'The mission or the margin?' A high-performance work system in a non-profit organisation

Abstract

Competitive and economic pressures have encouraged many non-profit organisations (NPOs) to implement high-performance work systems (HPWS); however, the objectives of such systems can contradict a ‘values-based approach’ to managing people. In this article, we ask how these two approaches to human resource management (HRM) can coexist and still result in a ‘strong HRM system’ and climate. Our unique case is an Australian Catholic NPO that combines a private and public hospital under the banner of Mercy Healthcare; the former must generate a surplus to fund the budget shortfall of the latter. Eighty-three interviews are combined with a range of secondary data, outlining the crises that motivated the implementation of a HPWS in a NPO. We identify a modified HPWS tempered by a values-orientation, softening potentially conflicting elements of strategic HRM and complementing the organisation’s deeply rooted Catholic values. Despite some conflict between what interviewees term ‘the balance between the mission and the margin’, careful alignment of organisational values with the HPWS resulted in a stronger climate, positive employee outcomes, and a high-performing HRM system. This article informs our understanding of how HPWS can contribute to NPO performance, and addresses the call for research on HRM in NPOs, and in particular, values-based systems of HRM.