Management 360º: Yasha Lange on Staff Motivation

I am not going to answer this in the next 500 words! Instead, I’ll devote a series of columns to this question, and hope to use your feedback and comments in future editions. This time, I’ll focus on staff only. Why staff? Because, as the cliché goes, it really is all about the people. Yet even though everybody knows that, not everybody acts accordingly.

Do you have a policy to recruit talented people, set them performance goals, reward them for their work, and dismiss them if they don’t do well? If you answered yes to all four: Well done. (Are you sure you’re being truthful?)

In reality, most media development organizations do not have a strong policy for developing their staffs. They have a lot of good reasons for that:

1. We don’t recruit, because we have no vacancies.
2. We can’t keep people, because we can’t pay them well enough.
3. We can’t pay bonuses, because donors do not allow that.
4. We can’t fire people, because it’s too complicated and may cost us a lot of money. And we don’t have money, which by the way brings us back to points 1 and 2, and maybe even 3.

Right. But despite the fact that an organization might be small, the funds limited and the work not always commercial, there are a few things to learn from the private sector when it comes to staff development. I’ll name two for now.

We’re all used to working with SMART (Specific, Measurable, Attainable, Relevant and Time-bound) indicators for some donors, and Objectively Verifiable Indicators for others. But when it comes to staff, we often do not use them.
Key Performance Indicators (KPI) for staff do pay off. If a staff member has, say, five indicators against which he or she will be assessed at the end of a year, it creates clarity.

For instance: “Organize five training courses, evaluated by the participants with a score no lower than seven.”

Or: “Prepare 10 project proposals, winning at least three, with a total value of at least 30,000 USD.”

Better still, the KPI’s can be given different weight, to show staff members what should take priority in their work. People know what to do, they can be evaluated properly in annual performance reviews, and complimented accordingly. In the end, this will also give your employees greater job satisfaction.

My second topic: Bonuses. I recently adapted the bonus plan of a commercial firm for a nonprofit organization. It gives employees a percentage of the gross margin on self-generated revenue (that’s the revenue from activities or services initiated and developed by themselves, minus direct external costs). In other words: If employees manage to attract income for the organization that is not spent directly (on staff, reimbursable expenses, and so forth) and can therefore be re-invested, they can keep a percentage of it.

For example: An employee identifies a potential grant, develops a proposal, and wins the contract for a series of trainings. The budget will typically have direct costs for organizing the training, but also include overhead, such as staff costs. A percentage of this can be legally returned to the employee. Another example: An employee makes a deal for reduced advertising costs with local media. Again, a percentage of the savings can go to the employee.

To back up, for a moment, to hiring. Recruitment is often done ad-hoc, without much effort. You suddenly get a project, and need to hire someone quickly. The right approach is to build a pool of ready hires and freelancers with a policy of permanent job listings on a nonprofit’s Web site, as well as bartering for ads in the local media. For example: A certain number of that media’s staff can participate in trainings, and in return the training organization can place a certain number of classifieds.

The current recession actually presents an opportunity for nonprofits to hire talented people. The overall effects are a subject that deserves a longer discussion. For now, the budgets of nonprofits that depend on government grants are not much affected. However, in the longer run I do expect government spending on development aid to be reduced (to alleviate budget deficits). That may hit nonprofits particularly hard, especially those that depend on one donor for the lion’s share of their funding.

Selecting people through permanent recruitment helps to raise the quality level of your staff. Focusing work through key performance indicators can ensure the effectiveness of staff. A bonus system can motivate people, and keep them in the organization longer. And yes, unfortunately sometimes it is necessary to let go of someone who does not perform well.

In the next issue, I’d like to write about (advisory) board development. Do share your experiences and ideas with me at assistant (at) gfmd (dot) org, so I can share them with all GFMD members.