Both non-profit and for-profit organizations face different challenges related to finances, legal compliance, workforce, and leadership in the ever-changing world of human resource. Nonetheless, given the structure and nature of non-profit organizations, they tend to face more distinctive human resource (HR) challenges that pose a threat to the fulfillment of an organization’s mission and vision if not well managed (Wilton, 2016). This makes human resource management (HRM) on non-profit organizations to differ tremendously from organizations that make a profit (Taylor, Gardiner, Gott, & Robinson, 2018). In essence, non-profit human resource departments highly rely on fluctuating budgets that are based on government funding, donations, and grants. This, in turn, leads to significant limitations and restrictions on how the human resource carries out its duties including hiring, recruitment, retention, and training of employees. Therefore, the human resource department in any non-profit organization should strive to direct their efforts on basic courses that fulfill the organization’s goals (Oxberry, McGloughlin, & Crowther, 2016). As a non-profit organization, Kirkwood Hospice at Huddersfield faces a variety of strategic human resource challenges that arise from limited finances, the use of volunteers, income from enterprise activities, and talent management and retention strategies.
Given that non-profit firms mostly sustain themselves on government funding, donations, and grants, the human resource department often works with a tighter budget as compared to profit based organizations. These constraints affect the ability of the human resource department to compensate workers with competitive salaries (Renz, 2016). Low salaries negatively impact the organization as the HR faces recruitment and retention challenges given that talented employees who can ensure the organization’s success are always looking for greener pastures. Kirkwood Hospice Organization is no different from such a challenge.
Although this organization enjoys a recommendable and outstanding reputation due to its committed involvement with the Kirklees community, it may face a drastic reduction of the NHS’ financial support which presently contributes up to 20% of the organization’s budget (Emsell & Davies, 2018). This is because, by 2020, the hospice sector has forecasted a £20 billion funding disparity in the United Kingdom’s NHS. This funding gap will cause financial shortcomings and instability especially if the organization does not access enough donations and grants to run its activities. Luckily, Kirkwood Hospice can also access a good amount of money from its charity shops and legacies which will reduce the pressures of budgeting.
Therefore, to solve the financial problems, it is recommended non-profit organization find other means of motivating their employees other than through compensations. Fortunately, salaries are not always the most significant factors that motivate an employee to agree to a job offer or remain as a committed employee with an organization (Maier, Meyer, & Steinbereithner, 2016). When employees are compensated with high salaries, they eventually become familiar with the salaries and became dissatisfied once again if they are not intrinsically motivated. As such, even with the expected budget cut, Kirkwood can devise alternative ways of appealing to its employees. According to research, employee motivation spurs risk-taking and commitment in any given organization. This is because human beings, under the right environmental conditions, not only accepts work but also actively seeks for more duties. One of the ways to help Kirkwood Hospice cut its financial budget is urging employees to accept a lower salary for a position that provides exceptional training as well as development opportunities. The organization may also emphasis on work-life balance by offering more flexible work schedules or telecommuting alternatives.
Use of Volunteers
Although the ability to involve volunteers in the performance of different activities is an advantage that non-profit firms hold over profit based organizations, their use also raises a unique set of challenges for the human resource department. These challenges arise from the fact that firms must make sure that volunteers are not compensated in any way and most importantly, do not expect to receive it. Failure to that, volunteers may be legally perceived as employees and therefore entitled to compensation rights that attend their designation.
Secondly, organizations must manage the duties and responsibilities performed by their volunteers just as they would with employed workers. Assigning of duties poses a challenge because volunteers who are poor performers or are not committed to advance the firm’s vision and mission can harm the morale of the workforce thus creating more challenges than they solve. For instance, when volunteers abandon their duties because they are not happy with the management, these roles are always assigned to other employees who may eventually feel overburdened.
Kirkwood heavily relies on the goodwill of their volunteers without which the company cannot exist. This company needs to effectively manage over 800 volunteers who dedicate approximately 120,000 hours every year (Emsell, & Davies, 2018). Thus, To ensure that no harm comes to the Kirkwood Hospice organization or its patients, the firm should establish screening processes that are designed to recruit and train volunteers who have a genuine desire and the necessary skills to make a positive impact towards the success of the organization. More so, the organization should implement a volunteer database.
Other aspects of performance management that the HR department needs to address include feedback channels and clear communication of expectations because they are crucial for employees and volunteers. Every worker should understand their defined roles and responsibilities to avoid misunderstandings or harm, especially to the patient.
Enterprise Activities Income
Kirkwood Hospice needs to enhance the supply chain strategy used by its shops. This company has twenty-one local shops located within West Yorkshire. These shops are a significant source of income for Kirkwood Hospice’s as they earn over £2m every year. The shops stock is kept running through the donations of quality items such as household items, books, clothes, CDs, shoes, collectables and anything else that may assist in raising funds for the Hospice. This company also conducts business via eBay selling a wide variety of recycled items such as antiques, bespoke clothing, vintage toys, and memorabilia (Emsell, & Davies, 2018). Also, Kirkwood Hospice Organization is currently operating an online shop that sells Christmas cards, stationery, diaries, and greetings. As such, the internet seems to be a bonus for the organization, but it is an under-developed opportunity thus posing a challenge.
The 21st century poses a challenge to organizations whose supply chains are not well developed. Kirkwood can raise more income from retail activities if broad but calculated risks were to be implemented and the organizational resources directed towards unlocking these opportunities. The Kirkwood Hospice members of the board of trustees have on various occasions mentioned that retail shops can be an opportunity where the HR department can add value. It is recommended that Kirkwood hospice improves its online presence across Europe (Green, Finkel, Fitzsimons, & Gino, 2017). In the 21st century, the internet enables more than 85% of the global population to purchase almost any item or service with a click of a button regardless of where they are located. As such, the 21st C demands that organizations adopt better supply chains and processes by identifying value streams. Kirkwood Hospice should adopt an online supply chain that enables customers to purchase all their products both online and from the local shop. They should also ensure that their customers receive their products within the shortest time possible.
Human Resource Theories and Models
As a result of globalization, the supply chains have become very dynamic thus posing high risks and uncertainties for both profits based and non-profit organizations. These uncertainties decrease market share and increase the need for organizational efficiency. Unfortunately, the increased attention for human resource management is an entirely recent phenomenon for most small and medium-sized organizations. HR researchers have largely ignored the theories and models guiding HR management in SMEs due to their structure and size (Maier, Meyer, & Steinbereithner, 2016). As such, SMEs lack the conceptual methods and frameworks that are applied by large companies, yet they employ the largest population. Theories and models fail to pay attention to individual HR management strategies, HR determinants in SMEs as well as the level of human resource formality (Barrales, Kaynak, & Gutiérrez, 2018). Most theories and research studies conclude that in small and medium-sized organizations, the HR manager is intuitive, informal and ad hoc.
This is a limitation because as a company gets bigger, it becomes formalized and its structure can be understood easily. This formalization arises from the fact that as the number of employees, leaders, customers, and volunteers increases, direct supervision and communication become a crucial process of coordinating activities. This fact holds for the HR manager because as the SME grows, it becomes increasingly difficult for the manager/owner to manage the workforce and therefore needs to delegate various responsibilities to different people inevitably leading to formalization (Nolan, & Garavan, 2016). In most SME, the managers seem to agree that HR formality is indispensable as it attracts more qualified employees and better customers leading to growth and profitability. More so, SMEs are unable to harness all the benefits of the human resource department which becomes a disadvantage because installing the HR department is very expensive (Gutierrez, Barrales-Molina, & Kaynak, 2018). Additionally, most of the traditional HR theories such as Fredrick Taylor’s scientific management theory which emphasized employee control are outdated, yet some small and medium-sized companies continue to employ them.
The link between organizational performance and strategic human resource management lies in an organization’s ability to satisfy, motivate, engage and manage their talents. In the 18th and 19th century, most organizations applied the bureaucratic theory and the scientific management theory whose main proponents were Max Weber and Fredrick Taylor respectively (Word, & Sowa, 2017). These theories paid attention to extrinsic motivation factors rather than intrinsic desires like a personal achievement. These theories also believed that human beings have an inherent dislike for work will avoid it when possible. As a result, employers always employed threats of job termination, fines and punishments to get work done (Cho, & Liu, 2017). The use of such methods posed challenges to the performance of employees within the organization.
Engaging, motivating and ensuring that employees are satisfied are a huge responsibility for the HR department as they ensure a competitive advantage in the global market. When employees are engaged in the leadership of the company and activities, they become more satisfied and less stressed on a personal level. Research shows that more satisfied employees are more productive as they are committed to their work, they take less “sick days,” they used less health care and are more likely to be retained within the organization for long. The link between job performance, satisfaction, and strategic HR management can be explained through an organization’s production, sales, absenteeism, failure to meet deadlines, expansion plans, lost working time and lateness.
However, McGregor’s Theory X and Y brought a new school of thought which revolutionized most HR management strategies. In theory X, McGregor criticizes the use of coercion, threats, direct and indirect control, punishment, and force against employees. In theory, Y McGregor asserted that the extent of mental and physical satisfaction is as natural as having a rest (Jeske, & Axtell, 2016). He emphasized that threats and punishments were not the only means of bringing forth employee engagement and motivation in a firm. Through theory Y, McGregor asserted that under the proper conditions, an employee does not only accept responsibilities but actively seeks to be engaged in various activities.
According to Herzberg’s Two Factor Theory, job satisfaction is a significant determinant of the level of employee motivation. Herzberg and his colleague conducted research in which they interviewed various accountants and engineers. In this research, the interviewees were required to explain whether or not they are motivated and satisfied with the events and experiences in their places of work. From their study, Herzberg came up with two categories of satisfiers which he named “maintenance or hygiene factors” and “Motivational factors.”
The hygiene factors included a salary increase, incentives, and vocational leaves and they proved to contribute insignificantly towards job satisfaction and engagement given that they had little impact when present or absent. As such, although Herzberg found these hygiene factors to be important, he regarded them as “di-satisfiers” because they only prevent unwanted results but fail to satisfy employee needs for satisfaction fully. Di-satisfiers largely correlate to the conditions under which an employee operates instead of the actual job description. For example, when the human resource department suggests higher compensation rates to retain employees, the employees eventually become familiar with the high salaries thus becoming dissatisfied all over again.
The motivational factors, on the other hand, were found to largely contribute to employee satisfaction, motivation, and engagement given that they had long-lasting impacts on employees. Herzberg’s research asserted that a considerable percentage of employees is satisfied, engaged, and motivated from achieving high stake projects within a given period. Achieving a high stake project contributes to the employees’ sense of pride and satisfaction because it is directly linked to his/her effort and creativity. Unlike in the past, the 21st-century employees feel motivated and satisfied with their jobs when they get recognized by their superiors and colleagues. Although the current population of employees may get well compensated for a job well done, wages are not the fundamental source of satisfaction, especially for employees who come from affluent families.
An interesting fact from Caudron (2007), the author of “Can Generation Xers Be Trained,” the current generation is more motivated by the recognition that huge salaries because they do not have children to take care of given that they avoid marriage until their late 30s (Ogunyomi, & Bruning, 2016). Secondly, rental costs are no issue because they live in their family mansions, they have been on vacations since their 1st birthday, and they have been driving a Porsche car since their 16th birthday. Both non-profit and for-profit firms should understand that low stake projects and duties are a considerable cause of employee dissatisfaction because they feel undervalues and that they lack opportunities to engage their competencies and exercise their skills. The observations made by Caudron (2007) correlate with Herzberg’s research which asserts that increased responsibilities foster creativity and lead to more satisfaction as employees actively compete for promotions by ensuring quality work. Therefore, companies must come up with new ways to ensure Generation X is motivated, engaged and satisfied, in their places of work.
Talent management also contributes positively to the performance of an organization. Fundamentally, talent management leads to innovation which is a paramount driver and determinant of a company’s success, growth and development, and profitability (Martinez, Soto, & Carayannis, 2017). More so, talent management helps a company to recruit, retain, and offer strategic support to its employees. The culture of any given organization sets the tone and performance of employees making it one of the most reliable drivers of innovation across the world. In the 21st Century, employees have an intrinsic desire to belong in an organizational where the leadership team and their subordinates understand their assigned roles and goals as well as an incentive to reach the goals (Bhuvanaiah, & Raya, 2015). The HR, therefore, should make an effort of retaining exceptional talents to ensure sustainability in a competitive global market.
Additionally, to ensure work performance through talent management, an organization must first hire employees who are equipped with the necessary skills that can lead to the achievement of a common goal. This requirement goes for both non-profit organizations such as Kirkwood and profit based organizations such as Pixar Company and Apple Inc. More so, non-profit organizations should screen their volunteers to ensure that they are motivated and innovative (Hussain, Currow, & Johnson, 2018). Some of the qualities that the HR department must screen for include flexibility, honesty, a sense of motivation, integrity, cognitive skills as well as enthusiasm. Secondly, if the workforce is to carry out an activity in groups, the human resource department must identify their weaknesses and strengths to group them strategically so that they can compensate for each other’s shortcomings, competencies, and skills.
Thirdly, a company must identify the most creative people, “creative minds” as referred in Pixar Company or “brain trusts” in Apple Inc., and give them the freedom to act on themselves in various departments of the organization. According to research, the present generation shows high performance when they have the freedom to follow their mind, work under minimal supervision and work in an organization equipped with modern technology. This indirect talent management has been used in most organizations that need to go global.
Talent management also involves creating an environment where the workforce can consult with one another on different projects without fear or intimidation (Hatum, 2017). A company’s leadership team should create a working environment that is safe enough for employees to share unfinished projects without fearing that their ideas might be copied by malicious employees or volunteers within the organization (Huang, Lee, Cheung, & Zohar, 2016). Leaders must ensure that every employee receives credit for their quality work through recognition and promotions. By so doing, organizations provide that employees refine their talents and skills. Additionally, the leadership team should also reinforce the mindset that every participant is learning to carry out an activity better every day and that learning together is fun. The ultimate duty of every corporate leader is to craft an environment where an average employee can make something extraordinary happen.
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