3 keys to selecting measures for nonprofit performance management

Many nonprofits are looking at performance management as a way to improve their ability to provide services and to use data intentionally for strategic planning. Here, when I say performance management system, I mean the collection of process and outcome measures that your organization collects and its approach to using those measures in strategic decision-making. In order for your performance management system to add value to your organization, here are three things that you should keep in mind when developing your plan.

Distinguish between staff performance and outcome performance

Management conversations around developing a performance management system for the organization can sometimes become entangled in a conversation about creating a performance management system for the staff. These are two intertwined but fundamentally different things. While performance management for your staff is crucial for effective human resource management, it’s separate from performance management for your programs. The information that your organization needs for strategic planning is at the level of the program and not at the level of the individual worker. Your performance management system will generate data that might cause you to change roles entirely.

Design performance measures around your logic model

Your performance measures should be built directly out of your logic model. For some examples of how to do that, check out this post. This is an opportunity to clarify your logic models – they’ll have to be perfectly clear before you can start measuring their components. Your performance measures will look at each of the activities and your short-, mid-, and long-term outcomes to answer the question is this happening? Process measures focus on the activities column of your logic model. Are we providing this service? How many people are we serving? How well are we serving them? Outcome measures look for changes in the participants as a result of participating in the program. Often “what will they know?”, “what will they be able to do”, and “how will they be better off” are useful guiding questions to think about in filling in the short-, mid-, and long-term performance measure columns.

Refrain from creating too many performance measures. Focus on items that are important to making decisions in your program.

Engage all the relevant stakeholders in developing performance measures

It’s crucial to include staff from all levels of your organization in developing your performance management system. Staff who work directly with clients or participants will have unique views on the organizations’ processes while managers will be able to provide a wider view and make connections between programs. Development staff usually understand better than anyone the information that they’re being asked to report to funders. Include them in the conversation and look for opportunities to use the information you’ll collect for funders in your planning. Communications staff will use these measures to tell your organization’s story. 

Engaging the relevant stakeholders should mean involving program participants in the process. Their understanding of how the program works and which elements are truly important is key to being able to make strategic adjustments. If it is not feasible to include a current or recent participant in your performance measurement design team, you may consider using focus groups or other creative approaches as a way to bring their voice and observations into the process. Don’t be afraid to explore a variety of design and facilitation techniques to bring multiple voices into the conversation.

In order to truly drive strategic planning, your performance measures and performance management system have to be aligned with your program goals, be true indicators of the impact that your organization has in the world, and reflect the vision and values of your organization. Your goal in designing them is ensure that they are specific enough to drive decision-making and powerful indicators of your organization’s mission and values.