Human Resources Maturity and the Three P’s, Part 1

During my years working as a consultant to nonprofits, I have observed three basic phases of organizations’ human resources maturity. This maturity can be defined in terms of how much delineation exists between position, person and performance.

Each phase has implications for the design and effectiveness of key human resources processes including recruitment and selection, compensation, performance management, professional development and career/succession planning.

As is the case with individuals, this type of maturity is somewhat — but not entirely — related to an organization’s chronological age. And, while the progression through the three phases generally holds true, I have found some organizations don’t start at the first phase, some never reach the third and some find themselves at those awkward stages in between phases.

In this post, we’ll take a look at the first two phases. In part two, we’ll examine the third phase as well as present some questions nonprofit managers and human resources professionals should ask about their own organizations.

Phase 1

In the first phase, the concept of position (or job), person (or employee) and performance are virtually indistinct from each other. This is typical of new, very small, growing organizations. In these settings, what is to be accomplished happens in a very situational manner by whoever has the time and ability to do it. Human resources capacity and sophistication is very limited as there is usually no staff dedicated to human resources activities.

Among organizations in this phase, recruitment and selection tend to be very informal and often ambiguous. Few if any formal processes exist, jobs are not well defined and recruitment tends to be driven by often mercurial organization needs.

Compensation levels and decisions tend to be purely driven by the external market. Compensation opportunities (e.g., salary ranges) are not defined, and little attention is paid to the internal equity of compensation practices.

Performance management, professional development and career/succession planning are usually nonexistent and, in the absence of well-defined positions, attempts in these areas tend to be futile.

Phase 2

Nonprofit organizations in the second phase of maturity have begun to formally define positions usually through the use of written job descriptions. This stage is typical of organizations that have grown to a size where ad hoc human resources practices have become tangibly inadequate. It is at this stage where organizations tend to recognize the need for increased human resources sophistication, and such capacity is increased often through the hiring of one or more dedicated human resources professionals.

At this point, recruitment and selection practices commonly improve driven by a clearer sense of organizational needs. It is often still difficult to tease out position requirements, especially the appropriate levels and types of experience, skills, knowledge and competencies necessary for each position.

Compensation practices are generally still primarily driven by the external market and secondarily by performance or internal equity, but usually not both. In this phase, organizations may have begun to identify compensation opportunities for some or all positions through the use of salary ranges, but they usually lack a systematic approach for managing salaries within those ranges. (See my posts last week about the role and construction of salary ranges here and here.)

As positions are more clearly defined, performance management, professional development and career/succession planning become feasible pursuits, but organizations in this phase often have made little or no headway in these areas often because they are lacking in human resources capacity and/or sophistication.

Significantly, as organizations grow and become more stable, the absence of these practices may negatively impact employee turnover, morale and effectiveness.

In part 2, we’ll take a look at both the third phase of human resources maturity as well as some questions to ask about your own organization.

Joe Brown
is the Principal and Founder of Slope Resources, LLC. Slope Resources provides a range of human resources and organization management consulting services to nonprofit organizations of all types and sizes. Joe is also the author of the blog Done by People, which focuses on human resources and organization management in the third sector, and will be a presenter at the 2010 Nonprofit Human Resources Conference. For more information about Joe Brown and Slope Resources, please visit

Photo Credit: psyberartist

Human Resources Maturity and the Three P’s, Part 1