What is Performance Management?

Performance management is a dynamic process that is designed to better understand program operations, monitor outcomes, and ultimately, help nonprofits become high performing organizations which produce positive outcomes. It involves regular, ongoing performance measurement, reporting, analysis, and program modification. 

Performance management is different from evaluation, although the two concepts are very much related.  People external to the program usually collect and analyze all information in an evaluation, and the evaluation is primarily used for research purposes or to inform large scale decision making.  With performance management, program staff collect and analyze information themselves, and use this information to make programmatic or organizational decisions while the program is operating and immediately upon the conclusion of the program.

Performance measures assess (a) services and (b) outcomes. Measures of services assess the program’s design and how it is implemented, including the number of sessions offered, the percent of curriculum covered, and factors related to program effectiveness, such as implementation quality, participation, and participant engagement. Measures of outcomes assess short- and long-term outcomes as described by a theory of change, logic model, or other document which explains the link between services provided and anticipated outcomes.

In performance management, it is necessary to set benchmarks. Benchmarks are performance goals that help programs determine whether they are achieving desired goals, both in terms of program implementation/service delivery and outcomes. A benchmark might be, for example, that all participants have at least 80 percent attendance or that there is a 33% decrease in a particular problem behavior by the end of the program.

An effective performance management system requires a commitment from staff at all levels of the organization and includes the following steps (see Table 1).  Depending on whether your organization is just getting started or whether you’ve been doing performance management for several years, you may jump in at different parts of the process.  Each of these steps is elaborated on in further detail in Key Steps in Outcomes Management and also Using Outcome Information.  Links to each of these reports and some additional resources in performance measurement and management are included at the bottom of the page.

Table 1: Steps for Engaging in Performance Management

I. Setting Up
1. Select programs to include
2. Determine who will be involved in developing the process and how
3. Establish an overall schedule
II. Deciding What and How to Measure
4. Identify the program’s mission objectives and clients
5. Identify the outcomes (results) sought by the program
6. Select specific indicators to measure the outcomes
7. Select data sources and data collection procedures for each indicator
8. Identify key client and service characteristics to be linked to outcome information
9. Pilot test the procedures, make needed modifications, and implement.
III. Analyzing the Data
10. Examine the outcome data
11. Report the findings
12. Seek explanations for unusual or unexpected findings
IV. Using the Results
13. Use the outcome information to improve services.

PerformWell is designed to help novice and intermediate level users expedite the process of deciding what and how to measure by providing menus of outcomes, indicators, data sources and data collection procedures.  In time, additional tutorials and webinars will be designed to assist users better analyze and use the data they collect to complete the performance management cycle.