The vast majority of key business performance measures of for profit organizations do not apply to nonprofit organizations. As Miller & Jentz (719) explain, the key difference between the nonprofit organization and the traditional for profit organization is that the "over-arching goal" of the latter is to generate "profits" - a goal the former does not share given its emphasis on "service." This distinction makes it necessary for nonprofit organizations to develop specialized measures to help the entire organization achieve goals and, simultaneously, to assist staff members and directors or managers in improving efficiency and performance.
One area where nonprofit and for profit organizations are highly similar is in their need to use organizational leadership and resources to empower followers in ways that result in a highly motivated workforce that performs at high levels of efficiency in achieving organizational goals. Kouzes and Posner (13) identify five practices associated with exemplary leadership: (1) modeling the way; (2) inspiring a share vision; (3) challenging the process; (4) enabling others to act; and, (5) encouraging the heart. At their core, then, successful leadership in nonprofit and for profit organizations requires successful human resource strategies and management. This analysis will compare and contrast human resource leadership and strategies in both types of organizations. A conclusion will address the importance of human resource management in today's business environment.
While the goal of leadership in both nonprofit and for profit organizations remains the same with respect to using resources to develop a highly motivated staff, the resources available to each and the strategies used to achieve this goal are often distinct. Compensation and benefits are often the main rewards offered to recruit and retain a highly skilled staff by for profit organizations. In the non...