
(2010), examining high school and college students between 1988 and 2008, and
the authors noted that 18% of the students in 2008 reported perfect self-esteem
scores. Twenge and Campbell (2001) had earlier commented that the rise occurred
during their high school and college years. The rise in self-esteem and narcissism
levels has led to more individualistic behaviors among the younger generation in
the workplace. Westerman, Bergman, Bergman, and Daly (2011) found high
levels of narcissism among students to be related to job entitlement. As a result,
organizations and employers are seeing a rise in unrealistically high expectations,
a constant need for feedback and praise, and increasing turnover with successive
generations when their needs are not satisfied (Ng, Schweitzer, & Lyons, 2010;
Twenge & Campbell, 2008). Indeed, a number of studies have documented shift-
ing work values—arising out of personality shifts—from one generation to another
with workplace implications.
Work values are important because they can be indicative of the career
preferences and types of work individuals prefer. In general, four work values
are commonly studied in generational research: extrinsic (e.g., pay and benefits),
intrinsic (interesting, challenging work), social (relations with coworkers,
supervisors), and altruistic (e.g., helping behaviors) values. Twenge, Campbell,
Hoffman, and Lance (2010) compared different work values across Baby Boomers,
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Gen Xers, and Millennials and found that Millennials value extrinsic rewards
more than Gen Xers and Baby Boomers. Hansen and Leuty (2012) examined
work values across the Silent Generation, Baby Boomers, and Gen Xers, and
found that Gen Xers emphasized compensation and job security, while the Silent
Generation emphasized status and autonomy. Twenge, Campbell, Hoffman, and
Lance (2010) also found that Millennials reported lower altruistic values than
older generations. Ng and Parry (2016) conducted a comprehensive review of
generational differences in work values and concluded that younger generations—
particularly for the Millennials—do tend to exhibit a strong preference for
extrinsic values and rewards, while the older generation of workers tends to
prefer the intrinsic aspects of work. There was no evidence that Millennials
espoused stronger altruistic values than preceding generations.
Of note, Krahn and Galambos (2014) found that Millennials value extrinsic
rewards more than Gen Xers, and have stronger job entitlements (an expectation
of a well-paying job with rising levels of education). As a result, Millennials have
high expectations for pay and benefits and rapid advancement (Ng et al., 2010).
This high level of expectation may be attributed to the high self-esteem and strong
sense of entitlement fostered by a highly involved parenting style (Hill, 2002).
Millennials’ preference for high pay may be especially concerning for nonprofit
organizations, given that, as an industry, nonprofits pay less than the public and
for-profit sectors (Faulk, Edwards, Lewis, & McGinnis, 2012). An overemphasis
on good pay and benefits by younger generations may lead to prospective employees
self-selecting themselves out of nonprofit jobs and leaving when they are dissatisfied
with their pay relative to their for-profit and public sector counterparts. Brown
and Yoshioka’s (2003) study found that even when employees are attracted to an
organization because of its mission, being dissatisfied with pay may explain why
they leave an organization—again demonstrating that what attracts an employee to
an organization is not always the same factor that explains an organization’s ability
to retain them (Cornelius & Corvington, 2012).
In another study, Twenge and colleagues (2010) reported the desire for greater
leisure time (with corresponding decrease in work centrality) and better work/
life balance increases with younger generations, suggesting that the workers today
are less committed to work than the Baby Boomers. Indeed, research studies have
found that Baby Boomers more strongly espouse a “live to work” attitude, while
younger generations tend to emphasize a “work to live” attitude (Gursoy, Maier,
& Chi, 2008). The emphasis on leisure over work may be attributed to the
younger generation of workers witnessing how Baby Boomers were downsized
out of their jobs despite having significantly invested their lives into work
(Ng et al., 2010). Moreover, as the younger generation begin their own families
and negotiate parental care, they are more likely to demand greater work/life
balance (Bianchi & Milkie, 2010). In this regard, nonprofit employers may do
well in appealing to younger workers, as they can offer more flexible work
arrangements (Ben-Ner & Ren, 2013; Kalleberg, Marsden, Reynolds, & Knoke,
2006) to accommodate greater life demands.
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Additionally, despite popular beliefs that the younger generation displays

concerns for the environment and expresses strong desires for meaningful and
fulfilling work (cf. Ng et al., 2010), Twenge et al. (2010) reported the desire to
help others among Millennials was no higher than previous generations. In
another study, Chen and Choi (2008) reported that Millennials, in fact, score the
lowest on altruistic work value compared to previous generations. Leveson and
Joiner (2014) found that Millennials were, in fact, willing to trade off social
responsibility for greater extrinsic rewards such as pay. Ertas (2015) reported
volunteering hours—a behavior strongly associated with nonprofit employment
(Piatak, 2015)—is also on the decline with younger generations. This is a cause
for concern, as nonprofit organizations rely on public service appeal and donative
labor to attract employees and volunteers (Einoff, 2015). Therefore, it should
come as no surprise for Millennials to trade off social responsibility concerns
for extrinsic rewards when asked to make job choice decisions (Leveson &
Threse, 2014). These studies raise concerns about how nonprofits can continue
attracting and retaining Millennials, a growing and important segment of the
workforce.
Understanding the Challenges and Opportunities

of Millennials’ Work Values
Over the past two decades, competition for funding, a focus on performance
metrics, and increased complexity in service demands have led to a growing
reliance on professional staff to manage programs and run complex nonprofit
organizations (Hwang & Powell, 2009; Park & Word, 2012; Smith & Lipsky,
1993; Suarez, 2009). This is a change from the composition of the workforce
just 20 years ago, when the average nonprofit worker had some college education
and most worked part-time (Preston, 1989). Currently, the average nonprofit
worker is employed full-time and has a graduate degree (McGinnis, 2011).
However, Millennial nonprofit employees are also different from previous
generations of nonprofit employees as they also hold higher proportions of Masters
Degrees, Professional Degrees, and Doctorates than their counterparts in the for-
profit and public sectors (McGinnis, 2011). Although statistics indicate young
people are attracted to nonprofit work, there are concerns as to whether this
commitment to the sector will be sustained due to questions of whether they
are satisfied with compensation practices in nonprofit organizations (Brown &
Yoshioka, 2003; Cornelius, Corvington, & Rusega, 2008; Cornelius, Moyers,
& Bell, 2011; McGinnis Johnson & Ng, 2016). Moreover, there are few indications
the average nonprofit organization has any strategic human resources strategy or
practices (Guo, Brown, Ashcraft, Yoshioka, & Dong, 2011), so questions about
how benefits, promotion opportunities, and other extrinsic benefits affect the
likelihood Millennials are satisfied in their nonprofit jobs remain unanswered.
Until a few decades ago, scholarly research supported the notion an employee’s
choice to work in a particular sector was a permanent decision. For example,
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Onyx and Maclean found that sector switching was rare in their 1996 study of
nonprofit employees. Nonprofit employees tended to change jobs frequently
(an average of 3.6 positions over 10 years), but most remained employed in the
nonprofit sector. Yet, 20 years later, McGinnis Johnson and Ng’s (2016) study
of Millennial nonprofit employees found that compensation was the most
significant predictor of sector-switching intention for Millennial nonprofit
managers (even controlling for different benefit packages). This echoes concerns
raised in popular press articles that Millennial employees are difficult to manage
because they are interested in rapid advancement and compensation that is not
proportionate with their abilities or skills (Ng et al., 2010).
One of the ways the preferences Millennials have about their career advance-
ment may affect nonprofit managers is in their job mobility, or the movement
of an employee from one job to another. Lyons et al.'s (2012, 2015) theory on
job mobility across generations predicts a combination of factors explain the dif-
ferences in the turnover or sector-switching intentions of Millennial employees.
These factors include: (1) structural factors in the economy; (2) individual work
values; and (3) decisional factors, such as a preference for mobility and norms
about careers.
On one hand, structural factors in the broader economy have created a
growing sense of sector agnosticism, where all generations of employees no
longer feel they can only ‘do good’ in the nonprofit sector. Employees can pursue
publicly-oriented missions in the for-profit sector through corporate volunteerism
or various social enterprise initiatives (Cornelius et al., 2008; Lee & Whitford,
2008; Rose, 2013; TIAA CREF/Independent Sector, 2011; Tschirhart, Reed,
Freeman, & Anker, 2008). A higher proportion of Millennial nonprofit employees
are sector agnostic when compared to other generations. Several studies find
that sector switching is very common for young, nonprofit employees, who often
begin their careers in the nonprofit sector but later switch to other sectors
(Chetkovich, 2003; Tschirhart et al. 2008; Piatak, 2012). Furthermore, graduate
education constantly reinforces the transferability of skills across sectors, and as
more Millennials enter the nonprofit workforce with graduate degrees, they may
be more sector agnostic than previous generations (Mirabella & Young, 2012;
McGinnis, 2011).
Decisional factors such as norms about career paths may also explain the greater
propensity for Millennial nonprofit employees to leave their jobs or sector switch
when compared to other generations. Employees across all generational cohorts
believe there are costs (advancement and salary) to organizational commitment
and do not intend to remain loyal to one employer. However, Millennials feel
especially comfortable changing jobs frequently and consider lateral moves an
important part of their career trajectories (Lyons et al., 2012, 2015). Lyons et al.
(2012) found that Millennials changed jobs more frequently than Generation Xers,
arguing “specifically, Millennials averaged 2.59 job changes when they were
between the ages of 20 and 24, which was significantly greater than the 1.28 job
changes for Xers, 1.39 changes for Boomers, and 0.60 job changes for Matures at
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the same age” (p. 343). The propensity of Millennials to change jobs more
frequently is also confirmed in Lyons et al.'s research. Dries et al.’s (2008)
investigation of five generations’ career satisfaction and a meta-analysis of 16 cross
sectional studies also found that organizational commitment decreased with each
generational cohort (Cohen, 1993).
The mobility of Millennials was also found in research specifically focused on
nonprofit organizations. Onyx and Maclean (1996) found young nonprofit
workers tended to change jobs more frequently. Building on both a growing
sense of sector agnosticism and the changing nature of careers, we suggest that
Millennial nonprofit employees are more likely to leave their jobs when a
nonprofit organization’s human resource strategy does not consider the work
values Millennials hold—which include but are not limited to—a greater desire
for increased compensation, advancement opportunities, flexible schedules, or
leisure benefits they desire.
Using Strategic Human Resource Management Practices

to Manage Across Generations
Despite the different work values across generations, we suggest awareness of
these challenges, along with a commitment to strategic human resource practices
(SHRM), can ensure a high performing nonprofit organization with engaged,
committed, and satisfied employees. SHRM aligns personnel management with
the organization’s goals rather than viewing human resource management as a
separate organizational function. By taking a strategic approach, nonprofit organ-
izations can assess their environmental context and plan for the future in pursuing
their mission. SHRM can help nonprofits be proactive rather than reactive in
recruitment and retention efforts.
The human resource management environment for nonprofits is challenging,
as nonprofits are accountable to their funders and external and internal stakeholders
to fulfill their missions. At the same time, the nonprofit sector is similar to other
sectors, as a majority of nonprofit organizations’ budgets go towards employees’
salaries and benefits (Pynes, 2013). As a result of limited budgets, nonprofits have
tended to use volunteers and hired employees who are willing to accept lower
wages because they have a commitment to the mission of the organization or
helping others. However, the nonprofit sector is both growing in numbers and
evolving with different technologies and different organizational forms (social
enterprise, benefit corporations, impact-investing firms). Therefore, recruitment
efforts will need to focus on a new set of skills (Mesch, 2010) and improving
compensation levels (Faulk, Edwards, Lewis, & McGinnis, 2012). The nonprofit
sector can no longer solely rely on intrinsic motivation and commitment to
helping others, especially as emerging research suggests this is not enough
to recruit and retain the next generation of nonprofit employees, i.e. Millennials
(those born between 1980–1995) and Generation Z (those born after 1996)
(Ng & McGinnis Johnson, 2016).
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Regardless of sector, SHRM practices can increase organizational performance

(Pynes, 2013; Rodwell & Teo, 2004). SHRM practices and high perform-
ance work systems have been linked to both real and perceived measures of
performance (Delaney & Huselid, 1996; De Prins & Henderickx, 2007).
However, few nonprofits have human resource management specialists (Ban,
Drahnak-Faller, & Towers, 2003), and most neglect to align organizational
strategy with human resource management (Akingbola, 2006). Existing studies
indicate that some nonprofits are more likely to adopt a strategic approach than
others. External factors, such as funding, competition, and demographic changes,
shape a nonprofit’s human resource management approach (Walk, Schinnenburg,
& Handy, 2014). Larger, more technologically advanced organizations that use
independent contractors are more likely to adopt a SHRM approach, as are
younger, educational organizations that do not have dedicated human resource
staff (Guo et al., 2011).
Researchers have developed a typology to distinguish the human resource
approaches that different nonprofits adopt based on the human resource and
strategic orientation of the organization (Akingbola, 2013; Ridder, Baluch, &
Piening, 2012; Ridder & McCandless, 2010; Ridder, Piening, & Baluch, 2012).
Nonprofits with an administrative focus imitate practices from the for-profit
sector without adapting them to the nonprofit context and view employees as a
cost to minimize. Nonprofits with a strategic focus view employees as an asset
to meet organizational goals, but may neglect the needs of the employees.
Nonprofits that focus on employees emphasize organizational commitment and
retention with benefits that support a work-life balance. Lastly, nonprofits with
a value-driven focus tend to struggle to meet the diverse demands of internal and
external stakeholders. Each of these approaches has implications for the main
areas of a nonprofit’s human resource approach—the recruitment and retention
of employees. Schneider’s (1987) attraction-selection-attrition framework
conceptualizes that people apply for jobs that match their interests, organizations
hire employees who are compatible with the organization, and employees leave
when they no longer fit. Below we discuss this theoretical concept within the
context of managing across generations for nonprofit organizations.
Recruiting and Retaining Nonprofit Employees with

Traditional Methods
Nonprofits currently face the pressing challenge of recruiting and retaining
effective employees. Studies have found people are often attracted to work in a
nonprofit because of their identification with the organization’s values and mission
(Brown & Yoshioka, 2003; Kim & Lee, 2007; Word & Carpenter, 2013). Since
mission attachment is an important aspect of nonprofit work, nonprofits rely more
on social networks of current employees in recruitment efforts (Ben-Ner & Ren,
2013). However, an individual’s fit with an organization may not be sufficient for
retention. For example, Brown and Yoshioka (2003) found mission attachment
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helped with retention of younger, part-time employees, but “the intrinsic motiva-
tions run thin as full-time employees earn salaries that appear noncompetitive to
other organizations” (p. 14). Similarly, Kim and Lee (2007) found that nonprofit
employees sense of mission attachment did not hold when employees were
dissatisfied with pay and/or career advancement opportunities. Nonprofit organi-
zations should recruit people who believe in the organization’s values and mission,
which enhances employee satisfaction, attachment, and motivation, but this may
not be enough to overcome dissatisfactions to retain employees (Herzberg, 2003).
Despite the importance of mission attachment, nonprofit employees are less
committed to their organizations than for-profit employees (Goulet & Frank,
2002). Retention is a serious issue, especially among younger nonprofit employees
(Mann, 2006; Johnson & Ng, 2015; Ng & McGinnis Johnson, 2016).
Nonprofit employees have long been viewed as noble do-gooders willing to
accept a lower wage because the work is more important than their salary (Lee
& Wilkins, 2011; Leete, 2001, 2006; Mirvis & Hackett, 1983). In this sense,
nonprofit employees are willing to ‘donate’ a portion of their time in order to
have fulfilling work. Handy and Katz (1998) even argue, “the need for such self-
selection is particularly important in nonprofits because they are not subject to
the usual checks and balances imposed by shareholders on for-profits” (p. 259).
However, people may leave the nonprofit sector in pursuit of higher wages
(Lewis, 2010; McGinnis Johnson & Ng, 2016), and the nonprofit sector can no
longer rely on employees to accept a lower wage (Brown and Yoshika 2003;
Faulk et al., 2012). Nonprofits should move beyond the view that employees are
a cost to be minimized to view employees both as an asset in pursuing the mission
and as employees in need of organizational support.
Alternatives to Traditional Models of Retention

Nonprofit organizations have limited financial resources to compete with for-profit
sector salaries (Frumkin & Andre-Clark, 2000) and have to legitimize compensation
decisions to stakeholders, such as funders, volunteers, and the media (Akingbola,
2013b; Brandl & Güttel, 2007). In addition, pay-for-performance systems are rarely
used because of both the relevance of the extrinsic reward with the potential for
crowding-out effects and the difficulty of ensuring knowledge, control, and
measurement of organizational goals (Theuvsen, 2004). Performance-based pay
may thwart the motivation of nonprofit employees that are intrinsically motivated.
In addition, nonprofit goals—much like those in the government—are more
difficult to measure than goals in the for-profit sector (Perry et al., 2009). Brandl
and Güttel (2007) found nonprofits with a competitive environment and freedom
to formulate strategic goals were more likely to implement pay-for-performance
systems, but also highlight several functional equivalents, including increased
autonomy or flexible work hours.
Besides relying on the mission attachment and the nature of the sector,
nonprofit organizations can pursue other human resource management strategies
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to retain employees. Nonprofit employees attracted to the mission and value of

the organization expect a work environment that matches those values and gives
them the opportunity to contribute to the mission (Quarter, Sousa, Richmond,
& Carmichael, 2001; Schepers, 2005). Training helps align employee skills and
values to the organization and is vital to ensure transfer of knowledge from one
generation of employees to the next (Pynes, 2013). Increased unionization of
nonprofit organizations is largely due to employee frustration with the work
environment not matching the values and mission (Akingbola, 2013a). In order
to sustain individuals’ motivation that draws nonprofit employees to work in the
organization, nonprofits must create and sustain a work environment that matches
their organization’s values and mission to retain these employees.
While nonprofit employees tend to value work that makes a difference and
contributes to society (Lyons et al., 2006; Tschirhart et al., 2008), they also value
responsibility, opportunities for advancement, and work-life balance (Leete, 2006;
Park & Word, 2012). Mastracci and Herring (2010) found higher proportions
of women in full-time and mission-critical positions in the nonprofit sector than
the for-profit sector, which they credit to transparent, inclusive human resource
management practices. Nonprofits are more likely to use self-directed work teams
and offline committees than for-profit organizations (Kalleberg et al., 2006). In
the nursing home context, nonprofits delegated more decision-making authority
to their nurses than for-profit homes (Ben-Ner & Ren, 2013). Nonprofit organ-
izations are beginning to take more of a SHRM approach by providing trans-
parency and giving greater autonomy to employees. Nonprofits can compete with
for-profit organizations by creating an inclusive and equitable work environment.
Nonprofits can do so by creating transparent and inclusive, team-oriented
organizational cultures to ensure all employees have a voice and equal opportunities
for career advancement.
Nonprofit organizations also tend to offer more work-life benefits than the
for-profit sector (Barbeito, Bowman, & Inc, 1998; Pitt-Catsouphes, Swanberg,
Bond, & Galinsky, 2004). While smaller nonprofits may not be able to compete
with for-profit sector wages, they can compete by getting creative with employee
benefits. Some benefits bear no costs to the organization, such as allowing employ-
ees to take their pets into the office or allowing for casual dress days. Smaller
organizations, those with 50–99 employees, are more likely to allow employees
to work at home occasionally, take breaks at their discretion, and tend to family
or personal needs during the workday without loss of pay, compared to large
organizations with 1,000 or more employees nationwide (Matos & Galinsky,
2014). Smaller nonprofit organizations unable to compete with high salaries can
offer employees greater flexibility and work-life balance.
Nonprofits also have the advantage of being able to use volunteers to diversify
the human resource management pool and save costs. Handy, Mook, and Quarter
(2007) find the interchangeability of employees and volunteers is a function of
the organizational demand and volunteer labor supply, where the importance
of employees to the organization’s mission is relative to the availability of
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volunteers who can substitute for a permanent workforce. Organizations should

anticipate the reaction of staff members if they are to use volunteers to replace
paid employees, and nonprofits should work with employees to establish the
parameters of any volunteer program (Pynes, 2013). To ensure volunteers and
employees see one another as allies rather than competitors, volunteer programs
should have a specific purpose and volunteers should have clearly delineated
responsibilities. In examining government organizations, using volunteers in
place of employees may be seen as unethical and may result in the loss of volun-
teers (Brudney, 1990). The nonprofit sector is also becoming more professional-
ized (Salamon, 1995; Weisbrod, 1998), and paid staff is likely to replace volunteers
rather than the reverse. Nonprofits became more bureaucratic as they partnered
with government to provide public services in the 1980s and 1990s (Smith &
Lipsky, 1999) and have become more professional in recent decades adopting
business practices (Hwang & Powell, 2009). Correspondingly, the nonprofit
sector has a greater need for professional employees with a wide variety of skills,
especially when faced with increased demand and/or fewer resources. The evolu-
tion of nonprofits highlights the need to recruit and retain the next generation
of nonprofit employees to provide these technical skills.
Practical Implications/Advice for Nonprofits

and Nonprofit Leaders
Despite research suggesting that nonprofits should provide an egalitarian work
environment that matches their values and mission, nonprofits’ dependence on
resources from external organizations often limits this strategic approach to human
resource practices. Funding organizations often require specific human resource
practices, such as training, for funding to be granted (Akingbola, 2004). Funding
organizations also place limits on the amount of funding that is allowed to go
towards administrative costs. Many organizations report funders wanting funds to
be used for direct services rather than overhead for infrastructure (Wing et al.,
2005) or administrative staff (Ban et al., 2003). However, nonprofit organizations
that are part of a national affiliate often have additional support through the
sharing of best practices or access to a national human resource system (Ban
et al., 2003). Due to changing revenue sources, human resource management
practices vary depending on whether funding is available for certain staff posi-
tions, reliance on project-based funding for contract employees on a contingent
basis, or requirements for specific policies or practices. We offer several sugges-
tions that can work for nonprofit managers, who must manage both within and
across generations.
• Implement a strategic human resource management approach that aligns with

the organization’s mission, not only to enhance organizational performance,
but also to retain employees by creating a work environment that matches the
organization’s mission and values.
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• When possible, offer more competitive salaries, as it is not feasible to rely

on mission attachment alone.
• Ensure that all employees have some idea of how they can advance within
the organization.
• Be transparent and inclusive with human resource management practices.
Give employees the opportunity to voice their opinions in order to gain
buy-in.
• Give employees autonomy in their jobs. Allow them to accomplish goals
without specific instructions on the process, unless they ask.
• Provide supervisors training on giving employees feedback and recognition,
outside of the annual performance review.
• Be creative with benefit options. Many benefits can be offered to employees
to provide a greater work-life balance and to illustrate that the organization
is supportive of its employees that have little to no costs. For example, some
nonprofits will pay for lunch so that employees can develop mentor/mentee
relationships. Others will pay the cost of the employees’ national association
dues.
While these recommendations focus on the recruitment and retention of Millenials,

who have high expectations for pay, benefits, and opportunities for advance-
ment (Ng et al., 2010), a SHRM approach can help nonprofits in the recruitment
and retention of employees across generations. By linking the management
of human resources with the management of organizational objectives, nonprofits
can lay out a strategic plan to recruit and retain employees needed to pursue their
mission. Generations may not require distinct working conditions (Yang &
Guy, 2006). In addition, the influence of life stages or age-related changes in an
employee’s career depends on work circumstances (Kafner & Ackerman, 2004).
Nonprofit managers should employ SHRM to create a work environment that
supports all generations.
The nonprofit sector is growing and becoming more professional, where
human resources can no longer rely on the altruism of employees to ‘donate’ part
of their work efforts. For the nonprofit sector to compete with both the govern-
ment and for-profit sectors, nonprofit organizations need to be strategic in their
human resource practices. To recruit the next generation and retain current
employees, nonprofit managers should employ SHRM to create opportunities
for advancement, a transparent, inclusive work environment, and positions with
meaningful compensation, autonomy, and recognition.
1 What do you think the biggest challenge is for nonprofits managing a multi-
generational workforce?
2 As a member of your generation, what attracts you to a specific job? What
would make you want to build a career with that organization?
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3 Do you think a multi-generational workforce breeds competition or

cooperation? Why? How can managers foster a culture of cooperation and
learning?
4 What are some of the ways in which nonprofits can make themselves more
attractive as employers to Millennials?
5 How do older generations (e.g., the Silent Generation and Baby Boomers)
view the younger generations (e.g., Millennials) and vice versa? What are
some of the stereotypes each generation has for each other?
6 What can Baby Boomers and Millennials learn from each other? How can
employers facilitate knowledge transfer across the different generations?
7 How would careers change for Millennials and future generations in terms
of the types, quantity, and quality of work?
Further Reading
For additional resources on managing across generations, see the following
resources:
Carpenter, H. & Qualls, T. (2015). The talent development platform: Putting people first in
social change organizations. San Francisco, CA: Wiley.
Hamidullah, M. (2016). Managing the next generation of public workers. New York, NY:
Routledge.Talent Philanthropy Project: The Talent Philanthropy Project (#fundthepeople)
works to increase the incentives and knock down the barriers to “talent investing” by
producing ideas and research, education and training, and practical tools that funders
and fundraisers can use within their ongoing work. www.talentphilanthropy.
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18
Diversity and Diversity
Management in Nonprofit
Organizations
Judith Y. Weisinger
di·ver·si·ty (d-vûrs-t, d-) n.: the quality of being different or unique at

the individual or group level.
in·clu·sion (n-klzhn) n.: a strategy to leverage diversity. Diversity always

exists in social systems. Inclusion, on the other hand, must be created.
United Way’s Diversity and Inclusion page at
www.unitedway.org/about/diversity-and-inclusion
Karamu House stands tall in our nation’s history as an inclusive institution that
served as a common ground for Clevelanders of different races, religions, and
social and economic backgrounds, as well as a trusted community resource for
local families.
webpages of the Karamu House theater, Cleveland, Ohio:
www.karamuhouse.org/about-karamu-house
Our mission to serve every student is part of what makes our tutoring service
the best one for any student. Simply put, there is strength in diversity, and
competitive advantage in knowing how to help all students succeed, not just
a narrow subset.
webpages of the Aspire Education Project, at tutoring and educational services
nonprofit in the East Bay, California: http://aspireeducation.org/story/
Introduction
The above examples indicate the wide degree with which the term “diversity” is
interpreted and used within nonprofit organizations and in the nonprofit
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sector as a whole. “Diversity” has been variously defined in the management

literature to reflect many dimensions of difference, whether cultural, gender-
based, racial or ethnic, related to (dis)abilities, and sometimes even personality
traits; and “diversity management” has generally referred to how these dimensions
of difference can be “managed” for increased organizational performance and
effectiveness. For example, Ivancevich and Gilbert (2000, p. 77) define diversity
management as “the commitment on the part of organizations to recruit, retain,
reward and promote a heterogeneous mix of productive, motivated, and
committed workers including people of color, whites, females, and the physically
challenged.” In practice, more often than not “diversity” is used to mean
representational diversity (Weisinger & Salipante, 2005), or the degree to which
organizational membership—board, leadership, staff, volunteers—reflects
underrepresented or underserved groups in society. Relatedly, compositional
diversity (Gazley, Chang, & Bingham, 2010) can include the degree to which
the demographic diversity in a nonprofit organization reflects its various
stakeholders.
The Hudson Institute’s Workforce 2000 report brought to the management
forefront a picture of the U.S. workforce as becoming increasing diverse, with
its projection that women, immigrants and (racial/ethnic) minorities would
comprise two-thirds of new entrants (Johnston & Packer, 1987). The report
implored organizations to take seriously how they were going to manage this
workforce diversity. Thus, conceptually, diversity was distinguished from equal
employment opportunity (EEO), a legal concept focused on leveling the playing
field for protected classes through antidiscrimination laws. As such, EEO efforts
are compliance-focused while diversity efforts are voluntary. It should be noted
here that critical diversity scholars assert that the diversity concept reflects a
“re-appropriation of equal opportunities” (Zanoni, Janssens, Benschop, &
Nkomo, 2010, p. 9). According to these authors, this re-appropriation involved
rhetoric highlighting diversity as positive and empowering, while at the same
time obscuring hidden power dynamics, in particular as concerns race, ethnicity
and gender, and making these dynamics more difficult to challenge. As discussed
later in this chapter, conceptualizations of diversity are rife with tensions and
contradictions that pose challenges for “managing” diversity in organizations,
including nonprofits.
Despite the conceptual distinction, in practice, diversity and EEO efforts may
be integrated within an organization—representational diversity can refer to
traditionally underrepresented groups that are the focus of recruitment and
retention efforts. But representational diversity dynamics are also contextual.
That is, the characteristics that make a nonprofit “more diverse” depends upon
how that organization currently “looks.” For example, in a predominantly
women-centered nonprofit, staffing more men could be considered diversifying
the staff. Or, a nonprofit might enhance representational diversity among its
volunteers from the local Muslim community, members of which have not
historically been involved with the nonprofit and who are not traditionally
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considered ‘underrepresented’. Thus, representational diversity can be quite

broad, depending upon the organizational context.
Breadth of representation notwithstanding, author Derwin Dubose (2014)
asserts that the nonprofit sector has a “Ferguson problem.” For example, Dubose
compares the glaring underrepresentation of African Americans in public leadership
and in the police force in Ferguson, Missouri—a city that is two-thirds African
American—to that in the nonprofit sector. Dubose paints the following portrait
of the sector, citing various recent studies, including one by CommonGoodCareers
and the Level Playing Field Institute, which highlights the over-representation
of whites in the workforce at 82% (Schwartz, Weinberg, Hagenbuch, & Scott,
2016). This is even more pronounced on a deeper dive into the representation:
The gap in representation is more pronounced in nonprofit governance,

where only 14 percent of board members are people of color. Similarly, in
specialized functions such as development, less than six percent of roles are
filled by people of color.
(Schwartz et al., 2016, p. 5, citing the Chronicle of Philanthropy,
Association of Fundraising Professionals)
These data are supported by several studies (Peters & Wolfred, 2001 and
Teegarden, 2004) which found that between 75% and 84%, respectively, of
nonprofits are led by whites, roughly 10% by African Americans, between 3%
and 4% by Latinos, and 6.4% by Asians (Peters & Wolfred, 2001).
Similarly, with regard to human service organizations in particular, Mor Barak
states: “Human services organizations have traditionally served a wide array of
communities with a high representation of diverse, disadvantaged, and oppressed
groups. This diversity has not been typically mirrored in the workforces of those
organizations” (Mor Barak, 2015, p. 84). Thus, at the basic level of representation,
nonprofit organizations are not wholly representative of their clients and
communities, at least when it comes to race and ethnicity involving traditionally
underserved groups. Further, some areas in the nonprofit sector suffer from a
significant underrepresentation of women. The Nonprofit Quarterly has reported
on this deficit in environmental organizations, where 70% of presidents and board
chairs in conservation/preservation organizations are men; and as with museums,
the larger the organization, the larger the gender representation gap. In large
conservation/preservation nonprofits, 90% of presidents and board chairs are
men (Lamb, 2015). Hence, it is clear that, at least with respect to some aspects of
diversity—race, ethnicity, gender—U.S. nonprofit organizational membership
does not often reflect those being served, nor does it always reflect shifting societal
demographics.
While there are other aspects of representational diversity that are of interest
to nonprofits, such as socioeconomic status or religion, representation is but
one aspect of the diversity challenge in nonprofit organizations, and its over-
emphasis is problematic for “diversity management.” For instance, a primarily
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representational diversity view conceals more complex aspects of identity and

diversity dynamics by ignoring the role of context and history in an organizational
setting, overlooking the role of multiple and intersectional identities, and down-
playing the dynamics of inclusion with respect to power, leadership and decision-
making. For example, with respect to power dynamics, Linnehan and Konrad
(1999, p. 402) suggest that an emphasis on such individual differences dilutes the
focus on intergroup inequality, a critical view echoed in the work of Zanoni,
Janssens, Benschop, and Nkomo (2010), who state that studying diversity through
a social-psychological lens that focuses on “individual discriminatory acts
originating in universal cognitive processes” ignores the fact that such acts are
contextually embedded, reflecting “historically determined, structurally unequal
access to and distribution of resources between socioeconomic groups” (p. 14).
The remainder of this chapter explores these oft neglected diversity dynamics
by first briefly summarizing the current academic literature on diversity in non-
profits,1 then examining why these emergent diversity dynamics are critical for
understanding and practicing “diversity management” in third sector organiz-
ations. I conclude by advancing the notion that diversity management is a long-
term, organizational cultural change process involving the notion of embedding
the valuing of difference across all of the organization’s activities.
The Business Case and the Social Justice Case for Diversity
Scholars have highlighted two major approaches to diversity efforts in nonprofits—
the business case and the social justice case. Though these two approaches may
be seen as complementary in the voluntary sector (Tomlinson & Schwabenland,
2010), each refers to a different way of framing (whether explicitly or implicitly)
diversity and inclusion efforts within an organization. A brief overview of each
framework follows.
The business case suggests that it makes practical sense for organizations to
diversify for enhanced organizational performance and effectiveness. In nonprofit
organizations, this might mean more outreach to underserved or under-
represented clients or community members. It could also mean recruiting and
retaining more staff, volunteers and board members who mirror the demo-
graphics of the local community and clients. Doing so presumably gives the
nonprofit an advantage in terms of mission attainment and organizational
performance and effectiveness, which can also potentially translate into increased
funding. Furthermore, a diversity of ways of thinking about how to do the organi-
zation’s work is expected to contribute positively to creativity, innovation, and
performance in organizations (Cox, 1991; DiTomaso & Thompson, 1988).
However, recent research by Fredette, Bradshaw and Krause (2016) found that
the appearance of diversity is not necessarily related to enhanced group effectiveness
outcomes in nonprofits, specifically creativity, innovation and decision-making.
Thus, it is not entirely clear that these presumed diversity benefits always accrue
to the organization.
326
The business case for diversity emerged in the for-profit sector, where diversity
is presented as a strategic advantage to organizations, leading to a presumed
positive impact on the “bottom line.” One business case argument goes some-
thing like this: “By tapping into previously underserved markets for our products
(or services), and hiring more employees from those communities in service
of our goal, we can increase our revenues, leading to a potential increase in our
profits.” Another such argument is: “By leveraging the different experiences,
capabilities and ways of thinking that diverse employees bring to the table, we
can improve our organization’s innovation and creativity, and our organizational
effectiveness, all of which can be developed into a competitive advantage.”
Thus, in the for-profit sector, the advantages of representational diversity have
been clearly articulated and many private sector organizations operate from this
premise.
However, empirical research on the link between diversity and organizational
performance, as reflected by the business case, has been mixed (cf., Jayne &
Dipboye, 2004), although some studies do establish a positive link between
diversity and outcomes. For example, McLeod, Lobel, and Cox (1996) found
that ethnically diversity groups produced higher quality creative outcomes than
homogeneous groups. Within the public sector, Pitts (2009) found a strong
relationship between diversity management and job satisfaction, as well as to
perceptions of work group performance. A diversity emphasis has also benefitted
women’s and African Americans’ individual managerial advancement (Kalev,
Dobbin, & Kelly, 2006).
Interestingly, Leiter, Solebello, and Tschirhart (2011, p. 33) found in their
study of association members that their respondents “rarely advocated a business
case for diversity” and in fact, some questioned the use of limited organizational
resources on diversity and inclusion initiatives. Thus, while the business case is
widely accepted, this does not mean that it is a widespread operating principle
in nonprofits. In the nonprofit sector, discussion and usage of the business case
has been more diffuse. Business case arguments from the for-profit sector should
in theory translate to nonprofit organizations, which do not have ‘profit’ but still
have a financial bottom line. However, while the idea that nonprofit organizations
should at least mirror their client base, and doing so will be advantageous to the
organization is perhaps a generally accepted notion, getting there has apparently
been more challenging.
In contrast to the business case, the social justice case for diversity asserts that
addressing diversity in nonprofits is a moral imperative. Its focus is on eliminating
the oppression of marginalized groups, redistributing power, and reducing
exclusion and marginalization. This framework is very prevalent in research on
diversity in education, but very rarely invoked in nonprofit management diversity
research. This could be due to the fact that many nonprofits are, by definition
of their missions, engaged in social justice work, and thus social justice is an
implied construct in these nonprofits. The social justice case addresses some of
the issues about diversity raised by critical diversity scholars.
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Judith Y. Weisinger
For instance, Noon (2007, p. 778) actively argues against the business case,
claiming that it has potentially fatal flaws that can undermine social justice. In
critiquing the business case for diversity, Noon states:
The business case relies on an overly rational cost–benefit analysis which tends
to assume that inevitably the balance will tip in favour of investing in equality
initiatives. The danger is that in some instances this will simply not be the case.
The costs. . . might be judged bys managers to out-weigh the benefits.
So, just as managers can rationalize the benefits of a diverse workplace, they could
also rationalize its deficits. In focusing on a cost-benefit analysis of diversity
efforts, as the business case implicitly does, any focus on remedying inequality
experienced by underrepresented groups can become obscured; diversity only
matters to the extent that it contributes to the bottom line.
In sum, these two approaches to diversity—the business case and the social
justice case—reflect different ways of framing the key focus of diversity efforts in
nonprofits. A business case perspective looks at individual differences, regards
these as positive, and presumes a positive impact of these differences, if appropri-
ately “managed,” on organizational performance and effectiveness. On the other
hand, a social justice perspective considers group (and intergroup) differences,
explicitly addresses power differentials, including differences in resource access
and distribution, with the goal of working towards reducing exclusion and
marginalization of disadvantaged groups. It is these group justice remedies that
are at the heart of the social justice case, as contrasted with the organizational
effectiveness remedies at the heart of the business case.
Current Research on Diversity and Diversity Management

Most research on diversity in the nonprofit sector has as its focus representational
diversity, and a good number of the extant empirical studies focus on board
diversity (see for example, Bernstein & Bilimoria, 2013; Gazely, Chang, &
Bingham, 2010; Hatarska and Nadolynak, 2012; Parker, 2007). Other recent
studies examine association membership (cf., Coffee & Geys, 2007a, 2007b; Leiter,
Solebello, & Tschirhart, 2011), volunteerism or volunteer activity (Berenson &
Stagg, 2016; Caldwell, Farmer, & Fedor, 2008; Forbes & Zampelli, 2014; Paik &
Navarre-Jackson, 2011; Savelkoul, Gesthuizen, & Scheepers, 2013), team diversity
(Perkins & Fields, 2010), accessibility (Rodman & Cooper, 1995), disability
(Kirakosyan, 2016); philanthropy (Drezner & Garvey, 2016) and class diversity
(Dean, 2016).
Representational diversity efforts are often coupled with inclusion efforts in
organizations. Inclusion refers to “the degree to which individuals feel a part of
critical organizational processes, . . .” (Roberson, 2006, p. 215) and also “describes
which individuals are allowed to participate and are enabled to contribute fully
in the group” (Miller, 1998, p. 151). In its broadest sense, inclusion refers to how
328
the talents of all organizational members are effectively leveraged for mission
attainment and better organizational performance. Inclusive practices stand apart
from—but are also linked to—representational diversity efforts. While
representational diversity is preoccupied with increasing the numbers of staff,
volunteers, or board members from underrepresented (or underserved) groups,
inclusion concerns the ways in which diverse organizational members are
included in meaningful ways in the organization’s activities.
Roberson’s (2006) study’s first phase, examining the meanings attributed to
“diversity” and “inclusion,” found these to be distinct concepts. For example,
Consistent with popular and scholarly diversity literature, definitions of

diversity focused primarily on heterogeneity and the demographic composi-
tion of groups or organizations, whereas definitions of inclusion focused on
employee involvement and the integration of diversity into organizational
systems and processes.
(Roberson, 2006, pp. 227–228)
The study’s later confirmatory factor phase then found that several practices were
factors associated with both “diversity” and “inclusion,” such as equity/fairness,
organization and stakeholder representation, and diversity commitment. She
concludes that these findings suggest that organizational practice has perhaps
already moved more towards the inclusion aspect of diversity.
In nonprofit studies, inclusion has been the focus of an increasing number of
studies (cf., Bradshaw & Fredette, 2013; Brown, 2002; Fredette, Bradshaw, &
Krause, 2016). Such studies, however, have typically focused on nonprofit board
inclusion, rather than on organizational inclusiveness more broadly. These studies
suggest that while inclusive board practices are beneficial, their relationship to
representational diversity is not always clear cut.
Moving Beyond Representational Diversity and Inclusion

The preceding discussion has portrayed the research on diversity in the nonprofit
sector as being mostly about representational diversity, with increasing attention
being paid to aspects of inclusion. But even the dual foci of representational
diversity and inclusion may not suffice for effectively working across differences
in nonprofits. The interrelationship between diversity, inclusion, and perform-
ance can be “nuanced, complex, and at times, tenuous” (Fredette, Bradshaw, &
Krause, 2016). For example, Brown (2002) found no significant relationship
between the degree of nonprofit boards’ inclusive governance practices and
minority composition (reflecting five ethnic categories) within the board, though
the research team did find a moderate correlation between categorical composition
(reflecting various categories including disability, education level, profession) and
these inclusive governance practices. An example of an inclusive practice used
in one neighborhood development organization was a “formula board,” which
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Judith Y. Weisinger
mandates that 51% of board members be residents who are eligible for the
nonprofit’s services. Another youth nonprofit had presentations by staff and
service recipients at every board meeting. The goal of such practices is to keep
the board in touch with the communities being served, and with their clients.
The implication of this finding from Brown (2002) is that boards can reflect
inclusive governance without being diverse in terms of race/ethnicity. In this
sense, though, one might argue that inclusive practices could lead to better
representational diversity as such practices could enhance the interest of individuals
from underrepresented groups in the nonprofit.
Further, increasingly fluid and complex individual and group identity dynamics
will impact diversity and inclusion success. For example, an increasingly multi-
cultural society means that more individuals are identifying as bi- or multiracial or
bi- or multicultural. What does this mean in terms of traditional ways of addressing
representational diversity? In organizations, accounting for the number of members
of traditionally underrepresented groups is more straightforward if individuals iden-
tify with a single group (e.g., African American/Black). But what if individuals
identify and African-American and European? What if someone identifies as a
“White Latino”? Who “counts”, and who gets to decide who counts? More point-
edly, what is it that the organization intends to demonstrate through its accounting
of representational diversity?
It is not only racial or ethnic identities that have become increasingly complex,
but likewise, many organizations struggle with how to address workplace issues
involving gender identity. Witness the dynamics surrounding North Carolina’s
HB2 law, the so-called “bathroom bill,” which requires transgender individuals in
schools and public buildings, including nonprofits, to use the restroom (and related
facilities like locker rooms) corresponding to the sex on their birth certificate. The
bill also bans LGBT antidiscrimination laws, such as the one that was passed by
the city of Charlotte. At the time of this writing, a U.S. district judge has temporarily
blocked three plaintiffs from having to follow NC’s HB2 law at the University of
North Carolina, meaning that for the time being, individuals can use the restroom
associated with their gender identity. The HR challenges here center in part on
what sort of HR policy, if any, should guide nonprofit policy around restroom
usage? Heightened rhetoric around fear for personal safety (i.e., transgender men
sharing a restroom with cisgender women) seems to advocate for HR ‘policing’ of
the restrooms. However, such a practice would not only be impractical, but also
undesirable from an inclusiveness view. Many organizations have addressed this
issue through structural changes (e.g., restructured restrooms, including not only
gender neutral restrooms but also private (sometimes called “family”) restrooms),
rather than through establishing new HR policy.
In previous research, with colleagues, I propose a values-focused approach to
diversity, wherein people’s inherent diversity is recognized as being fundamentally
valuable for the organization throughout all its activities (Weisinger, Borges-
Méndez, & Milofsky, 2016). Such an approach does not render representational
330
diversity or inclusion meaningless. Rather, it suggests that organizational leaders

recognize the limitations of using these approaches exclusively, and broaden the
way that diversity is conceptualized and managed in their organizations:
Recognizing the complex and contextual nature of identities leads us to a

perspective that emphasizes recognizing, involving, and serving multiple con-
stituencies as a way of embedding consciousness of diversity in organizational
values and in all aspects of functioning
(Weisinger, Borges-Méndez, & Milofsky, 2016, p. 3)
Three emergent diversity dynamics inform a more nuanced view of an

embedded diversity consciousness for nonprofit managers. These are: (1) the
context and history in the diversity trajectory of the nonprofit; (2) intersectional
and multiple identities; and (3) inclusive practice with respect to leadership,
power, and decision-making.
Contextual and Historicity

As alluded to earlier in the chapter, diversity and its management are not one
size fits all propositions (Leiter, Solebello, & Tschirhart, 2011). What is diversity-
relevant in one organizational setting may be very different in another.
Mor Barak (2015) supports this view, discussing how the categories used by the
U.S. federal government to measure and track diversity (e.g. White, Asian, Black
or African American, etc.) do not capture the complexity of diversity in the
United States today and could not be used in any other national context, making
them of a little use overall.
Multiple Identities/Intersectionality
Traditional notions of representational diversity stem from the precepts of
affirmative action and EEO. However, these concepts do not adequately deal
with intersectional identities (Crenshaw, 1989). For example, a Black woman is
“counted” as African-American and counted as a woman for representational
diversity purposes, but the unique discrimination and implicit bias challenges
facing those with the intersectional identity of “Black woman” are obscured.
Thus, binary views of identity (e.g., male or female, Latino or European, able-
bodied or disabled) force individuals to choose between what they may feel are
equally salient aspects of their identity. If discussions of racial prejudice and
discrimination are now routinely ignored in organizations, the specific type faced
by those with intersectional identities is likely doubly ignored. Further, such
intersectionality requires nonprofit managers to have a more nuanced under-
standing of identities and their roles in the workplace. Similarly, issues related to
gender identity and gender fluidity call into question stereotypical ways of dealing
with “gender” in the workplace, that is, as a binary construct (he/she). The
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Judith Y. Weisinger
movement towards gender neutral restrooms in workplaces stems, in part, from

questioning traditional notions of gender, and provides an example of how
practical solutions be useful in advancing conceptual ideas. In educational settings,
the increasing use of gender-neutral pronouns—by giving agency to individuals
in terms of how they wish to identify—is another example. For HR practice,
these dynamics suggest the importance of opportunities for organizational
members to provide ongoing feedback about their concerns; of meaningful
avenues for dealing with these concerns (e.g., employee committees); and
ongoing training and education about emergent issues impacting organizational
diversity and inclusion.
Power, Leadership and Decision-making

A nonprofit organization may have representative membership, but those
members may be excluded from critical decision-making processes and leadership
opportunities, thus lacking the ability to exercise the power required to effect
meaningful diversity-related change. Therefore, an emphasis on inclusion and
inclusive practices is warranted with a focus on decision-making. As alluded to
earlier, inclusion refers in part to the degree to which those from traditionally
underrepresented groups are fully involved in governance and operational
decisions in nonprofits (Weisinger et al., 2016). Relatedly, Mor Barak (2014)
appropriately defines inclusion in relation to exclusion:
The concept of inclusion-exclusion in the workplace refers to the individual’s

sense of being a part of the organizational system in both the formal processes,
such as access to information and decision-making channels, and the informal
processes, such as “water cooler” and lunch meetings where information
exchange and decisions informally take place
(Mor Barak, 2014, p. 155)
Even inclusion in leadership positions can be undermined. Take, for example,

women’s roles on nonprofit boards. Citing a Washington Post article, the Nonprofit
Quarterly states that while 43% of nonprofit boards comprise women, when we
look at nonprofits with $25 million or more in income, that percentage drops to
33% (Lamb, 2015). Thus, while women may be seen as being well-represented
on nonprofit boards, this tends to be on the boards of small and medium-sized
nonprofits.
Effective diversity management means that not only are nonprofits representa-
tive of their clients and their communities; not only do they allow the expression
of views from those representing these constituencies, but they also share power
with these constituencies, providing them with meaningful participation in decision-
making and leadership. One key way of sharing power is developing effective
board and leadership recruitment practices that broaden the sources of talent for
the nonprofit representation. For instance, a nonprofit, depending upon its area,
332
may reach out to affinity groups, professional associations, or various advocacy

groups to tap into talent that may not have traditionally reflected their sources.
Another is structuring opportunities for various organizational members to provide
input on key programs, activities, and goals.
Implications for People Management

This chapter has discussed nonprofit organizations’ focus on representational
diversity and inclusion, issues therein, as well as their option to frame these
diversity efforts using the business case versus the social justice case for diversity.
The chapter has also raised important issues regarding emergent dynamics that
call into question mainstream notions of diversity and inclusion.
The consequent discussion leads us to consider the implication of these issues
and dynamics for the management of diverse people in organizations. Some of
these implications are nicely summarized by Leiter, Solebello, and Tschirhart
(2011, p. 3) from their qualitative study of diversity and inclusion in membership
associations:
• focusing on particular targets

• being sensitive to incremental accomplishments
• taking a long-term view
• having leadership support and . . .
• . . . making programs worthwhile to members who have competing demands
for their time and attention
• involving underrepresented groups and powerful stakeholders in program-
ming [Diversity & Inclusion] decisions is likely to be helpful.
Some of these recommendations are consistent with suggestions in our review

of diversity research (Weisinger et al., 2016). We concluded that “the diversity
concept must move well beyond a managerial approach to include broader social
theories . . .” including those related to power, interest conflicts, complex iden-
tity dynamics and the structuring of volunteering and work in nonprofits
(Weisinger et al., 2016, p. 1).
What this means in practice is that nonprofit organizations need to focus
on diversity and inclusion as a culture change process—one in which the idea of
valuing difference is embedded in all organizational activities. As such, addressing
diversity is a long-term proposition. It is also one in which difficult but open
conversations need to take place about identity, power dynamics, and leadership,
as well as about organizational structures and processes and how these impact
the effectiveness of organizational work across dimensions of difference. It also
means structuring opportunities for organizational members to learn from
others (Weisinger & Salipante, 2005), particularly those who are “in the trenches”
and more knowledgeable about aspects of working with diverse clientele. In sum,
instead of asking whether organizations “are” or “are not” diverse, we suggest
333
Judith Y. Weisinger
an approach wherein the value of diversity and difference is incorporated in an

ongoing fashion into all organizational activities (Weisinger et al., 2016, p. 2).
From an HR standpoint, an organization can incent staff and leadership to behave
in ways that are consistent with stronger diversity and inclusion practice. In this
sense, rewards need not necessarily be monetary; having performance review
criteria that reflect desired diversity and inclusion behaviors/practices/goals is
one way to reward those who are making the necessary changes. Further,
ensuring that nonprofit leadership is held accountable for meeting diversity and
inclusion goals is another. Researching and implementing diversity and inclusion
best practices (e.g., for recruitment, retention, program development) is another
way to move towards a culture that values differences.
A recent example of ‘walking the talk’ with respect to diversity and inclusion
comes from the Girl Scouts of the USA (GSUSA). The Western Washington
chapter of the GSUSA received a $100,000 donation from an individual whose
name is kept private in the news report (D’Onofrio, 2015). The one request the
donor added after giving was: “Please guarantee that our gift will not be used to
support transgender girls. If you can’t, please return the money.” The chapter
CEO, without hesitation, returned the money, reiterating the GSUSA’s mission
to serve every girl. What might have been a contentious decision was actually
then bolstered by an impromptu IndieGoGo.com campaign that raised three
times the original donation in just three days. Thus, inclusive practice in this
instance was ingrained in the organization’s mission and values, and making the
short-term decision not to accept a sizeable donation was seen as completely in
sync with their inclusive culture, and further, did not comprise the organization’s
funding but rather enhanced it. One way, from an HR perspective, to ‘walk the
talk’ is via target of opportunity funding and hires. This provides key decision-
makers with funding to hire individuals who were possibly not seeking
employment at the nonprofit, but whose experience and expertise complement
those of the existing staff. Depending upon which aspects of diversity are relevant,
this practice provides leadership with more flexibility in recruiting talent.
This aforementioned example from the Girl Scouts is probably rare. And the
fact that nonprofit staff members may have been educated on how to work with
diverse clients does not mean that they actually have effective skills to do so
(Mor Barak, 2015, p. 86; Weisinger & Salipante, 2005) nor to inculcate effective
inclusive practices. Thus, it is first imperative that nonprofit organizations first
focus on those diversity and inclusion practices that most directly inform its
mission and second, on how to best develop the necessary diversity competence
among its leadership, board, staff, members, and volunteers who will implement
those practices.
Finally, I would highlight Leiter, Solebello, and Tschirhart’s (2011, p. 3)
conclusion that the associations in their study with a significant emphasis on
diversity and inclusion, “share a high level of comfort with change, conflict, and
empowerment of others.” Thus, even the development of skills involving
adapting to change, managing conflict, and devolving responsibility to empower
334
organizational members is an important aspect of the diversity challenge in

nonprofits.
Note
1 A recent review of the empirical literature on diversity in nonprofit organizations can
be found in J. Weisinger, R. Borges-Méndez, & C. Milofsky (2015). “Diversity in the
Nonprofit Sector,” Editors’ Introduction to the Nonprofit and Voluntary Sector Quarterly,
Special Issue on Diversity, 45(1), 3S–27S.
Answer the following questions using your own nonprofit organizational context
(or one with which you are very familiar):
1 How are diversity and inclusion defined within the context of your
organization?
2 Do you think the way these concepts are defined impacts how well your
organization advances its mission? Why or Why not?
3 What concrete HRM practices might be developed to enhance an embed-
ded diversity consciousness in your organization? That is, what can you do,
beyond the routine diversity and inclusion practices, to develop the recogni-
tion of difference as a value threaded throughout the organization’s work?
Web Resources
1 The Independent Sector has recently a launched an online portal featuring
curated content on diversity, equity and inclusion (DEI), including resources
to support effective DEI practice: www.independentsector.org/focus_areas/
diversity?s=dei%20
2 The Center for Association Leadership, ASAE, offers diversity and inclusion
resources at: www.asaecenter.org/resources/topics/diversity-and-inclusion
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inequality: Rethinking difference through critical perspectives. Organization, 17(1), 9–29.
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19
Technology and Human
Resource Management in
Jennifer A. Jones
Introduction
The landscape of technology, though complex, is one of the most important
trends a human resource leader in the nonprofit sector can follow. In fact, a recent
report by Society for Human Resource Management (SHRM, 2015) indicated
technology is one of two primary drivers of change in Human Resources (HR)
and that “continuous innovations in technology will fundamentally change the
way HR work is accomplished” (p. ii). More specifically, scholars have found that
technological innovations have had a notable impact on the processes of recruiting,
selecting, motivating, and retaining employees (Pynes, 2013; Stone, Deadrick,
Lukaszewski, & Johnson, 2015). For example, technological innovations are
expected to lessen the administrative burdens of Human Resources Management
(HRM) and to provide a method for leveraging information about the workforce.
Assistive technologies also allow greater access to the workplace for individuals
with disabilities (U.S. Department of Labor, 1999) and provide for workplace
flexibility in the form of telecommuting and virtual volunteering. There is,
of course, a shadow side to technology. Even the most advanced technological
systems bring issues such as software viruses, privacy concerns, and ergonomic
challenges, all of which have important implications for the management and
leadership of nonprofit organizations.
This chapter outlines a variety of the ways technological innovations have
changed the business of human resources. It exposes the reader to a broad swath
of research and, in particular, to the sorts of benefits and challenges technology
is likely to pose within the context of managing people in nonprofit organizations.
Technological innovations (and their ensuing challenges) may be of particular
interest to nonprofit leaders, many of whom operate with slim budgets and all
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of whom operate within the complex landscape of nonprofit accountability and

legitimacy (Ebrahim, 2003; Sloan, 2009). The chapter is divided into two sections.
First, this chapter provides an overview of the existing research of technology
and human resources. Then, the chapter makes sense of the research in light of
the on-the-ground needs of nonprofit human resource leaders. It frames the use
of technology within human resources as a leadership challenge and poses three
research-based questions practitioners can use to maximize their implementation
of technology within the workforce.
For the purpose of this chapter, technology is defined broadly as the use of
computers and digital information, including telecommunications devices, to
gather, store, retrieve, and circulate information. This definition includes the hard-
ware (e.g. computers, video recorders), software (e.g. email systems, social media
platforms, etc.), and technologically-developed products such as online training
programs (for more information, see Brown & Charlier, 2013; Cronin, Morath,
Curtin, & Heil, 2006; Stone et al., 2015).
Part I: Review of Existing Research

This section of the chapter reviews existing research on technology and human
resources. The presentation of this research is first structured around core
functions of HRM: to recruit and select, motivate, and retain talented employees
and volunteers (Pynes, 2013). Then, it will look at two specific aspects of
technology: (1) the influence technology has had—and is having—on the nature
of many job positions; and (2) the broader HRM-related challenges and
opportunities posed to organizations via social media. This review is not
exhaustive; in fact, the aim of this section is to expose the reader to a broad swath
of the types of technology-related benefits and challenges encountered by HR
leaders in the nonprofit sector, and to offer insight as to how the field is evolving.
Regrettably, much of the research on human resources and technology is
focused on the for-profit sector. Less attention is paid to the nonprofit sector;
however, the research that does exist suggests technology affects HR functioning
in nonprofit organizations and, often, does so in profound ways. For example,
as early as 2000, case studies were emerging that documented the use of inform-
ation and communications technologies by nonprofits to reshape the flow of
communication within the office and to reshape both internal and external
relationships (see, for example, Burt & Taylor, 2000). Even less research has been
conducted that specifically explores the relationship between technology and volun-
teers. However, it is clear there are myriad ways technology has informed
volunteer administration. For example, technology has allowed volunteer
orientation and trainings to be conducted online rather than in person, and
technology has allowed volunteers to perform services remotely (i.e., virtual
volunteering). In fact, as early as 2001, volunteers were using the internet to
search for opportunities and, in some cases, to provide services (Toppe, Kirsch,
& Michel, 2001). Given the comparative dearth of nonprofit-related research on
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technology and human resources, this chapter draws from research related to
for-profit companies and, where appropriate, makes suggestions as to how it may
be applicable to the nonprofit sector.
Recruiting and Hiring

This section discusses some of the implications of technology in the process of
recruiting, interviewing, and selecting employees. Considerations for volunteers
are also addressed.
Recruiting
Technology has changed the way nonprofit organizations recruit employees and
volunteers, beginning with how opportunities are advertised. The printed—
and, often, expensive—newspaper advertisement has been replaced with online
ads that are often less expensive or, at times, free. These online ads can be posted
on newspapers and magazines as well as hiring sites such as Monster.com. There
are also a host of job and volunteer posting boards that specifically target nonprofit
organizations (e.g., Idealist and Volunteer Match). Community partners such as
colleges and universities may also distribute information about job or volunteer
opportunities via online posting boards, social media (e.g., LinkedIn groups), and
emails to members of their listserve. Many nonprofit organizations also post job
positions on their own website and social media sites, thus potentially attracting
passive job seekers who care about the organization.
In theory, the primary advantages of digital advertising are lower costs and the
ability to reach a broader, more diverse pool of applicants. The proof, however,
is not in the pudding. Online recruiting has increased the number of applicants
per position and, subsequently, increased the administrative and transaction costs
of hiring (Stone, Lukaszewski, & Isenhour, 2005). However, online recruiting
strategies have not attracted a higher quality pool of applicants nor have they
increased the general diversity of the applicants (Galanaki, 2002; McManus &
Ferguson, 2003). Many would-be applicants do not have the technological access
or sophistication necessary to conduct an effective online job search, despite a
marked growth in the use of the internet among adults in the United States
(from 54% in 2000 to 84% in 2015) (Perrin & Duggan, 2015). It is critical that
HR leaders bridge these gaps and make strategic efforts to reach a broader swath
of potential applicants.
Online recruiting is evolving. Thus far, it has been a one-way communication
process that, in most cases, does not allow potential applicants to interact with
or ask questions of the organization. This static communication style has been
said to “create an artificial distance between applicants and organizations” (Stone
et al., 2015, p. 218). Recently, HR departments have begun using social media
platforms such as LinkedIn to engage and develop relationships with potential
applicants. These strategies are markedly different from traditional one-way
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communication and are expected to shift the paradigm of recruiting in general

(Dineen & Allen, 2013). Future versions of online recruiting will likely focus
on developing opportunities for online interaction between the organization
and potential employees, and these new strategies will allow both parties to
simultaneously woo and vet the other.
Interviewing
Technology has also been adopted during the screening process, including the use
of technology-mediated interviews such as video conferencing and telephone
interviews. The interview is an important event during which the interviewer is
able to assess candidates on job qualifications and other softer areas such as person-
ability in regard to organizational fit (Chuang & Sackett, 2005). There is consider-
able debate in the literature as to whether technology-mediated interviews can
adequately replace the in-person interview. For example, telephone conversations
tend to be less interactive and spontaneous than face-to-face conversations;
however, they can provide a sense of anonymity and help participants feel less
self-conscious (Sellen, 1995), which presumably would be appealing to some job
candidates.
Video conferencing also has its benefits and challenges. It can provide
important nonverbal cues, increase interactivity, and help participants discriminate
among speakers (Sellen, 1995); however, such interviews also pose problems of
their own. For example, participants in a series of experiments reported feeling
“distanced by the video systems and less a part of the conversation” (p. 430). It
is also likely that participants on a video call may look at the faces on the screen
instead of at the eye of the camera (often just above the screen). These participants
may believe they are making eye contact even though it would not appear as
such to their listeners. In fact, it could be perceived as though the participant was
avoiding eye contact or being evasive.
In short, it is hard to replicate face-to-face conversations. A study of 802 post-
interview job applicants selected via a university campus recruitment center indi-
cated that face-to-face interviews may be preferable to video or telephone interviews.
Specifically, “face-to-face interviews procured higher (a) perceptions of fairness
than telephone and videoconferencing, (b) perceived interview outcomes than
videoconferences, and (c) intentions to accept a job offer than telephone inter-
views” (Chapman, Uggerslev, & Webster, 2003, p. 950). It is recommended that,
before selecting an interview medium, an organization consider the financial and
staff time costs, industry norms, and the size of the qualified applicant pool.
Nonprofit leaders, in general, will want to carefully weigh the costs of face-to-face
interviewing. The costs, for example, may be particularly steep for organizations in
rural areas (such as a rural health center trying to recruit physicians) or organizations
conducting national executive searches; however, the short-term costs of in-person
interviewing may yield an overall lower hiring cost if the candidate, as research
suggests, is more likely to accept the job offer after an in-person visit.
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Selecting
Organizations may use a variety of technology-based tools to help determine
which potential applicant is the best fit for the position. These tools can range
from a simple test of an applicant’s computer skills to more complex assessments.
While many of these methods can offer insight into the candidate, there is the
possibility these may prematurely limit the pool of candidates. The results of
computer-based tests, for example, are affected by gender and racial differences
(Wallace & Clariana, 2005) and may reflect demographic variations in computer
ability (Perrin & Duggan, 2015) rather than variations in general ability or
aptitude. Research thus far has not conclusively indicated whether techno-
logical tools for applicant selection are effective in enabling employers to hire a
high-quality, diverse workforce (Stone et al., 2015).
HR professionals should proceed with caution when relying on technology-
based tools, and take care to interpret the results in light of other data gathered
about the candidate throughout the interview process. In the end, assessment
tools might provide more insight about the retention and continued motivation
of employees than objective evidence about who should or should not be hired.
For example, a nonprofit leader might ascertain through an interview that a
potential employee is bright and hard-working, but computer-based tests reveal
this person is not as proficient in Microsoft Excel as the organization would like.
This person might be hired with the understanding that they will be trained in
Excel and their performance measured over time.
Retaining and Motivating

Retaining and motivating employees are also core functions of HR (Pynes, 2013).
These functions include performance management, compensation, training, pro-
fessional growth, and job satisfaction. Here, too, technology has influenced HRM
in myriad ways. These ways are of particular importance to nonprofit organizations
that seek to streamline HRM costs, use professional development as an employee
benefit, or increase the number of staff or volunteers.
Performance management
Many companies are using electronic performance management systems (e-PM)
to measure employee performance and provide feedback (Hedge & Borman,
1995; Sierra-Cedar, 2015; Sulsky & Keown, 1998). Such systems can track
employee performance, monitor employee activity, record formal and informal
feedback, and prompt managers to meet with employees as needed (Stone et al.,
2015). These systems have the potential to make the evaluation process more
efficient and cost-effective (at least for larger organizations), and can be particularly
helpful for organizing feedback from multiple stakeholders (see, for example,
Bartram, 2004; Bracken, Summers, & Fleenor, 1998).
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However, it is important to be clear about what, exactly, is meant by perfor-

mance: These e-PM systems typically track quantifiable, objective measures (e.g.,
number of minutes talking to a client on the phone) (Sulsky & Keown, 1998)
and are less likely to address critical issues of quality. E-PM may also decrease
interaction between employees and supervisors as information that used to be
presented face-to-face can now be delivered electronically. These systems may
not be suited for capturing the nuances of nonprofit work. For example, an e-PM
system may be able to track the number of clients seen by a group of case-
workers, the number of minutes spent with each client, and the types of services
and referrals provided by the caseworkers; however, an e-PM will be less likely
to track the more subtle variation in caseworkers’ performance (e.g., whether a
genuine human connection was forged or the extent to which a caseworker
encouraged a client to think differently about how they were approaching
challenges).
Less is known about employee reactions to electronic performance manage-
ment. For example, one quasi-experimental study (n = 35; Payne, Horner,
Boswell, Schroeder, & Stine-Cheyne, 2009) of one organization, where one
group of employees received electronic appraisals and the other group received
the traditional pen-and-paper appraisals, yielded mixed results. Employees who
received their performance appraisal via an online system reported higher percep-
tions of supervisor accountability but lower perceptions of the quality of these
evaluations. It is possible that increased usage of electronic processes—including
practice and creativity on the supervisor’s part—will influence future perceptions.
In particular, it has been suggested supervisors can use technology such as video
conferencing and internal social media to increase connectivity with their
employees and, thus, mitigate the challenges posed by e-PM (Stone et al., 2015).
Regardless, care should be taken to alleviate what some would suggest can be an
incomplete and somewhat dehumanizing review of employee performance. This
caution is especially salient for nonprofit leaders, as much of nonprofit work
requires what scholars have described as emotional labor, or relational work that
requires both emotional engagement and emotional management (Guy, Newman,
Mastracci, & Maynard-Moody, 2010). E-PM systems are likely to be ill-suited
for the supervision and support of such labor.
Compensation
Many HR departments have adopted e-Compensation systems, which automate
payroll and compensation planning, and employee self-service systems (ESS),
which allow employees to process routine transactions (such as changing their
address or enrolling in benefits) via a web-based system. These systems have been
called the “biggest development” in regard to HR technology (Walker, 2001a).
They are designed to decrease costs (Gherson & Jackson, 2001) and decrease
error (American Payroll Association’s 2010 report, as cited in Inc.com 2014).
Such systems also “relieve the organization’s HR personnel of routine tasks, and
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allow them to concentrate on more strategic activities” (Konradt, Christophersen,

& Schaeffer-Kuelz, 2006, p. 1150). These systems, ESS in particular, are still
fairly new, and academic research is not yet conclusive as to their effectiveness
(Dulebohn & Marler, 2005; Konradt et al., 2006; Marler & Fisher, 2013). A
number of these claims are based on industry reports.
The success of these systems hinges upon employee acceptance and adoption,
factors that are influenced by the usefulness of services and ease of use (Davis,
1993; Konradt, Christophersen, & Schaeffer-Kuelz, 2006). The good news is that,
at least in one study (n = 517; Konradt et al., 2006), user strain (i.e., employee
angst) was negatively related to usefulness and ease of use. In short, HR leaders
who adopt software platforms that are directly useful to employees and include
user-friendly characteristics (e.g., visually pleasing, easy to navigate) are likely to
be more successful. The extent to which successful adoption occurs in the non-
profit context will, of course, vary widely. It is likely that larger nonprofit organi-
zations will have an increased capacity to institute such systems and, for these
organizations, the investment of money and staff time may indeed lead to employee
satisfaction and increased overall efficiency. Smaller organizations, however, will
likely find such services to be cost-prohibitive and, unless they can partner with
other small organizations, may find themselves unable to compete in this area.
Training and E-learning

Companies are increasingly using technology-based methods to provide employees
with on-the-job training (Miller, 2012). Technologically-based delivery methods
such as recorded videos, live webinars, and online courses provide a low-cost,
flexible, efficient, and convenient alternative to in-person trainings (Salas,
DeRouin, & Littrell, 2005; Welsh, Wanberg, Brown, & Simmering, 2003). Online
or digital training courses are especially useful for agencies with multiple locations
or where the same information must be conveyed repeatedly (e.g., trainings on
client privacy, sexual harassment). Such trainings, also known as e-learning, can
include organization-wide privacy and safety trainings, department-specific train-
ings, as well as leadership and management trainings. In a nonprofit organization,
these trainings could potentially be offered to both volunteers and paid staff
members. For example, the Red Cross offers an online new employee and volun-
teer training (Red Cross, n.d.). This training is available publicly and also doubles
as a low-cost screening tool: Before ever contacting a Red Cross staff member,
potential volunteers can view the online orientation and decide whether or not
their interests align with the organization’s needs.
E-learning requires significant pre-planning and does have its downfalls.
Research has revealed concerns related to the start-up costs, the lack of inter-
action, and the temptation to equate the company’s delivery of information
with the individual’s understanding of information (Welsh et al., 2003). This
latter point is especially important: An instructor in an in-person course can
gauge students’ understanding of the material by scanning the room for furrowed
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brows or by asking a few targeted questions. An instructor in an online course must

be more creative and systematic in such assessments. Evaluation of technology-
based training is, therefore, especially critical. Additionally, it is important that
organizations ensure employees understand the relevance of a specific training:
Knowledge transfer is related to knowledge gain and, also, trainees’ satisfaction
with and perceptions of the utility of the training (Alliger, Tannenbaum, Bennett,
Traver, & Shotland, 1997; Sitzmann, Brown, Casper, Ely, & Zimmerman, 2008).
Of course, any and all of these factors may be influenced by the users’ capacity
to interface with technology, which must also be taken into consideration.
In general, it is likely that nonprofit organizations will benefit from adopting
a blended approach to employee development which combines both in-person
and technology-based trainings (Salas, DeRouin, & Littrell, 2005; Stone et al.,
2015). Nonprofits should also stay abreast of changes, as e-learning is developing
rapidly and organizations may soon use virtual simulations, gamifications,
knowledge repositories, and crowdsourcing as vehicles to train employees (Stone
et al., 2015).
Technology-related Changes in Employment Opportunities

In addition to influencing many of the functions of HRM, technology has also
had a dramatic impact in the types of position available within nonprofit
organizations and the sorts of activities for which each position can reasonably
be responsible (Pynes, 2013; Saidel & Cour, 2003). The magnitude of changes
cannot be overstated. As Kraemer and Dedrick (1997) wrote, access to information
can change the location and nature of decision-making, entire job classifications
disappear while new ones are created, layers of management are eliminated,
organizational politics take on new dimensions, and jobs can become more or
less satisfying to workers (p. 100).
In nonprofit organizations, such changes can occur in myriad forms. For
example, the implementation of electronic health records has affected the
qualifications required of most nonprofit healthcare professionals and, also, either
eliminated or fundamentally changed the nature of most medical record jobs.
Separately, the use of software (rather than html coding) to develop websites has
meant that nonprofit staff members without any computer science background
may be asked to develop and publish websites. This next section explores
technology-related changes in job functions, the development of new positions,
and implications for job satisfaction.
Technology and changes in job functions

Technology is changing many of today’s existing jobs (Pynes, 2013). For example,
information technology has increased the number of tasks any individual is able
or expected to perform. This is true at all levels of the organization. Lower-level
employees may have little technology-related education or skills and, yet, may
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be tasked with what was previously considered higher-order administrative tasks

including maintaining spreadsheets and databases, coordinating client trans-
portation, and even developing websites (Saidel & Cour, 2003). There are
different ways to think about such changes in job function, and such changes
are especially important to consider for long-time employees who may or may
not be interested in learning new techniques. In a series of in-depth interviews
conducted at three New York-based nonprofit agencies, such task expansion was
described by support staff members as both an enriching experience and a stressful
increase in workload. Conversely, executive staff members who were traditionally
tasked with higher-order decision-making find that technology makes it more
efficient for them to complete many of the lower-order tasks—such as writing
memos or generating reports—they would previously have assigned to adminis-
trative assistants. Executive staff members have reported significant increases in
the amount of work they perform and, also, increased stress during the initial
learning phase associated with new technology. In short, technology-related
changes to job functions may increase the potential productivity of employees
but the lived experience of employees should also be carefully managed before,
during, and after the change process. Managing the process may be particularly
important for nonprofits for which employee turnover is especially costly, such
as smaller organizations operating with limited HR budgets or for organizations
seeking to retain employees in niche positions (e.g., bilingual physicians in rural
health centers).
Technology and New Jobs

In addition to changing the nature of existing jobs, new technologies also frequently
lead to the creation of new types of position. For example, nonprofit healthcare
companies that accept federal dollars must use Electronic Health Records (EHR)
and demonstrate “meaningful use” of such records (HealthIT.gov, n.d.). As a
result, a host of technology-related healthcare jobs have been created to help
nonprofit organizations transition from paper to electronic records, train providers
and support staff, develop meaningful reports and related policies and procedures,
and to ensure patient privacy. Similar, albeit somewhat less dramatic shifts have
occurred in human service case management, in theater and ticket sales, and other
nonprofit uses of technology. As technology takes over much of the mentally and
physically repetitive tasks (Pynes, 2013), many positions, such as medical record
filers, are becoming increasingly obsolete.
The nonprofit sector as a whole may be well positioned to benefit from the
new jobs that are created. This may be particularly useful for HR leaders whose
nonprofit organization is not large enough to offer employees long-term career
advancement opportunities. As Saidel and Cour (2003) noted,
Given the nonprofit workforce’s willingness to move laterally into more

challenging jobs and the difficulty in hiring technologically skilled employees,
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Jennifer A. Jones
nonprofit organizations may be in a better position to use the implementation

of new technologies to reward and motivate workers.
(p. 13).
In short, the old job becomes a new job when new technology and technology-
related training is added. This would likely have implications for job satisfaction.
Technology and Job Satisfaction

As technology has changed the nature of jobs in the nonprofit sector, it is
important to understand how this technology has influenced how workers
experience their jobs. In particular, scholars have found that the strategic
implementation of technology can, indeed, improve job satisfaction, particularly
for nonprofit organizations. For example, the immediacy of technology may
provide increased autonomy and a sense of instant accomplishment that Saidel
and Cour (2003) argue is difficult to achieve in human services organizations,
organizations that are often focused on long-term outcomes. For example, a
caseworker will not be able to solve all of their client’s issues in one session; but
they can indicate via a performance management system what steps they took
toward helping the client achieve long-term goals. This checking of the boxes
on small tasks (e.g., specific referrals) can provide an immediate sense of
accomplishment that helps sustain the employee’s motivation over the long term.
As Pynes (2013) has written, many positions in today’s nonprofit sector work-
place demand a “more educated workforce with advanced knowledge” (p. 414)
and, additionally, require continuous training to keep up with the rapidly evolving
field. The good news for HR leaders is that technology-related education can
be perceived (i.e., positioned) as an employee benefit. In a series of 23 in-depth
interviews, Saidel and Cour (2003) also found that continuous technology training
can be an enjoyable activity that improves job satisfaction. Such employee develop-
ment boosts the nonprofit’s overall capacity and, at the same time, increases
the marketability of the employee for both internal promotion and external
advancement.
Nowhere have the changes in technology-related job functions been so rapid
as in the arena of social media. Often, entry-level employees find themselves com-
municating via social media with hundreds, thousands, and sometimes millions of
individuals and, in doing so, must operate more like a seasoned communications
director than as entry-level support staff. In this complex and evolving landscape,
nonprofit HR leaders are struggling to understand and provide adequate
leadership.
Social Media and Human Resources

Social media usage among nonprofit organizations has become ubiquitous: 97%
of the largest U.S. nonprofits use social media platforms (e.g., Facebook, Twitter,
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Instagram) to communicate with constituents (Barnes, 2010). There are numerous

HR-related risks to nonprofit social media usage (Cohen, 2013; Palfry, 2010),
including risks related to employee and client privacy (Hyman, Luks, & Sechrest,
2011; Jones & Soltren, 2005; Mainiero & Jones, 2013; Rosenblum, 2007), labor
law violations (accidental or intentional; Lafe, 2011; National Labor Relations
Board, 2013), and brand reputation (McNeill, 2012), particularly when an
employee’s morally questionable activities become publicly available via social
networking sites.
Social media usage by employees can be divided into two categories: job-
related and personal (Jones, 2015). The first category, job-related social media
activities, takes place in a variety of departments. For example, fundraising staff
may connect with donors via LinkedIn; program staff may connect with clients
via Facebook; and volunteer administrators may use Twitter to recruit new
volunteers. All of these activities have the potential to blur the boundaries of
employees’ professional and personal lives, especially if work-related online
connections are developed via employees’ personal social media sites. This
blurring is of particular concern to the organization when it involves at-risk
clients (such as youth or victims of domestic violence) or high-profile donors
(who may maintain a relationship with the fundraising professional even after
that staff member has begun working for another agency).
The second category, employees’ personal use of social media, can also have
unexpected and, at times, serious impacts on an organization. For example,
employees may want to access and update their personal sites during work time,
and they may connect with one another via social media, even to the extent of
“monitor[ing] each other’s location on Foursquare before a lunch meeting”
(Mainiero & Jones, 2013, p. 187). Alternatively, employees’ personal social media
posts may get confused with professional social media posts, such as the example
of the Red Cross employee who tweeted to the Red Cross’ fan base a message
about #gettingslizzerd (i.e., drunk) (Wasserman, 2011). The message had been
intended for the employees’ personal account. Much of this type of blurring
between professional and personal boundaries may be considered harmless, but
it does open the doors to less-benign interactions, particularly in cases of stalking
and sexual harassment. It does not take much imagination to see why HR leaders
must pay attention to and attempt to manage the risks involved in employee
social media use, both job-related and personal.
One way that organizations manage risk is by adopting social media policies.
There is reason to believe that social media policies, in general, are becoming
more prevalent (Barnes et al., 2015; Jones, 2012a; Kind, Genrich, Sodhi, &
Chretien, 2010). These policies are far more complex than other governance
policies such as a whistleblower or conflict of interest statement. The complexity
is twofold: First, social media policies have multiple and, often, divergent func-
tions, including to protect employees’ rights (see, for example, Lafe, 2011;
National Labor Relations Board, 2013) and to manage the organization’s reputa-
tion (McNeill, 2012). Second, social media is a mercurial and rapidly-evolving
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phenomenon. New opportunities and new risks are emerging almost daily, and
these new risks can potentially render yesterday’s policy obsolete.
There is some debate about which department should be responsible for
crafting social media policies. A recent study by SHRM (as cited in Leonard,
2012) indicated that an organization’s social media policies are often written by
one department (e.g., human resources, information technology, senior leadership,
or marketing). This process can be problematic, as each department is likely to
have its own internal logic and may not fully understand the needs and/or goals
of another. For example, a legal department and a communications department
may have very different approaches to social media. Additionally, the social
media landscape is evolving rapidly and no policy can adequately address risks
that have yet to emerge. Therefore, a team-based approach to developing social
media policies may be a better way: (1) to ensure the policies are appropriate for
the entire organization; (2) to obtain employee buy-in; and (3) to offer a learning
environment that develops staff capacities—individually and as a team—to
respond to emergent risk (Jones, 2015).
While social media policies may be one of the more complex policies that a
nonprofit develops, there is some good news. For many years, nonprofit
organizations have operated without the guidance or best practices related to
social media policies (see, for example, Hymen, Luks, & Sechrest, 2011). In
recent years, however, such guidance is beginning to emerge. Consultants and
industry support organizations have developed workbooks and templates to
guide practitioners (for example, Idealware, 2012; Jones, 2012b, February 9).
Also, scholars and legal experts are (slowly!) producing material that is also
helpful, albeit somewhat less digestible (for example, Cohen, 2013; Jones,
2015b). The challenge for nonprofit organizations is to make sense of both
academic and practitioner recommendations in light of their own unique
circumstances (e.g., risk tolerance, employee expertise, and specific mission) and,
also, to recognize that a social media policy must be reviewed and revised on a
regular basis.
Part II: Implications for Practice

The remainder of this chapter discusses the implications for the nonprofit sector
of the material presented thus far. This is no easy task. The nonprofit sector is
extraordinarily diverse in regard to size and type of organization (McKeever &
Pettijohn, 2014) and there are multiple permutations of size and type. These
permutations have implications for HRM practices (Guo, Brown, Ashcraft,
Yoshioka, & Dong, 2011). Therefore, is difficult, if not impossible, to offer
comprehensive recommendations on how nonprofits should implement
HR-related technology. Instead, this section of the chapter suggests two things:
(1) the use of technology in HRM should be viewed as an issue of strategic
leadership directly related to the organization’s goals; and (2) implementation
should be understood as a process of change management. The chapter then
350
concludes with three questions an HR leader might ask themselves and their team.
These questions are based on the research presented earlier in the chapter and are
designed to help the HR leader to identify and mitigate at least some of the
challenges posed by technology.
Strategic Leadership and Technology

The implementation of technological innovations is, at its core, an issue of
strategic leadership. Success is not simply a matter of providing a more efficient,
user-friendly experience of human resources but, rather, identifying what that
improved experience will mean in terms of broader organizational productivity
(e.g., employee retention). In short, as Alfred J. Walker (2001b) has written,
“The ultimate goal of HR technology is to help the organization meet its business
goals and objectives today and in the future” (p. 10). The link between technology
and organizational goals must be clear. Specifically, Walker suggests, to be
considered successful, HR technology must accomplish the following objectives:
• Strategic Alignment [It] must help users in a way that supports the goals of the
business.
• Business Intelligence [It] must provide users with relevant information and
data, answer questions, and inspire new insights and learning.
• Efficiency and Effectiveness [It] must change the work performed by the Human
Resources personnel by dramatically improving their level of service,
allowing more time for work of higher value, and reducing their costs
(pp. 3–4).
The connection between technology and business goals offers an interesting

challenge for HR leaders in nonprofit organizations. Nonprofits have a unique
set of business goals and objectives that cover a number of different stakeholders
(Balser & McClusky, 2005; McCambridge & Salamon, 2003). For example,
nonprofit leaders must manage relationships with donors, volunteers, clients,
community members, elected officials, and employees. These different relation-
ships with different stakeholders are managed by a variety of departments, and
each department may include staff with a range of skillsets and technological
backgrounds. In short, a nonprofit organization can be an incredibly diverse
universe and, in many cases, a microcosm of society. HR leaders, therefore, must
take the time to understand the multiple bottom lines of their organization and
the specific contexts of each department. The benefit of technology to these bottom
lines and within these contexts must be explicit, clear, and substantial.
Leadership in Implementation
It has been suggested an effective way to implement HR-related technology is
through the lens of change management (Sierra-Cedar, 2015). The change
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Jennifer A. Jones
management model was introduced by Julien Phillips (1983) and includes three
critical components: a new strategic vision, new organizational skills, and
political support. In regard to HRM and technology, the first component, a new
vision, is best addressed when HR leaders frame their work in relationship
to organizational goals. For example, technological improvements in the
employee hiring and/or training processes would logically lead to improved
employee retention which, in turn, allows the organization to focus more dollars
on programmatic goals. Or, alternatively, employee training in technology
may lead to improved job performance: Training employees in electronic
health records, for example, may be costly but it may improve the quality of
service provided (and, not inconsequently, the organization’s billing efficiency).
The importance of this connection between HR and the organization’s goals
cannot be understated.
The second component, new organizational skills, includes on-the-job train-
ing, changes in job functions, and the hiring of new positions. These concepts
were the focus of much of the research presented in the first half of the chapter,
and it became evident that information technology has changed the nature of a
number of positions. As Saidel and Cour (2003) found, “it appears everyone in
the labor force, regardless of hierarchical level, must now be more of a techni-
cian” (p. 12). Changes in job functions extend even into the realm of HRM. It
is increasingly important that HR staff members have a good understanding of
technology (SHRM, 2015). As a representative from one of the nation’s leading
HR consulting firms indicated, “HR professionals must develop a proficiency in
broad HR applications and their potential delivery systems. They must be able
to apply this knowledge to the business-planning process” (p. 5). HR leaders,
therefore, must think broadly about the range and types of organizational skills
needed to execute their vision, including the skills needed within the HR
department.
The final component, political support, is crucial. Research in change manage-
ment and, also, in the implementation of HR technology suggests it is critical
that HR leaders garner internal support at all levels. This includes involving
employees and, where applicable, volunteers in the process. For example, scholars
Konradt, Christophersen, and Shaeffer-Kuelz (2006) suggest that the involvement
of the employees in the planning process should be an essential component of
the project, for example by conducting interviews, performing work-flow and
working environment analysis, and collecting ideas based on paper prototypes.
During the roll out phase, employees should be informed about the project by
running an internal marketing campaign (p. 1150).
Additionally, HR leaders can involve employees in the implementation of
technology by developing inter-departmental teams, such as those developed to
create social media policies (Jones, 2015). Different organizations will require
different strategies for pursuing political support but, in general, process of
developing internal buy-in is critical for all HR leaders seeking to implement
new technologies.
352
Three Questions to Consider

As described in the first half of the chapter, research suggests that technology can
create at least as many problems as it alleviates. A few simple questions can help
organizations sidestep at least some of these challenges. Here are three questions
worth considering:
Question #1: How Does This Technology Affect Our Staff and
Volunteers?
Nonprofit HR departments are unique in that they often work with both paid
and unpaid staff. The implementation of any technological innovation must be
considered from the perspective of both groups. Employees may have little
choice and many will adapt to whatever technological system the organization
adopts; however, volunteers can more easily vote with their feet. Each organization
will have to assess their particular team and their current (and future) human
resources needs to determine the most appropriate role for technology.
Question #2: What Are the Implications for the Quality and Diversity
of Our Workforce?
Research indicates that technology may have important and, sometimes,
unfortunate implications for quality and diversity (McManus & Ferguson, 2003;
Stone et al., 2015). For example, some seasoned medical providers may retire
early rather than learn new technologies or highly skilled individuals may not see
a job application that is only distributed electronically. Additionally, internet-
based recruiting may yield a candidate pool more likely to contain “job-hoppers”
than traditional recruiting methods (McManus & Ferguson, 2003). Nonprofit
HR leaders should take care to know their particular community and develop
appropriate strategies by, for example, broadening where an organization posts
paid and volunteer positions. This does not have to be a time-consuming task.
Nonprofits with smaller HR departments can ask a volunteer to develop a wide
distribution list of media outlets (e.g., community colleges, and ethnic, cultural,
and religious publications) and gathering places (e.g., community centers,
advocacy groups), and can share that list with HR departments in other small
nonprofits.
Question #3: How Does Technology Affect Relationships Among

Our Staff?
Technology can accomplish many of the functions previously performed by
management, but at what expense? How does a given technology, such as elec-
tronic performance management or employee self-service, change the relationships
between staff and supervisors or between staff and human resource personnel? If
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Jennifer A. Jones
technology decreases the opportunities for meaningful interaction, strategic HR

leaders might look for alternative ways to build internal social cohesion. Additionally,
HR leaders might work with supervisory staff to develop management styles and
strategies that reinfuse humanity into their relationships with supervisees.
Conclusion
Like rocks skipping on water, this chapter has touched upon a number of different
ways HRM has been and will continue to be impacted by technology. The
first half of this chapter presented a broad swath of research on how technology
affects core HRM functions such as recruiting, hiring, retaining, and motivating
employees. It also looked at the influence of technology on position descriptions,
namely that technology has eliminated now obsolete positions, changed—at least
in part—the nature of almost all positions, and created new job classifications.
Additionally, the first half of the chapter discussed the HR-related challenges
posed by social media. In looking at the research, two things became increasingly
clear: Technology is having a profound impact on the functions of human
resources, and technological innovation is rapidly posing new challenges.
The second half of the chapter reflected upon the first half and asked, “What
now?” It argued that the implementation of technology is, at its core, an issue
of strategic leadership that must be carefully orchestrated. Successful leaders will
steward all three aspects of Phillip’s (1983) change management model: vision,
skills, and political support. Appropriate and effective technological innovations
can improve job satisfaction, employee productivity, and, also, offer unique
professional development opportunities to all involved.
1 There are many different ways technology can be used in human resource
management. Do some stand out to you as more important than others?
Why?
2 Some researchers suggest that external social media platforms (e.g., Twitter,
LinkedIn) can be used to develop relationships with job candidates and, simi-
larly, that internal social media platforms can be used to develop relationships
between supervisors and supervisees. How could this be accomplished, and
what challenges may arise when pursuing such a strategy?
3 It is often difficult to secure funding for nonprofit administrative expenses.
How could an HR leader best position their ideas so that the implementation
of technology becomes attractive to the CEO and/or to funders?
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20
Conclusion
Toward a Research Agenda for
Nonprofit Human Resource
Management
Jessica K. A. Word and Jessica E. Sowa
Work is about a search for daily meaning as well as daily bread, for recognition as
well as cash, for astonishment rather than torpor; in short, for a sort of life rather
than a Monday through Friday sort of dying.
(Studs Terkel)
Introduction
One of the most challenging and rewarding parts of many people’s lives is the
work they do. While we work to put food on the table, we also work to achieve
personal satisfaction and, in the case of those who work in nonprofit organiz-
ations, make a difference in the world, to know we have had an impact. This
book approaches work and the management of it in the nonprofit sector from the
belief that work is important and critical to individuals, organizations, and the
communities they serve. The importance of work in the nonprofit sector is related
to the nature of the sector itself. The nonprofit sector more than any other sector
is concerned with the “commons” or the things we share and do together as
a society apart from pure market rationality (Lohmann, 1992). Work for many in
the nonprofit sector is about more than simply performing a job to receive a wage.
The aim of this book and much of the scholarship discussed in this volume seeks
to improve the ability of organizations to retain, motivate, and engage employees,
but also to assure work in the nonprofit sector serves a broader purpose and is
meaningful for the employees, nonprofits and the communities they serve.
This volume has attempted to capture the state of the field in terms of the
research on human resource management (HRM) concerning the nonprofit sector.
As many of the authors have stated, much of the information and research available
is limited and in the beginning stages of development. We still have work to do as
359
a community of scholars and practitioners to capture the full complexity of what

it means to work in the nonprofit sector and how to manage the human resources
of the nonprofit sector effectively. However, these early efforts already show a great
deal of promise in terms of their ability to positively impact the development of
theory and practice. This chapter begins by exploring some of the fundamental
differences in terms of work in the nonprofit sector as a whole, and then returns
to the challenges raised in the introduction and throughout this work. We then
conclude with a brief review of the work presented in this volume and outline
directions for future research. While this book is a comprehensive treatment of
the state of HRM research in the nonprofit sector, we hope it is the beginning
of a long and continuing conversation on how to strengthen the HRM capacity
and make the work meaningful, rewarding, and as professionally managed as
possible for those who dedicate their lives to the service of others and society in
the nonprofit sector.
The Importance of HRM in Nonprofits

The examination of the issue of human resource management for nonprofits is
a timely one with increasing questions in the sector about defining and identifying
the impact nonprofit organizations have on our communities. The HR function,
while traditionally thought of as payroll, record keeping, and benefits administra-
tion, has broadened to be much more important to the success of organizations
and, for nonprofits, their ability to deliver on their missions. This shift is one in
which organizations focused on performance see human resources as critical to
executing strategic initiatives and assuring they have the correct staff in place for
those strategies to be successful (Benedict et al., 2008). Again, to connect back
to themes raised earlier, people are the critical ingredient for a nonprofit to
develop high performance; the resource-based view emphasizes a nonprofit’s
human capital as central to its competitive advantage. To make sure they have a
steady stock of this human capital, in particular, the need for better management
of human resources in the nonprofit sector is driven by the need to ensure
organizations can compete for and keep the talent they need to be successful. In
particular, the work of Jasmine McGinnis Johnson and Eddy S. Ng (2016) points
to challenges in retaining Millennial managers and those with advanced degrees
when pay is too low. This finding suggests that additional attention needs to be
paid to the factors that attract and retain nonprofit workers. As the nonprofit work-
force grows in depth, breadth, and demographic complexity, the time is now to
improve how we manage this workforce.
Millennials and Gen Xers now make up the largest groups in the labor force
(Fry, 2015). The importance of these workers to the current and future of
nonprofit organizations cannot be understated. These two generations, along
with being the largest groups in the labor force, are also some of the most highly
educated workers due to rising education attainment levels. The need to retain
and attract these workers early in their careers is underscored by the research on
360
Conclusion
sector choice, which suggests early career experiences and preferences shape
where an employee will work throughout their career (Tschirhart, Reed,
Freeman, & Anker, 2008). This highlights the need to act quickly to improve
human resource management and compensation for nonprofit workers or face
long-term deficits in the ability of nonprofit organizations to compete especially
as older workers the sector retire (Landis-Cobb, Kramer, & Milway, 2015). If
the nonprofit sector is to deliver on the promise of the growth of the last
40 years, the sector needs to take steps to professionalize how its workers are
managed, including the smallest, grass-roots nonprofits, to ensure that those who
choose to work in the nonprofit sector will not leave to pursue their careers
elsewhere.
Qualities of the Nonprofit Workforce and the Sector

One of the main themes that resonated in the study of nonprofit human resource
management is the unique challenges and assets of organizations in this sector.
The challenges include the unpredictability of many of the resources in the sector
such as revenue, due to instability in fundraising and grants, the range in size and
complexity of organizations, which challenges the ability to develop recom-
mendations for better management practices, the wide variety of work undertaken
in the sector, with so many different types and forms of employment, and the
changing roles and availability of volunteers. Paired with these challenges come
some of the more unique assets of the sector, which includes the broad support
that many organizations enjoy because of their strong ties to the community and
the ability to appeal to employees, donors, and volunteers not just in terms of
economics but also in terms of altruism (Grønbjerg & Paarlberg, 2001). These
challenges and assets are part of what make the nonprofit sector distinct but
these qualities require researchers and managers to think differently about these
organizations and how to apply their skills to findings solutions to better serve
nonprofits and communities. We will now explore some of the characteristics of
working in the sector and how they shape the need for future research.
In particular, many of the authors in this volume have highlighted the
involvement and importance of volunteers and the work they perform in
nonprofit organizations as unique. The voluntary nature of the nonprofit sector
remains one of the most rewarding, and challenging, aspects of managing in
nonprofit organizations. It asks managers to work with people who are so
passionate about the work they do not need to be paid but, because of their
status, their service is often less stable and more sporadic than that of paid
employees (Cnaan & Handy, 2005; Lammers, 1991). However, the management
of volunteers presents distinct advantages and limitations in terms of the manage-
ment of human resources. As Jeffrey Brudney and Hayley Sink in Chapter 12
discuss, volunteer management until recently has been largely discussed as a one-
size-fits-all approach for nonprofit organizations. There is a great need to more
closely examine the factors that impact the effectiveness and necessity of volunteer
361
management practices and under which circumstances different aspects of

volunteer management can and should be applied. When a nonprofit organization
has a sizeable portion of staff who are donating their human capital and therefore
are not motivated by extrinsic rewards, careful attention to how these staff are
managed and motivated is critical to the organization. This research by Brudney
and Sink will help volunteer managers better adjust the universal model to the
needs and resources of their organization.
While managing a volunteer staff raises a particular set of questions for a
nonprofit, another distinct issue in the sector is the challenge of managing
paid staff alongside volunteers. While volunteers and employees both choose to
work for a variety of reasons, managing these two sources of labor and talent
side by side can at times cause difficulties for both managers and employees. The
interplay of paid and volunteer labor was explored in Chapter 15 by Allison
Russell, Laurie Mook, and Femida Handy. This chapter illustrates that one of
the remaining challenges for researchers is to more closely examine how the
interaction between volunteers and staff contribute to or detract from the engage-
ment of volunteers. This chapter also emphasizes the need to examine the trade-
off inherent from mixing paid staff and volunteers in the production of nonprofit
goods and services. Future research on volunteer management and HRM in
nonprofits needs to further investigate the interactions between these labor forces
and the possible interactions in terms of productivity, engagement, and the
culture of organizations.
Another aspect often documented in the literature and noted by observers of
the sector are the characteristics of the nonprofit workforce itself. The individuals
who seek to work for and create nonprofit organizations are often described as
different in terms of their motivation and engagement at work (Lee & Wilkins,
2011; Leete, 2000; Park & Word, 2012). These workers are often pointed to as
more altruistic or motivated to serve a cause bigger than themselves. However,
little comparative data exists that truly examines differences between workers
across the public, nonprofit, and for-profit sectors of the economy. Most of the
research that addresses these differences only looks comparatively across two
sectors and excludes the third. Collection of comparative data about individuals
who self-select into these sectors can begin to unpack the extent to which
theories, such as the donative labor hypothesis (discussed in more detail by
Beth Gazley in Chapter 2), are indeed correct about the qualities of nonprofit
workers and the organizations they serve. As mentioned earlier, if people do
self-select into the sector and early sector choice has an influence on individuals’
career paths, we need to better understand what drives people to enter the
nonprofit sector first, so we can keep them here and make this a rewarding life-
long professional path.
While the sector has grown over time and more individuals are making their
careers in the nonprofit sector, some particular HRM challenges remain
unaddressed. Unlike many areas of the U.S. economy, the nonprofit sector as a
whole tends to include more women than men. Despite the higher than average
362
Conclusion
representation of women in the nonprofit labor force, issues of fairness and

equality still persist. The 2016 GuideStar Nonprofit Compensation report, which
examined 990’s for 96,000 nonprofit entities, found that compensation for female
executives still lagged behind their male counterparts, with the gap being the
most pronounced measuring 23% at nonprofits with budgets from $2.5 to $5
million dollars (Wyland, 2016). The report also highlighted the fact that few
women lead large nonprofit organizations, despite their prevalence in the
workforce. The prominence of women in the sector and the often noted pay
disparities between nonprofit wages and those in the public sector mean additional
research needs to be conducted to examine the role of gender on the nonprofit
wage gap (England, 2005; Leete, 2000) and also the role of gender on the
evolution of the sector as a whole. In the area of human resources, the role of
gender in terms of attracting and keeping talent also needs to be more fully
investigated since some research has suggested women are more attracted to
nonprofit work because they are more altruistic in nature (Themudo, 2009).
Another aspect of the nonprofit sector that influences the management and
development of human resources is the relatively limited size of most nonprofit
organizations. As discussed by John C. Ronquillo, Annie Miller, and Ida Drury
in Chapter 3, nonprofit organizations currently employ approximately 1 in 10
Americans but the majority of these organizations have relatively few employees.
Their relatively small size overall makes it difficult to devote sufficient resources
to the management, training, and development of staff. This is especially true
given that most nonprofit organizations lack a staff member devoted to human
resource management (Guo, Brown, Ashcraft, Yoshioka, & Dong, 2011). For
scholars, this means we need to focus our efforts on developing research and
theory to apply to smaller organizational settings with fewer HR specialists
and more generalists to increase the relevance of this work to all nonprofits.
Directions for Future Research

The nonprofit sector has come a long way. The sector has grown significantly
in the past 40 years in the United States and is the main career path for many
who are interested in making a difference in their communities. As documented
in Chapter 16, by Carrie Oelberger, Anne-Meike Fechter, and Ishbel McWha-
Hermann, the power of nonprofits is not limited to the United States—nonprofits
are a global force for change, but with that growth remains many management
challenges. While more education programs are started every year to train those
working in the nonprofit sector and more scholars dedicate their attention to
improving our body of knowledge on how the sector does and should operate,
we still have work to do.
Many of the limitations of our understanding of the issues surrounding HR
in the nonprofit sector are the result of data limitations. The limitations on the
availability and quality of the data to study nonprofit organizations are a well-
documented and ongoing issue for nonprofit researchers (Grønbjerg, 2002).
363
Many of the existing data resources stem from data collected by a few government
sources including: the federal Internal Revenue Service, state-level data available
from State Attorney Generals and Secretaries of state, the federal Department of
Labors Bureau of Labor Statistics data, and other archival data sources. The use
of these data sets poses challenges for all nonprofit researchers since these data
sets were designed for administrative purposes and not for research purposes.
This means data must be collected by individual researchers with limited ability
to create random samples to gain a representative sample of nonprofits or their
employees. Progress is being made in this area (see the work of the Center on
Nonprofits and Philanthropy of the Urban Institute and GuideStar), but gathering
systematic data on management in the nonprofit sector is a Herculean task.
Additionally, further complications with these data sources ensue because of
the failure of many data sources to have specific categories or coding for nonprofit
organizations. For example, the Bureau of Labor Statistics collects data on employ-
ers through the Quarterly Census of Employment and Wages, which includes
most employers in the United States. However, the data is designed to look
at employment by industrial classification and does not include coding of organi-
zation by type, so both nonprofit and for-profit hospitals fall under the same
category within the data. The only way to then identify nonprofit organizations
in this data set is to match the data to IRS data sets, which are often somewhat
dated by the time they are released. This means the research and analysis into the
management of human resources by nonprofit organizations are likely missing
many newer and smaller organizations.
Additional issues are faced in creating information relevant for researchers
and practitioners across the entire nonprofit sector. The diversity of the nonprofit
sector has long been a challenge for nonprofit researchers. We are not just
comparing apples and oranges in the nonprofit sector—we are examining the
whole fruit basket. As discussed above and in Chapter 3 by John C. Ronquillo,
Annie Miller, and Ida Drury, most of the organizations in the nonprofit sector
are relatively small, creating an issue in terms of the availability of data and the
collection of new data from organizations that represent the sector as a whole.
In particular, one of the challenges is collecting data from these smaller nonprofit
organizations, which tend to respond at a lower rate to surveys or are simply
excluded from data collection (Hager, Wilson, Polack, & Rooney, 2003).
In part, small organizations are often excluded because of the limited availability
of data on these organizations from the IRS. Organizations with gross receipts
less than $200,000 and assets below $500,000 are only required to file a 990 EZ
and organizations with less than $50,000 in gross receipts are only required to
file the 990-N or E-postcard, both of which contain fewer data fields afforded
for research. The limited data on small organizations makes it more difficult to
research management issues that challenge newer and smaller organizations.
These include areas examined in this book such as training and development as
explored by Toby Eagan in Chapter 13 and recruitment and selection challenges
for small organizations as raised by Rikki Abzug in Chapter 6.
364
Conclusion
Another limitation of the use of the 990 for the study of human resources in
the nonprofit sector is the very small amount of information it contains that
pertains to management and employment. Currently, the form only collects data
on “key employees” or those making in excess of $150,000 in compensation
annually. Since this excludes most nonprofit employees, the IRS 990 form is
usually just the starting point to identify organizations for researchers interested
in nonprofit HRM issues. Even as a starting point it limits the ability of nonprofit
researchers to select organizations based upon number of employees for sampling.
Limitations in this data make it more difficult to answer questions raised in
Chapter 9 by Sally Selden as to how well nonprofits examine their compensation
practices, whether they consider questions of equity in setting their salaries and
whether they adopt compensation practices designed to promote high performance
in their nonprofits.
The lack of consistent data sources also makes it difficult to study organizations
over longer time frames. As the nonprofit sector grows in importance and pro-
fessionalization, we need to understand the dynamics behind this growth for
HRM and ensure it follows a productive path. While a great deal of social science
research employs cross-sectional data analysis, this approach limits the ability of
researchers to more fully examine the causal mechanisms between human
resource issues and other outcomes of interest such as organizational performance
or outcomes in the community. For example, a recent work by Erin Melton and
Kenneth Meier (2016) used multi-year data to examine the link between public
sector human resource functions and organizational performance. Their analysis
focuses on outcomes for public schools and found that the size and scope of the
HRM function needed to change as the goals of the particular school district
changed. The type of nuance demonstrated in this analysis would not have
been possible had it not been for multi-year data. We need to be able to apply
similar analysis techniques as the nonprofit sector grows and changes. This
analysis not only demonstrates the need for multi-year data but also the need to
examine models that avoid one size fits all approaches to the study of HRM,
models that can be tailored to particular nonprofit contexts, such as those
discussed by Hans-Gerd Ridder and Alina McCandless Baluch in Chapter 5 and
Jeffrey Brudney and Hayley Sink in Chapter 12. Small organizations and those
heavily reliant on volunteers will likely need models that adapt to their needs,
goals, and available resources. However, knowing that to be true and showing
it are two different things—we need more longitudinal data to make the case for
investing in nonprofit HRM capacity to foster its growth and professionalization.
One of the unique challenges of examining the impact of HRM on nonprofit
success is the difficulty in defining and measuring successful outcomes because
of the abstract nature of nonprofit missions (Sawhill & Williamson, 2001). This
lack of a universal measure for successful outcomes makes examining the impact
of HRM across organizations more challenging. As noted by Marlene Walk and
Troy Kennedy in Chapter 14, human resource management and performance
appraisal are meant to contribute to the overall success of organizations. However,
365
the limited ability to examine the impact of performance appraisals and other
HRM strategies across organizational settings and missions limits the ability of
scholars to examine their role in the success of organizations. Walk and Kennedy
further point to the need to be cautious in the adaptation of performance appraisal
research to both practice and scholarship on nonprofits since ultimately these
organizations have different aims.
Chapter 2 by Beth Gazely, Chapter 8 by Heather Carpenter, and Chapter 11
by Kunle Akingbola all point to the need for additional research about how best
for managers to balance the competing needs of organizations while at the same
time engaging, motivating, and retaining their employees. These challenges are
heightened by resource constraints on nonprofit overhead and the pressure to “do
more with less” often present in the sector (Lecy & Searing, 2015). However,
this focus on doing more with less often limits the ability to effectively manage
nonprofits and forces organizations to cut corners in terms of the management
and development of employees. While in the short term these trade-offs may lead
to cost savings, these savings are likely unsustainable and can impact both the
quality of the work done and the ability to maintain and engage employees.
The challenge for researchers is to demonstrate the link between these trade-offs
in terms of employee engagement and retention and the quality of outcomes for
the sector and communities.
A key issue in HRM across sectors is how best to manage diverse staff in an
organization. In Chapter 18, Judith Y. Weisinger explored the issue of diversity
not just from the traditional frame of representation of diverse groups but also
drawing upon perspectives in social justice, power and identity dynamics, and
interest conflicts. Examining diversity from this perspective challenges researchers
and practitioners to think of diversity and inclusion in new ways that engages the
culture of our organizations. The challenge to rethink diversity in the sector also
presents new research challenges where scholars must think beyond traditional
examinations of looking at head counts in terms of diverse groups and instead
investigate the changes diversity brings to organizations for the betterment of staff
and the organization.
The examination of the unique qualities of staffing for international NGOs
by Carrie Oelberger, Anne-Meike Fechter, and Ishbel McWha-Hermann in
Chapter 17 also point to trade-off and difficulties in managing diverse paid staff
in an international setting. This examination points to how different employee
expectations and cultural differences can shape the nature of the relationships
between NGOs and employees. Their work points to a need to better understand
the challenges involved in cross-national staffs and the ethical issues such as equity
and staff safety inherent in such endeavors.
In Chapter 7, Yeonsoo Kim’s examination of succession planning for nonprofit
organizations points to the need to better investigate models of succession planning
and management suited to the nonprofit setting. As often pointed out, the smaller
size of nonprofits limits the resources that these organizations have to devote to
such efforts and the attention and resources staff can devote to these efforts.
366
Conclusion
However, the dependence of nonprofit organizations upon others for resources

makes them particularly susceptible to changes in leadership, which suggests the
need for careful planning around leadership development and succession. If these
challenges are to be dealt with for the nonprofit setting, additional research needs
to be conducted about how best to tailor succession planning to smaller organi-
zations in the nonprofit sector. It is likely with the looming retirement of many
Baby Boomers across the workforce this research will be valuable not only to small
nonprofit organizations but also small businesses.
Related to the issue of succession planning and management is the issue of
training and development for nonprofit organizations. In Chapter 13, Toby
Eagan examined the current practice and research concerning the training and
development of the nonprofit workforce. He found that overall both the research
and practice of training and development were underdeveloped, particularly
when it came to smaller and less well-established organizations. His review
pointed to the need for both researchers and nonprofit leaders to frame training
and development of staff as part of the process for organizational learning and
strategy for organizations. As practice in this area advances, researchers will need
to investigate the link between resources invested in these strategies and broader
organizational performance and the role of these actions in recruiting and
retaining staff.
Joan Pynes, in Chapter 10, examines the role of labor relations in the nonprofit
sector and points out labor relations may become an increasing concern from
both researchers and practitioners due to increased unionization in growth areas
of the nonprofit sector. These growth areas include fields such as healthcare,
legal, education, and research (Desilver, 2015). This might mean some of the
larger organizations in the nonprofit sector such as universities and hospitals may
face additional management challenges due to unionization, including recent
movements by college athletes and graduate students to unionize. This points to
the opportunity for scholars to extend existing lines of investigation concerning
labor relations in the for-profit and government sectors into nonprofit research,
particularly in healthcare and other highly professionalized portions of the
nonprofit sector.
In terms of the evolving nature of HRM in the nonprofit sector, Jennifer
Jones’s examination of the impact of technology in Chapter 19 also poses some
interesting questions and challenges for the nonprofit sector. In particular, her
work suggests technology will impact the ability to recruit and retain staff and
volunteers since many find adaptation to new technology difficult and many
diverse groups access technology differently or are shut out from it. It is likely
technological change will drive many aspects of HRM especially in terms of how
we communicate with and recruit volunteers and employees.
The need for additional research and attention to the development of HRM in
the nonprofit sector is clear. However, the reason to do this goes beyond the
interests of scholars. Scholars and those in the field need to always keep in mind
the importance of employees in terms of our ability to serve society and the
367
missions of nonprofit organizations. Failure to fully employ the resources and poten-
tial of staff means further losing ground in terms of addressing society’s most pressing
issues and allowing for continued suffering and struggle for the most vulnerable in
our communities. It means the important work of nonprofits may be less effective
than it could be, more costly in terms of time and money, and ultimately could lead
many to lose faith in the sector to provide answers and services. It could mean the
loss of valuable talent needed to find new paths forward in the nonprofit sector as
those employees go elsewhere in search of meaningful work and supportive
workplaces.
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369
Index
Please note that page references to non-textual content such as Figures will be followed by
the letter “f ” in italics, whereas those for Tables will be followed by the letter “t”. References
to Notes will contain the letter “n” followed by the Note number, while references to Web
Resources will contain the letter “w”. “HRM” stands for “Human Resource Management”,
while “HR” represents “human resources”.
Abzug, Rikki 88, 91, 93, 364 American Express Nonprofit Leadership
Acceleration Pool Model 106, 108, 109f Academy 135–6
Accenture (consulting firm) 198 American Postal Workers Union (APWU)
accountability, nonprofit: implications of 180
nonprofit sectoral theories for 22–3; American Red Cross 20, 224; see also Red
paradox of accountability 22 Cross
action learning 234 American Society for Healthcare Human
activist accommodating learning style 237 Resources Administration (ASHHRA)
Adams, Stacy 146 180
ADDIE (Assessment, Design, Develop, American Society for Training and
Implement and Evaluate) approach Development (Association for Talent
239–40, 241f Development) 225
administrative costs 6 Americans with Disability Act (ADA) 64
adult learning 234–5 Analysis of Variance (ANOVA) 158t
AFL-CIO 177 andragogy 234–5
Aguinis, H. 264 Anheier, H. K. 25
Agut, S. 192 anti-discrimination laws 46, 54–5, 330
Air Force manual, US 240 Appleby, Roslyn 297
Akingbola, Kunle 9, 74, 199, 250, 252, appraisals, performance 9; individual
280, 366 perceptions towards 259, 262; as key
Allen, W. C. 240 component of performance management
Amarante, Eric Franklin 8 252; purpose 256–7; recommendation
amateurism, philanthropic 19 for regular reviews 60; strategic function
American Express Foundation 133 within performance management 251;
American Express NGEN fellowship 133 see also performance management
370
Index
Argyris, C. 229 Brudney, Jeffrey 9, 207–8, 213–14,

Association for Human Resource 272–3, 279, 281, 282, 365
Management in International Bureau of Labor Statistics 2, 30, 142, 204,
Organizations 293 213, 364; labor relations, in NPOs 167
Association for Talent Development burnout-antithesis approach, employee
(ATD) 225 engagement 195–6, 198
association revolution 285 business intelligence 351
associational rights, US 19 Byham, W. C. 106, 108, 109f
Atlanta Symphony Orchestra (ASO) 166
attraction-selection-attrition framework Caers, R. 95
312 Canada General Social Survey on Giving,
Australia, nonprofit sport organizations Volunteering and Participating (2010)
in 96 272
Carpenter, Heather 8, 124, 126f, 129, 366
Baby Boomers 36, 93, 304, 307–8, 310; Center for Association Leadership (ASAE)
see also Generation X; generational 335w2
differences, managing; Millennials Centro de los Derechos del Migrante
Baines, D. 178 (CDM) 166, 177
Bakker, A. 198 Chambers v. Valley National Bank of
Baluch, Alina McCandless see McCandless Arizona (1988) 58, 65n4
Baluch, Alina Chang, W. W. 223, 232, 233
Ban, C. 89, 92, 94 Charan, R. 106, 107
Barrick, M. R. 197 charitable organizations 29; charity culture
Barton, Clara 224 136; registered, numbers of 30; theories
Becker, G. S. 225 of nonprofit sector 18, 20, 21
Becker, K. 95, 260 Charity Navigator 136
benchmarking of jobs 146 Chartered Institute of Professional
Berman, E. M. 92 Development (CIPD) 225
Bernhardt, A. 177 Cheese, P. 123, 126
biographical information blanks 96 Chen, P. J. 309
Bish, A. 95 Chen, X. 148, 149, 160
Blacks 38, 170 Choi, Y. 309
Blackwood, A. 30 Christophersen, T. 352
blue-collar workers 60–1 CHS Alliance (formerly People in Aid)
board member labor, compensation of 21 293, 294, 296
bona fide occupational qualification Chum, A. 274, 275
(BFOQ) 19 Cirka, C. C. 262
Borges-Méndez, R. 335n1 Citizens United v. FEC (2010) 22
Borkoski, C. 36, 37 Civil Rights laws, US 19, 21, 53
Boyce, Milton 206–7 client-centered therapy (CCT) 236
Bradshaw, P. 326 collective bargaining and unions 169–70
Brandl, J. 148, 159–60, 313 collective organizational approach,
Brickley, J. A. 18 employee engagement 197
BRICS countries 289 Collinson, S. 290
Bridgespan Group 122; Leadership Colorado Nonprofit Association 134
Development Process 130–1; Nonprofit CommonGood Careers 137, 325
Leadership Development Toolkit Community Memorial Foundation 133
112–13, 116–17 community-based organizations (CBOs)
Brooks, K. 166 285, 298
Brookshire, D. 306 Compassionate Carers (Pryor and Mitchell)
Brown, J. 35 135
Brown, W. A. 306, 308, 312–13, 329, CompassPoint Nonprofit Services and
330 Transition Guides 112, 113
371
Index
compensation practices 8, 21; base pay Department for Professional Employees

rates, establishing 148; compensation (DPE) 179–80
structure, key elements 147–9; and Department of Labor (DOL), US 144;
equity see equity and compensation; employment law 44, 46, 47, 49; training
human service nonprofits 145, 150–5, and development 231; and violations of
156t; internal and external equity, employment and labor laws 177; Wage
principles of 146–7, 152, 153; and Hour Division 143
international NGOs 293–5; Millennials Derous, E. 95
148–9, 306; multi-state study of Dess, G. G. 162n5
human service nonprofits 149–50; non- Devaro, J. 306
distribution constraint, implications DiMaggio, P. J. 25
for 20–1; in NPOs 142–65; objectives direct service employees 33
160–1; organizational size 149; discrimination: faith-based 19; social
regulations influencing compensation policy 174–5; see also anti-
in NPOs 143–5; release of claims, discrimination laws
on termination 59; research setting diversity/diversity management 323–38;
149–50; research summary, nonprofit business case and social justice case
sector 145–6; strategies 142; systems, 326–8; business case perspective 328;
size and use 157–8t; and technology context and historicity 331; current
344–5 research 328–9; definitions 324;
competencies, developing 122; barriers ethnic minorities 38, 170; moving
137; sub-competencies 124–5 beyond representational diversity and
competition, and external/formal inclusion 329–33; multiple identities/
recruitment approaches 93 intersectionality 331–2; Muslim
Congress, US 18 communities 324–5; people
Consolidated Omnibus Budget management, implications for 333–4;
Reconciliation Act (COBRA), US 64 power, leadership and decision-making
contingency approaches, volunteer 332–3; representational diversity 324,
management 210–12; confronting of 328, 329–33; social justice perspective
212–14 328; values-focused approach 330–1
contract failure 17 donative labor hypothesis 21
Cooper, M 166 donors 6
Cornell University 225 Dooley, C. R. 224
Corporation for National and Community Drahnak-Faller, P. 94
Service 272 Drucker, Peter 232
cost of living adjustments (COLA) 148 Drug Free Workplace Act, US 51
Cotton, A. 123–4 Drury, Ida 8, 363, 364
Council for Certification in Volunteer Dubose, Derwin 325
Administration (CCVA) 220 Duffield, M. 290
Cour, S. 347–8, 352
Cox, T. H. 327 Ebrahim, A. 22, 23
Cravens, J. 218 “economic realities” test, status of worker
Craver, C. B. 175 47–9
critical action research 235–6 Eddings, B. 166
Cronforth, C. 232 efficiency and effectiveness, technology
Csaky, C. 297 351
culture change 333 Egan, Toby 9, 227, 364, 367
Electronic Health Records (EHR) 346,
De Witte, K. 95 347, 352
Deckop, J. R. 262 Ellis, Susan 208–9t, 209, 218, 281
Dedrick, J. 346 Emanuele, R. 276–7, 277
demographic changes 9–10 emergency succession planning 113
372
Index
Emerging Practitioners in Philanthropy procedures 51; drug, alcohol and

(EPIP), Nonprofit Talent and smoking policy 51; employees vs.
Leadership Development Toolkit 134 independent contractors 46–51;
emotional intelligence 125 employment at-will 50, 57, 59;
empathy 236 federal laws, summary 61, 62–3t, 64;
employee handbook 50–1, 58 harassment in workplace 51, 55–7;
Employee Retirement Income Security hiring and retention of staff 52–4;
Act 143 holidays/vacation policies 50; legal
employee self-service systems (ESS) 344, aspects 44–66; market pressures 32–3;
345 minimum wage laws 44, 60–1, 61,
employees: benefits 173–4; direct service 144–5; negligent hiring and retention
33; engagement 185–203; exempt from claims, protection against 52–4;
overtime 144–5; inappropriate activity, overtime 144–5; payment to employees
actions of employers in relation to 53; 60–1; recruiting and retaining
vs. independent contractors see nonprofit employees with traditional
employees vs. independent contractors; methods 312–13; screening of staff
interests of 172–4; investigation of 52–3; size of sector 30–1; supervision
activities 54; job satisfaction 188–9; of employees 53; talent acquisition,
payment to 60–1; performance reviews diverse and inclusive 35–6; termination
see performance reviews, employees; of 57–60; trends 29–43; turnover and
recruiting and retaining nonprofit retention 33–5
employees with traditional methods employment at-will 50, 57, 59
312–13; rights of 174; screening of Eng, T. Y. 92
52–3; supervision of 53; termination engagement, employee 9; burnout-
of employment see termination of antithesis approach (Maslach) 195–6,
employment; unions, right to form 198; collective organizational approach
170; see also employment, non-profit; (Barrick) 197; commitment 193;
labor relations, in NPOs conceptualization and research 189–92;
employees vs. independent contractors 44, and customer outcomes 192; defined
46–51; degree of control exercised/ 186–8; determinants 186–7; job
retained by employer 48–9; “economic satisfaction 188–9, 194; management
realities” test 47–9; employee practitioners 186, 190, 198;
handbook 50–1; extent of relative multidimensional approach (Saks)
investments of employee and worker 196–7, 199; need-satisfying approach
48; importance of distinction 46; job (Kahn) 194–5; and nonprofit
descriptions 49–50; making the organizations 198–9; organizational
determination 47–9; misclassification outcomes 190; personal engagement
of workers 46–7; permanency of 187; and profit 192; research 187–8,
relationship 48; special skills and 191–2, 198–9; satisfaction-engagement
initiative requirement 48; work approach (Harter) 196; theoretical
performed as integral part of employer’s approaches 192–7; traditional 186;
business 47; worker’s opportunity for and turnover 192
profit or loss 47–8 enterprise culture 232
employers, duties of, harassment in entrepreneurship theory 20
workplace, addressing 56–7 e-Postcard 30
employment, non-profit 8; anti- Equal Employment Opportunity Commission
discrimination laws 54–5; application v. Chestnut Hill Hospital (1995) 58
of employment law on nonprofits equal employment opportunity (EEO) 324
45–6; assessment of state of sector equity and compensation: equity theory
30–1; compensation and equity 36–8, 146; internal and external equity,
39t; complaint procedures 51; current compensation principles 146–7, 152,
trends and challenges 31–9; disciplinary 153; nonprofit employment 36–8, 39t
373
Index
Erickson, E. Jr 166 practices to manage across generations

Ertas, N. 309 311–15; work values 305–11
ethnic minorities 38, 170 Gilbert, J. A. 324
Evelyn and Walter Hass Jr. Fund 133 Girl Scouts of the USA (GSUSA) 334
expatriates 286, 290, 291, 298 Goleman, Daniel 125
experiential learning cycle 237 Gordon, D. 166
external equity (market competitiveness) Govekar, M. A. 277
146–7 Govekar, P. L. 277
extrinsic rewards 24, 127 government failure theory 17, 18, 37
Grasse, N. 38, 145
Facebook 93 Gratton, L. 81
facilitation theory 236–7 Great Recession 142, 143
Fair Labor Standards Act (FLSA), US: GuideStar 136, 147; GuideStar Nonprofit
compensation practices 143, 144; Compensation report (2016) 363
employment law 44, 60–1, 65n6 Guo, C. 73, 138, 260, 282
fair-wage theory 146 Güttel, W. H. 148, 159–60, 313
Farndale, E. 251
Faulk, L. 147 Haiven, J. 87, 88, 91–2
Fechter, Anne-Meike 9, 363, 366 Hall, L. M. 93
Federal Reserve Bank of Kansas City Hall, M. F. 93
115–16; Nonprofit Executive Hallock, K. 147
Succession-planning Toolkit 113; Hamann, D. J. 147
types of succession planning by Handy, Femida 9, 74, 75, 79, 272–3, 274,
114–16; see also succession planning 277–8, 313, 314, 362
Feeney, M. K. 89 Hansen, S. B. 89, 306, 308
Fine, J. 178 harassment in workplace 51, 55–6;
Fletcher, M. A. 166 employer’s responsibility to address
FLSA see Fair Labor Standards Act 56–7
(FLSA), US Harbison, F. 225
Form 990-N 30 Harrison, T. D. 145
Fredette, C. 326 Harter, J. K. 192, 194, 196
Froelich, K. 102, 117, 118–19 Haski-Leventhal, D. 281
From the Top Down (Ellis) 208 Hawthorne Studies (1930s) 24
Fyfe, N. R. 280 Hayday, S. 191
Headington Institute 296
Galambos, N. L. 308 health and safety, workplace 173–4
Garner, J. L. 145 healthcare industry, US 17–18
Gazley, Beth 7, 90, 93–6, 279, 366 Heaton-Shrestha, C. 296
Geller, S. L. 90 Helmig, B. 75
gender factors: employment in nonprofit Herman, R. D. 306
sector 171–2; means-testing 156t; pay Herring, C. 314
gap 38, 155, 156t Herriot, P. 95
Generation X 36, 304, 307, 308, 360; see Herzberg, Frederick 225
also Baby Boomers; generational high performance work practices 34
differences, managing; Millennials high performing nonprofits (HPNs)
Generation Z 311 150–2, 154, 155
generational differences, managing 36, hiring and retention of staff 35, 52–4
304–22; practical implications and Hispanics 38
advice for nonprofit sector and leaders Holton, E. F. 239
315–16; recruiting and retaining hospital volunteers 273
nonprofit employees with traditional hospitals, US 17–18
methods 312–13; using strategic HRM HR see human resources (HR)
374
Index
HR architecture see human resource (HR) human service nonprofits: compensation

architecture practices 145, 150–5, 156t; multi-state
HRM see human resource management study 149–50
(HRM) hybrid legal forms 20
HRM Index 260
Huang, Y. E. 223 independent contractors, vs. employees
Hudson Institute, Workforce 2000 report see employees vs. independent
324 contractors
Huggins, L. 89 Independent Sector 133, 335w1
human capital 8, 9 Individual Professional Development
human resource development (HRD) Assessment 129
228; HR Wheel 229–30 individualized learning styles 237
human resource (HR) architecture: information and communication
aligning with the strategic orientation technologies (ICT) 172
of NPOs 80–1; conceptual model Ingerfurth, S. 75
75–8; defined 260; empirical evidence INGOs (international non-governmental
78–80; professionalizing 81; shifting organizations) 9, 285–303;
81–2; types, in NPOs 77f; see also commitment to HRM structures 293;
nonprofit organizations (NPOs); compensation practices 293–5; dual
strategic human resource management salary system 293, 294; examples 285;
(SHRM) expatriates 286, 290, 291, 298;
human resource management (HRM): HRM considerations 292–8; and
administrative 77, 78; bureaucratic 78; international aid 287–92; localization
content 82; HR Wheel 229–30; 287; management of HR in 285–303;
importance in nonprofit sector 360–1; national staff 294; performance
interchangeability of labor as part of management and professional
280–2; interchangeability of labor in development 295–6; professionalization
context of nonprofit HRM 279–82; 287, 288, 291; reward systems, design
motivational 77, 78; in nonprofit sector 295; socialization of international
3–6, 279–82; strategic see strategic workers 294–5; staff selection 293;
human resource management (SHRM); staff well-being 296–7; travel and
strategy-focused and flexibility-focused expatriation 297–8; universalist vs.
73–4; and technology, in NPOs contextualist paradigms 292; see also
339–58; “three failures” theory, NGOs (nongovernmental
implications for 17–20, 37; values- organizations)
based 77, 78–9 Initiative for Nonprofit Talent and
human resource planning 105 Leadership 133–4
Human Resource Wheel 229 Instructional System Design, US military
human resources (HR): administrative 69, 239
79; climate 81; function 69, 70; impact interchangeability of labor 9; in context
of practices on performance 71; in of nonprofit HRM 279–82; definitions
international NGOs, managing 285– 273–4; modeling 274–6; as part of
303; motivational 79; policies 80–1; HRM 280–2; see also workforce, mixed
principles 80; programs 81; replacement paid and volunteer
planning 104; and social media 348–50; InterHealth 296
specialists, role of 91–2; strategic 79; Internal Revenue Service (IRS), US 18,
talent management 105–6; values-based 47, 143, 364
79; workforce planning 104–5; see also international aid, and INGOs:
human resource (HR) architecture; “bunkerization” of aid 290; division
human resource management (HRM) of knowledge 288–9; division of
human resources information systems labor 291–2; dual security system
(HRIS), HR Wheel 229–30 290; history 287–8; mobility 290;
375
Index
nationalization 292; place of work Konrad, A. 326

289–91; see also international non- Konradt, U. 352
governmental organizations (INGOs) Kossek, E. 35
international non-governmental Kothari, U. 289
organizations (INGOs) see INGOs Kraemer, K. L. 346
(international non-governmental Krahn, H. J. 308
organizations) Kramer, K. 116
interviews 342 Krause, H. 326
intrinsic motivation 311; compensation KSAOCs (knowledge, skills, abilities and
policies 159–60; performance other characteristics) 4, 124
management systems 258, 261; Kuo, Y. 223
recruitment and selection 93–4;
strategic human resource management labor relations, in NPOs 8, 166–84;
(SHRM) 76, 79; talent management legal environment 167–8; projected
127 occupational growth 171–2; reasons
IRS see Internal Revenue Service (IRS), for protecting employees 174; “Right
US to Work” laws 22, 168–9; social policy
ISOTURE (Identification, Selection, 174–8; unions see unions; worker
Orientation, Training, Utilization, interests 172–4; worker rights 174
Recognition, and Evaluation) model, labor unions see unions
volunteer management 206–7 leader-member exchange (LMX) 262
Issa, J. 306 leadership: American Express Nonprofit
Ivancevich, J. M. 324 Leadership Academy 135–6; developing
future leaders 116–17; diversity
job descriptions 49–50, 53, 126f management 332–3; engagement of
job functions, changes in 346–7 senior leaders 116; future leadership
job satisfaction: determinants 189; team, vision of 116; Initiative for
and engagement 188–9, 194; high Nonprofit Talent and Leadership
performance work practices 148; 133–4; Leadership Development
and person-organization fit 95; and Process 130–1; Leadership Pipeline
technology 348; see also engagement, Model 106–8; Nonprofit Leadership
employee Development Toolkit (Bridgespan
job-seeking behavior 21 Group) 112–13, 116–17; Nonprofit
Johnson, J. M. 148–9 Talent and Leadership Development
Johnston, D. 37 Toolkit (EPIP) 134; process of
Joiner, A. T. 309 developing leaders, improving 117;
Jones, Jennifer 10, 367 strategic leader development planning
113, 115; and success of NPOs 112;
Kahn, E. 236 talent gaps filling 117; technology
Kahn, W. A. 187, 194, 194–5, 197, 198, implementation 351–2
199 learning: action learning 234; adult
Katz, E. 313 learning 234–5; e-learning 345–6;
Kearney, B. J. 50 experiential learning cycle 237; learning
Kelliher, C. 251 styles 237–8; see also training and
Kellner, Ashlea 37 development (T&D), nonprofit sector
Kennedy, Troy 9, 365, 366 Lee, J. W. 313
Kettlitz, G. R. 96 Leete, L. 21, 37, 159
Kim, S. E. 313 Leiter, J. 327, 333, 334–5
Kim, Yeonsoo 8, 366 LeRoux, K. 89
Klinger, S. 176 Leuty, M. E. 308
Knoke, D. 148, 149, 160 Level Playing Field Institute 325
knowledge management 130 Leveson, L. 309
Kolb, D. A. 237, 238 Levine, D. 146
376
Index
Levinson, Jay Conrad 232 Micah-Jones, Rachel 177

Lewin, Kurt 225, 233 Michels, R. 299n1
Lewin, T. 147 Millennials 87, 308, 360; compensation
licensed clinical social workers (LCSW) practices 148–9, 306; exceeding
147 Generation X 36; managers 149;
Lilly Ledbetter Fair Pay Act 2009 143 qualifications 309; recruitment and
Linnehan, I. 326 selection 93; work values 308, 309–11;
Lipsky, D. B. 176 see also Baby Boomers; Generation X;
Liu, C. Y. G. 92 generational differences, managing
Lobel, S. 35, 327 Miller, Annie 8, 363, 364
Louisiana Nonprofit Association 134 Milligan, C. 280
Lowe, G. 187 Milofsky, C. 335n1
low-profit limited liability corporations minimum wage laws 44, 60–1, 144–5
(L3Cs) 20 Mirabella, R. 3
Luthans, F. 192, 196 Mitchell, G. E. 25
Lyons, S. T. 306, 310, 311 mixed workforce see workforce, mixed
paid and volunteer
McCambridge, Ruth 179 Mook, Laurie 9, 275, 278, 280, 314, 362
McCandless Baluch, Alina 8, 78, 79–80, Mor Barak, M. E. 325
82, 83n1, 365 Mordaunt, J. 232
McClelland, David 225 motivation: extrinsic rewards 24, 127;
McGinnis, J. 306 intrinsic see intrinsic motivation;
McGinnis Johnson, Jasmine 10, 306, 310, technology 343; theories of nonprofit
360 sector 20, 24
McGraw, P. 96 motivational theories 24
McHatton, P. A. 73 Motwani, J. 96
McKeever, B. O. 142 multidimensional approach, employee
McLagan, P. 229 engagement 196–7, 199
McLean, M. 306, 310, 311 mutual support organizations 211
McLeod, P. 327 Myers, C. A. 225
McWha-Hermann, Ishbel 9, 291, 363,
366 National Labor Relations Act 1935
Mahler, W. R. 106 (NLRA) 167
Maloney, J. 166 National Labor Relations Board (NLRB)
management, and succession planning 167, 168, 173
see succession planning National Organizations Survey 92
management practitioners 186, 190 National Taxonomy of Exempt Entities
market failure theory 17, 18, 37 (NTEE) 162n5
market pressures, nonprofit employment National Union of Hospital and Health
32–3 Care Employees 172
Marsden, P. V. 92 Natuzzi, Steve 38
Maslach, C. 194, 195–6, 198 Nayak, P. 116
Maslow, Abraham 225 Naylor, Harriet 205, 206
Mastracci, S. H. 314 need-satisfying approach, employee
Mayo, Elton 225 engagement 194–5
meaningfulness 195 negligent hiring and retention claims,
means-testing 156t protection against 52–4
Médécins sans Frontières 290 Nelson, O. T. 89
Meier, Kenneth 365 Nemenoff, E. K. 89–90
Meier, S. 24 neo-institutional theories 25
Meijs, L. C. P. M. 210–11, 211t, 213–14, Netting, F. E. 275–6, 280
281, 282 Network of School of Public Policy,
Melton, Erin 365 Affairs and Administration (NASPAA) 3
377
Index
new public management movement 32–3 pitfalls 88; professional development

Ng, Eddy S. 10, 148–9, 306, 308, 310, support 137; professionalizing the HR
360 architecture 81; recruitment and
NGOs (nongovernmental organizations) selection for 87–100; regulations
1–2, 225, 285, 287; see also INGOs influencing compensation in 143–5;
(international non-governmental shifting the HR architecture 81–2;
organizations) size 111–12, 242–5; strategic human
Nickson, D. 94–5 resource management in 73–5;
Nikolova, M. 145 succession planning and management
Nishii, L. H. 259 in 110–17; training and development
Noe, J. L. 233 223–49; see also strategic human
non-distribution constraint, implications resource management; succession
for compensation 20–1 planning and management
nonprofit accountability, implications of Nonprofit Quarterly 179, 325, 332
nonprofit sectoral theories for 22–3 nonprofit sector: compensation equity
nonprofit and philanthropic sector, efforts 37–8; compensation research 145–6;
to support talent within 132–6; diversification of 29; employment
American Express Nonprofit trends 29–43; growth 2; human
Leadership Academy 135–6; Initiative resource management (HRM) in 3–6;
for Nonprofit Talent and Leadership human service nonprofits 149–55,
133–4; Nonprofit HR Talent 156t; importance of HRM in 360–1;
Management Conference 135; qualities of sector and workforce
Nonprofit Talent and Leadership 361–3; size, in United States 2, 29;
Development Toolkit (EPIP) 134; succession planning and management
Talent Development Initiative 134–5; 112–13; theories 17–23; volunteerism,
Talent Philanthropy Project 132–3; legacy of 272–3; see also nonprofit
see also nonprofit sector organizations (NPOs); nonprofit
nonprofit education programs 3 sectoral theories, implications;
Nonprofit Employment Practice Survey succession planning and management
(2016) 2, 33, 34, 35, 36 nonprofit sectoral theories, implications 7,
Nonprofit Executive Succession-planning 17–23; of non-distribution constraint
Toolkit (Federal Reserve Bank of for compensation 20–1; for nonprofit
Kansas City) 113 accountability 22–3; for third sector
Nonprofit Finance Fund 171 employment law 21–2; of “three
Nonprofit HR Talent Management failures” theory for HRM 17–20
Conference 135 Nonprofit Talent and Culture Summit
Nonprofit Leadership Development 135
model 131–2 Noon, M. 328
nonprofit organizations (NPOs): aligning normative theories 16
HR architecture with the strategic North Carolina, HB2 law 330
orientation of 80–1; compensation NPOs see nonprofit organizations (NPOs)
practices in 142–65; conceptual nursing homes, wage inequality 147
model of HR architectures in 75–8;
empirical evidence on HR architecture Occupational Safety and Health Act
in 78–80; engagement, employee (OSHA) 45, 64
198–9; financial pressures 32; funding, Odendahl, T. 90
ability to generate 6; global role 1; Oelberger, Carrie R. 9, 287, 290–1, 363,
goals 74; high performing 150–2, 154, 366
155; labor relations 166–84; legal status O’Neill, M. 90
of US organizations under state and online volunteering 218
federal law 17; lessons learned for Onyx, J. 306, 310, 311
practice of managing human resources opportunistic behavior 18
in 80–2; “one-size-fits-all” solution, organizational size 149
378
Index
organizational theories 16, 23–5 Powell, W. W. 25

organizations, nonprofit see nonprofit pragmatist/converging learning style 237
organizations (NPOs) Pratt, Jon 179
Oster, S. M. 38 Preparation Engagement and Perpetuation
(PEP) model 220
Pallotta, Daniel M. 136 Presidio Institute, San Francisco 136
Parker, L. D. 73 Preston, A. E. 90
Parry, E. 308 profit: and engagement 192; see also
particularism, philanthropic 19 nonprofit and philanthropic sector,
Pathfinder Solutions 134, 135 efforts to support talent within;
Paton, R. 232 nonprofit organizations (NPOs);
pay inequality/compression 146, 147 nonprofit sector; nonprofit sectoral
pedagogy 234 theories, implications
Peiro, J. M. 192 pro-social behaviour 24
Pension Protection Act 2006, US 30 public sector: ethos 89; volunteer
people management, implications of programs in 207–8
diversity for 333–4 Public Sector Motivation 89
performance appraisals see appraisals, Public Service Motivation (PSM) 89, 91
performance Pynes, Joan 8, 348, 367
performance management systems 9,
250–67; adapting of pay for Qualls, T. 124, 126f, 129
performance 159–60; appraisals 256–7, Quarter, J. 278, 314
259; article review 253, 254–5t, 256; Quarterly Census of Employment and
design and technical implementation Wages 364
258; effects of 250–1; electronic 344; Quatt Associates 148
employee-management relationship
259; findings 253, 256–61; integration racial inequality 38
into organizational context 260–1; ratchet model, volunteer management 9,
international NGOs 295–6; intrinsic 212–19, 216t; applying 216–19; client
motivation 258, 261; methods 252–3, population 217; description 214–16;
254–5t; outcomes 261; personal human elements 219; intervals of
characteristics and manager/employee volunteering 216–17; organization
interactions 258–9; rating systems size 218; organization type 218;
251; reviews, and termination of organizational lifecycle 217–18;
employment 60; and technology 343–4; organizational scrutiny 218; steps 220;
training and development 125–6 volunteer proximity 218
Perry, J. L. 89 Rawls, J. R. 89, 159
Perryman, S. 191 Ready to Lead study (2008) 306–7
personal engagement 187 recruitment and selection for NPOs 8,
person/environment fit 305 87–100; best practices 88, 91–4, 94;
person/organization fit 305 Britain compared to Canada 91;
Peters, J. 35 dependent and independent variable
Peterson, S. J. 192, 196 dimensions 88; external/formal
Philadelphia Ronald McDonald House recruitment approaches and role of
(PRMH) 281 competition 93; impact of nonprofit
philanthropic insufficiency/particularism recruitment and selection 95–6;
19 internal/informal recruitment approachs
Phillips, Julien 352 and role of social networks 92–3;
Piening, E. P. 78, 79–80, 82, 83n1 lessons learned 96–7; and nonprofit
Pinz, A. 75 labor force 89–91; nonprofit selection
Pitts, D. 327 94–5; online recruiting 341–2; role of
positive psychology 236 HR specialists 91–2; social process
Pousner, H. 166 model 94–5; successful recruitment,
379
Index
antecedents 93–4; talent management Safrit, R. D. 206

124 Saidel, J. R. 347–8, 352
recruitment of talent 125; barriers to Saks, A. M. 188, 192, 194, 196–7, 199
137–8 Salamon, L. M. 18, 90
Red Cross 345, 349; see also American Salanova, M. 192, 198
Red Cross salary compression 147
reflective/diverging learning style 237 salary inversion 147
regenerative approach to volunteer satisfaction-engagement approach,
management 213–14 employee engagement 196
Rehnborg, S. J. 211 Schaufeli, W. 198
Ren, T. 147, 148, 149, 160 Schede Piatak, Jaclyn 10
replacement planning 104 Schinnenburg, H. 74, 75, 79
research: agenda 359–69; and Schmiesing, R. J. 206
compensation in nonprofit sector Schneider, B. 312
145–6, 149–50; critical action research Scholz, Bettina 290
235–6; diversity/diversity management Schön, D. 229
328–9; engagement 187–8, 191–2, screening of staff 52–3
198–9; future directions 363–9; sectoral theories see nonprofit sectoral
nonprofit sector 145–6; technology theories, implications
340–50 Sekhon, Y. K. 92
resource dependency theory 24–5 Selander, K. 198
resource-based view (RBV) 5, 72, 76 Selden, S. C. 8, 33, 260, 261, 365
Restatement (Second) of Contracts § 205 self-dealing, restriction on 20–1
64n3 Semi-Annual Labor Activity in Health Care
retention of staff: concerns 18; executives Report 180
35; and mission of organization 32; Senge, Peter 229, 238
negligent hiring and retention claims, service delivery model 210
protection against 52–4; strategies 34; service delivery organizations 211
talent management 124, 126–7, 138; Service Employees International Union
technology and HRM 343; traditional (SEIU), SEIU Healthcare unit 172
models, alternatives to 313–15; and Seven-Pointed Star Model 106, 108, 110
turnover 33–5; volunteers 213 sexual harassment policies 56
Revans, R. W. 234 Shaeffer-Kuelz, U. 352
Rich, B. L. 194, 199 SHRM see strategic human resource
Ridder, Hans-Gerd 8, 76, 78, 79–80, 82, management (SHRM)
83n1, 259, 365 Shuck, B. 191, 194
“Right to Work” laws 22, 168–9 Sidel, M. 23
Roberson, Q. 329 Simpson, M. R. 194
Robinson, D. 191 Sink, Hayley 9, 365
Robinson, R. B. 162n5 Smola, K. W. 307
Rochester, C. 210 social exchange theory 196–7
Roeger, K. 30 social media 51, 93, 348–50
Rogelberg, S. G. 280 social movements (1960s) 175
Rogers, Carl 236 social networks 92–3, 272, 312
Ronquillo, John C. 8, 363, 364 social psychology 24
Rose, R. P. 90 social role theory 24
Rossi, B. 295–6 social welfare nonprofits 22
Roth, S. 296 Society for Human Resource
Rothwell, W. J. 106, 108, 110, 118, 129, Management (SHRM) 225, 339
130 sociology 24–5
Rudney, G. 37 Sokolowski, S. W. 90
Ruhm, C. J. 36, 37 Solebello, N. 327, 333, 334–5
Russell, Allison 9, 362 Somasunduam, U. V. 227
380
Index
Sowa, J. E. 33, 261 talent management 105–6; traditional

Srinivasan, N. 277–8 succession planning 103; workforce
Stafford v. Purofied Down Products planning 104–5
Corporation (1992) 58, 65n5 Sutton, C. D. 307
Stahl, Rusty 132, 133 Swanson, R. A. 238, 239
Steinberg, R. 20–1 systems theory 228–9, 238–9
strategic alignment, and technology 351
Strategic and Tactical Talent Management T&D see training and development
129–30 (T&D), nonprofit sector
strategic human resource management Talent Development Initiative 134–5
(SHRM) 8, 70–3; aligning HR Talent Development Platform 127, 128f,
architecture with the strategic 129
orientation of NPOs 80–1; conceptual talent management 8, 122–41; acquisition
model of HR architectures in NPOs of talent, diverse and inclusive 35–6;
75–8; definitions 70; empirical barriers to implementing talent
evidence on HR architecture in NPOs management strategies 136–8;
78–80; generational differences 311–15; competencies, developing 122,
horizontal fit 71, 75; HRM bundles 124–5, 137; components 123–7;
71; human rights orientation 76; lessons future possible outcomes 138–9;
learned for practice of managing investing in talent through training
human resources in NPOs 80–2; in and development 125–6; models
nonprofit organizations (NPOs) 73–5; 127–32; nonprofit and philanthropic
professionalizing the HR architecture sector, efforts to support talent within
81; shifting the HR architecture 81–2; 132–6; Nonprofit Talent and
strategic HRM theory 75; strategic Leadership Development Toolkit
orientation 76; strategy content 70; (EPIP) 134; recruitment of talent 125,
strategy formulation 70, 71–2; strategy 137; retention of talent 124, 126–7,
implementation 70, 72; vertical fit 138; succession planning 105–6; talent
70–1, 74, 75 needs, identifying 123–4, 136
strategic leadership, and technology 351 talent management strategies, barriers:
Studer, S. 210 competencies, developing 137;
succession planning and management recruitment of talent 137; retention
101–21; Bridgespan Group, Nonprofit of talent 138; talent needs 136
Leadership Development Toolkit talent needs: barriers to identifying 136;
112–13, 116–17; concepts, identifying 123–4
distinguishing 104–6; consideration of Talent Philanthropy Project 132–3
succession planning in nonprofit sector taxation law, US 20; tax-exempt status
113; current status in nonprofit sector 30, 31
112–13; definitions 102–4, 110–17; Taylor, T. 96
departure-defined succession planning Technical Talent Management Model 130
113, 115; development of 118; technology: affecting relationships among
emergency succession planning 113, the staff 353–4; affecting staff and
114–15; Federal Reserve Bank of volunteers 353; compensation practices
Kansas City 113, 114–16; future 344–5; definitions 340; employment
scenarios 117–19; goals 103–4; and opportunities, technology-related
HR processes 104–6; lifecycle, five changes 346; and face-to-face
generations 111f; lifecycles 110; conversations 342; and HRM, in
members, key roles 114t; models NGOs 10, 339–58; implementation,
106–10; in NPOs 110–17; in private leadership in 351–2; implications for
sector 110; programs 103; replacement quality and diversity of workforce 353;
planning 104; roles 113; strategic interviewing 342; job functions,
leader development planning 113, changes in 346–7; motivation of staff
115; succession planning process 103; 343; new jobs 347–8; performance
381
Index
management 343–4; recruitment and research 235–6; facilitation theory

hiring 341–2; retention of staff 343; 236–7; individual learning styles 237–8;
review of existing research 340–50; systems theory 238–9
selection of staff 343; social media and Training within Industry (TWI) programs
HR 348–50; strategic leadership 351; 224, 239
training and e-learning 345–6; video Truss, C. 81
conferencing 342 Tschirhart, M. 90, 327, 333, 334–5
Ten Hoorn, E. M. 210–11 Tucker, B. P. 73
Terkel, Studs 359 turnover: and engagement 192;
termination of employment: employee involuntary and voluntary 33; in public
performance reviews 60; implied sector, reasons for 34; and retention,
contract exception 57; methods 58–9; in nonprofit employment 33–5;
against public policy 58; release, “Turnover Treadmill” 122
considering securing 59; wrongful Twenge, J. M. 307, 308, 309
claims 57–8 Twitter 349
theories of nonprofit sector 7, 15–28;
economic 17; “good” theory 16; Ullrich, R. A. 89
neo-institutional theories 25; normative unconditional positive regard 236
16; organizational 16, 23–5; sectoral unemployment insurance 144
17–23 unions: and collective bargaining, mixed
theorist/assimilating learning style 237 views on 169–70; contracts with
Theuvsen, L. 24, 159 nonprofit agencies 173, 175; decision
third sector employment law, implications to vote for unionization 172–3;
for nonprofit sector theories for 21–2 education and training opportunities,
“three failures” theory, implications for advancing 175–6; employees’ right to
HRM 17–20, 37 form 170; motivation to join 172;
Thunnisen, M. 123 social policy 174–8; threats to 168–9;
TIAA-CREF Institute and Independent variations in support for 170; see also
Sector study 307 labor relations, in NPOs
Towers, M. 94 Unite Here 166
Towers Perrin 186, 190, 198 United Kingdom, nonprofit training in
Townsend, Keith 37 232
trade unions see unions United States: associational rights 19;
training and development (T&D), Bureau of Labor Statistics see Bureau
nonprofit sector 9; ADDIE of Labor Statistics; Civil Rights laws
(Assessment, Design, Develop, 19, 21, 53; First Amendment to
Implement and Evaluate) approach Constitution 19; Great Recession
239–40, 241f; challenges 230–1; 142, 143; healthcare industry 17–18;
contexts 231–2; CRASP acronym nonprofit employment see employment,
235–6; cross-sector integration of non-profit; Pennsylvania nonprofits 92,
applications 245–6; definition of 94; size of nonprofit sector in 2, 29,
training 125; e-learning 345–6; framing 122; violations of employment and
of 226–8; goals 227; investing in talent labor laws 177; voluntary board of
through 125–6; nonprofit literature directors 271
232–3; in NPOs 223–49; organizational Urban Institute 171; Nonprofit Sector
size impacting 242–5; performance Project 277
management systems 125–6; situating US News and World Report 3
in organizations 228–30; training Utrecht Work Engagement Scale (UWES)
delivery, online or in-person 244; 196
training theories 233–9; work-related,
history 224–6 Van den Berg, H. 199
training theories 233–9; action learning Van Horn, R. L. 18
234; andragogy 234–5; critical action vicarious liability 46
382
Index
video conferencing 342 Watson, M. R. 88, 91, 93

voluntary failure theory 17, 18, 19 Watson Wyatt Worldwide 190
volunteer management 9, 204–22; client Weber, Max 225
population 217; competencies 205; Weick, K. E. 16
confronting of contingency approaches weighted application blanks (WABs) 96
212–14; contingency approaches Weisinger, Judith Y. 10, 335n1, 366
210–14; cost implications of use of Welfare Workers’ Association of England
volunteers 272–3; determining 225
nonprofit demand for volunteers Werther, W. B. Jr 92
276–9; faith-based programs 275–6; Westerman, J. W. 307
hours of volunteering 309; ISOTURE Wilkinson, Adrian 37
(Identification, Selection, Orientation, Wise, L. R. 89
Training, Utilization, Recognition, Wolfred, T. 35
and Evaluation) model (Boyce) 206–7; Wollard, K. 191
net-benefits of use 273; organization work values: and attraction to nonprofit
size 218; organization type 218; work across generations 305–7; and
organizational lifecycle 217–18; generational differences 307–9; of
organizational scrutiny 218; origins Millennials, understanding challenges
of volunteer administration 206; and opportunities of 309–11
participation model 214; prevailing Worker Adjustment and Retraining
models 205; problems with universal Notification (WARN) Act 64
approach 209–12; public sector, worker centers 178
volunteer programs in (Brudney) Workers’ Compensation Insurance 144
207–8; ratchet model 9, 212–19, 216t, workforce, mixed paid and volunteer 9,
220; reasons for a volunteer workforce 271–84; challenges of managing
272–3; regenerative 213–14; relative 279–82; economic factors, nonprofit
productivity, compared with paid labor force 272–9; interchangeability
labor 273; requisites for volunteer of labor 273–6, 279–82; legacy of
program 207; rights of volunteers 21; volunteerism in nonprofit sector 272–3;
technology affecting volunteers 353; optimizing nonprofit labor force
tradition of volunteerism 271; universal 276–9; reasons for a volunteer
approach to 204, 205–12; variations in workforce 272–3; volunteers and paid
dependence upon volunteers 18; staff 279–80
voluntary board of directors 271–2; workforce planning 104–5
voluntary sector ethos 89; volunteer workplace, harassment in 51, 55–6;
programs from the top down (Ellis) employer’s responsibility to address
208–9t; volunteer proximity 218; 56–7
see also workforce, mixed paid and Wounded Warrior Project 38
volunteer Wright, P. 259
Volunteer Protection Act 1995, US 21
Von Bertalanffy, Ludwig 238 Yanay, G. V. 213
Von Schnurbein, G. 210 Yanay, N. 213
Yoshioka, C. F. 306, 308, 312–13
wage differentials 21
wage inequality 146, 147 Zbib, I. 96
Walk, Marlene 9, 74, 75, 79, 365, Zononi, P. 326
366 Zsiga, P. L. 235
Walker, Alfred J. 351 Zuber-Skerritt, O. 235–6
383

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“If I were to make a list of scholars who we should hire to assemble current

thinking on human resource management in the nonprofit sector, Sowa and

“The Nonprofit Human Resource Management Handbook is an excellent confluence

As an increasing number of individuals go to work in the nonprofit sector,

Jessica K. A. Word is an Associate Professor in the School of Public Policy and

Jessica E. Sowa is an Associate Professor in the School of Public and International

RECENTLY PUBLISHED BOOKS

Edited by Jessica K. A. Word and

ISBN: 978-1-4987-3817-0 (hbk)

2 Theories of the Nonprofit Sector 15

3 Trends in Nonprofit Employment 29

4 Legal Aspects of Nonprofit Employment 44

5 Strategic Human Resource Management 69

6 Recruitment and Selection for Nonprofit Organizations 87

7 Succession Planning and Management in Nonprofit

8 Talent Management 122

9 Compensation Practices in Nonprofit Organizations:

10 Labor Relations in Nonprofit Organizations 166

11 Engagement, Satisfaction, and Nonprofit Organizations 185

12 Volunteer Management: It All Depends 204

13 Training and Development in Nonprofit Organizations 223

14 Making Nonprofits More Effective: Performance

15 Interchangeability of Labor: Managing a Mixed Paid and

16 Managing Human Resources in International NGOs 285

17 Managing Generational Differences in Nonprofit Organizations 304

18 Diversity and Diversity Management in Nonprofit

19 Technology and Human Resource Management in

20 Conclusion: Toward a Research Agenda for Nonprofit Human

3.1 Number of registered 501(c)(3) organizations 30

4.1 Federal regulations and protections 62

About the Editors

Jessica K. A. Word is an Associate Professor in the School of Public Policy and

About the Contributors

neo-institutionalism in organizations, Dr. Abzug is co-author (with Jeffrey

Kunle Akingbola is an Associate Professor in the Faculty of Business Administration

Alina McCandless Baluch is Lecturer in Management at the University of

Heather L. Carpenter is Assistant Professor and Program Coordinator of the

Toby Egan, Ph.D., is Associate Professor and Senior Executive Fellow in

Anne-Meike Fechter is Senior Lecturer in the Department of Anthropology at

Beth Gazley is Professor of Public and Environmental Affairs at Indiana University-

Jasmine McGinnis Johnson is an Assistant Professor at The George Washington

Jennifer A. Jones, Ph.D., is an Assistant Professor of nonprofit leadership and man-

Troy Kennedy is a Graduate Assistant at the School of Public and Environmental

Ishbel McWha-Hermann is an Early Career Fellow in international human

Annie Miller is a Research Assistant Professor in the Graduate School of Professional

research focuses on management of public networks, combating human trafficking,

Laurie Mook is Associate Professor in the School of Community Resources and

Eddy Ng is a Professor of Organizational Behaviour and the F.C. Manning Chair

Carrie R. Oelberger is an Assistant Professor of Management at the University

Jaclyn Schede Piatak is an Assistant Professor in the Department of Political

Joan E. Pynes is Professor of Public Administration at the University of South

Hans-Gerd Ridder holds the Chair in Human Resource Management at the

John C. Ronquillo is Assistant Professor of Nonprofit and Public Management

Hayley K. Sink, M.P.A., is a practitioner in the nonprofit field in Wilmington,

Marlene Walk is Assistant Professor of Nonprofit Management at the School

Judith Y. Weisinger, Ph.D., is Visiting Associate Professor of Management at

documented the growth in nonprofit education programs. Her work observed a

Human Resource Management in the Nonprofit Sector

• What is our approach to managing people in our nonprofit? Do we have a

• We are employing individuals from many different backgrounds and many

The Purpose and Scope of This Book

• Provide a solid grounding in existing research on nonprofit human resource

Overview of the Chapters