(Number 3 in a series)
For several years, I had the distinct pleasure of building
and growing a unique program that helped grow social enterprises. We did such a good job that we were
recognized by the United States Association for Small Business and Entrepreneurship for our innovative efforts. We helped over 60 organizations
search for and find appropriate earned income strategies to help fund their
missions. It was during this time that I
discovered one of the cures for NMS (Nonprofit Martyrdom Syndrome).
NMS, as you will recall, is a horrible disease that keeps
may social benefit organizations from realizing their potential. One of the symptoms of NMS is a pay scale
that is well below what it should be for folks doing such important work. But
the cure is at hand, and came to me in a conversation I had while running this
exceptional program.
The basic structure of the experience was that local
nonprofit leaders were teamed with university students for a semester long
experience to explore the world of social enterprise. We promised that folks
would leave the course with a better sense of the feasibility of earned income
for their unique mission (and no, it’s not for everyone), as well as some
initial thoughts about a model that might work for their organization (match tomission is critical). We hoped that some of them would move far enough along to
think about actually launching a venture (about half of them did, and most of
them are still in business). For this we
asked the nonprofits to pay three credits of graduate level tuition (about $1,800
at the time).
Each semester, we would hold a series of events to promote
the program and recruit participants. At one of these events, the sincere and
well-meaning executive director of a local effort took me to task for the
“exorbitant” fees we were requesting, and
told me flat out that we would never get nonprofits to participate because they
just couldn’t afford that kind of money (interestingly, we had a waiting list
every year, but I digress).
In a moment of inspiration, I requested permission to ask
her a few questions about her shop.
First, did she have an office? “Of course”, she said. Next, did that
office have a receptionist? Again,"yes”. I then proceeded to describe this receptionist.
“Let me guess – late twenties, minimal education, low to moderate performance
in the job, some attendance issues”. At this point, I’m getting a somewhat
annoyed look. Then, “you probably pay
this person somewhere around $10/hour”. Now she’s thinking I’m either a psychic
or a stalker, but gulps out a quiet “yes”.
Sensing I’m on to something, “and
you accept the substandard performance because you feel that your pay is
substandard and that this is the best you can expect. You’ve never spoken to
this employee bout improving performance. You’ve never had a performance review
or set concrete expectations for this job.
And, I bet that’s how you run your whole office. “
Now some steam is starting to rise from the ears of my earnest
colleague. Undaunted, I press on to make my point – “If you implemented a
proper performance management system for your employees, you would not only
have a more efficient and effective team, you‘d save enough money to be able to
pay the tuition for this program.” And
that’s when it hit me.
Many nonprofits are locked in a performance management
failure cycle. The guilt over low pay prevents them from dealing with employee
performance. Carrying subpar employees on the payroll ties up the cash that is
needed to build and grow programs. It is
– truly – a vicious circle.
What is takes to break free is a willingness to have
uncomfortable conversations with your employees. It takes the courage to set
clear goals and hold everyone (including yourself) accountable for achieving
those goals. It also takes the strength to be able to let someone go when they
are not measuring up. At the end of the
day, all of this is just sound basic human resources management. It’s also the
cure for the most common strain of NMS – low grade compensation. The good news is that fixing this is
easy.
While a simple raise in pay would be a good start, a better
way would be to implement a decent human resources management system. A system
where pay rates are benchmarked to similar roles in both commercial and mission
oriented firms, where performance expectations are clear, where rewards for
exceptional performance and consequences for substandard results are both clear
and quickly delivered.
Don’t think for a minute that I’m suggesting that this is
easy. It’s hard work. But whether it’s my overworked and underpaid friend Billy,
or the underperforming receptionist, the results are the same. I’ve seen it
hundreds of times. It’s like getting a
new pair of eyeglasses. You’d learned to
live with you vision a bit blurry, and then one day, you suddenly see much more
clearly. And the world is a much better place.
(next time, symptom
#2 - the 24/7 work week)
