Perks, productivity pay can pinch-hit for raises

NONPROFITS INC.

September 26, 1994|By LESTER A. PICKER

In the past few weeks, I've had two inquiries on the topic of nonprofit salaries. In both cases, the executive director and the chairman of a board committee of their respective nonprofit organizations were planning for 1995 and wanted to know what were appropriate salary increases to budget.

Of course, many nonprofits today would love to be in a position to consider any salary increases at all. They are still hurting from the recession and don't feel they can afford the luxury of salary increases. Several nonprofits with which I am familiar have not given salary increases for three years.

In the case of the two nonprofit representatives that called, each had received a board commitment to bite the bullet and raise whatever funds were necessary to give a fair across-the-board salary increase.

My contacts within the nonprofit community are reporting salary increases in the 2-to-5 percent range, with most of those apparently weighing in around a modest 3 percent.

But I've also noticed a definite trend away from across-the-board increases.

Many nonprofits have started a productivity-based system of raises, usually tied to meeting or exceeding annual goals. Typically, there is a small base increase for everyone, with the remainder going into a pool that rewards the best performers. In some cases, area supervisors have a discretionary pot of funds which they can use in whatever ways will increase productivity in their work group.

In fact, nonprofit executives and boards of directors throughout the country are discovering that nonmonetary incentives can be appealing and should be part of the compensation mix. These people recognize that financial gain is not the primary motivator of nonprofit employees.

Using the area supervisor as an example, some may opt for a team-based decision on how funds will be distributed.

In at least one case I know, the team decided to forgo what would have been, at best, a small wage increase. With taxes deducted from their modest salary increases, the group decided a drawn-out procedure for allocating the funds simply wasn't worth it. Instead, they chose to use the funds for a three-day outdoor adventure retreat, which further enhanced their team-building skills.

Smaller nonprofits, in particular, have suffered from the effects of the recent recession (is it over yet?). They should consider the benefits of nonmonetary incentives.

Given the frenetic pace of modern life, most nonprofit employees I know would welcome an opportunity to earn extra vacation days or personal leave time. The real cost of these incentives can be eased if colleagues buy into the system and agree to cover for the rewarded employee.

And, what about those small reminders that tell an employee her extra efforts are appreciated? It seems to me that we too quickly discard flowers and fruit baskets that were popular in days past as possibly sexist. There are always tickets to the theater or gift certificates to a favorite restaurant.

To get more bang for the buck, make arrangements with local businesses to obtain these extras at significant discount.

One large local nonprofit gives away a weekend for two at a resort for their top employees. The resort owner sells the packages at deep discounts, making this a win-win for everyone. Hotels, typically at low occupancy during weekends, are receptive to this type of promotion.

I've found that employees like this incentive, which gives them a ready-made excuse to get away with a partner without kids or distractions.

They appreciate the thought and effort their employer put into this kind of reward system.

Of course, nonmonetary incentives should not be a substitute for decent wages. But, with a little creativity, nonprofits can develop a less costly mix of employee incentives that will motivate the work force and keep donors and supporters happy.

Les Picker is a philanthropy consultant. Write to him at The Brokerage, 34 Market Place, Suite 331, Baltimore, Md. 21202; (410) 783-5100

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