Compensating competitively.

Compensating Competitively

A very old Turkestan proverb says, "What you have put into the kettle comes afterwards into your spoon." Roughly paraphrased, I guess that means you get what you deserve. In the short run, you can probably amass evidence that defies that principle, but eventually a fuzzy fairness prevails.

One tangible reward that we regularly fish out of the soup bowl is our paycheck. In J. K. Lasser's classic management text Business Management Handbook, the authors state, "The salary paid to a specific executive must be in line with those paid for comparable jobs in the company, in the area, and elsewhere in the industry, and it must fairly reflect the nature and scope of his responsibilities. A salary is significant not only in terms of the purchasing power and living standards which it represents to the person receiving it, but also as a measure of his importance and prestige."

I believe what the authors of the Lasser book say. A portion of our sense of self-worth is tied up in how we perceive the relative competitiveness of the compensation we earn. No doubt there are significant exceptions, but I believe our ability to attract the best and the brightest management talent to the nonprofit arena depends in part - in large part - on our ability to offer compensation that is not only equitable within a single association and competitive within the association community, but also competitive with wages paid within the macroeconomy.

For that reason, I was delighted recently to encounter some encouraging comparative data in the important 1990 study Comp Key: Effective Compensation: A Key to Non-Profit Success, published by the Applied Research and Development Institute and The Support Centers of America, Denver, and funded principally by The Beatrice Foundation, Chicago.

In the forward to the book, Jonathan Cook, executive director of The Support Centers of America, says, "Compensation in the non-profit sector takes many forms. . . . To make wise compensation decisions, each organization must examine its own circumstances, the level of commitment of its potential employee and volunteer work force, the types of non-financial compensation available in that organization's context, and many other factors. For many non-profits, a below-market salary strategy may make sense, combined with above-market opportunities for personal influence, personal growth, professional development, flexibility of life-style, and service. For other non-profits, a substantially below-market strategy will not work - at least for some of their job classifications. We non-profits do have one factor in our favor," he says. Our employees "value working for a cause they believe in. This is a competitive advantage for the non-profit sector and its bottom line of improving society. However, it is not enough to justify ignorance about what is happening in the world around us regarding compensation.

"It is your job to keep good people coming to the sector," says Cook, "and keep enough of them so that the important work of your non-profit is performed effectively."

The study compares salaries for key positions in nonprofit, government, and private sector organizations. Three positions in the study can be reasonably compared to positions in ASAE's Association Executive Compensation Study, Seventh Edition. The chart on this page compares data from the Comp Key study to ASAE's salary study.

Strictly, this comparison is pretty loose. But it at least offers an interesting point of comparison for consideration. It suggests that executives of trade and professional associations - at least those represented by ASAE members - are faring far better than their nonprofit brethren in general and are reasonably competitive with government executives. It also suggests that top salaries in the for-profit sector continue to outpace those in our field.

Worrying about your compensation and the compensation of your staff members is not entirely self-serving. Our collective efforts to push for competitive salaries will not only help us improve the flavor of our personal meal, but may help strengthen the base of the collective nonprofit soup - and thereby help to continue to attract the most capable people to this important work. [Tabular Data Omitted]