Use performance measures wisely in managing nonprofits
Performance measures are essential for good management. But sometimes measures are used in ways that harm rather than improve performance. The Atlantic Magazine article (see link below) illustrates the problems using customer satisfaction in hospital management. These problems apply to other performance measures as well.
Some thoughts on avoiding these problems:
- Consider the possible unintended consequences of using a performance measure. Identify ways improving one measure could hurt performance in another area. Develop ways to balance competing performance priorities.
- Don't put too much weight on one measure. There are many examples of organizations rewarding a narrow measure of performance only to realize that employees focused solely on that measure to the detriment of other equally important areas.
- Use judgment in interpreting and applying measures. Management is never as simple as paint by numbers. Measures are imperfect and good performance is multi-dimensional. Judgement is needed in using measures to guide management decisions. Performance measures are just one part of the picture.