Strategies for Motivating People in Non-profit Organization - Term Paper Example

Strategies for Motivating People in Non-profit Organization Introduction Motivation is one of the functions of leadership. A leader is supposed to influence his or her followers towards realization of a pre-determined and shared goal. This leadership influence is often considered positive in the sense that it encourages people to act or behave in a certain way. Therefore, the leader acts as a motivator. Without such motivation, people would lose interest and commitment towards the realization of the shared goal. Within the organizational context, motivation of employees is a complex phenomenon. Several factors cause this complexity. For instance, the number of employees working within an organization partly determines how easy the organizational leaders can motivate them. Additionally, the type of organization also plays a role in how managers motivate employees. In for-profit organizations, employee motivation can be linked to the profits made in that employees are rewarded depending on the amount of profits they are able to raise. However, in a non-profit organization, this may not be the case because such organizations do not seek profits. Instead, non-profit organizations often perform philanthropic work based on volunteerism (Rexhaj, 2011). Therefore, employees within non-profit organizations may not be motivated through compensation/salaries.Moreover, the specific motivation strategies adopted by organizations could add to this complexity. There are multiple motivation theories that organizations may adopt. Each of these theories has its principles, advantages and disadvantages. Depending on they type of motivation theory that an organization adoptsapplies, the complexity of implementing it varies. Despite these factors, this paper focuses on the role of growing diversity in the workplace and how this affects strategies for motivation in non-profit organizations. The paper argues that growing diversity in non-profit organizations calls for multidimensional approach to motivation. The paper is organized into three main sections. The first part, introduction, provides an overview of the topic and the thesis. The second part, the body, provides the main discussion of the paper. This is the longest part and will be divided into different sub-sections. Finally, the conclusion will provide a recap of the main points from the discussion, restate the thesis, and provide concluding remarks. Main Discussion Non-Profit Organizations Before delving into the main discussion about how growing diversity influences motivation strategies in non-profit organizations, it is worthy to understand what non-profit organizations are and what makes them different from for-profit organizations. This understanding will be useful when discussion the motivational strategies for non-profit organizations. The main difference between for-profit and non-profit organizations is in their missions. The mission of for-profit organizations is to derive profit from providing particular goods or services to people/consumers. On the other hand, non-profit organizations seek to bring change in society (Drucker, 1990, p. 3). Most non-profits tend to work in the areas of education, health, environment, development, and addressing poverty (Rexhaj, 2011; Anheier, 2014, p. 105). Non-profit organizations have a unique model. According to Chen (2010), non-profit organizations received donations from donors and use them to provide assistance to communities and the society in general. Unlike for profit-organizations, non-profit organizations do not share surplus funds/profits with shareholders or owners. The fact that non-profit organizations mainly operate on philanthropic work has several implications. One major implication is that quite a considerable number of people working for these organizations are doing so on voluntary basis (Ott & Dicke, 2011). This means that they are not paid a salary or wage for their service. According to Powell & Steinberg (2006, p. 167), there ratio of paid workers to unpaid workers in non-profit sector in the US is about one to six. Motivation Theories Workplace motivation has been a subject of interest for many years. Several theories of motivation have emerged over the years with different perceptions of motivation. Generally, the different motivation theories can be categorized into two groups. The first group is the reward-based motivation theories or extrinsic motivation theories. These motivation theories consider motivation as the outcome of a reward (Kouneiher, Charron & Koechlin, 2009). For example, employee salary or wages is part of the reward that motivates employees. With reward-based motivation, the removal of the reward often leads to demotivation (Cameron et al., 2005). The second group of motivation theories is the non-reward-based theories or intrinsic motivation theories. The intrinsic motivation theories assume that people are motivated to perform certain tasks for their own merit and not because of an external reward (Cameron, 2006, p. 12; Rutledge, 2008, p. 33). A good example of intrinsic motivation is going to work because of the love for the job. Despite the obvious distinction, extrinsic and intrinsic motivation theories are related. Apparently, extrinsic motivation can influence intrinsic motivation. Having noted the two main categories of motivation theories, it is important to discuss various motivation theories in a chronological way. Scientific Management – this is one of the earliest motivation theories proposed by Taylor under his scientific management theory. According to this theory, employees are motivated by financial rewards such as wages. Taylor proposed that workers needed more wages to perform better. However, this theory was criticized for being too simplistic and overlooking other sources of motivation apart from rewards (Rexhaj, 2011, pp. 10-11). Maslow’s Hierarchy of Needs – according to this theory, human motivation is based on meeting different levels of needs. Maslow proposed five levels of needs according to priority hence the hierarchy of needs. According to the theory, humans will often seek to gratify the lowest levels of needs before the upper levels of needs. Essentially, gratifying the different levels of needs is the source of motivation (Montana & Charnov, 2008, pp. 238-239). Diagram 1 below illustrated the hierarchy of needs according to Maslow. Diagram 1: Maslow’s Hierarchy of Needs Source: Prince, Hughes & Kapoor (p. 281). Contingency Theory–otherwise referred to as the reinforcement theory, the contingency theory of motivation posits that a person’s behavior is influenced by the potential consequence. Apparently, when the consequences of a behavior or action are positive, they tend to cause a reinforcement effect such that the person is motivated to perform the same activity or behavior even more to get similar outcomes. However, if the consequences of a behavior or activity are negative, they will not have the reinforcing effect, which causes demotivation. Based on this theory, reinforcements can be positive or negative. Positive reinforcement occurs when the consequences of a behavior cause a repetition of the behavior. Negative reinforcement occurs when the consequences of a behavior deter a repeat of the behavior (Montana & Charnov, 2008, p. 247). Equity Theory–Stacey Adams proposed the equity theory of motivation noting the people tend to compare themselves to others and this affects their motivation. Apparently, people compared their input-output ratio to referent others to determine whether they are fairly treated or not. If they feel that they are treated unfairly in that their input-output ratio is lower that that of referent others, they will be demotivated (Rexhaj, 2011, pp. 14-15). Expectancy Theory – the expectancy theory posits that a person’s motivation is a product of three factors including valence, instrumentality, and expectancy. Valence is the intensity of an individual’s desire or need. Instrumentality refers to the view that a person’s performance will create other outcomes. Expectancy is the person’s conviction that his/her effort will influence performance effectively. The relationship between the three factors in motivating people is illustrated in diagram 2 below. Diagram 2: Expectancy Theory Source: (Rexhaj, 2011, p. 15) Job Enrichment–this motivation theory is related to Herzberg’s two-factor theory. According to the theory, job satisfaction and dissatisfaction are caused by certain factors in the workplace. One set of factors, the hygiene factors, are responsible for alleviating job dissatisfaction. A good example of a hygiene factor is payment. The other set of factors, non-hygiene factors, are responsible for causing job satisfaction. This could be the job itself. Based on this theory, motivation occurs through job enrichment (Rexhaj, 2011, pp. 12-13). Goal Setting Theory – This theory was proposed by Locke and Latham. It is based on the assumption that goals influence a person’s effort and perform. Apparently, setting clear goals provides direction and motivation to achieve the goals. Setting higher goals causes higher performance. The premises of the goal setting theory is the effect of goals on individual choice, effort, persistence, and motivation as illustrated in diagram 3 below. Diagram 3: Goal-setting Theory Source: (Rexhaj, 2011, p. 16). From the chronological analysis of the different motivation theories above, one clear trend is the shift from reward-based motivation to a combination of extrinsic and intrinsic motivation. The scientific theory emphasized the use of external rewards as a source of employee motivation. However, the job enrichment and goal-setting theories look beyond the external rewards to the intrinsic motivation. Growing Workplace Diversity and its Implications on Motivating People in Non-Profit Organizations Traditionally, the organizations were male-dominated. Factory workers and managers were predominantly men. Women were not represented or were under-represented in the workplace. This was caused by various factors especially sociocultural factors regarding gender roles. Women were perceived as housewives and were not expected to leave their children to go to work. Men, on the other hand, were considered as the sole breadwinners who were supposed to provide for their families including wives and children. To perform this task, men had to go to work to earn wages or salaries that would be used to support the family. This created a workplace that was not diverse in terms of employees. However, this has changed. Modern workplaces are more diverse. Women are now taking up positions within the workplace including top management positions. Moreover, hitherto unrepresented groups such as people with disabilities, transsexuals, and discriminated races or ethnicities are now more represented in modern organizations. This has been driven by various factors including non-discriminatory policies such as affirmative action and education that has weakened cultural values that caused the discrimination. In the US for example, women make up almost 50 percent of the workforce and this proportion is projected to increase in the future (Burns, Barton & Kerby, 2012). As Toossi (2012) posits, today’s labor force is more ethnically and racially diverse, comprised of more women, and older than the past decades’ labor force. Workplace diversity can be defined in two ways. First, it represents the growing representation of different groups in the workplace. This definition captures the more evident growing representation of women, ethnicities, races, gender-orientation, and physically challenged in the workplace. Second, a new concept of diversity is emerging known as diversity of thought. This refers to the different thinking backgrounds of employees in modern workplaces (Rezvani, 2015). The two definitions or conceptions of diversity are related. Implications of Growing Workplace Diversity The growing diversity in the workplace has positive and negative implications for organizations. In a report of a study commissioned by US Labor Secretary in 1987, increasing workplace diversity was recommended as an effective strategy to attract talented employees and create competitive advantage. Based on the findings and recommendations from the report, many companies started to appreciate diversity. Initially, companies did not appreciate diversity because it seemed to complicate the creation of a shared corporate culture. However, the insights from the report led to a raft of measures by organizations to create diverse workplaces (McCormick, 2007). One of the main positive implications of growing workplace diversity is the growing talent pool. Organizations can benefit from workplace diversity by employing people with diverse talents and skills that would create a diverse talent pool. For example, a non-profit organization can benefit from employee diversity by recruiting volunteers with skills in fundraising, community mobilization, psychology, and other necessary technical and non-technical skills. In a report on workplace diversity in the non-profit sector, one of the main findings was that employees often consider the support for workplace diversity when seeking opportunities to work in non-profit organizations (Thurman, 2011). Apart from the diverse talent pool, workplace diversity also creates a positive image and reputation for an organization. Since these organizations serve a diverse society, having a diverse workforce resonates with the communities that they serve. Despite the positive effects of workplace diversity, the growing diversity also had negative implications for non-profit organizations. The main challenge of growing diversity in the workplace is management of multiple cultures, needs, and interests. Every organization has a unique organizational culture. This unique organizational culture may be threatened by growing diversity among employees. Different employees will have different cultures, interests, and needs. Aligning these diverse cultures, interests, and needs with the overall organizational culture may be a challenge for many organizations. Apart from this, other possible challenges have been noted. According to Davidson (2011), workplace diversity does not always increase performance, which negates the bottom line argument of diversity boosting organizational performance. Other possible challenges of managing a diverse workforce include increased employee turnover, differences in employee satisfaction, and resistance to diversity (Davidson, 2011). The more interesting challenge of growing diversity in non-profit organizations is motivating employees from different backgrounds with different needs and expectations. From the discussion of motivation theories above, some theories emphasize the intrinsic motivational approach where the individual is considered. For example, in Maslow’s hierarchy of needs, an individual’s motivation will depend on which level of needs he or she is at. In a non-profit organization, some people may be in the psychological level while others may be in the safety, social, esteem, or self-actualization levels. For example, the Bill and Melinda Gates Foundation employs many people from across the world. The co-founders Bill and Melinda are considerably higher up in the hierarchy of needs compared to most of their employees. Therefore, motivating employees from the diverse needs levels may be difficult. In the next section, the discussion will focus more on how strategies for motivating people in non-profit organizations have evolved with the growing diversity of employees/volunteers. The Evolution of Thinking about Strategies for Motivating Employees in Diverse Environments The subject of increasing diversity has not been well received or appreciated in the non-profit sector. A recent report found out that although most non-profit organizations understand the importance and need for diversity in the workplace, quite a number have not developed strategies or environments for improving such diversity (Thurman, 2011). From this finding, we can deduce several insights. First, non-profit organizations, just like for-profit organizations, are becoming increasingly aware of the importance of workplace diversity. This is exemplified in the large number of articles, studies, and discourses on the subject of diversity in non-profit organizations (see Tomlison & Schwabenland, 2010). With regard to strategies for motivation in the diverse non-profit organizations, several factors are worth noting. First, non-profit organizations tend to rely more on intrinsic motivation than on extrinsic motivation (Leete, 2000). This is linked to the fact that non-profit organizations have missions that are not profit-oriented. Therefore, employees or volunteers in non-profit organizations have been traditionally expected to have intrinsic motivation to join such organizations. This tendency led to adopting of several motivation strategies that sought to enhance intrinsic motivation. One of the main strategies was the mission and internal value systems of non-profit organizations. Often, non-profit organizations will paint themselves as philanthropic and seeking to solve social problems or enhance the lives of people or quality of the environment. This disposition is expected to motivate individuals to work for such organizations because it creates a sense of fulfillment, achievement, or accomplishment. Therefore, many people working in the non-profit sector are motivated by the sense of accomplishment or fulfillment that comes with it. However, with the growth in diversity, there has been new thinking around the issue of motivating employees in the diverse non-profit organizations. There has been a shift from the intrinsic motivation focus to inclusion of extrinsic motivation. This is evident in the number of non-profit organizations paying salaries or wages to their workforce. Extrinsic motivation is increasingly recommended for non-profit organizations as a means to achieve the much desired intrinsic motivation or for purposes of achieving larger objectives of the organizations (Tippet & Kluvers, 2009, p. 10). This paradigm shift is influenced by recent research that reveals growing diversity necessitates different motivation strategies. In a study to establish the top motivation factors among employees of non-profit organizations, it emerged that employees are motivated by multiple factors including salary increases, recognition, healthy relationships, good work environment, chance to make a difference, seeing the results work, and autonomy among others (Stojanovic, 2008). Table 1 below presents the findings based on the ranking of the motivation factors. Table 1: Motivation Factors Ranking among Non-Profit Employees Rank International Staff Average Score National Staff Average Score 1 Seeing results of work 2.7 Good salary 3.2 2 Possibility to make a difference 3.5 Seeing results work 3.6 3 High level of autonomy 5.0 Health office atmosphere/relationships 4.4 4 Recognition by manager/peers/clients 5.2 Possibility to make a difference 4.6 5 Good salary 5.5 Recognition by manager/peers/clients 5.7 6 Health office atmosphere/relationships 6.3 High level of autonomy 6.4 7 Promotion and career development opportunity 7.4 Promotion and career development opportunity 7.2 8 Transparency 8.5 Performance-related benefits & salary increases 7.2 9 Nice work environment (modern equipment, office) 8.6 Transparency 8.0 10 Performance-related benefits & salary increases 9.1 Nice work environment (modern equipment, office) 8.2 Source: (Stojanovic, 2008, p. 34). From the table above, it is evident that different factors motivate non-profit workers including extrinsic and intrinsic factors. However, intrinsic factors still dominate the most common motivation factors in the sector. Suggested Approaches to Addressing the Challenge With the growing diversity in non-profit organizations and the multiple motivation factors, there have been suggestions for adopting a multi-thronged approach in motivating people in the sector. The traditional approach that favored intrinsic motivation is no longer seen as been effective on its own. The intrinsic-extrinsic dichotomy has been challenged in modern suggested approaches to motivating diverse employees in non-profit organizations. In a study to determine the motivation strategies of managers of contemporary non-profit organizations, Chen (2014) established that non-profit managers apply multiple motivation styles including intrinsic motivation, external motivation, amotivation, introjected motivation, and identified motivation. Thisfinding emphasizes the importance of multidimensional approaches in motivating non-profit organization employees and staff. These different motivational approaches are discussed in more detail below. Identified motivation – this motivation approach is based on the usefulness/value of an activity and its fit within the value system of a people. Apparently, people will be motivated to accept regulation if the activity meets these two conditions (Chen, 2014, p. 741). Introjected motivation – this motivation is based on the feeling of obligation to perform an activity as a way of avoiding shame, pressure, and anxiety (Chen, 2014, p. 741). External motivation – motivation comes from the desire to gratify an external desire or from the promise of an external reward. Providing salaries and wages are typical examples of external motivation (Chen, 2014, pp. 741-741). Amotivation – this refers to impersonal regulatory style that entails not valuing and believing in an activity to yield desired outcomes, which leads to quitting or avoiding that particular activity (Chen, 2014, p. 742). Despite the recommended multidimensional approach to motivating people in non-profit organizations as an effective strategy to deal with the growing workplace diversity, it has also been suggested that non-profits should not try to emulate for-profits in their multidimensional motivation strategies. Apparently, non-profit organizations differ from for-profit organizations in that family-friendly policies and increased responsibilities are more desirable among non-profit employees while career advancement and extrinsic factors are more favorable in public sector organizations (Lee & Wilkins, 2011). Implementation of the Suggested Approaches The recommended multidimensional approach to motivating people in the non-profit organization is varied. It is important to note than a considerable number of non-profit organizations still employ the traditional intrinsic motivation strategies. The implementation of the suggested approaches can be understood through review of case studies. In one case study on a non-profit organization in Honduras, National Non Government Organization, the implementation of the multidimensional approach to motivating employees and volunteers was seen to yield positive results. Prior to the intervention, the non-profit organization had been plagued with low employee motivation, which resulted in high turnover. This low motivation was linked to several factors such as nepotism, delayed payments, low salaries, lack of listening, lack on employee consultation, and lack of respect among others. To address the problem of low employee motivation, the executive board adopted a comprehensive intervention, which led to the replacement of the CEO and a realignment of the organization. Some of the specific interventions included creating an open-door policy, employee participation in decision making, accident and insurance benefits, employee recognition through internal memos, and continuous training and development opportunities. The outcomes of the implementation were evident in the rising level of employee motivation. The level of employee attrition dropped significantly (FRONTERA, 2007, pp. 12-13). This case study provides evidence that the multidimensional approach suggested in for modern non-profit organizations that are dealing with more diverse workforces is being implemented. The case study also provides evidence for the effectiveness of the multidimensional approach. Another evident trend in the implementation of the multidimensional approach in motivating employees in the diverse non-profit organizations is the rise in employee salaries/wages. According to a recent survey in Philippines NGOs were found to be offering the highest salary rates for supervisory level and junior executive positions in 2013 (Magkilat, 2014). In yet another research study in Britain, one of the main findings showed that there was a 60 per cent increase in the number of people earning six-figure salaries in the largest NGOs in the country between 2010 and 2013 (Anyangwe, 2013). These findings suggest that more non-profit organizations are beginning to include the extrinsic motivation strategies by using salaries and wages. In some modern non-profit organizations, especially the international non-profit organizations such as the UN, the remuneration of employees is considerably higher than in some for-profit organizations. This is also evidence that the recommended multidimensional approach to motivating people in non-profit organizations in the face of growing diversity is becoming widely accepted and adopted. However, the implementation of the multidimensional approach has some limitations. Even with the rising salary levels of people within the non-profit sector, the discussion about salaries and other external rewards within the sector is still limited. This is largely associated with the assumption that non-profit organizations should not pursue profits or returns. This blanket assumption discourages the open discussion about the use of salaries, wages, and other employee benefits within the non-profit organizations. This has resulted in an apparent over-emphasis of volunteerism within the sector. Many non-profit organizations still encourage people to work for them on volunteer basis. Effectiveness of Multidimensional Approaches to Motivation in Non-Profit Organizations The implementation of the multidimensional approaches to motivating people in non-profit organizations with the challenge of growing diversity has been evident. However, the real question should go beyond the implementation to the outcomes of the implementation. The outcomes of the implementation of the multidimensional approaches to motivation will determine whether the approaches have been effective so far in motivating people within the non-profit organizations. In a survey to assess the effectiveness of intrinsic and extrinsic motivation among employees of nonprofit organizations in Pakistan, Hafiza et al., (2011) noted that extrinsic motivation was more effective than intrinsic motivation in the three non-profits studied. The study showed that employee motivation was strongly influence by extrinsic rewards such as pay and fringe benefits. However, the study noted that such extrinsic rewards, especially financial rewards, are not utilized optimally by the non-profit organizations despite their effectiveness in motivating employees. With regard to intrinsic motivation, the study established that intrinsic rewards were less effective in creating employee motivation among the three non-profit organizations. Overall, the study established that extrinsic rewards were the main sources of employee motivation in non-profit organizations. Without the extrinsic rewards, the study concluded that intrinsic rewards would have little impact if any. Thisfinding is quite contrary to expectations considering the belief that intrinsic rewards are more prevalent in non-profit organizations. In yet another study of Homelessness sector in England, which represents non-profit sector, Antunes (2012) established that while many organizations used pay-for-performance systems for motivation, the effect of these systems were minor compared to the effect of intrinsic factors. This finding seems to emphasize the initial expectation that extrinsic motivation is less effective in non-profit organizations than in for-profit organizations. It also challenges the findings from the previous study conducted in Pakistan. From existing evidence, it is quite difficult to conclude whether the proposed multidimensional approach to motivating diverse non-profit workforces has been effective. However, it is clear that some level of success has been achieved. The findings from the Pakistan study provide crucial evidence suggesting the combination of extrinsic and intrinsic rewards is effective in motivating people within the non-profit organizations. In the study on the homelessness sector in England, the same conclusion can be made. Although the extrinsic (pay for performance) is shown to be less effective than the intrinsic factors, the study established that pay-for-performance systems are partly effective. Overall, it can be argued that the combination of extrinsic and intrinsic approaches to employee motivation enhances the effectiveness of the multidimensional approach especially with the growing workplace diversity. Way Forward Based on the current level of implementation of the suggested multidimensional approach to motivating people in non-profit organizations and the mixed outcomes, several issues arise. First, it is undeniable that workplace diversity is real and is sweeping across all types of organizations including non-profit organizations. Therefore, the need for applying effective motivation strategies will continue to grow. With the growing diversity in non-profit organizations, the differences in employee needs and expectations will continue to grow. Based on most of the theories of motivation, especially the contemporary ones, differences in employee needs and expectations imply that different approaches to motivation are needed. Unlike in the scientific management era, modern non-profit organizations cannot apply one-size-fits-all motivation strategies. Second, the implementation of the suggested multidimensional approach to employee motivation in the non-profit sector is still below optimum. Many non-profit organizations are still using the traditional approaches that favor intrinsic motivation over extrinsic motivation. This gap in the implementation should be addressed. There is need for non-profit organizations that are yet to embrace the suggested multidimensional approach to do so. This will reduce the level of uncertainty regarding the ultimate effectiveness of the multidimensional approach. Third, there is need to develop a better assessment of the real effects of the multidimensional approach to motivating people in non-profit organizations. Currently, the existing evidence is limited and cannot be used to provide a strong decision whether the approach is effective or not. The only existing evidence is suggestive. More studies to assess the real impacts of the multidimensional approach will address this limitation. However, before conducting more assessments, it will be necessary to ensure that more non-profit organizations implement the approach. Finally, with the current trend in advocating for multidimensional approaches in employee motivation in non-profits, it will be crucial for the existing barriers, especially the perception that non-profits should not have any profit interests, to be addressed. It is important to break the barrier to open discussion about issues of payment in the non-profit sector to create the appropriate environment for advocating for new approaches to dealing with the challenge of growing diversity in such organizations. Conclusion This paper has focused on the pertinent issue of growing workplace diversity and how this affects employee motivation in the non-profit sector. It has been established that growing diversity posits challenges to previous motivation challenges that mainly targeted intrinsic motivation among employees in non-profit organizations. With this challenge, there have been discourses on addressing the challenge and ensuring that employee motivation strategies in such organizations are effective. Non-profit organizations are unique in that they do not provide attractive external rewards such as for-profit organizations, which make it necessary to identify effective strategies for motivating employees to accept to join the sector even without the expectation of financial rewards. However, the growing diversity is bringing people with different needs, including psychological, safety, social, and self-actualization into non-profit organizations. This has influenced the adopting of multidimensional approaches that combine the intrinsic and extrinsic motivation strategies. Although this new approach is being implemented in the sector, the implementation is still low. Moreover, assessment of the effectiveness of the new approach is limited. However, there are indications that it is effective. 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