10 Chapter 10: EMPLOYEE ASSOCAITIONS, CLUBS, AND PARTICIPATION

Learning Objectives

*Understand the importance and structure of an employee association/club

*Learn to develop policies and procedures of an association

*Understand and appreciate the role of board members and president/director

*Attempt to develop an association and encourage participation

*Understand how to improve programs, engage in training, and retain members

Introduction

Within sport industries, there are a lot of professional associations or workers’ unions existed to promote good social causes, maintain and certify the quality of professional services and practices, protect the rights of the employees, and provide training, workshops, and education for the betterment and advancement of professionals. Readers can refer to Table 1 for the nature and services provided by some large size professional associations. The employee association/club discussed in this chapter is relatively smaller in size. It is a separate non-profit legal entity set up for employees within an organization. Sometimes, this entity can be an addition to or in place of an employee services department (Sawyer, 2001). The study of Blanken & Liff (1999) prophesized the global changes, technologies, leaderships, legislations, expectations of workforce, and revenue trends would soon dictate and impact the rising of employee associations/clubs in 21 century.

Table 1. Examples of Professional Associations in Sports Industries

Employee Services and Recreation Association

Employee Services and Recreation Association (ERSA, http://www.usdaesra.org/) is a non-profit organization that a variety of services for the employees of the United States Department of Agriculture (USDA). Since 1923, the organization has provided recreational, educational, and wellness activities and other services to benefit USDA employees by improving morale and productivity. ESRA is governed by a board of directors who are also employees of USDA from various units and departments. Board of directors are volunteers who are selected by employees to serve as liaisons between ERSA and USDA. The association also have full-time staff who are hired to handle day-to-day operations.

ERSA operates an employee store, named The “Ag Connection” in the AG Promenade Mall in Washington D.C. It is also the organization’s headquarters. In addition to purchases of retail items at discount rates, the headquarters also accommodate pharmacy, restaurant, conference, hair salon, and dry cleaning center. ERSA members can register a variety of programs at the store as well. ERSA offers recreation activities, educational seminars, field trips, discount tickets for many events in the Washington D.C. area. USDA employees can learn more information from the ERSA official website and its major publications (ERSA Catalogue). Table 2 shows more organizations/services that are offered in the USDA.

Table 2. More Organizations/Services in the USDA.

Establishing Employee Association/Club

Taking Initial Steps

As soon as the top management team has agreed to support an employee association, members should start develop a formal structure of the association/club. (It is ideal to prepare a written letter of understanding and documented by both sides.) There are great strategic advantages to incorporating the association/club. Someone should contact the Internal Revenue Services (IRS) and request Form 1024 to apply for 501(c)4 tax-exemption status for the intended non-profit association. It is also important to obtain Form SS4 and draft the association’s structure, mission, objectives, and identify the leadership. When an association is incorporated, it eliminates volunteer leaders’ personal liability, creates a business environment, provides protection under libel laws, allows the association to own real estate and facility for activities, and make it easier to purchase liability insurance (Sawyer, 2001).

The bylaws and the constitution of the association should not contains any language that implies discrimination against any person on the basis of race, color, or religion. When applying for the tax-exempt status, the association must submit documents that contain personal contact information and reports of meetings and member gathering with the application. Even though the association is non-profit, it can still collect membership fees, due, and raises revenues through the use of facilities and activities. Gross receipts from non-membership sources cannot exceed 35%. Of that 35%, less than 15% of the receipts may be derived from the use of association’s facilities or services by the general public. Gross receipts must be generated from the normal and usual activities of the association (i.e., charges, admission fees, membership fees, dues, assessment, and investment income, and normal capital gains on investment).

To create a permanent structure for the association/club, bylaws and policies should be introduced. In general, the association’s/club’s bylaws cover common subjects, such as:

• Statement of purpose—Mission statement and reasons for existing and functions
• Forms, types, and qualification of membership—Opportunities and requirements
• Membership dues—Explanation of membership cost and renewal process
• Elected officers—Also known as the Board of directors; list title, description of terms, power, duties, and rule for filling vacancies
• Chief executive office—Details in responsibilities, power, and reporting procedure
• Voting qualifications—Descriptions of procedures, proxies, and quorum provisions
• General assembly—Meeting schedule and meeting structure
• Standing committees—Purpose, responsibilities, and participation
• Accounting, fiscal, and reporting procedure—How funds are tracked and recorded
• Corporate seal—Obtainment of the corporate emblem so it can be reproduced; and
• Amending the bylaws and dissolution

Organization and Structure of an Association/Club

The article of association is the paper work that defines the objectives, functions and responsibilities. It determines the activities that the association stands. In most cases, it covers a constitution and bylaws. These two documents define membership eligibility, voting control and rights, and the methods of electing governing board. They are legal documents stated in general terms to handle inevitable changes and maintain orders in activities and programs of the association/club. In addition, they provide provisions for the election of a governing board, the number of board, method of selection, terms, duties, and responsibilities. They are several names that commonly used to address the governing board, such as “Board of Directors”, “Executive Board”, and “Board of Trustees.” Provisions of the constitution and bylaws are generally made by the board. In some cases, there are committees that are served by the members and associate staff to assist the board of directors in affecting the policies and governance of the association.

Lastly, organizational structure and procedure should never be considered final, unchangeable, or irrevocable. An innovative association should welcome all possible ideas to improve the existing rules and policies and maintain a great check-and-balance on the power of all leadership within the association.

To accomplish an employee association’s purposes and mission, the association must be governed by good policies and follow sound procedures. In simple terms, policies are guiding principles and procedures are working methods. In general, policies are classified into external policies and internal policies. External policies deals with the philosophy of the membership and position of the association on issues and problems. The internal policies usually involve the character, purpose, structure, and purpose of the association. They include sub-topics, such as: (1) officers, board, and committee polices, (2) membership policies, (3) financial policies, (4) personnel policies, (5) legal policies, and (6) general policies (i.e., seals and codes and services to general public). When companies (organizations) encounter a merging situation, instead of keeping many different company-wide employee associations, the best solution is centralizing the employee associations’ procedures and policies and bring representatives from different company sites to maintain the operation.

The board of directors commonly predominates the formation of the major policies. Sometimes, an association may use a policy committee to screen the proposed policy changes or allow the executive committee to make minor changes in the policies. A minor change in the policies usually need a simple majority (over 50%) to be approved. A change in the bylaws would require a two-third vote of the board or a vote by all general members. In general, the bylaws should record the procedure on how and when the members can make (i.e., sending proposals to the policy committee) and vote for the policy changes. When a proposal is submitted, it should be properly circulated and reviewed by all committee members and general members as well prior to voting.

Board Members and the President

The term organization in this paragraph means a function of management. It is about a matter of people working together toward a common goal and operating the association/club efficiently. An association’s board is the association’s most important committee. It is usually elected through direct election by the general members or appointed through the organization (human services department). Depending on the size of the association, the optimal number of board ranges from 7 to 11 (purposefully selecting an odd number to break a tie vote). While selecting the board of directors, one might consider candidates’ various expertise, talent, and geographical or demographical representation as well. It is every board members’ and the president’s (the elected leader among the board members/directors) responsibility to maintain an environment for great performance by the entire association staff and general members. The board of directors develops policy, approves budget, establish long-term plans and goals. They are ultimately responsible for the success and failure of the association. The ideal president of an association should be proven performer and leader. He/she represents the association and board and interprets board’s actions. An elected president usually assumes his/her position after some experience as a board director (member). With the help of current president, past presidents, and chief executive, a new elected president can quickly pick up the understanding of association’s objectives, policies, resources. The president’s handbook (usually prepared by the chief executive) is also a great tool to assist elected president learning the role.

The Executive’s Role

Typically, an association executive (Chief Executive Officer) is responsible to the Board of Directors and orchestrate the time and talents of many members to carry out the objectives of the association. The chief executive are in charge of the operation of the staff according to the policies and procedures established by the board. The chief executive may recommend and initiate the development of new policies through wise and thorough leadership. Mutual respect and support are the foundation for a productive working relationship between the board of directors and chief executive.

Functions of Committees

Committees are most productive tools that an organization or an association to work with. The operation of committees demonstrates the philosophy of “departmentalization” by breaking up a relatively large group into smaller divisions to work on assigned tasks in order to achieve efficiency. Since this is a limit to the number of persons and time that one individual can effectively supervise, the use of committee is also a good example of reflecting the practice of optimum “span of management”. The primary function of a committee is to contribute to the efficient operation of an association. The most convincing rationale for establishing a committee is the desire to encourage group participation in problem solving. However, it is also a format that is overly used to a point of abuse. It normally cost more time and money for committees to function, and the decisions provided by the committee members may also be unanimous. These issues further expose the disadvantage of committees.

Committees may be classified according to function or longevity or both. Based on the length of the operation, committees are either standing committees or short-term special (ad hoc) committees. According to function, there are four categories of committee commonly existed, administrative, project, problem, and liaison. The committee responds to its challenges by giving recommendations and actions to be taken. The chairperson of a committee involve with human relations and group dynamics. The individual primarily has responsibilities and duties in five areas: (1) planning the meetings, (2) conducting the meetings, (3) maintaining records and information, (4) getting the actions going, and (5) evaluating the works and effort. The chairperson often is the individual who communicate the final recommendations and reports completed by the committee. The chairperson also has other helpers (elected committee members) including Vice (Assistant or Deputy) Chair, Treasurer, and Secretary in carrying out committee tasks. The procedure of selection of committee members may be stated in the bylaws. Like the board of an association, the size of a committee may vary. The suggested ideal size is around three to nine people. Members are usually been nominated and selected based on their ability, passion, expertise, and representation of a specific faction. They must be selected when a quorum is constituted.

When the structure and governing policies are established for the association/club, the leaders among the board and committees can actively recruit and retain a volunteer base among employees. Many volunteers who are interested in joining the association/club often enjoy serving others and would like to improve employee morale. Recruiting volunteers is an ongoing process. Leaders must advertise where the need is and challenge the new and young employees to consider the meaning of volunteering. Invite individuals who possess honesty, trust, teamwork, leadership, enthusiasm, humor, responsibility, and competence to participate in the board and committees. A volunteer is no different than any other employee on the staff. They should be trained and guided through simple or elaborate trainings. The most important point is to keep them clearly informed about the goals, procedures, schedules, expectation, responsibilities, and emergency protocols of the association. Leaders may not want to forget

That the company’s retirees who possess experience and expertise could be a good source of volunteers.

Video Clips and Websites

http://www.youtube.com/user/TheCDPEA

https://www.facebook.com/TheCDPEA

Promoting Participation in Employee Association and Employee Services Programs

The member is the foundation for successful operations of any employee service-related association or programs. However, the high dropout rate and low retention rate constantly hinder the longevity and sustainability of the employee association or employee service programs. Statistics showed within in six months about a half of new employee members would drop out of employee service program. Each year, fitness facilities loses an average of 40% of their member base. The average length of an employee services membership last about 1.63 years for multipurpose programs and 1.4 years for fitness-only facilities (Sawyer, 2001). If the retention rate can be merely improved by 5%, it is likely the net profits of the employee services program may double in size. To help combat the issue of high drop-out rate and low retention, the following sections will address topics related to understanding members’ renewal decisions and improving the existing programs and services with effective strategies.

Why Members Decide Not to Renew Their Membership?

Many employee association leaders or service manager actually know very little about their members. It is their job responsibility to gather knowledge from current members and use the obtained information to increase and maintain business. They can adopt a relatively simple and low cost survey to create a member profile system (MPS). A MPS is an after-marketing strategy to assist the managers and executive director in retaining members (Irwin & Sutton, 1995). The development of MPS data involves four important features: (1) addressability (ensuring that communication is reached to all identifiable members), (2) consumer purchasing histories, (3) flexibility, and (4) accountability. The program managers and association leaders may with the MPS databases in every imaginable way to examine members’ satisfaction, analyze certain member groups, target special groups for certain promotions and events, and setting benchmark references. A well designed business survey can assist in the following areas:

• Effectively defining the market;
• Knowing and familiarizing the existing and potential members;
• Determining how members perceive the services, programs, and facilities, etc.;
• Positioning and repositioning existing services and facilities among other competitors; and
• Identifying the right know of program benefits and converting them into the services and programs.

Most often, members drop out their membership or programs because they are not satisfied with services or programs. They may also upset with little attention given to them to fulfill their needs and expectation. Other reasons for drop out may include lack of a sense of belonging, loss of motivation, schedule conflict, and cost outweigh the benefits. The keys to retain high volume of memberships focus on the following five fundamental strategies.

(1) The association or employee service department must routinely implement creative and high-quality programs for members to enjoy.

(2) Maintaining an enjoyable program atmosphere for all activities, so members can identify with the association or service programs.

(3) Seek and select personnel with good interpersonal skills and establish a rapport with the members. Add a personal touch to communicate and connect with the members. This practice will translate happy employees into comfortable members.

(4) Using a suggestion box, focus groups, surveys, and informal conversation to solicit members’ input regarding all aspects of the association and employee service operations. Actively listen to what members have to say and stay informed.

(5) Understanding the positive influences is important in the retention process. Managers and leaders should recognize strengths that they can control and duplicate, such as excellent instructors, safety, fun, appropriate classes and courses, atmosphere, group unity, rewards, and cleanliness of the facility.

Additional Concerns about Recruitment and Retention

The most powerful bonds for retaining members are established by program instructors. Good program or exercise instructors will exhibit sincere interest in the customers, be enthusiastic, develop good interpersonal relations with the customers, respect the customers’ need, be creative to improve their services, and motivate others. The managers and leaders can collaborate with those inspiring instructors to combat the personal reasons that cause one to drop out the association or programs.

Table 3 displays some of the costs associated with recruiting new members. In general, the listed expenses may account of 15-45% of collected membership fees. The cost of renewing a member is minimal.

Table 3. Costs Associated with Recruiting New Members

Management and membership retention are highly correlated. Staff training to maintain members. Renewals are cost-effective, since very few associations or clubs have a large new consumer base that affords them to overlook renewals. The employee services manager or association leaders must develop a regular in-service training program for staff and an orientation programs for all personnel. Effective management policies must be established and well executed. The goals are to develop highly motivated staff and personnel to enjoy their job and work with customers (in this case, the employees of the organization).

Quiz Questions

Q1. Employee services profits come from the replacement of members. True/False

Q2. Which of the following is a reason for members to drop out service program?

1. Not a family affair
2. Benefits outweigh the costs
3. Does not fit schedule
4. All of the above
5. A and C

Q3. Good program or exercise instructors will exhibit sincere interest in the customers, be enthusiastic, and develop good interpersonal relations with the customers. True/False

Q4. The size of committee is primarily determined by:

1. its purpose
2. the size of the company
3. the nature of its work
4. a and c

Q5. The board of directors predominates in formulation of major policy for the employee association. True/False

Q6. Most organizations seeking recognition of exemption from federal income tax usually do not need to submit the employer identification number (EIN). True/False

Q7. Trends that will affect an employee association in the 21st century may include:

1. technology use
2. leadership’s role
3. globalization
4. all of the above
5. a and b only

Q8. Which of the following is not an example of Employee Services and Recreation Association’s program?

1. Educational programs
2. The Ag Connection
3. ESRA Hospital
4. ESRA insurance service

Q9. Which of the following is incorrect about recruiting volunteers?

1. Getting volunteers to help with employee services seems to become easier every year.
2. The event where volunteers are needed should be promoted as if it were the event of the year.
3. Recruiting must be an ongoing process.
4. The younger employees rarely are seen volunteering for anything.

Q10. The most powerful bonds for retaining members are established by:

1. Volunteers
2. Owner of the organization
3. Instructors
4. None of the above

Brainstorming Activity

Does your institution have a student-organization for sport management major or sport science discipline? Could you take on the leadership role by forming a new association or club to service the students of aforementioned major or discipline? Try to come up with ideas for organization and structure of your association/club. Identify people who may be interest in becoming board of directors or chairpersons of committees. Address some of the concepts and policies that will be included in the constitution and bylaws.

References

Blanken, R., & Liff, A. (1999). Associations will thrive. Employee Services Management, 42(1), 7.

Irwin, R., & Sutton, W. (1995, July) Employing data based marketing to sport organizations.  Seventh Biannual World Marketing Congress. Melbourne, Australia.

Nichols, G. & Ojala, E. (2009). Understanding the management of sports events volunteers through psychological contract theory. Voluntas, 20, 369-387.

Sawyer, T. H. (2001). Employee services management: A key component of human resource            management. Champaign, IL: Sagamore.

WikiHow.com (n.d.). 10 tips to defuse potentially expensive predicaments.  http://www.wikihow.com/Defuse-a-Situation-With-a-Difficult-Customer