Non-Profit Management Issues
Serving an agency for twenty years is a long period of service one can ever do for his or her company. It tells about the employee, how loyal he is towards the firm. Employees like these should be given high compensation if and only if they had done a lot in giving back to the organization. By providing compensation, an employee not only feels appreciated but it also reinforces the culture and values of the organization in achieving business goals and objectives.
The approach to evaluate the CEO should be done objectively and subjectively. Objective evaluation is one of the convenient processes for both the employees and the supervisors and even the CEOs. It deals with the quantified scores that can be measured and gives back very crystal clear result. No one can tamper with the results nor can any person who is doing evaluation be blamed for being partial. All the tasks undertaken by the employee and his action to achieve those tasks will only influence the results of an objective evaluation.
The CEO of the company should be evaluated objectively first that what tasks he has undertaken since the last twenty years and what action he has taken to achieve
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Subjective evaluation is done on the criteria of the quality of the work done by the worker, what sort of attitude he has in the work place, his effective communication level, and all leads to the outcome of this evaluation. These evaluation criteria would tell the board of directors that whether the CEO work is of the quality or not even if he is achieving them on time. Secondly, his attitude towards the work and his employees should tell them how he treats his co-workers and manages to handle them. The medium of communication for transferring the company strategic goals and objectives also depends a lot in achieving the tasks.
For compensating the CEO, the board of directors should give him more compensation if the CEO has really worked hard by putting his efforts. The average compensation given to the CEOs of similar agencies is hundred thousand dollars but the board of directors should increase the compensation package for this CEO as he has been serving the company for last twenty years. Even though, in the non-profit organizations the compensation policies are practiced backwards, this CEO has proved its loyalty by being there for the company and never leaving it.
The board of directors should give him extra compensation on his performance and loyalty towards the organization. (Iyer, n. d) The CEO could be compensated by giving him life insurance, health insurance, giving him paid vacations or making a retirement plan which he would be considering after three years. Also, it is preferred to give the CEO compensation in cash, so that he could use his money in buying a car or any other commodity of his choice. (Lublin, 2007) So if the CEO has really achieved the target of donation they had aimed for, he should be compensated high otherwise not.
After three years, the CEO would be considering for retirement and the board of directors wants someone to replace him in such a way that he or she carries the non- profit organization ahead and achieve the task and strategies like the previous one. They also should hire someone who has a great public image and can earn the non-profit organization huge donation gaining the trust from people. The board of director should also consider the loyalty of the next CEO who is willing to give his all time to their organization rather than someone else.
This should be planned two years before the CEO retirement as the organization would have ample of time to recruit someone who could carry on their work in a very efficient manner. Q2. Companies biggest fear these days is that if their employees are not happy they would start making unions which would make other employees go against the company policies too. This also reduces the productivity from the employees which eventually results in low sales or unsatisfied customers. This unhappiness and low morale of the employee can be due to many reasons.
As a trouble-shooting consultant, I would start looking from the style of management, then leadership style, career development opportunities and lastly salary policies and rewards and recognition policies of the company. Dissatisfaction and low morale of employees occur if the management or the organizational culture of the firm is not appreciating the workers. The employees may also feel that their leaders are being bias with few employees and their leadership qualities are not very effective in communicating their matters to the top management.
Besides this, the company is not offering any career development opportunities to the staff and employees to advance in their own fields. Lastly, the salary, reward and recognition policies are not very good to retain and make the staff happy despite of the all the hard work they had been doing for the firm. If these causes are not handled properly, this may arouse a very complex situation. To overcome this, the management should change its environment in such a way that every employee and the staff feel a part of the firm.
Also, the leadership style may be very dictatorship which makes the employee limited to the work and decisions. If the leadership style is such that the employees and the staff are allowed to participate in the decision making process related to the job then this would increase their motivation and morale which would eventually increase their productivity for the organization. Career development opportunities also increases an employee satisfaction and morale as the employees get an incentive in the form of training and development in such a way that can shape their future, and would land them better job opportunities in future.
This might also help them in getting promotion and personal appraisal. Lastly, if the company salary and reward and recognition polices are not straight and crystal clear then this would definitely decrease their morale. Employees want good salary, and if they are not paid enough for the work they are doing, this would cause dissatisfaction and low morale among the employees. Raise should be given to them to give show them a picture that the firm really cares about them and want to retain them.
Also, if bonuses and compensation in the form of life insurance and health insurance are given, this would give an employee an assurance that the firm would support them if any hard luck falls on them and would compensate and give rewards for the performance they would show towards the betterment of the non-profit organization. (Herzberg, 1987) To overcome this problem, we have looked many possibilities which if solved would solve the low morale and dissatisfaction of the staff.
For this as mentioned above the firm needs to raise salaries of the employees to give them a reason to work hard for a further raise in future. Secondly, the firm should give them some job security so that the employees don’t feel that they might be laid off if any problem occurred in the firm or the country economy. Also, the employees should be given incentives in the shape of life insurance and health insurance to ensure the employees that they are being valued by the organization.
To increase their performance and productivity the top managers should use empathy and the management by objective approach (MBO), fairness towards everyone in the firm, promotions held periodically, and an environment where they can have a sense of belongingness with the organization and a very effective and efficient conflict resolution management. (Nohria et al, 2008) Q3. The most difficult phase a non-profit organization could ever face is the shortage of the cash flow, or the cash flow problem during the year.
If this problem occurs two to three times a year then it means that the strategy the firm is using to raise the cash for the organization are not going in the right direction and should be revised immediately. For happy home family service agency, they should do fund raising in the right way so as to generate more funds to support the families of the people. This fund raising could be done by communicating to the public on public events where high profile officials make their speeches and other famous and rich celebrities’ give the service agency huge ostentatious donations to help the families.
This should be done continuously after almost every quarter or half yearly so that people keep on giving donations to support the agency. Also, fund raising could be done through commercials of different firms promoting not only their product but also advertising their good will for the community and the agency by supporting them. Sometimes people from rural area leave their place and go to urban area to have a good career and earn money. These urban migrants maintain their links to their home town and thus the agency can exploit them by persuading them to contribute to their home community development.
This would be very successful as it would remove the guilt of not being present for their home community and being absent from the scene. The agency could get then a big piece of chunk of donation from these rich urban migrants. All these fund raising activities would definitely give a huge raise in the cash flow for the happy home family service agency and this would decrease their credit line use which used to be very expensive for them. (Bartle, n. d) The happy home family agency could also bring diversity in their fund raising programming.
If they keep their donors interested they would be able to raise more money for their agency. They could bring their diversity by holding charity ball where elite class can come and give their generous and ostentatious donations to the agency. Besides this, they could do charity by involving a school where the kids can volunteers to generate funds for the service agency which could bring them some food and other necessity items. They can hire scout girls and boys to go door to door and sell confectionary items to generate funds, which could raise the cash flow for the organization.
They should hold public events where high profiled officials participate, giving speeches and donations to support the event. The agency can also run a campaign which could promote their cause and people can give away donations online on through text messages. All these diverse programs keeps the audience and other people interested in the cause, as if the same type of program could cause boredom to the donors. So for entertainment music events could also be held, where they can give huge donations (Khilawala, n. d).
These events should also be held in long durations so that donors stay interested and don’t take wrong impression of the agency. If the agency started asking donations frequently, then it will raise suspicions from the donors side that where all the money is going? That is why, to improve the condition of the shortage of cash flow in happy home family service agency, the agency should do more fund raising to generate more money for the firm. Secondly, they should do some more diverse programs to get more funds. Diverse programs would keep the donors interested in the cause and would make them donate more to the agency.
Q4. The board of directors work is not only to give goals and objectives to the lower and middle management to accomplish but also to keep a bird eye view on the different department and things of the firm especially if the non-profit organization is running as mental health care centre. If a non-profit organization is running a mental health care centre they have to check the quality care they are providing to the patients, the human resource management department whose duty is hire and recruit those people who can deal very efficiently with the patients.
Also, they should have very strong sources through which they can fulfill their financial needs and to use these funds the right way financial management should be very strong so that the funds are allocated at the right places. Lastly, risk management team should also be there so that they can control any disrupting situation which could bring bad name to the mental health care service agency. The roles and responsibility of the board of directors is to mainly protect the assets of the shareholders’ and ensure they receive a decent return as profit on their investments.
Here in the non-profit organization, the board of directors not dealing with the shareholders but with the donators who are giving generous donations to support their cause. The board of director here is not answerable for the return on investment but to give feedback where all the donation money is going too. Their main role is to govern the authority within the management structure to select, do evaluation and approve the appropriate compensation for the CEO of their company. Not only this, they are also supposed to see the financial statements of the company and approve them and to disapprove acquisitions and mergers.
The structure of the board is usually made up of men and women who are called directors. They are elected by the shareholders but in non-profit organization the boards of directors are those who either have started the cause or who are donating ostentatiously for the cause. The number of the board of directors can vary between companies, and they vary because they are not supposed to be linked as an employee or someone else. More responsibilities of the board of directors are to establish the audit and compensation committees.
First, the audit committee is mainly responsible to ensure the financial statements and other related reports are fair and fair estimates are done. Compensation committee on the other hand is supposed to set a base compensation, awards, and other incentives for the executives. (Kennon, n. d) Also, board recruitment, orientation and training is done to train and increase the board of directors information about the service firm. Board of director recruitment would be done here on the basis of the beliefs in the agency mission and values.
Secondly, if the board of director is ready to have long term and loyal commitment to the firm then that person should be hired. As for their orientation, it is done to let the new member know about the standard procedures and rules which are used in the board meetings, what contents they shall be discussing regarding the mental health care, and to make them informed about the organizations and its programs. Training of board of members is also very necessary and this takes place usually annually or shortly after a new board member is selected.
The point for training the board of director is to provide quality care to the patient, emphasizing on the education and creating an atmosphere for the development. By having training, it would also help to clearly state the objectives whose outcomes could be easily measure. If this all is done, then the mental health care centre would be able to provide a very safe and different environment for the patients (Anthes, 1985). Q5. The board of directors should realize the situation very critically from both the employee point of view and the cost effective point of view.
They should not make any judgment without having a consensus from the employees since as mentioned, the AAA non-profit organization most of the employees happen to be mothers who have small children. The board of director should review this issue by first looking into the matter of the senior executives who know more about their workers then they do. For the organization who already is running well and is organized, they should not risk shifting somewhere the employees have problem reaching it.
Here one issue we see is that there is no strong relationship between the board of director and the senior executives. The board of director should see what senior executives are accountable for not their responsibilities. For them, CEO is the only person they deal with as he tells them about the tasks and goals as a whole body. Therefore, if the senior managers knew about the change in location, they should have talked to the executive director about the employees’ problem rather than waiting for the confirmation on shifting the place.
The CEO is responsible to meet the expectations of the board of directors and here the senior executives should have talked to the mothers about the shifting too, convincing them to stay for the company as incentive might be provided to them. This might create interest in the workers too which may influence them to continue working for the company. The relationship between the board of directors and the executives is considered not to be hierarchal. This leads to in depth relationship of both them, that they both should have a relationship of both of them should be like supportive peers. (Carver, 2006)
Also, the relationship of board executive tells about the difference in their status and position. This also sometimes creates conflict as the senior executives are working as employees for the firm, earning salary every month and the boards of directors are not entitled to it. This also implies that board of director are dominant in some parts of the organization while the chairperson in those in which board directors are not present. But for this issue, both parties should sit and discuss whether the employees’ retention and satisfaction is more important to them or cutting cost of the lease of the building.
They should give priority to the employees more since because of them, they are able to run the firm in a very effective manner. The board of directors and the executive relationship should be strong enough so that no conflict issue like this ever rises again. This would not only hurt the company image and structure, but the employees would also be affected by this. The employees will not then care about the company loyalty and services they are providing since it would be very hard for them to leave their small children at home for a long time or to carry them out of town just for the sake of their jobs.
Also, the senior executives should try to bring up good proposal for now shifting the building somewhere else. This also shows one more thing that the executive director of the AAA non-profit organization is more dominant in the organization then the chairperson. This issue is also creating a conflict. Therefore to solve this matter, the firm should reconsider its decision about shifting out of town which would have a huge impact on its employees. (Iecovich & Bar-Mor, 2003) References: Anthes, E. (1985). Board Recruitment and Orientation.
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