Question

HRMG-Compensation-In your own words, "What are some effects of pay on employee behaviors in a not-for-profit organization?" 500 words or more, please.

Answer 1

Pay is a very important factor in today's world as everything runs on money. Even in the humanitarian sector or not-for-profit organizations, while salaries and stipends may not be as lucrative as in the corporate world, still the payment factor is necessary for workers to maintain their families and homes and to cover all their miscellaneous expenses including travel costs and incidental expenses. What is necessary to understand is that employees feel demotivated in the event of lower pay scales, lack of bonuses and increments, delays in payment of salaries, etc.

While employees in the not-for-profit sector do realize that they are in the field due to their social service calling and are happy to contribute towards the betterment of society and the environment as a whole, they still need to be satisfied with their human needs and wants.

In the humanitarian sector, there can be a high risk of threat to life and harm especially in the event of war torn countries and conflict zones or even in the case of natural disasters like floods and violent storms, earthquakes, volcano eruptions, etc., so having proportionate pay covers the risk to loss of life and should make it worthwhile to take such a high risk.

There is an acute shortfall of humanitarian field workers and the ever increasing threats and conflicts needing urgent attention by various not-for-profit organizations, better pay will be a driving factor in attracting more people to take up such jobs and go to the conflict zones to help refugees or IDPs (internally displaced persons) to secure them for further hardships.

Volunteers need not be paid because by the very definition of volunteering, people who have volunteered are the out of their own deliberate choice to do social work in any form and are not looking at it as a career or employment factor.

Not-for-profit organizations budget for all operating costs including staff salaries as they are entitled to raise funds from donors and also raise funds through various other sources to provide aid and rehabilitation to victims. It will become necessary for employees from such organizations to be made into a cost centre entitling them to earning a living while also serving the underprivileged or destitute.

By its name itself, a not-for-profit does not indicate that everything is charity and it only means that the organization should make money enough to cover all its costs and expenses and be able to sustain itself.

Experienced, skilled and trained staff need to be given salaries or retainers in order to ensure that they are valued and to prevent staff attrition which will affect the organizational operations since it is much more costly in monetary terms as well as time consuming to search, select and train new staff to come to the same level of resilience and expertise as the older ones.