Compensation in nonprofit organizations

Hallock, Kevin F.

doi:10.1016/s0742-7301(00)19007-3

Cited by 18 publications

(13 citation statements)

References 59 publications

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“…This is consistent with the institutional rigidity arguments put forth earlier in the paper. According to Hallock (2000), not-for-profits often peg compensation to educational credentials. Thus, unlike for-profits, not-for-profits cannot easily relax institutional constraints that tie compensation to educational qualifications.…”

Section: Discussionmentioning

confidence: 99%

Human Capital and Institutional Determinants of Information Technology Compensation: Modeling Multilevel and Cross-Level Interactions

2002

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Compensation is critical in attracting and retaining information technology (IT) professionals. However, there has been very little research on IT compensation. Juxtaposing theories of compensation that focus on human capital endowments and labor market segmentation, we hypothesize multilevel and cross-level determinants of compensation. We use hierarchical linear modeling to analyze archival salary data for 1,576 IT professionals across 39 institutions. Results indicate that compensation is directly determined by human capital endowments of education and experience. Institutional differentials do not directly drive compensation, but instead moderate the relationship of human capital endowments to compensation. Large institutions pay more than small institutions to IT professionals with more education, while small institutions pay more than large institutions to IT professionals with less education. Not-for-profit institutions pay more than for-profits to IT professionals with more or IT-specific education. Further, information-intensive institutions pay more than non information-intensive institutions to IT professionals with more or IT-specific education. We interpret these results in the context of institutional rigidity, core competencies, and labor shortages in the IT labor market.Compensation, Hierarchical Linear Modeling, Management of IT Professionals

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Section: Discussionmentioning

confidence: 99%

Human Capital and Institutional Determinants of Information Technology Compensation: Modeling Multilevel and Cross-Level Interactions

2002

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“…Scholarship regarding nonprofit wages has been largely descriptive (e.g., Hallock, 2000), focused on public charities, and concerned with the differential wages between the for-profit and nonprofit sectors. Nonprofit executive compensation has been demonstrated to have a relationship with organization size, organization type, subsector category, ideology, and level of reliance on public donations (Frumkin & Keating, 2010;Gray & Benson, 2003;Oster, 1998;Twombly & Gantz, 2001;Urban Institute, 2001).…”

Section: The Evolution Of Nonprofit Financial Performance Studiesmentioning

confidence: 99%

The Impact of Employee Compensation and Financial Performance on Nonprofit Organization Donations

Yan

Sloan

2014

The American Review of Public Administration

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This study focuses on the complex interaction between employee compensation and organizational financial performance. In particular, we investigate the impact of higher than median employee compensation on nonprofit donations and whether such impact is conditional on the financial performance of the organization. Using recent panel data from 10,206 nonprofit organizations across multiple tax designations, we test the hypotheses with Tobit maximum likelihood estimation that incorporates measures of employee compensation, financial performance, financial capacity, and controls for state factors and nonprofit type. Findings demonstrate that employee compensation above the median is unfavorable for donations overall; however, the negative effect is mitigated by sound financial performance. This study highlights the collective impact that exists between financial performance and employee compensation on organizational donative resources, directly speaks to an organization's internal capacity to raise private revenue, and adds subtlety to the ongoing discussions of how much is enough compensation for high-quality nonprofit leadership.Employee compensation and financial performance are two of many potential considerations for donors when it comes to the decision of where and how much to give to nonprofit organizations. Both factors figure into assessments of nonprofit organizations by watchdog groups and are monitored by board members and other organizational stakeholders as well. Donors may be drawn more to organizations they feel will provide good stewardship of their donated monies or withhold gifts from an organization they deem either excessive in its employee compensation or inept in dealing with finances, and the cumulative effect of multiple individual giving decisions affects an organization's bottom line. This study tests the interaction between nonprofit financial performance and employee compensation and its impact on private donations. To the best of our knowledge, this is the first study to examine such interaction.

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“…Regarding NPOs, a number of studies have investigated differences in salary levels between nonprofit and for-profit organizations and also differences in salary levels within the NPO sector Langer, 1989;O'Connell, 1992;Osters, 1998). Previous research has identified determinants on salary levels (Hallock, 2000;Handy & Katz, 1998;Schiff & Weisbrod, 1993).…”

Section: Typology Of Compensation Systemsmentioning

confidence: 99%

Organizational Antecedents of Pay-for-Performance Systems in Nonprofit Organizations

Brandl

Güttel

2007

Voluntas

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The applicability of pay-for-performance systems (PfP-systems) in nonprofit organizations (NPOs) is discussed controversially both in literature and in practice. Existing theoretical models emphasize the importance of the employee's motivation and output control for the effectiveness of PfP-systems. However, empirical evidence on which factors influence PfP-system's introduction in NPOs is still lacking. Based on an exploratory study of nine Austrian NPOs, this paper develops hypotheses on what organizational factors distinguish NPOs that rely on PfP-systems for managing employees' performance differences from those that use alternative approaches (e.g., job enrichment, NPO-spirit). Findings suggest that decisions on the application of PfP-systems are influenced by five determinants: perceived degree of competitiveness regarding funding and service provision; degree of strategic freedom; clarity of strategic objectives; existence of management instruments; and organizational culture.Résumé L'applicabilité de la rétribution pour la performance (PfP : pay-forperformance) dans le cadre des organisations à but non lucratif (NPO : Non Profit Organisation) fait l'objet d'une discussion controversée à la fois dans les documents et dans la pratique. Des modèles théoriques existants mettent l'accent sur l'importance de la motivation des employés pour l'efficacité des systèmes PfP. Cependant, la preuve empirique sur la nature des facteurs qui influence l'introduction des systèmes PfP dans les NPO fait encore défaut. En se basant sur une étude prospective de neuf NPO autrichiennes, cet article développe des hypothèses sur la nature des facteurs organisationnels qui distinguent les NPO ayant recours aux systèmes PfP pour gérer les différences de performance des employés de celles qui utilisent des approches alternatives. Les conclusions suggèrent que les décisions portant sur l'application des systèmes PfP sont influencés par cinq facteurs déter-minants : le degré perçu de compétitivité concernant le financement et la prestation de services, le degré de liberté stratégique, la clarté des objectifs stratégiques, l'existence d'instruments de gestion et la culture de l'organisation.Zusammenfassung Die Anwendbarkeit von leistungsbezogenen Vergütungs-systemen in Nonprofit-Organisationen wird sowohl in der Literatur als auch in der Praxis kontrovers diskutiert. Theoretische Modelle betonen die Bedeutung der Mitarbeitermotivation und Ausgabesteuerung für effektive leistungsbezogene Vergütungssysteme. Allerdings fehlen noch immer empirische Beweise darüber, welche Faktoren Einfluss auf die Einführung leistungsorientierter Vergütungssys-teme bei den Nonprofit-Organisationen haben. Basierend auf einer Forschungsstudie neun österreichischer Nonprofit-Organisationen stellt dieser Beitrag Hypothesen dazu auf, welche organisatorischen Faktoren die Nonprofit-Organisationen, die bei der Handhabung der unterschiedlichen Mitarbeiterleistungen auf leistungsbezogene Vergütungssysteme bauen, von den Organisationen abheben, die alternative Method...

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Compensation in nonprofit organizations

Abstract: Although the nonprofit sector is enormous, we know little about how workers there are compensated. This may be due, in part,

Cited by 18 publications

References 59 publications

Human Capital and Institutional Determinants of Information Technology Compensation: Modeling Multilevel and Cross-Level Interactions

Human Capital and Institutional Determinants of Information Technology Compensation: Modeling Multilevel and Cross-Level Interactions

The Impact of Employee Compensation and Financial Performance on Nonprofit Organization Donations

Organizational Antecedents of Pay-for-Performance Systems in Nonprofit Organizations

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