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Nonprofit Performance Reviews: 4 Best Practices

Performance reviews in both nonprofit and for-profit sectors serve as a tool in which managers and their employees, and other key stakeholders can evaluate work performance. They help identify strengths and weaknesses, offer constructive feedback for skill development, and assist with individual goal setting in relation to department and organizational goals.   

Nonprofit performance reviews are generally and more specifically focused on aligning goals with desired performance outcomes related to dollars raised, membership growth, number of visitors, people served, and overhead costs .     

Monitoring performance and growth is an ongoing part of managing employees, so it’s important for nonprofits to have effective, well-defined, and standardized performance management procedures— including performance reviews— to ensure their workforce is productive and engaged. 

However, how should this process look?  Are there any adjustments that can be made to develop performance reviews that are effective for nonprofit organizations?

This guide will discuss four tips for conducting effective performance reviews for nonprofit employees. 

Provide adequate notice and preparation instructions.

Performance reviews can be stressful for both employees and managers alike. Aim to give both parties plenty of advance notice so they are able to prepare adequately.

Beyond just giving notice, leadership or your HR team should provide details about the performance review process to both managers and direct reports. These details should cover:

  • Expectations: What information will managers and employees be expected to provide prior to the performance review process? What tasks will both need to complete? Compensation conversation may or may not be wrapped into these meetings. Astron Solutions’ guide to communicating compensation suggests having those conversations separately after the performance review. That way team members are able to focus their attention on discussing the employee’s performance.
  • Timeframes: When should various parts of the performance review process be completed? This could include written evaluations from managers, feedback forms from employees, and the performance review meeting itself.
  • Resources: What resources can you provide to managers and employees to ensure performance reviews run smoothly? This could include standardized evaluation forms and updated and accurate job descriptions.

In the few weeks leading up to performance reviews, host meetings at which managers can ask questions and review expectations for the process.

If your organization does not have a standardized performance review process in place, consider working with specialized HR consultants who can provide guidance, whether you are looking to build your process from scratch or improve your current practices. 

Provide actionable, honest, and clear feedback.

When nonprofit employees walk away from performance reviews, they should have clear insight into their performance including where they have had a strong impact and where they can improve. 

Consider using the Start, Stop, Continue model to give employees tangible feedback that they can act upon following the performance review. This model involves breaking feedback down into three categories:

  • Tasks the employee should start doing
  • Tasks the employee should stop doing
  • Tasks the employee should continue doing

Beyond simply categorizing feedback in this manner, provide the underlying reasoning behind why an employee should Stop/Start/Continue each task. While you should avoid under- or over-explaining points, providing this reasoning can secure employee buy-in and help them learn from the feedback to make informed decisions in similar situations going forward.

Establish measurable goals for the next performance period.

Setting performance goals for members across an organiation – from board members to employees – is a crucial part of ensuring a nonprofit is being run effectively. Each performance review should end with a discussion of the employee’s goals for the next performance period.

These goals should be specific and measurable, so employees have a clear understanding of how they can improve incrementally each day. One framework to keep in mind is the SMART goals method, or setting goals that are:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time-based

For example, imagine you are setting fundraising goals for an employee on your organization’s major gift fundraising team. Their main goal for the next performance period is to increase the number of major gift prospects that they are stewarding for an upcoming capital campaign. With the SMART goals framework, you might outline the goal in the following manner:

  • Specific: This goal would deal with specific major gift prospects with whom the officer was actively in conversations and meetings.
  • Measurable: You would measure the number of major gift prospects with whom the employee was actively engaged.
  • Attainable: Because major gift prospects are less numerous than the average supporter, you would choose a number relevant to how many potential prospects your organization has in its pipeline.
  • Relevant: The goal would be relevant to the organization, as capital campaigns are largely funded by major donations.
  • Time-based: This would be measured over the course of one performance period.

Record these goals and regularly revisit them. RealHR’s rundown of workplace training notes that building a culture of continuous improvement boosts both productivity and employee retention.That way, you can assist the employee if it seems they may not meet them, whether with training, additional resources, reminders, or encouragement.

Beyond creating goals for individual employees, create big-picture strategic goals for your nonprofit as a whole when possible. These goals should be cascading—as in, each should be tied to both departmental and individual goals. That way, each employee can see the role they play in the forward movement of your nonprofit as a whole.

Consider incorporating a continuous feedback model.

Recently, both for- and nonprofit organizations have begun moving away from annual performance reviews as they can inadvertently limit how often employees receive feedback and can discuss their performance with management.

Instead, many organizations are embracing a model that involves more frequent reviews (such as bi-annual or quarterly reviews) accompanied by periodic check-ins. In these check-ins, managers provide ongoing feedback, coaching, and goal tracking to help employees stay on track between official reviews.

Many organizations have found this to be a more productive approach as it helps employees to continually improve upon their performance. This is as opposed to allowing too much time to pass between check-ins, something that can lead to losing track of performance goals.

However, remember that even if you do embrace a continuous feedback model, it should be used alongside performance reviews as part of your greater performance management system as a whole. Performance reviews are crucial, standardized checkpoints between employees and managers and as such, should not be abandoned even as ongoing feedback is incorporated.

It is crucial for nonprofit organizations to have standardized performance review procedures, both for the benefit of employees and the organization overall. However, these meetings are only helpful if they are planned for and held effectively—confusing, muddled performance reviews can do more harm than good.

As a recap, effective nonprofit performance reviews:

  • Are preceded by adequate notice and information.
  • Provide actionable and honest feedback.
  • Establish measurable goals, both for individuals and the organization.
  • Are bolstered by a continuous feedback process.

If your organization does not have a clearly established performance review process or you are looking to improve your current procedures, consider working with a human resources consulting firm with professional experience in nonprofit organizations. This partner will bring both performance management and nonprofit expertise to your organization, combining the two to create a valuable process for your employees, management, and organization as a whole.

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