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The End of Meaningful Work in the Not-for-Profit Sector? A Case Study of Ethics in Employee Relations Under the New Business-Like Operation Regime

Abstract

Developed from meaningful work and business ethics, we investigate the motivational effect of meaningful work on paid staff (not volunteers) with a “shortage” of ethical employment practices situated in the Not-for-Profit sector. We tested the traditional notion of meaningful work by nature and by line manager support (under its business-like practices) to compensate for the “sacrifice” (low pay and job stress caused by poor employment terms) of front line staff working alongside professional managers paid the market rate. Using a mixed-method case study, we employed SEM modelling to analyse a staff survey of 125 valid responses and administrative records of staff resignation, alongside interviews. The results show that meaningful work by nature and by line manager support are positively and significantly associated with job satisfaction but neither has a significant effect on staff resignation action. There is no empirical evidence to support the compensating effect of meaningful work by nature; meaningful work by line manager support has a stronger effect only through reduced job stress, rather than compensating for the low pay, in preventing resignation. The qualitative analysis reveals that continued low pay and using precarious employment contracts have evoked the questioning of ethics of employment practices in this sector. We discuss the implications and suggest further areas of research.

Introduction

There has been a significant interest in meaningful work as an important aspect of employment. This has formed part of new ways to align the human need for a purposeful working life with workplace effort. A stream of organisational studies have been devoted to guide managers on ways to “provide and manage meaning” through organisational mission/culture (identity with the work of the organisation), interpersonal relationships (sense of belonging), job design (interacting with beneficiaries when it is possible) (Chalofsky, 2003; Lips-Wiersma & Morris, 2009; Michaelson et al., 2014). In contrast, meaningful work by ethical employment practices including supportive line manager, fair pay and empathetic employment terms and conditions have been overlooked (Bowie, 1998; Van Buren & Greenwood, 2013; Yeoman, 2014).

Most mission-based charities (classified as not-for-profit Voluntary Organisations, NPVOs, in the UK) have traditionally attracted employees through their ethos and the purposeful nature of work itself. Staff thus accepted the “sacrifice” of low pay and poor employment conditions in exchange for the intrinsic nature of meaning found in the delivery of their services to those in need (Allahyari, 2001; Gardner, 1987; Nickson et al., 2008; Taylor, 2004). This exchange for meaningful work itself was assumed by senior managers to have continued among frontline employees. This is despite the emergence of professional managers receiving competitive pay resulted from business-like operation in this sector, which included, inter alia, business-like rhetoric, employment practices, and operational methods (Cooper et al., 2020; Maier et al., 2016).

The growing pay gap between front-line staff and their professional managers (both are paid workers rather than volunteers) has challenged business ethics—being fair and perceived fairness—in employment (Van Buren & Greenwood, 2013; Wang & Seifert, 2020) and the moral basis of the ‘compensating effect’ derived from meaningful work in this sector. Our study addresses the question: does meaningful work still have the intended motivational effects in charitable sector under the current business-like model?

We examined the impact of meaningful work on employee outcomes (job satisfaction and resignation action) in one branch of an international leading UK-based Christian charity. A mixed-method approach was employed to study the case organisation over two years. This enables us to make two contributions: first, we develop and test a holistic understanding of meaningful work, thus bridging the research gap between business ethics and organisational studies of meaningful work. Second, we explicitly examine the traditional notion of a compensating effect in NPVOs under current business-like operations, thus contributing to the discourse on the development of a sector-specific set of employment practices.

The paper begins by analysing secondary sources to establish the sectoral and national contexts for employee relations, and then develops the theoretical framework within meaningful work and business ethics from the extant literature. The research design is explained, key findings are presented, followed by discussion and conclusions.

The Context: Meaningful Work in the Not-for-Profit Sector

Meaningful Work by Nature and by Employment Practices

Meaningful work is considered to emerge from certain job characteristics, for example, “a feeling that one is receiving a return on investments in one’s self in a currency of physical, cognitive or emotional energy that arises from undertaking work that is worthwhile, useful and valuable” (Kahn, 1990, p. 704). The charitable sector in and of itself evokes notions of moral integrity through rectifying social injustice for those in need. Its values and virtues overlap with individual’s inherent need for a purposeful working life. Working in NPVOs has long been seen as an exemplar of meaningfulness (Baines, 2009; Cunningham, 2010; Gardner, 1987). That is to say, work in this sector is intrinsically meaningful by its nature. In this study, we define meaningful work by nature as concerned with task activity and control (process and outcome) and relates to work as having intrinsic worth.

Organisational study scholars have contributed to our understanding of the motivational effect on employees through “providing or managing” the meaningfulness of one’s work. This line of thought tends to focus on organisational mission restatement, job design, and interpersonal relations typically through line manager support (Lips-Wiersma 2009; Michadelson et al. 2014). Meaningful work, therefore, can also be achieved/experienced when supervisors create a supportive and helpful working environment. However, the ethical dimensions of meaningful work by employment practices including a supporitve line managers, fair pay and empathic employment terms and conditions have often been overlooked. Work can only be meaningful when structured as job roles that provide ‘fair’ and more generous than legally required minimum pay (Greenwood & Simmons, 2004; Van Buren & Greenwood, 2013), which enables economic freedom (Bowie, 1998) required for an autonomous and dignified life (Yeoman, 2014).

In this study, meaningful work by employment practices captures the ethical practices under which work is expended: pay, employment conditions, management, priority setting, and measurement of success. It includes fair pay (paying what the worker feels reflects the worth of their contribution instead of meeting the minimum legal requirement), decent working conditions (safety and job security), and line manager support. We sought to test meaningful work by nature and by line manager support. Both of which were considered to have a motivational effect in a business setting on employee outcomes in the charitable sector which has increasingly embraced the norms of business-like over the last twenty years (Baines 2019; Cunningham, 2016; Cooper et al., 2020).

Contemporary Employment Relations in UK Charities

Working in faith-based charities was traditionally seen as answering a “calling” by its followers or those who shared its stated ethos (Taylor, 2004). Staff were expected to accept low pay and poor employment terms (unpaid hours, few holidays, no sick pay) which harks back to a vision of religious service as a vocation based on the theological imperative that humans are here to serve God’s will by serving others (Gardner, 1987; Hackl et al., 2007). Work in such charities was historically undertaken through grace and the vow of monastic poverty. Unsurprisingly, the majority of staff used to be religious, female, with low qualifications, and were willing to accept low pay in exchange for the meaning and status of ‘doing good’ and ‘doing God’s work’ (Allahyari, 2001; Mazereeuw et al., 2008).

In Britain, a government-inspired retreat from welfare state provision to neo-liberal market solutions has encouraged charities to fill the resulting welfare gap through market competition since the 1990s. Marketization has changed the attitudes and relationships of NPVOs with their beneficiaries, funders, and employees. This has been replaced by consumerism (Cunningham, 2016) and commodification of their activities and outputs (Baines, 2009; Cunningham, 2010; Maier et al., 2016). This involves the adoption of more business-like goals such as an increasing interest in monetary concerns (Hoffmann, 2011; Jäger and Beyes, 2010) and business expansion. There are now 56 super charities with annual income of over £100 million. This business success has been used to defend high pay for their CEOs, 32 of whom were paid more than £200,000 a year (Hope, 2015; NCVO 2020). In all of this, our understanding of the impact on employment relations is very limited (King, 2017; Maier et al., 2016; Stride & Higgs, 2014).

The nature of the workforce in the NPVOs has changed dramatically during this transition. More paid staff have been recruited to undertake a NPVO’s business activities (Baines et al., 2019; Cunningham, 2016; Huang and Powell, 2009). The sector has seen a 17% increase in paid employees since 2010 (NCVO, 2020), leading to a less overtly religious and better-qualified workforce. Over half (51%) of the workforce have a university degree compared with only 28% in the private sector. Management professionals and experts in substantive fields, such as medicine, education, and social care, have been recruited at the comparable rate as offered in the private or public sector (Hwang and Powell, 2009; Maier et al., 2016). On the other hand, most front line workers are still paid at the national minimum wage. Overall 73% of staff in the charity sector earn below the ‘living wage’ (The Living Wage foundation, 2017) and one in ten full-time workers in this sector need a second job to make ends meet (NVCO, 2020). In addition, there has been wide use of precarious employment contracts (fixed term and “zero-hour” contractsFootnote 1) to achieve “efficiency”. One third of the workforce are on fixed-term contracts. Employment insecurity and further deterioration in terms and conditions of employment have caused increased job-related stress among staff (Baines et al., 2019; Baluch, 2017). Such low pay and poor employment terms are based on the traditional norm of “sacrifice” which has ensured project-winning bids though lower wages and reduced back-office costs (House of Lords, 2017). This has contributed to the narrowly measured business success—incomes have doubled from £12.8 billion in 2010 to £29 billion in 2017/18 (NCVO, 2020) which mainly comes from the success of the 695 major charities (with annual income over £10 million).

A few extant studies of employment in charities, mostly qualitative in nature, still support the notion that a high level of job satisfaction is associated with its value-based and emotionally laden work—meaningful work by nature (Baluch, 2017; Charlsworth et al. 2015; Cunningham, 2010). One response to these atypical findings is the unusually strong support from line managers derived from the congruence in shared values of charitable work with their subordinate colleagues (Baluch, 2017; Knapp et al., 2017; Nickson et al., 2008). However, this fails to explain the persistent high level of staff turnover, more than 20%, reported in recent years (CIPD 2018; HarrisHill 2019), which intriguingly includes the higher resignation rate among professional managers who are relatively well-paid (Landles-Cobb et al., 2015).

We examined whether meaningful work by nature and by line manager support have the intended motivational effect, found in private sector businesses (Michaelson et al., 2014), in a sector that is undergoing business-like transformation but continues with low pay and poor employment conditions. We develop our hypotheses based on the meaningful work of business operations in its current charitable setting.

Meaningful Work by Nature and by Practices (Through Line Manager Support) as Predictors of Employee Job Satisfaction and Turnover Behaviour

Charitable work, in both traditional and modern incarnations, captures the core element of the meaningfulness of job characteristics (Kahn, 1990). The intrinsic motivation for employees is derived from the perceived congruence between their own core values and those of the charity for which they work (Thompson & Bunderson, 2003). This line of argument supports the management thesis that perceived ‘meaningful work’ indicates a good person-organisation fit. It can then compensate for low pay and poor employment conditions for those pursuing meaningful work without compromising the level of job satisfaction (Baluch, 2017; Charlesworth et al., 2015; Nickson et al., 2008). This is one important factor in the retention of staff (Verquer et al., 2003), and thus leads to Hypothesis 1.

Hypothesis 1a

Perceived meaningful work by nature is positively correlated with job satisfaction.

Hypothesis 1b

Perceived meaningful work by nature is negatively correlated with resignation action.

Organisational research has also revealed the motivational effect through providing and managing meaningfulness at work. This line tends to focus on interpersonal relations such as the important role of line managers (Lips-Wiersma 2009; Michadelson et al. 2014). Extant studies show that line managers are seen as the symbolic personification of the organisation to many staff, and their positive attitudes and helpful responses to various work events are perceived as signs of organisational support (Mossholder et al., 2005; Rosso et al., 2010). Line managers’ attitudes and behaviour (Purcell & Hutchinson, 2007) in terms of being responsive and fair has been found to positively correlate with job satisfaction and negatively correlate with turnover intention in both the private sector and in charities (Carr et al., 2008; Knapp et al., 2017). These form the web of sentiments associated with ‘belonging’ cemented by relationships with co-workers and supervisors (Piccolo & Colquitt, 2006). This leads to Hypothesis 2.

Hypothesis 2a

Meaningful work by line manager support is positively correlated with job satisfaction.

Hypothesis 2b

Meaningful work by line manager support is negatively correlated with resignation action.

Line managers and co-workers have been found to be particularly supportive in the charitable sector partly due to the congruence of meaningfulness in work (Baluch, 2017; Cunningham, 2010). However, meaningful work by ethical employment practice, such as fair pay and empathic employment terms and conditions, is beyond line managers’ remit. This line of research has been largely ignored in employment studies in this sector. There are potentially three reasons for this: first, pay and employment terms are sensitive topics in general, especially in a sector that is still largely funded by donations. There is hardly any discussion on pay practices despite the significant adverse impact of poor pay on front line workers as acknowledged by some studies (Baines et al., 2019; Baluch, 2017; Charlesworth et al., 2015) and in news reports (Hope, 2015). Second, pay and employment conditions are beyond the scope of line managers’ discretion while most extant studies have focused on. Thirdly, meaningful work by ethical employment practices; especially pay and compassionate employment terms and conditions, in religious charities have still been widely overlooked by scholars, senior leaders, donors, and policy-makers. We explicitly examine the compensating effect of meaningful work on employee outcomes by taking into account the current business-like pay practices in this sector.

The Pathway of Meaningful Work Through Perceived Fair Pay and Employee Outcomes: A Mediating Mechanism

Fairness at work is a core element in business ethics and meaningful work by employment practice. It refers to employees’ perception of organisational justice in terms of distributive, procedural, informational, and interactional fairness (Colquitt & Rodell, 2015). Perceived pay fairness relates to staff awareness of their own worth in terms of effort, skill and responsibility in relation to their comparable benchmark, such as colleagues internally and counterparts externally. Perceived pay fairness meets the human needs for justice and thus leads to desirable employee outcomes and behaviour (Van Buren, 2008; Wang & Seifert, 2020). However, those who seek meaningful work by accepting employment in a charity may be prepared for the ‘compensation effect’ and accept relatively low pay as being fair (Allahyari, 2001; Gardner, 1987; Taylor, 2004). Based on this line of argument, we would expect that perceived fair pay, even when comparably low, could lead to positive employment experiences, that is to say, a high level of job satisfaction and low tendency to resign. This gives rise to the following mediating path:

Hypothesis 3a

Meaningful work by nature is positively correlated with perceived pay fairness that is positively correlated with job satisfaction.

Hypothesis 3b

Meaningful work by nature is positively correlated with perceived pay fairness that is negatively correlated with resignation action.

Furthermore, organisational support can enhance work motivation especially given poor pay and challenging working conditions in charities. A vital factor in determining employment experience is the role of the line manager (Purcell & Hutchinson, 2007). Line manager support can provide the necessary encouragement at work by fulfilling relational and social-emotional needs that shape the daily experience of work (Knapp et al., 2017; Piccolo & Colquitt, 2006). It also further helps to strengthen any sense of virtuous contribution, and reinforce the value of the work done. That is to say, line manager support can compensate for low pay and lead to positive employment experiences. This leads to the following hypotheses:

Hypothesis 4a

Meaningful work by line manager support is positively correlated with perceived pay fairness that is positively correlated with job satisfaction.

Hypothesis 4b

Meaningful work by line manager support is positively correlated with perceived pay fairness that is negatively correlate with resignation.

The Pathway of Meaningful Work Through Job Stress and Employee Outcomes: A Mediating Mechanism

The other aspect of “sacrifice” in this sector is to endure poor employment terms and conditions, for example, unpaid overtime was seen as normal (Gardner, 1987; Nickson et al., 2008). This has continued under the private-sector business models. It was found that employees have been coerced into making more ‘sacrifices’ such as working a high proportion of unpaid hours (Charlesworth et al., 2015), paying out of their own pocket to cover expenses (Baines et al., 2019), and increased workload (Cunningham, 2016). Continued poor employment terms and conditions have resulted in increased job stress—occupational stress and the inability to cope with pressures on the job (Baluch, 2017; Comish & Swindle, 1994). This has been exacerbated by employment insecurity (fixed-term and zero-hours contracts) and economic stress caused by inadequate wages (Baines et al., 2019; Charlesworth et al., 2015; NVCO 2020). Job stress was found to correlate with negative emotions and decreased job satisfaction leading to detrimental behaviour responses, such as resignation. However, those who share the charity’s mission may be better prepared for the nature of the tasks involved, the understanding that working with a different group of people (physically or mentally impaired) in a charity would involve stressful working conditions, but it helps to fulfil the mission. In this case, the intrinsic value of meaningful work can alleviate job stress, thus creating a mediating effect as in Hypotheses 5.

Hypothesis 5a

Meaningful work by nature is negatively correlated with job stress that is negatively correlated with job satisfaction.

Hypothesis 5b

Meaningful work by nature is negatively correlated with job stress that is positively correlated with resignation.

Meaningful work by practices (through line manager support) can alleviate the day-to-day pathology of drudge-induced stress at work through guidance, support, and protection (Baines & Cunningham, 2011; Baluch, 2017). It can ensure a dignified, safe, and just workplace, which may have a strong compensating effect for the level of job stress experienced. We therefore expect a mediating mechanism through reduced job stress on the relationship between line-manager support and resignation. This leads to our Hypothesis 6.

Hypothesis 6a

Meaningful work by line manager support is negatively correlated with job stress that is negatively correlated with job satisfaction.

Hypothesis 6b

Meaningful work by line manager support is negatively correlated with job stress that is positively correlated with resignation.

Research Design and Method

We gained unique access to one branch of an internationally renowned Christian charity in 2017/18. The charity was chosen for it representativeness in terms of charitable activity (social care, business success with more than £10 million in annual turnover), workforce characteristics, and more importantly, typical business-like employment practices (pay-disparity between frontline staff and professional managers, and the use of precarious contracts). The charity has provided social care to vulnerable people around the world for nearly 200 years. Social care activities have seen a rapid employment growth in the not–for-profit sector since central government’s attempts to transfer social services from a monopoly provider (local government) to a more competitive market model. This resulted in the reported business-like transformation and now employs 37% of the total voluntary sector workforce (NCVO, 2020). The branch studied provides social care for homeless people funded through mixed business activities including traditional donations, grants won from local government, fees for projects from the private sector, funds from lottery and international non-government organisations, and income through its gyms, nurseries, training centres, shops, and other fundraising activities. Its annual income makes it one of the fastest growing charities in Britain (NCVO, 2020). There are 214 paid employees, among them one third are on fixed-term contracts and a further 15 on zero-hour contracts. About two-thirds of the workforce are women, 57% of them have a university degree, and interestingly 62% of the workforce are non-Christian. Most employees are front-line workers including support workers, mentors, housing officers, nursery workers, and gym instructors. There are 45 line managers (room leader, team leader) and 24 professional managers at different levels to fulfil various business functions. The composition of its workforce clearly captures the changing nature of work in this sector and makes it a typical case to study.

Low pay (minimum wage) and poor employment terms and conditions (precarious employment conditions, long hours, some violent clients) apply to frontline workers while professional managers are paid at the market rate. We found this from its recruitment advertisement online and HR confirmed it. Professional managers are paid in line with their counterparts in the private and/or public sectors, for example, a finance manager post was advertised at the time as £50,000 plus per annum. However, the total compensation package (including pensions and training) is less than in other sectors. In contrast, frontline workers who deal with challenging activities on a daily bases were paid at the prevailing national minimum wage (£7.50 per hour for those over 25 years old in 2017 in the UK). A support worker, for example, whose job description includes helping homeless people to move towards independent living which “required day to day support for adults with complex and coexisting needs due to poor mental health, learning difficulties, substance misuse and trauma”, was being offered £15,000–£17,000 per annum, equivalent to a full-time post at the national minimum wage.

The study is based on four types of data sources collected over two years including two focus groups with eight staff representatives; semi-structured individual interviews with four professional managers, six line managers and four front line staff. The sample of participants for the interviews offers the intended demographic variety in terms of age, gender, employment status, and job tenure. An online staff survey and staff turnover administrative records 12 months after the survey were also examined. The qualitative data collection is inductive in nature and aims to explore the relevance of meaningful work by nature and by employment practice.

Based on our research objectives and literature review, we developed an initial semi-structured interview protocol that was refined as the data collection process advanced (Loudoun & Townsend, 2016; McCracken, 1988). Questioning proceeded from general topics of employment experience to become increasingly specific aimed at pay, employment conditions, employment relations with managers, colleagues and clients, general well-being, and what can be done to make things better. The question format was predominantly open-ended and covered the same topics for each participant/group. Interviews lasted between 50 and 90 min, and were audiotaped and transcribed.

Qualitative Data Collection

The analysis and interpretation of data were intertwined and evolved throughout the collection process through constant comparison (Loudoun & Townsend, 2016; Tharenou et al., 2007). Codes were developed and applied to categorise these qualitative data, themes emerged around meaningful work by nature, relationships with line manager, pay-disparity, employment conditions, and ethics. The findings are summarised to provide the context and insights when it is not possible to use quantifiable material in the overall analysis.

Quantitative Data Collection

A questionnaire was developed with its content agreed by the management in order to gain their support for its dissemination. Pay disparity questions were not included in the questionnaire because management considered them too sensitive. We thus included questions to gauge the perception of fair pay in order to offer some indication of attitudes to the pay gap. The survey was set up through an independent online platform and the website link was sent to all staff through the HR department (hardcopies were also made available with pre-paid envelops). Assurances of confidentiality and how the data would be used were included in the cover letter. During the follow-up, after 12 months, we were able to identify whether staff turnover was voluntary or involuntary through confidential coding (only known by the researchers). Both qualitative and quantitative data collection gained ethical approval from the University Ethics Committees. The survey received 133 valid responses (79% response rate) which included 25 voluntary resignations and 8 redundancies or retirements (excluded from the sample), leaving 125 valid responses for the analysis. This makes the voluntary resignation rate of 20% of this sample, which is in line with the sector average (CIPD 2018).

Measurement

Dependent variables included staff turnover and job satisfaction. The former was collected from administrative records. We therefore know their actual resignation behaviour.Footnote 2 Job satisfaction consists of responses to rating on three survey items: I am satisfied with what I do in my job; I look forward to work when I get up in the morning; I am enthusiastic about my job Factor analysis confirms that it is unidimensional (reported in Table 1). Likert scales were used throughout (1 = strongly disagree; 5 = strongly agree).

Table 1 The measurement of main variables

Explanatory variables include meaningful work by nature and by practice (through line manager support). The former was developed from meaningful work by work itself (Kahn, 1990; May et al., 2004; Pratt & Ashforth, 2003). It includes rating on three items: My personal values match my organization’s charitable ethos; my employer’s values and culture provide a good fit with what I value in life; My work at this charity has special meaning; it’s not ‘just a job’. Line manager support was developed from extant literature (Baluch, 2017; Knapp et al., 2017; Maier et al., 2016). It includes ratings on the three items: my line manager listens to my personal concerns, my immediate manager will go out of their way to help me; and my manager treats me with dignity and respect (see Table 1 for the factor analysis result).

Mediators were “sacrifices” (low pay and job stress caused by poor working and employment conditions) as a given in this sector. The former was measured through ratings on perceived fair pay by effort, skill, and responsibility. Such perceived fairness is based on comparison with already poorly paid colleagues. Job stress includes rating on three items: I am exhausted in this job because my department is understaffed; I often find it difficult to fulfil my personal commitment because of the amount of workload; my family/partner gets a bit fed up with the pressure of my job (see Table 1).

Table 1 details all survey items, reliability statistics, factor analysis results and the distribution differences between current staff and those who have left through T-test and χ2 test. It shows that the former reported a higher level of meaningful work by nature (T = 2.58, p < 0.01) and by job satisfaction (T = 2.65, p < 0.01) than the latter. While the latter reported a higher level of job stress (T = 2.19, p < 0.05). Table 2 shows bivariate-relationships among the main variables. In the first column, level of job satisfaction is significantly and negatively correlated with resignation action. This confirms that voluntary resignation is indeed mainly due to low satisfaction with one’s job, and not for other reasons, such as moving house. In columns 2–5, the sign of these correlations are as expected. For example, meaningful work is positively correlated with perceived fair pay and is negatively correlated with job stress, indicating a potential compensating effect. Such correlations are also observed between line manager support and these two mediators respectively, but with the coefficients being stronger.

Table 2 Correlations among main variables

Analysing Both Quantitative and Qualitative Evidence

Both quantitative and qualitative evidence were used to substantiate the hypotheses. We employed Structural Equation Modelling (SEM) to test meaningful work on staff outcomes as depicted in Figs. 1 and 2. In the analysis, we include demographic variables, such as age, religion, gender, types of contract, job tenure, and being a manager (including line managers and professional managers). Since we used various data sources, including survey and administrative records, the potential Common Method Bias (CMB) is not a concern.

Fig. 1
figure1

The direct and indirect mechanisms on job satisfaction

Fig. 2
figure2

The direct and indirect mechanisms on resignation action

Findings on the Impact of Meaningful Work on Job Satisfaction and Resignation

The summary of SEM result is presented in Table 3, path analysis of each hypothesis is shown in Figs. 1 and 2. Hypotheses 1a and 1b are to test the intrinsic motivational effect of meaningful work by nature on job satisfaction and resignation behaviour one year later. In steps 1 and 2, after controlling for personal and other employment characteristics, it shows a significant and positive correlation between meaningful work by nature and job satisfaction ((β = 0.31, p < 0.001) while the correlation between meaningful work by nature and resignation behaviour is negative but negligible. Thus, the empirical results support Hypothesis 1a but reject Hypothesis 1b.

Table 3 Summary of SEM results

Hypotheses 2a and 2b are to test the motivational effect of meaningful work by line manager support on employee outcomes. As shown in steps 1 and 2, the correlation between meaningful work by line manager support and job satisfaction is a significant and positive (β = 0.52, p < 0.001) while the correlation between meaningful work by nature and resignation behaviour is negative but negligible (β = − 0.12, p = n.a.). Thus, Hypothesis 2a is supported but Hypothesis 2b is rejected. It is noticeable that the coefficient of being a manager (β = 0.61, p < 0.05) is significantly and positively correlated with resignation, indicating a higher turnover rate among managers.

Hypotheses 3a and 3b are to test the intrinsic motivational effect of meaningful work by nature through the compensating effect of perceived fair pay (low pay as a given) on job satisfaction and resignation behaviour. That is to say, we test these two paths: meaningful work by nature→perceived fair pay→job satisfaction and meaningful work by nature→perceived fair pay→resignation. To make the SEM analysis valid, both parts on each paths need to be statistically significant (Hayes, 2013). In Step 3, the coefficient between meaningful work by nature and perceived pay fairness is positive but negligible (β = 0.05, p = n.a.), as shown in Figs. 1 and 2. Since the first part of both paths does not exist. Hypotheses 3a and 3b are rejected. That is to say, meaningful work by nature lost its intrinsic motivational effect to make people feel the pay is fair when it is low in a charity anymore; this will be further discussed later.

The discontent caused by low pay for front line workers was clear in the qualitative data analysis. For the same job, they would be paid double in the public or private sector. A few support workers told us: “work is like social work but without the status and pay”; “the pay is terrible night shift £7.20 per hour, weekend work £7.20 per hour”; “if I was to work in the social care sector privately I would be earning at least another £5000 per year”. Antisocial hours coupled with lone work have made staff re-evaluate their pay-meaningful work trade off. A support worker (with 3 years’ experience) told us “I work unsociable hours—weekends—and 12 h shifts. My colleague and I lone work each shift. We have the responsibility of overseeing approximately 70 to 80 residents … We support their presenting needs, monitor the CCTV; manage incidents; act as security, support other departments and operate as fire marshals with the relevant training, the pay is the same (national minimum wage), I could get paid more money working in Aldi or ASDA (supermarket)”.

Hypotheses 4a and 4b are to test the motivational effect of meaningful work by line manager support through the compensating effect for perceived fair pay (low pay as a given) on employee outcomes. This has been done through testing two paths: meaningful work by line manager support→perceived fair pay→job satisfaction and meaningful work by line manager support→perceived fair pay→resignation. In step 3, the coefficient between meaningful work by line manager support and perceived pay fairness is positive and significant (β = 0.25, p < 0.05). However, in step 5, the coefficient between perceived fair pay and job satisfaction is positive but negligible (β = 0.02) after taking into account meaningful work by nature and by line manager support as shown in Fig. 1. That is to say, perceived fair pay in a low pay setting does not lead to high job satisfaction Thus, Hypothesis 4a is rejected. While in step 6, the coefficient between perceived fair pay and resignation behaviour is negative and signification (β = − 0.10, p < 0.05). That is to say there is an indirect effect through this path but it is negligible (Β = − 0.02) as shown in the middle of Table 3. Thus, Hypothesis 4b is not supported.

Hypotheses 5a and 5b are to test the intrinsic motivational effect of meaningful work by nature through “alleviating” job stress on employee outcomes through testing two paths: meaningful work by nature→job stress→job satisfaction and meaningful work by nature→job stress→resignation. In step 4, the coefficient between meaningful work by nature and job stress is negative but negligible, that is to say, meaningful work by nature does not have the “alleviating” effect on job stress in a business-like charity setting anymore. Hypotheses 5a and 5b are not supported.

The intrinsic motivational effect of meaningful work by nature seems lost during the business-like transformation; instead the questioning of ethical stance on low pay and using precarious employment contracts has emerged in the qualitative analysis. A project manager (with 2 years’ experience) said “I feel that I am fairly rewarded for my own role but despair that some of my colleagues are paid National Minimum Wage … and that there are people on Zero-Hour contracts. I do not think it is particularly Christian—it says in the Gospels that the worker is worth their wage. That we work for a charity and a Christian one at that is not a good enough reason, especially given the disparity between wages at the top and the bottom”. The stringent sick-pay as also questioned by staff. An office worker (with 3 years’ experience) said: “as a charity working with people I would have thought looking after the staff in terms of their health and well-being would be paramount…As a single parent I am worried about losing out on pay due to being ill or my child being ill”.

Hypothesis 6a and 6b are to test the motivational effect of meaningful work by line manager support through “alleviating” job stress on job satisfaction and resignation behaviour by testing these two paths: meaningful work by line manager support→job stress→job satisfaction and meaningful work by line manager support→job stress→resignation. In step 5, the coefficient between job stress and job satisfaction is negative and significant (β = − 0.12, p < 0.05) and the coefficient between job stress and resignation is positive and significant (β = 0.16, p < 0.01) in step 6. This validates the indirect effect between line manager support on both job satisfaction and resignations through reduced job stress. However, only the indirect effect of the latter is negative and moderately significant (b = − 0.07**, p < 0.05). That is to say, line manager support helps to reduce job stress and leads to a reduced tendency to resign. Therefore, Hypothesis 6b is supported while Hypothesis 6b is rejected.

The low pay policy has caused a high level of frontline staff turnover and has taken its toll on the relatively well-paid professional managers. As a project manager (with 2 years job tenure) told us: “I struggle with recruiting and retaining staff mainly due to pay scales”. The Finance manager (with 1-year job tenure) states, “a team member left and I have picked up that job role rather than team member being replaced. I find that now there are not enough hours in a day”. That is to say, despite good support from these managers’ line managers, the level of stress has become hard to overcome. Sometime, the support from line managers itself can be a stressor. As the project manager above reveals, “I have a good relationship with my line manager and I know that I can call on her if and when I need to. I feel that she values my work but that this can also be detrimental to me as I am often called on to do more…”. Increased level of job stress may well contribute to high level of resignation among professional managers.

In summary, the quantitative analysis shows that both meaningful work by nature and by line manager support leads to higher level of job satisfaction but has no effect on resignation behaviour. There is no evidence to support the traditionally held belief that meaningful work by nature can compensate for low pay or job stress in the current low pay and business-like setting. Meaningful work by line manager support has a limited effect on employee outcomes through reduced job stress, but not through compensating for low pay.

The qualitative analysis reveals that continued low pay for front line workers caused discontent directly for those workers involved, and indirectly for their better-paid professional managers. The business-like pay and employment practices raises questions of business ethics in a charity which champions Christian values. It seems both staff and professional managers are aware of this pay-disparity; however, the main discontent is the low pay for front line workers. There are potentially two reasons for this. First, staff seem to accept that the pay of their manager is fair given the workload and stress they face. In the studied charity, professional managers are paid at the market-rate though their overall remuneration (personal development and pension) package is still lower than in other sectors. The senior managers are not paid as extravagantly as reported in other big charities (over £200,000 a year). Second, this also reflects the changed nature of the workforce. This is now a changed job in which the beneficiaries are addressed as “clients”, and therefore staff believe they deserve a fair pay that is enough to survive and to reflect the social value of their work. The low pay practice is seen by staff as demeaning and undermines the meaningful work upon which the entire charitable purpose is based.

Discussion and Implication

Our findings show that among others, the ‘sacrificial’ dimension that might be ‘natural’ or expected from workers in a faith-based charity, who will get their reward from God in case they do not get it from their salary, is probably vanishing for many under the business-like efficiency-seeking model. However, work meaningfulness still affects job stress and employee outcomes when line manager is perceived to be supportive.

These findings are surprising but expected for the following two reasons. First, while most well-established charities originated in religious form with staff being attracted by its mission/ethos, yet most current staff are no longer driven by religious conviction. For some of them, particularly those who joined the charitable sector as a result of the contracting out of public social service provision (Cunningham, 2010), working in a charity is just a job, and so the meaningfulness of the job may not concern them (Michaelson, 2011). Instead, they may expect employers in this sector to be more ethical (living wage rather than minimum wage; better employment conditions). Secondly, charity missions are generally concerned with championing humanitarianism over crude financial gain. Poor pay and employment insecurity for front line workers demeans the worthiness of the work and undermines staff dignity (Van Buren & Greenwood, 2013; Yeoman, 2014). The fact that professional managers are paid at the market rate and some CEOs enjoy a significant pay package indicates that charities can afford to pay staff their full worth, but still pay front line workers the national minimum wage. Such practices fail to respect the worth of what their front line workers deliver. It is therefore seen not to honour human, social, and professional purposes of charitable work undertaken by frontline workers (Baines et al., 2019; Jeavons, 1992). This has been evidenced as ethical questioning in our qualitative analysis.

Our research, we believe, has made two useful contributions to the field. First, we have extended the motivational effect of meaningful work by employment practices. Most extant studies have explored meaningful work through manipulating—“providing or managing” meaning at the workplace (Michaelson et al., 2014). The ethical aspect of meaningful work to provide fair pay and decent employment terms and conditions have been overlooked (Bowie, 1998; Van Buren & Greenwood, 2013; Yeoman, 2014). Our findings reveal the adverse consequence, high staff turnover, when pay and employment practices are seen not reflect the ethics that a charity ought to demonstrate.

Second, we contribute to the understanding of employee relations in a sector that is still undergoing business-like transformations. The results support the view that meaningful work by nature and by line manager support contribute to high job satisfaction as reported by extant qualitative-based studies (Baines et al., 2019; Baluch, 2017; Charlesworth et al., 2015; Cunningham, 2016), but neither has an effect on staff retention. On the one hand, it indicates the motivational source of meaningful work by nature and the daily support by line manager to demonstrate meaningful work in this sector. On the other hand, the appropriateness to adopt business-like pay practices—pay based on market value instead of social value upon which the sector is based—is questioned by staff. This has intensified when most front-line workers (instead of volunteers or religious fellows) in charities struggle to pay their household bills (Charlesworth et al., 2015; NCVO, 2020). There is also an important knock on effect of the role of line managers for work-induced stress and mental health. Thus, we contribute to the discourse on the development of sector-specific employment practices (Cooper et al., 2020; Maier et al., 2016). Our study shows the importance of reflecting charitable ethos and business ethics in guiding a new type of employee relations during the shift to an efficiency-seeking business model.

Implications for Managers

Much of the survival of charities is dependent on high calibre staff drawn to the sector through their search for meaningful work. The zealous passion for such work can be sustained only through ethical treatment in pay and employment conditions (Bowie, 1998; Yeoman, 2014). The deep meanings inherent in organizational values and virtues can be a double-edged sword (Thompson & Bunderson, 2003). Those faith charities that stress the need for sacrifice to help those in need may face a stronger backlash from those same employees who witness a violation of these ideals in their own affairs.

In order to deliver a sustainable efficiency-seeking model for charities, it is important for charities to provide meaningful work by employment practices derived from their own purposeful work with the advantage of not having to bow to shareholder pressure (Cooper et al., 2020). Under such moral guidance in employment relations, it is possible to pay staff an agreed fair wage and to create dignified and safe working conditions. In so doing, they would accord with their ethical values as an employer (Bowie, 1998; Van Buren, 2008; Van Buren & Greenwood, 2013). This can allow staff to fulfil their own desires to enact meaningful work, which would include doing their jobs more efficiently and effectively.

However, ethical employment practices have to come from the top management or charity leaders especially as human resource management is still fragmented in this sector (Baluch, 2017; Cooper et al., 2020). Only when senior management differentiate charities from private businesses can a sector-specific people management approach be developed. Blindingly imitating private sector HR practices is in danger of mimicking the move from employees’ helpmates to being ‘business partners’ with their feet under the corporate boardroom table (Dundon & Rafferty, 2018; Greenwood & Simmons, 2004).

Limitations and Future Directions

We recognise that there is much that this paper by its nature, intention, and scope could not achieve. Firstly, the study indicates a weakness in the approach to collect administrative data from one organisation. Although the merit to have administrative recorded data has been praised for its accuracy (Carr et al., 2008; Mossholder et al., 2005), the perspective of employees from a large representative pool can capture the changing employment relations in this sector better. Secondly, the case study reveals a high turnover among professional managers and their disapproval how front line colleagues were not treated ethically. It thus offers a potential cause of costly high turnover rates among professional managers from a business ethics perspective, which is a concerning and under-researched phenomenon (HarrisHill 2019; Landles-Cobb, et al., 2015). The scope of this study does not allow us to explore further, we thus open up avenues for debate on the appropriateness of business-like transformation in many areas in this sector including employment, leadership, service delivery, governance, supply chains with different types of workers, types of not-for-profit organisations, and national context.

Conclusion

Organisational scholars have endeavoured to find ways to “provide and manage meaning” at the workplace in order to harness the intrinsic motivational effect of human search for meaningful work. This paper aims to examine a more holistic impact of meaningful work by nature and by employment practices founded on business ethics. We argue that there is a tension between these two in current charity employment relations with management pushing business-like practices and workers wishing for fairness—the two clash when they contradict the charity’s values and missions, and thereby undermine both. Employment practices in a faith-based charity are examined, and we found that the intrinsic motivational effect of meaningful work by nature is limited, while meaningful work by line manager support fails to deliver the expected positive outcomes when it blindly adopts business-like pay practices and precarious employment contracts. We have argued that it is wrong to assume that charities, as employers, will act according to the assumptions of corporate social responsibility, whereby organisational mission is aligned with internal ‘best’ practices. The study thus reveals the overriding importance of reflecting the charitable ethics of the charity in question onto its own employees’ work experiences, and thereby developing sector-specific employment practices in the process of becoming more efficient and effective.

Notes

  1. 1.

    This is a type of legal contract in which the employer is not obliged to provide any minimum working hours, and employees do not have to accept the work offered by an employer. It seems “fair” and give both sides “flexibility”, but actually offers the employer flexibility at the costs of the employees’ job insecurity due to power-imbalance.

  2. 2.

    Staff turnover intention was collected in the survey, which is significantly and positively correlated with resignation action. We use the record since it is more accurate.

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Wang, W., Seifert, R. The End of Meaningful Work in the Not-for-Profit Sector? A Case Study of Ethics in Employee Relations Under the New Business-Like Operation Regime. J Bus Ethics (2021). https://doi.org/10.1007/s10551-021-04891-4

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Keywords

  • Meaningful work
  • Perceived fair pay
  • Job stress
  • Staff turnover behaviour
  • Not-for-profit sector