New Zealand study of not-for-profit (NFP) shows high degree of employee involvement doesn't produce results without strong HRM policies

Purpose: There is a growing interest in employee involvement as a means to enhance commitment and wellbeing. Typically, there is a degree of power sharing in decisions at all levels. In large organizations, the strategy has been shown to deliver benefits. The authors wanted to study the themes in a small NFP. Design/methodology/approach: The authors chose an extreme case of a small NFP organized on democratic lines but with only informal HRM policies. They felt an extreme case would be instructive. The organization, which they gave the pseudonym OA, is a small non-profit agency that offers education around sexual violence and advice and support to survivors. As a collective, it involves everyone in decision-making. The lead author carried out the detailed study over six months based in the office. It involved formal interviews with six existing employees and six ex-employees, or volunteers, as well as a clinical supervisor. Findings: The study showed that without systematic and strategic HRM policies, strong forms of employee participation won’t deliver higher levels of equity. Although the NFP in the study operated as a collective, it lacked even basic HR policies. The consequences included poor management, high turnover, burnout and inadequate training. Originality/value: The authors said the results showed that small size and organizational commitment did not always support effective employee participation. Weak HR policies made the problems of poor communication and decision-making worse and caused a lot of stress. As a result, the high turnover impacted performance. The findings add a note of caution to existing findings about employee participation. In fact, perversely, it can even lead to worse outcomes. Arguably, they say, HRM is even more essential in a small NFP environment because of the structural constraints and lack of funding.