Association for Public Policy Analysis & Management

Whereas public and nonprofit organizations have control over the conditions of work, they have limited flexibility with financial resources.  Thus, how can public and nonprofit organizations keep their employees engaged and satisfied is a perennial question.  This raises the important question -- how can organizations structure work conditions to offset their limited ability to offer monetary incentives?  Further, can better management have implications for greater employee commitment and the satisfaction employees derive from income?  We identify three central work environment variables that management has control over - centralization, work autonomy, and job goal clarity.  Centralization refers to decision premises and the extent to which it is located at the higher echelons of the organization.  Work autonomy, on the other hand, pertains to the freedom employees have in making routine and everyday decision in the course of performing their jobs.  Job goal clarity is the extent to which work role performance expectations for employees are clear and explicit.  Our expectation is that these three key variables will have both direct and mediated effects on affective commitment and income satisfaction.  We expect the mediating effects to be through intervening variables such as job satisfaction and individual-organization value congruence. We develop the logic for study hypotheses and test the hypotheses with data collected from five private nonprofit and seven public organizations in the northeastern United States. Although these organizations performed a range of functions, all of them provided services such as medical care, public health, child protection, interest group advocacy, and psychological/psychiatric services.  Personnel involved in clerical, housekeeping, and other administrative support roles were excluded from the sampling frame because our goal was to collect data from managerial and professional employees working for a range of public and private nonprofit organizations. Most study measures were based on previously published and validated scales.  We then use structural equation modeling to test the effect of sector on institutional and organizational differences and the effect of these differences on employees’ affective commitment and income satisfaction.    Our findings provide support for the idea that management efforts to structure work conditions influence both commitment to the organization and satisfaction employees derive from income, regardless of monetary incentives and work roles. More specifically our findings reveal that sector matters. Analysis indicates that in nonprofit organizations there is less centralization, more work autonomy, and increased goal clarity which creates higher affective commitment and income satisfaction.