A case study of the effects of a total compensation strategy on the culture of a nonprofit organization

This study examined the effects of a total compensation strategy on the culture of a nonprofit. This study also examined employee perceptions of the new total compensation strategy. A paired-samples t-test was used to determine whether a statistically significant difference existed between the means of the variables designated as productivity, innovation and culture before and after the implementation of a new total compensation strategy. A Pearson r was used to determine the degree to which productivity, innovation and culture variables were associated. A simple linear regression was used to examine how effectively the total compensation strategy variable allowed prediction of the value of the variables designated as productivity, innovation and culture. The study was initiated in order to increase understanding of those elements that influence organizational productivity, innovation and cultural change. The setting was a donative nonprofit in St. Louis, Missouri. The data analysis in this study revealed that the independent variable; i.e., the new total compensation strategy had a statistically significant effect on the culture of the nonprofit organization. The findings presented in this study also illuminated ways in which employees viewed the new total compensation strategy as most helpful; i.e., providing a sense of ownership and motivation, and conversely, as least helpful; i.e., confusion about how the strategy works. An integrated analysis of the quantitative and qualitative data also suggested ways in which the effect of the new total compensation strategy could be increased. For example, the analysis suggested that more support for being creative and doing new things would increase organizational productivity and innovation. As a second example, the analysis suggested that more freedom for employees to exercise discretion in decision-making would increase organizational productivity and innovation. Future research that addresses the application of organizational interventions developed in the private sector to the nonprofit sector and considers the impact of personal value systems will further refine the body of evidenced-based interventions. These interventions will assist nonprofit organizations to enhance sustainability, contribute to the effectiveness of organizational functioning and finally the satisfaction and well-being of those employed by the organization.