Using an Outcomes and Performance Management Process Model for Nonprofits
The food bank sees the hungry members of its community get the help they need, the homeless shelter knows its beds are full, the mental health advocacy and awareness group knows that their support groups make a difference. Even though they’re running without a performance management process model, they know that their programs work. But often times, these organizations don’t have the facts, logic models and robust evaluation systems in place that funders are increasingly relying on to make tough decisions.
You’ve heard that funders are increasingly demanding nonprofits operate on an outcomes- or evidence-based model, but what does that even mean? How do you put that kind of thing into practice, especially while trying to solve the day-to-day needs of your clients and service your programs effectively?
Believe it or not, implementing a performance management process model will not only allow you to secure more funding, but it will also allow your organization run more efficiently, make a bigger impact, and act as a lodestone during strategic planning sessions.
Keep reading to find out how to move your organization toward a performance management process model.
Identifying the outcomes that matter to your organization is the first step towards long-term success. The next step is integrating those metrics into a model of performance management. Using an outcomes and performance management process model doesn’t just show you what you’re doing well (or not so well). Ultimately, it ensures that you can continuously discover what your organization needs to grow, improve, and adapt to uncertainty and change.
Strong organizations use performance appraisal methods that are directly tied to outcomes metrics. The best nonprofits ensure that these processes are deeply embedded in the way they do business, from program strategies to business processes to talent development. And the most efficient organizations use robust management software to seamlessly integrate performance management throughout the organization.
As the Harvard Business Review points out, the biggest challenge to effectively managing positive change in an organization is that “there is little agreement on what factors most influence transformation initiatives. Ask five executives to name the one factor critical for the success of these programs, and you’ll probably get five different answers. That’s because each manager looks at an initiative from his or her viewpoint and, based on personal experience, focuses on different success factors.”
Anyone who’s worked in a nonprofit can tell you the same is often true when evaluating their organizations’ performance. Different stakeholders have different perspective on what is working and why. That makes it hard to make decisions about how to best improve performance.
Programs are the heart of any successful nonprofit. They are the direct reflection of the organization’s mission and the ultimate testing ground for their beliefs and goals for social change. Programs are also the place where organizations must juggle an enormous number of variables. This is especially true when your programs involve direct interventions.
For example, a nonprofit after-school program not only has to think about the content and structure of their activities, but must also be able to account for a host of variables from school resources and support, individual student needs or constraints, and parents’ concerns or availability.
Using ETO Software to track program outcomes allows that after school program to discover critical insights that help program administrators fine tune every aspect of their program. In addition to periodic performance appraisals, robust management software allows ongoing system monitoring. That way you can make subtle and strategic changes as programs are implemented instead of expending resources to overhaul a program that might only need a few tweaks.
Efficient business processes are important for all organizations, but nonprofits face heightened challenges. Since so many of these processes impact the amount of time, energy and resources devoted to non-program “overhead,” efficiency can significantly impact program outcomes.
Making sure your organization’s performance appraisal steps include evaluating relevant business processes can help an organization identify opportunities to increase efficiency without sacrificing outcomes. As you define key metrics, consider how those metrics might be reliant on or intersect with different business processes. The use of strong tools like ETO software and the integration of those tools throughout the organization will ensure that your efforts to streamline and improve business processes support your focus on outcomes.
Performance management gets extra tricky when you need to evaluate the individual performance of employees, board members and volunteers. Personalities and team dynamics add an extra layer of complication to regular performance management processes. In the nonprofit world, the human side of human resources can be amplified because passion for the cause often gets conflated with professional competence.
Clearly passion and commitment are critical to the success of any nonprofit organization. Personal connections to the issues and passion inspire people to go the extra mile and inspire loyalty even when there are more lucrative opportunities in the private sector. Without passion, employees, leaders and volunteers rarely perform at their best.
The challenge in a nonprofit is that sometimes that passion overshadows or obscures other critical performance measures. More importantly, inspiring and encouraging individuals to grow and change can be stymied when their passion keeps leaders from questioning and evaluating performance with a critical eye.
Outcomes data can open doors to even greater performance from your people. Outcomes-centered performance management models ensure a shared focus and language for describing success and identifying areas for improvement. And ETO software provides you with reports and templates that simplify the process.
At the end of the day, you can see obstacles objectively, challenge assumptions, and keep personalities in check. Plus, instead of seeing passion as a potential roadblock to needed change, outcomes-based performance management helps direct passion so it supports and sustains those changes.
Implementing a holistic and organization-wide performance management process model can be a daunting task. But, the right tools, including ETO Software, can make it a lot simpler by making performance management a seamless part of your operations. Anchoring performance metrics and procedures with outcomes gives you the power of shared focus throughout your organization. That can make the difference between a struggling nonprofit and a world-class, impactful organization.