The Association HR DilemmaHR and Organizational Challenges in

Associations and NPO’s

CSAE National ConferenceOttawa, November 2, 2012

2

Agenda Setting the stage: Associations and NPOs

Who are they?

What do they need?

Views / Role of HR

HR and Organizational Dilemma’s Faced by Associations and NPO’s

Addressing the Dilemma’s

How HR Can Help

3

Associations and NPOs NPOs (in our definition) include non-governmental organizations

(NGOs), para-public agencies, professional associations, lobby groups, foundations, institutes, and charities.

NPOs can be found in the arts, cultural, sciences, sports, recreation, entertainment, religious, educational, finance, environmental, health and social services sectors.

Some Associations and NPOs are large, most are small.

Some are well funded, and others struggle for revenue.

Association types include Industry (31%), Professional Association (33%), Charity (23%) and Special Interest (8%).

4

Who Are NPOs? (3) What Associations and NPO’s have in common is not what they are,

but what they are not.

They are not the government (municipal, provincial or federal) nor are they private sector for-profit companies. They are in between.

Many Human Resources (HR) policies, practices and procedures found in government and/or the private sector will apply to Associations and NPOs. Many will not.

Another key differentiator is the type of jobs. Associations and NPO's tend to have far more unique (one employee) positions

than private sector companies where many people do the same job.

They tend to have far more generalists (people wearing multiple hats) than specialists.

5

What Do Associations and NPOs Need? Nonprofits need specialized expertise.

The types of solutions used at multinational, for-profit corporations, can't simply be imposed on mission-driven organizations.

Increasingly, the social sector is faced with complex human resources challenges that require unique responses and solutions.

From a continuing national unemployment crisis, to a shortage of qualified human resources professionals with sector specific experience, to the lack of sufficient funding for infrastructure support, many nonprofit organizations are confronted with very real workplace concerns.

Morton, Lisa Brown. President & CEO of Non-Profit Solutions (Washington DC)

6

What Do Associations and NPOs Need? Many NPO’s are faced with:

Funding shortages Employee turnover Absenteeism Grievances Skill gaps Stressful work environment.

Certainly many are spending more time on their strategic goals today in the areas of fundraising, new technology and client services.

The role of Human Resources on a strategic level may not be clearly defined.

Howe, Teresa. Charity Village (Toronto)

7

Views on the Role of HRThe field of HR has a problematic reputation. Are HR professionals:

Those warm and fuzzy, overly nice, ‘people persons’ who spread joy and happiness, parodied in television commercials?

The meanest people ever? Directors of Labour Relations. Catbert, the Evil Director of HR.

Mindless paper pushers?

The organizational police department?

Those pedantic bureaucrats whose goal in life is to dogmatically enforce a myriad of arcane HR rules and regulations.

8

Views on the Role of HR (2) Strategic HR leadership is an oxymoron. HR people are neither

strategic nor leaders. HR is a necessary evil.

HR is a dark bureaucratic force that blindly enforces nonsensical rules, resists creativity, and impedes constructive change.

HR is a henchman for the CFO.

People processes are duplicative and wasteful, creating a forest of paperwork.

HR organizations have ghettoized themselves to the brink of obsolescence.

HR is uniquely unsuited… to the important role of raising the reputational and intellectual capital of the company.

Most HR managers aren’t particularly interested in, or equipped for, doing business.

‘Why We Hate HR”. Fast Company (New York)

9

Views on the Role of HR (3)CEO’s across the world rated HR as their worst-performing

business function. No other function, not even the notoriously unlovable IT-department, came close to being this unappreciated.” (The Economist)

The Globe and Mail blamed the war in Afghanistan on the HR Department. War is an HR issue. War is a matter of skilled labour. Guns and planes are of secondary

importance. Things (in the war) go wrong due to: Hiring, labour shortages, training,

specialization, flexibility, size of work force, seniority, re-training, skill set matches, fitting the right people to the right job, and getting the wrong people out of the way.

The problem (with the war) is; a terrible screw up by the HR department.

10

Views on the Role of HR (4)To some extent, the pundits have a point. We need to: Communicate far better.

Why? To speak the same language as top management, to demonstrate how HR practices are linked to business strategy.

Clearly demonstrate HR’s value to the organization. Why? To prove how ‘people results’ drive the business.

Greatly improve our business acumen. Why? To be successful strategic partners, to integrate, to better

understand the business.

11

Views on the Role of HR (5)To some extent, the pundits have a point. We need to: Increase our use of HR metrics.

Why? To link HR practices to organizational performance, to report on performance, to show the contribution to the bottom line.

Forge a strategic partnership with managers and employees. Why? These are the people who really make the business run.

12

Association / NPO DilemmasDilemma: A problem offering two possibilities, neither of which is practically

acceptable. 1. CEO vs. COO?

2. Do You Have the Right Jobs in Your Organization?

3. Will the People You Hire Stay? Why?

4. Public Sector or Private Sector?

5. Are You Paying Properly?a) Fairness?

b) What is our market position?

c) How can we afford key skills?

d) Pay for Performance?

e) Internal communications?

13

1. CEO vs. COO A challenge for many Executive Directors.

The Executive Director is called upon to play two distinct roles;

Chief Executive Officer – with an upward, external perspective, and

Chief Operating Officer – with a downward, internal perspective.

In any given week, it may be difficult for the Executive Director to be flying across the country giving speeches or attending

meetings with Board members and key clients / stakeholders, while at the same time being in the office directing and

managing day to day operations.

Dr. G. Salton, Organizational Engineering Institute (Ann Arbor,

MI)

14

1. CEO vs. COO Those organizations with the right size and funding levels can easily split

the job in two, and have both a CEO and a COO.

Others survive by:

Minimizing the CEO-type activities, and/or by

Having a strong team of Directors in-house to “manage the store”.

This latter structure requires department Directors who are very qualified in their own disciplines and who can also interact as an effective team (“play well”) with the other Directors.

15

2. Right Jobs? Is your organization well designed? How do you know? What does a well designed organization look like, and how does it feel to

work there? How is it different from a poorly designed one?

Signs of Poor Organization Design • Lack of inter-office coordination• Excessive friction and conflict among internal groups• The existence of silos that block intra-organizational coordination• Unclear roles• Under-utilized and /or misused resources• Poor work flow• Reduced responsiveness to change• Decreased financial performance• High employee dissatisfaction and turnover• Proliferation of extra-organizational units such as task forces,

committees and projects Nadler, David A. and Tushman, Michael L. Competing by Design (Oxford University Press)

16

3. Will the People You Hire Stay? Are your employees there because they need a

job or because they are committed to your cause?

Is Retention a good thing?

Why is it always the good people who leave?

• Walk Away (Job Abandonment)• Death• Be Demoted (Constructive Dismissal)• Be Fired• Be Laid Off (permanently)• Retire• Transfer• Promotion• Resign

Retention Getters• Non-monetary recognition of performance (saying ‘thank you’).• Empowerment (increased responsibility for work and decision making).• Fairness (equitable rules and procedures).• Employee development (job rotation, mentoring, training).• Work-life policies (flextime, flexible leave practices).• Information sharing (communicate, communicate, communicate).

Nine Ways to Leave Your Job

17

4. Public Sector or Private Sector?Topic Public Sector Private Sector

Goals Public Good Profit

Legality Obey the Law Obey the Law

Staffing Slow Fast

Compensation High at Low End / Low at High End

Low at Low End / High at High End

Performance Evaluation Process Results Focus

Merit Pay No Yes

Career Development

Yes Yes

Volunteers N/A N/A

Termination Keep Poor Performers Fire Them

Association / NPO

Member/Mission Driven

Obey the Law

Medium

Poor?

Not Sure

Maybe

Sort of

Yes

Procrastinate / Worry

18

5. Are You Paying Properly? Your Compensation program must be fair. But what is ‘fair’?

Free from bias, dishonesty, or injustice.

Employees expect Compensation to be fair.

Is equal (identical) treatment to all ‘fair’? Or is unequal treatment more ‘fair’?

Internal equity, external equity, employee equity, pay equity.

Do your Offer Letters or Employee Manuals use the word ‘fair”?

Group Exercise.

A) The Fairness Dilemma

19

5. Are You Paying Properly?

Who do we compete with for labour?

Which sector should we compare with?

Is geography a factor?

What is our competitive Market Position?

Lead, Lag or Match?

B) The Market Position Dilemma

20

5. Are You Paying Properly?

How do we attract and retain key (hot) skills in high demand?

We pay low (e.g. social services sector), but still require top finance, development (fund raising) and IT staff.

What do we do?

Solutions?

C) The Key Skills Dilemma

Option Result DilemmaPay Low Can’t hire key skills Key jobs unstaffed

Pay Medium Hire under-qualified Creates operational issues

Pay High Hire key skills Internal Inequity

21

5. Are You Paying Properly?

Should we do performance appraisals?

Do we pay for performance? Or not?

How can we measure performance?

Do we pay like government? Annual step increases based on tenure and experience.

Or do we pay like the private sector? Strong emphasis on performance and merit pay, with bonuses.

Many Associations and NPOs desire the productivity that pay-for-performance programs can generate; but often lack the discipline and will power necessary to enforce such policies.

D) The Merit Pay Dilemma

22

5. Are You Paying Properly?

How much do you tell?

Should staff know:

Their own salary? Other employee salaries? Their job grade? Their salary range? How they progress through the range? When and how annual salary increases are managed? Your Compensation Philosophy / Policy? Your Pay Policy Position?

E) The Salary Communications Dilemma

23

Addressing the Dilemmas Do you have a clear vision and mission? Do staff know what it is?

Do you have an overall corporate strategy? Is HR planning aligned?

Is effective HR Planning in place to ensure that the necessary quantity and quality of people are available when needed?

Are programs and practices for the recruitment, selection and placement of staff aligned with corporate business needs?

Are programs and practices for the retention of staff and the management of turnover, attrition and absenteeism in place?

Are Learning, Training and Development programs and practices aligned with the organization’s strategic goals and objectives?

24

Addressing the Dilemmas (2) Do Performance Management programs and practices ensure

that individual performance is linked to corporate objectives?

Are Employee Engagement programs in place to: Provide a supportive culture and work environment.

Respect the individual.

Deliver effective employee communications.

Enable employees to provide client-focused delivery.

Does the organization ensure a safe and healthy work place?

Do Compensation policies programs support and reflect effective internal, employee and external equity?

25

How HR Can Help

Deloitte (Toronto)

Talent Strategist Contribute to business strategy Translate business strategy into

global workforce requirements Forecast talent needs and

address talent gaps Orchestrate learning, skills and

career development

Change Master Build and oversee change

management capacity

Organizational Architect Provide OD and performance

optimization consulting Define organizational culture / values Design the workforce environment

Performance and Reward Architect Design and administer performance

management, compensation and recognition programs

HR Service Delivery Manager Determine the HR service delivery

model Design / foster optimal connection with

the organization

26

How HR Can HelpSounds Nice.

How Do I Get These Services?

• Hire an HR Officer / Manager / Director.

• HR Shared Services with other NPO’s.

• Consider Under-Fills.

• Hire an HR Temp for an interim period.

• Outsource HR (or In-source part-time).

• Hire a consultant as needed.

• Hire “Down Shifters”.

• Acquire volunteer HR expertise via your Board.

27

More InformationThe Non-Profit DilemmaHR and Organizational Challenges in Non-Profit Organizations (2012)

Do You Have the Right Jobs?

Are You Paying Properly?

Will the People You Hire Stay?

http://www.amazon.com/The-NPO-Dilemma-Organizational-Organizations/dp/1937299023

28

Questions?

Tim@McConnellHRC.com613-836-4648www.McConnellHRC.com

28