Human Resources, Job Satisfaction, and Financial Sustainability

This chapter explains the key roles of human resources management and job satisfaction in the financial sustainability of a nonprofit organization. Topics in this chapter include, but are not limited to, human resource management systems, job satisfaction approaches and theories, staff turnover, and staff retention, and the relationship between human resources and financial sustainability.


Simply put, human resources management is the set of managerial activities involved in planning, recruiting, motivating, retaining, and developing a workforce that can contribute to the efficiency, effectiveness, overall performance, and sustainability of an organization. Systematic human resources management started primarily during the early twentieth century to address issues related to worker's compensation and safety raised by labor and union organizations (Li, 2003). Then, human resources management evolved to include issues of equal-employment opportunities, diversity, organizational management, performance management, information systems, and talent management (Li, 2003; Vosburgh, 2007).

Increases in the workforce and growth of organizations have shifted human resources management from being an employment unit inside an agency to becoming a more systemic specialization focused on the overall organization (Narsavage, 2008). Companies increasingly started to view employees or workers not just as entities to negotiate and deal with (Vosburgh, 2007), but also as "valuable organizational resources" (Kaufman, 2001, p. 509). The middle of the twentieth century saw the professionalization of human resources management, and more emphasis was put by organizations on issues of benefits, compensation, labor relations, and training and development as a vital element to the growth and sustainability of an agency (Narsavage, 2008; Scott, 2003). It is important to underscore that the pressure of grassroots movements, especially the labor and union organizations, has influenced government regulations to play a pivotal role in transforming the extent of human resources management within organizations. As Connor and Ulrich (1996) explained, changes in legislations were critical in "equal employment opportunity, occupational safety, and health and pension reform" (p. 29).

The late twentieth century saw the evolution of human resources management as a sector in which organizations started to seek for more accountability in the form of return on investment (Laabs, 2000). This led to more focus on human resources management costs, productivity, and quality, but also on the added value of employees to the bottom line of organizations (Tren, 2000). Obviously, this facilitated the emergence of initiatives and decisions about layoffs, restructuring, employee displacement, and downsizing (Mackavey, 2006; Rynes, 2004). It is important to underline that the clash between union organizations, as well as structural adjustment policies in the context of globalization of markets and workforce were significant contributors to massive organizational changes that had great implications for human resources management (Morley, Gunnigle, O'Sullivan, & Collings, 2006; Payne & Huffman, 2005).


Managing human resources in a nonprofit organization has various legal implications inherent to equal-employment opportunity laws and regulations. The most common laws and regulations are found in Table 17.1.

TABLE 17.1 Common Employment Laws and Regulations

Laws and Legislation

Brief Description

National Labor Relations Act of 1935

Guarantees basic rights of private-sector employees to organize into trade unions, engage in collective bargaining for better terms and conditions at work, and take collective action, including strikes, if necessary. Created the National Labor Relations Board, which conducts elections that can require employers to engage in collective bargaining with labor unions (also known as trade unions).

Title VII of the Civil Rights Act of 1964

Prohibits discrimination by covered employers on the basis of race, color, religion, sex, or national origin.

Executive Order 11246 and 11375 of 1965 and 1967

Prohibits discrimination on the basis of sex in hiring and employment in both the United States federal workforce and on the part of government contractors. Employers must take affirmative action to ensure that

applicants and employers are not treated differently based on sex, religion, race, color, or national origin.

Discrimination in Employment Act of 1967

Applies to employers of 20 or more employees, and prohibits employment discrimination against anyone at least 40 years of age in the United States, as well as standards for pensions and benefits provided by employers.

- Executive Order 11478 of 1969

Prohibits discrimination in employment on the basis of race, color, religion, sex, national origin, handicap, and age.

Requires all departments and agencies to take affirmative steps to promote employment opportunities to groups affected by discrimination.

Occupational Safety and Health Act of 1970

Requires that employers provide employees a safe and healthy environment that is free from recognized hazards, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress, or unsanitary conditions.


Rehabilitation Act of 1973 and 1974

Prohibits discrimination against individuals with disabilities.

Requires affirmative action in the employment of handicapped people.

Vietnam Era Veteran's Readjustment Act of 1974

Requires equal opportunity and affirmative action to provide equal opportunity and affirmative action for veterans in the Vietnam era, disabled veterans, and any veterans who served active duty time during a war event that qualifies for a campaign badge.

Pregnancy Discrimination Act of 1978

Prohibits discrimination in employment on the basis of pregnancy.

Immigration Reform and Control Act of 1986, revised in 1990 and 1996

Prohibits employers from hiring illegal immigrants.

Requires employers to attest to their employees' immigration status.

Americans with

Disabilities Act of 1990

Prohibits discrimination against disabled people.

Older Workers Benefit Protection Act of 1990

Prohibits discrimination in hiring, promotions, wages, or termination of employment and layoffs of individuals 40 years old and older.

Civil Rights Act of 1991

Same as Title VII

Family and Medical Leave Act of 1993

Requires that employers provide 12 weeks of unpaid leave for family and medical emergencies.


Accountability Act of 1995

Requires U.S. Congress and associated agencies to apply some of the employment and workplace safety laws applied to businesses and the federal government.

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