Presentation to the Canadian Society of Association Executives on HR management dilemmas and challenges and how to solve them.

1. The Association HR Dilemma
HR and Organizational Challenges in
Associations and NPO’s
CSAE National Conference
Ottawa, 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
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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, ed
ucational, 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%).
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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.
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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)
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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)
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7. Views on the Role of HR
The 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.
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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.
‘Why We Hate HR”. Fast
 HR organizations have ghettoized themselves to the brink of Company (New York)
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.
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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.
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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.
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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.
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12. Association / NPO Dilemmas
Dilemma: 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?
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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. Dr. G. Salton, Organizational
Engineering Institute (Ann Arbor,
In any given week, it may be difficult for the Executive MI)
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.
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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.
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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)
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16. 3. Will the People You Hire Stay?
Nine Ways to Leave Your Job
 Are your employees there because they need a
job or because they are committed to your • Walk Away (Job Abandonment)
• Death
cause?
• Be Demoted (Constructive Dismissal)
• Be Fired
 Is Retention a good thing? • Be Laid Off (permanently)
• Retire
• Transfer
 Why is it always the good people who leave? • 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).
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17. 4. Public Sector or Private Sector?
Topic Public Sector Private Sector Association / NPO
Goals Public Good Profit Member/Mission Driven
Legality Obey the Law Obey the Law Obey the Law
Staffing Slow Fast Medium
Compensation High at Low End / Low Low at Low End / High at Poor?
at High End High End
Performance Evaluation Process Results Focus Not Sure
Merit Pay No Yes Maybe
Career Yes Yes Sort of
Development
Volunteers N/A N/A Yes
Termination Keep Poor Performers Fire Them Procrastinate / Worry
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18. 5. Are You Paying Properly?
A) The Fairness Dilemma
 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.
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19. 5. Are You Paying Properly?
B) The Market Position Dilemma
 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?
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20. 5. Are You Paying Properly?
C) The Key Skills Dilemma
 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?
Option Result Dilemma
Pay Low Can’t hire key skills Key jobs unstaffed
Pay Medium Hire under-qualified Creates operational issues
Pay High Hire key skills Internal Inequity
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21. 5. Are You Paying Properly?
D) The Merit Pay Dilemma
 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.
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22. 5. Are You Paying Properly?
E) The Salary Communications Dilemma
 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?
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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?
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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?
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25. How HR Can Help
Talent Strategist Organizational Architect
 Contribute to business strategy  Provide OD and performance
 Translate business strategy into optimization consulting
global workforce requirements  Define organizational culture / values
 Forecast talent needs and  Design the workforce environment
address talent gaps Performance and Reward Architect
 Orchestrate learning, skills and  Design and administer performance
career development management, compensation and
Change Master recognition programs
 Build and oversee change HR Service Delivery Manager
management capacity  Determine the HR service delivery
model
 Design / foster optimal connection with
the organization
Deloitte (Toronto)
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26. How HR Can Help
Sounds 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.
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27. More Information
The Non-Profit Dilemma
HR and Organizational Challenges in http://www.amazon.com/The-NPO-Dilemma-
Non-Profit Organizations (2012) Organizational-Organizations/dp/1937299023
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28. Questions?
Tim@McConnellHRC.com
613-836-4648
www.McConnellHRC.com
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