Finding a purpose at work - Comparing the not-for-profit and private sectors
The idea of staff in not-for-profit (NFP) organisations being engaged and connected with the mission and values of their organisation is not a foreign concept. However, we recently set out to discover whether organisational purpose is equally effective for driving staff engagement in the private sector. To the surprise of some, purpose was found to be a universal ingredient for engaging people at work, whether they are in the not-for-profit or private sector. However, our research suggests that this message may not be reaching the private sector.
How did we come across this interesting finding? As part of my Masters of Organisational Psychology, my research aimed to test whether HR frameworks for motivating employees should be tailored to different occupational sectors or whether a more generalised approach was appropriate. I explored some of the key sector differences highlighted in the literature, namely the availability of financial resources and career opportunities, and the focus on organisation mission and values.
Existing literature had proposed that as NFPs’ services are often reliant on external funding bodies (including donors and government), organisations within this sector typically have fewer discretionary financial resources than their private sector counterparts. Therefore, it was surmised that NFP organisations typically have lower salaries, fewer promotions and more volunteers. Given these conditions, I predicted that employees within the NFP sector would be less likely to anticipate the availability of opportunities to progress their career and financial incentives.
In a randomly selected sample of staff who completed our survey between 2011 and 2013, including 289 employees (across 8 organisations) working in the NFP sector and 362 employees (across 5 organisations) working in the private sector, significantly more staff in the private sector were satisfied with both rewards and career opportunities offered within their organisations. Also, while rewards and career opportunities were important for engaging staff across both sectors, they were more important for engaging staff in the private sector.
I also wanted to examine the perception that NFPs should orientate their HR framework around the mission and values the organisation stands for, as this was suggested to be a uniquely successful NFP strategy. Indeed, staff’s belief in the organisation’s mission and values was significantly stronger in the NFP sector sample. However, what was interesting was that the relationship between mission and values and engagement was equally as high in both sectors. That is, despite fewer staff endorsing their organisation’s purpose in private sector organisations, alignment with the organisation’s core purpose and values was just as important for engaging these staff as in the NFPs.
So what do these results all mean? In summary:
Unsurprisingly, employees within the NFP sector are less motivated by the availability of financial incentives and career opportunities . You don’t work for a charity if you want to earn big bucks! Obviously, HR managers therefore need to consider the occupational sector context of the employees they are working with.
The existing literature emphasises, and our research confirms, that a great way to attract and retain valued employees in the NFP sector is to leverage the organisation’s mission and values to create a distinctly unique context .
However, employees within the private sector are equally motivated by the mission and values of the organisation as NFP sector employees . To improve engagement, private sector organisations may need to consider more clearly articulating their purpose, values and work, recruiting like-minded employees, orientating staff to their mission and values, building a clear link between staff roles and organisational outcomes and ensuring all other work practices within the organisation are aligned with their purpose – including the remuneration and recognition strategies.