The Personnel Committee: Insuring Equitable Compensation for the Employees and Providing Oversight for the Board of Directors

How does an agency decide on the minimal educational requirements for the professional and administrative staff it employs? Who decides on equitable compensation for employees in the non-profit organization? How does the board of directors insure they are being responsible when they set salaries and how do they know they are not underpaying the professional and administrative employees? How do you set an appropriate pay scale in determining levels of compensation? Who in the non-profit organization has to know what employees are earning and what fringe benefits they receive?

There are many issues concerning compensation and they often are raised in meetings of the various committees of the board and at board meetings. There are times when it is appropriate to have a discussion about the agreements that have been reached with employees and there are times when it is the wrong place and the wrong time to focus on these concerns. A well functioning board develops a way of involving its members in these issues so that the discussion is not embarrassing to the members of the staff or the board.

It is within the purview of the board’s personnel committee to deal with a variety of subjects including, the number of professional and administrative staff needed by an organization, and the appropriate ranges of compensation for employees depending on their level of education and training, their responsibilities, and the length of time they have been working for the agency. The committee in consultation with the executive establishes the professional standards for professional practice and it is necessary to have a review of these policies. For some organizations it might be every 5 years and depending on the level of professional development it might be done more or less frequently.

A key instrument in structuring the organization’s relationship to its staff is the personnel code (more will be said about this in a forthcoming posting). Generally, it states the policies and practices dealing with salary ranges, benefits, attendance including time off, and a myriad of other concerns. From the perspective of the lay leadership, their role is to define and identify the broader policy issues. For example, they are not involved in the determining how many vacation days a veteran employee receives during the year. The committee’s deliberations focus on developing the broader policies.

Often the members of the committee will spend time educating themselves not only about the role of the committee in the non-profit organization but also on what such a committee does and how it can work effectively. At times this means learning about other organizations and how difficult situations are handled. One of the questions they confront revolves around identifying and defining the acceptable level of fringe benefits without overburdening the board members with a research project focused on similar organizations. Most of the time there is sufficient information available through affiliate non-profits and it is quite appropriate for the agency director to seek information from like organizations in the same city or in other cities. This provides a basis for comparison.

In larger organizations, where there is a director of human resources, and possibly other staff working in a HR department, a comparison study will be conducted. Background material can be prepared for the personnel committee to use as part of the educational process. The more the committee chair and the members know about the non-profit organization’s personnel policies the more of a resource they can be in developing appropriate personnel policies for the organization.

In the present atmosphere organizations are demonstrating they have appropriate oversight over personnel expenses. When questions are asked about the salaries and fringe benefits the agency should be prepared to respond on how they developed the salary scale they use. The organization has to clearly articulate the basis for establishing the minimal educational level of its professional staff and the rational for deciding on a staff to client ratio. All of these issues are part of the board fulfilling its responsibility in providing oversight on the policies guiding the services provided by organization to the community.

Thus, the personnel committee of the board not only concerns itself with salaries and benefits but also deals with the level of staff employed by the organization. The agency’s policies that guide the engagement of staff goes beyond the issue of money spent on compensation and is also a way for the organization to insure it offers the highest quality service. An active and committed personnel committee can be a great support to the non-profit organization’s efforts to provide the highest quality service to its clients.

Stephen G. Donshik, D.S.W., is a lecturer at Hebrew University’s International Leadership and Philanthropy Program and has a consulting firm focused on strengthening non-profit organizations and their leadership for tomorrow. Stephen is a regular contributor to eJewish Philanthropy.