| Nonprofit organizations (NPOs) employ more than 11 million people. These employees work for organizations in a sector that touches the lives of most Americans. Moreover, this sector has increased significantly over the past 60 years from a little more than 12,000 organizations in 1950 to over 1.6 million organizations today (Lampkin & Boris, 2002). As these organizations become larger they begin to look and behave more like for-profit businesses. This rapid rise in the number of nonprofit organizations has increased competition within the sector, both in terms of long-term financial stability and human capital. While NPOs are structured along different motivating and operational dimensions than for-profit organizations, in many instances they both compete in the same environment for human capital. An important dimension to achieving and maintaining a competitive advantage its the integration of human resources with the business strategy.; This study examines the extent to which strategic human resource management (SHRM) practices can impact perceptual organizational performance by direct means, through improvement of specific human capital skills and behaviors (motivation). Most previous studies that contributed to the understanding of SHRM issues were based on large, established for-profit organizations. The present study departs from the previous SHRM literature in two ways. First, data were collected using a mail survey to 401 randomly selected NPOs. The survey had a response rate of 21% with 84 fully completed questionnaires.; Second, a structural equation model (SEM) was constructed and tested to determine the effects of SHRM practices on retaining and training human capital, and the impact on performance. According to the literature, firms vary in performance particularly because they differ in human capital.; Based on the review of the literature, four independent variables were used in the model. The dependent variables used to test the model were employees' intent to leave, perceived organizational performance, and human capital. The results were used to test seven hypotheses. The data served to expand the notion that SHRM is a valuable asset and may affect organizational performance. Optimizing training activities and minimizing employees' intent to leave the organization appeared to be good predictors of organizational performance.; Future research avenues proposed included longitudinal studies to assess how these complex relationships converse over time and to examine whether organizational performance is indeed significantly increased through the mediating mechanism of decreasing the employees' desire to leave the organization. |
