How should my organization be

recruiting, hiring, and

compensating employees?

What is Human Resources management?

The employees who make up an

organization are its most valuable asset.

Human resources management is a means

of building and protecting this asset, with

the goal of maximizing worker moral,

motivation, and productivity.

Human resources management focuses

on policies and procedures that can help

achieve this goal.

What is Human Resources management?

The goal of human resources management in a nonprofit organization is essentially the same as in a for-profit organization: to establish and maintain an effective workforce.

Human resources policies address the following issues:

Assessing personnel needs of the organization

Recruiting personnel

Selecting and hiring personnel

Orienting new employees to the organization

Compensation and benefits

Performance management

Training and development

What is Human Resources management?

Nonprofit organizations do however face some unique challenges in human resources management:

Nonprofit organizations often have more limitedresources than for-profit organizations,including…◦ Smaller HR departments

◦ Smaller budgets for compensation

◦ Pressure to keep administrative overhead costs low

Nonprofits have to deal with special payroll and tax circumstances.

Nonprofit organizations must often manage both paid employees and volunteer.

What is Human Resource management?

This section will provide an overview of

three major functions of human resource

management:

Recruiting

Hiring

Compensation

We will explore effective policies,

philosophies, and important questions

related to each of these functions.

Recruiting Policies

The following tips can help you maximize your recruiting efforts:

When posting a job, cast a wide net. Post it on a variety ofwebsites and encourage staff to send it to their networks.

On the job description, provide information on the missionof the organization, job duties, reporting structure, requiredqualifications, pay rate, and how to apply.

Hiring should be led by executive and managerial staff.

Recruiting Policies

The following tips can help you maximize your recruiting efforts:

Brief, train and minimize the number of interviewers.Avoid board member involvement except when hiringsenior executives.

Do not ask illegal questions.

Avoid an implied contract; be careful on promises made.

Recruiting Policies

You may not ask questions concerning a potential employee’s nationality, sex, age, appearance, race, sexual orientation, gender, citizenship status, pregnancy, disability, or marital status. Some Illegal interview questions include:

“What is your race?”

“What is your native language?”

“Does your religion prevent you from working weekends orholidays?”

“Do you have children?”

“What is your birth date?”

See the supporting document in section 2a, Guidelines for Pre-Employment Inquiries, for a more complete list of acceptable and unacceptable questions.

Hiring Policies

Any hiring process takes thoughtful planning, but because nonprofits often face limited resources, it is even more important to ensure that the hiring process is done right.

It is important that new employees fully understand the nature of their employment as well as the policies that affect them.

Some studies estimate the cost of turnover to be 20% of an employee’s salary, so a clear and efficient hiring process will save your organization money in the long run.

Hiring Policies

The following policies can aid the process of hiring a new employee:

When planning an interview process, allowtime after the interviews are complete forall interviewers to convene and discuss thequalifications of the candidates beforefinalizing the hiring decision.

When hiring an ED, the full board orexecutive committee should make the hiringdecision.

Hiring Policies

Once you have selected an employee forhire, you should begin the properdocumentation of the employee by openinga personnel file and keeping it up-to-date.(There is an example in section 2c. )

Provide the new employee a set ofpersonnel policies/employee handbook andhave employee sign and dateacknowledgement of their receipt.

Keep track of employee signed documentsin the personnel file.

At-will vs Contract Employment

It is important to determine whether thenature of the position you are hiring for is atwill or contract.

Be sure to clearly state the conditions of theemployment in the offer letter.

Employees should sign and dateacknowledgement and understanding of thenature of their at will employment ascontained in the receipt of the personnelpolicies of the Corporation.

At-will Employment

The employment standard in the state of New York is at-will employment. In NYS, ALL employees are considered to be “at-will” employees unless they are “employed-under-contract.”

At-will employees can be terminated for any legalreason at any time without notice, with orwithout cause.

Notice of at-will employment should be repeatedin the personnel policies whenever there is apossible or perceived change in the employmentstatus, such as promotion or lateral transfer, etc.

Contract Employment

The alternate standard within NYS is contractemployment. Contract employees are governed bythe binding commitments and promises exchangedwithin the “four corners” of the document.

The organization should determine who has theauthority to develop, review and execute contractswhile stating the same in your internal corporatedocuments.

The board, or a committee of the board, shouldreview all employment contracts, independentcontracts and funding contracts.

Contract Employment

There are three “magic” elements of a binding

contract, required to be present in every

contract:

Price

Term

Signature of the party to be charged

Without any one of these the contract would not

be binding.

Exempt Employees versus Non-Exempt

Certain employees are exempt from provisions of

the Fair Labor Standards Act (FLSA)

Exempt employees are generally employed on

a “salary basis” and will customarily earn the

equivalent of at least $600 per week.

Such employees are not eligible for overtime

compensation.

Exempt Employees versus Non-Exempt

Exempt employees’ primary duties fall under one or more

of the following three defined categories:

1. Executive

Employees with executive functions direct or supervise the

work of two or more employees and their primary duties must

be management.

2. AdministrativeEmployees with administrative duties are generally responsible

for office or non-manual work directly related to management

policies or general business operations and their work

customarily requires the exercise of discretion and independent

judgment. (receptionists and administrative assistants are typically non-exempt because their work does not require the exercise of independent judgment).

Exempt Employees versus Non-Exempt

3. Professional

Employees with professional responsibilities perform work

requiring knowledge of an advanced type in a field of science or

learning customarily acquired by a prolonged course of

specialized study. Their work customarily and regularly requires the exercise of

discretion and independent judgment or their work is original

and creative in character in a recognized field of artistic

endeavor.

Exempt Employees versus Non-Exempt

Non-exempt employees are generally

employed on the basis of a single “hourly rate.”

Non-exempt employees are eligible for overtime

compensation at the rate of one and one half (1- 1/2) the regular hourly rate for hours worked in

excess of forty during a given week. Even if an employee compensated with an annual salary, the employee can still be non-exempt. If the employee does not fit the categories of an exempt employee listed above, the employee may be eligible for overtime.

Unions

If your organization has unionized staff, be sure to

follow all employment contract rules specific to

the segments of unionized staff. Remit all required

payments to the union on time.

Determining Compensation

Determining the appropriate compensation for a position can be a daunting task. Here are some considerations for determining compensation:

Consider job requirements and agency needs.

Look at the labor market. How competitive is it?

Consider the organization’s priorities, as demonstrated in the Strategic Plan, and future plans for both program and service delivery.

Always weigh salary, benefits, and perks.

Determining Compensation

When determining Executive Compensation,

remember that excessive wages may flag the

IRS to investigate “excess benefit transactions.”

High wages may also impact funder and donor

perception of the organization or violate state

laws, such as NYS EO38.

Compensation Policies

The board should set the goals of a compensation philosophy. Some common goals are:

To attract, motivate and retain the work force you need.

To reinforce key organizational strategies and core values, such as salary scales to ensure equity.

To be reasonable.

To guide budget development and planning.

Compensation Policies

Make sure you consider the compensation

philosophy of your organization.

As an employer, what is your stated or implied

approach to how you compensate staff?

Are these criteria consistent within each staff

category?