Lori Kipnis, SPHR, SHRM-SCP, is managing director for the Strategy & Advisory Practice area at Nonprofit HR in Washington, DC.
Associations and other nonprofits often worry they’ll have a tough time competing for staff in a tight job market. These four strategies can help create reward metrics and a compensation program to help your association stay competitive.
Now more than ever, it’s important for association leaders and managers to place emphasis on elevating the employee experience by ensuring frequent opportunities for performance and development feedback, role clarity, and meaningful and equitable reward and recognition strategies.
After all, employee engagement is a key factor in the retention of high-performing employees. As Gallup highlights, managers are responsible for 70 percent of team engagement. In thinking of your association’s finances, it’s simply too costly for your association to risk the attrition of key talent. According to Gallup, the cost of replacing an individual employee can range from one half to two times the employee’s annual salary.
An agile, easy to understand, and transparent compensation program is the foundation in ensuring that your pay practices, such as pay for performance, are not only grounded in competitiveness with the external market but also internally equitable.
Here are four key initiatives your association can integrate to support employee engagement and retention.
Set performance and development goals collaboratively. Goal setting allows for individual role clarity and accountability. During times of change and uncertainty, it’s especially important for leaders and managers to communicate association-wide and team-level strategic priorities. In turn, a manager’s direct reports should meet to collaboratively shape individual performance objectives and development (in alignment with defined strategic priorities). During these dynamic times, it’s important for goals to be reviewed on a regular basis to account for shifting priorities and to ensure relevancy.
Leaders and managers should not pause on facilitating career growth conversations out of concern that a traditional vertical promotion opportunity is not available, either due to budget limitations or association size.
Provide frequent opportunities for managers and direct reports to discuss performance objectives and career-development feedback. This recommendation does not require more meetings. Additional feedback discussions can be easily embedded into existing one-on-one meetings between managers and their employees. Feedback discussions allow for progress monitoring against goals, review of additional supports or resources needed, and active and ongoing conversations about employee career growth and development.
Leaders and managers should not pause on facilitating career growth conversations out of concern that a traditional vertical promotion opportunity is not available, either due to budget limitations or association size. Rather, managers and direct reports should actively contribute to discussions about opportunities and skills the employee can be exposed to within the next three months, six months, nine months and up to one year.
Career development is not solely limited to traditional vertical promotion opportunities. Managers and direct reports should explore opportunities for expanding depth and breadth within an individual role and/or contributing across teams or association-wide. Examples of opportunities to expand a professional skillset include leading a project or initiative, observing a meeting, and staffing an internal working group. Mentorship and job shadowing also allow for skill and competency development. Leaders and managers run the risk of losing top talent by not actively engaging in career-development conversations.
Ensure your organization has these elements in place to enable support of pay for performance. Job descriptions should exist for each role and reflect the breadth and scope required, which will enable your organization to complete a market analysis on each role. Roles within your organization should be created to support the mission of the organization, not with individuals in mind. Ensure that staff salaries are competitive to the market role and determine that staff are paid equitably according to experience, performance, and expertise. Lastly, as an organization, make sure you’ve decided and agreed upon the organization’s approach to performance management: Will it be based on ratings or continuous feedback?
Consider the following when determining your organization’s pay-for-performance approach. Determine your available performance salary pool, regardless of how you craft your pay-for-performance practice. Determine your methodology for pay-for-performance recommendations, thinking about how much managers will participate in the increase process. Have a fair and equitable process in place to calibrate pay-for-performance increase amounts.
For all these initiatives, ensure that both performance management and compensation programs are developed through a diversity, equity, and inclusion lens. And ultimately, confirm that your programs are grounded in equitable practices and shared through performance management training and transparent communication of your compensation program, polices, and practices.