Keeping employees happy when funding does not permit financial rewards

January 28, 2014

Keeping employees happy when funding does not permit financial rewards

In traditional business models, rewards are usually monetary. A successful company makes more money and a successful employee receives larger paychecks. Conversely, hiring levels go down when profits and demand fall. For nonprofit businesses, the relationship between success and money is far less consistent. A nonprofit may have its biggest demand for employees when it's funding levels are lowest.

For the HR departments of tax-exempt organizations, this can make it difficult to establish how many employees to hire and how to reward them for a job well done. One way to motivate employees when monetary bonuses or raises are not an option is to hire candidates that believe in the mission. And nonprofit leaders, according to the Times Union, should work to motivate employees much the same way that they do donors. Help them realize that their contribution to the cause is important and that will make their job rewarding.

A strong leader fosters a giving philosophy 
If the mission is strong enough and the employee committed, he or she may even wish to do more work for the organization or give back perks such as unused time off. If a nonprofit can afford to improve the financial situation of their employees, there is certainly no reason not too. To keep top talent, even when they are committed to the cause, does take some other incentives.

However, a good leader can help employees realize that even when times are tough and paychecks are small, their work is appreciated and their impact on the organization is important. The right employee can even be motivated by being allowed to play a bigger role in the future operation of the nonprofit. A more senior position, even without a pay raise, will be seen by the employee as a signal that the organization is committed to keeping them around.

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