Nonprofit Performance Management and Goal Setting

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Managing people may be the hardest part of leading a nonprofit. A performance management plan should be an immediate investment and include SMART employee goals.

According to Gallup estimates, the cost of poor management and lost productivity from employees in the U.S. who are not engaged or actively disengaged is estimated between $960 billion and $1.2 trillion per year. Wow!

Nonprofit budgets can be tight. Organizational demands can be high. Ensuring your staff are operating at peak performance is needed.

Implement a performance management program and watch your staff flourish and your outcomes achieved.

Of course, you don’t have to do it along. You can always get help to get things started with a good foundation.

What is performance management?

Performance management is vital in managing people. It is used to support decisions on training, support, compensation, promotions or demotions, and employment termination.

Typically the process includes setting clear expectations with the employee and providing periodic feedback. This feedback can be formal or informal.

Why goal setting?

When setting performance expectations, establishing clear goals is essential. There are four typical types of goals:

  • Job Description Goals – These are goals defined in the job description. Typically these goals are expected to be achieved continually. This is “What” must be done.
  • Behavioral Goals – These are the expectations about “how” one is to accomplish their goals and are also continuous in nature.
  • Project Goals – These goals typically have a time-bound constraint. They may be achieving a particular outcome or deliverable.
  • Stretch Goals – These are challenging goals that are difficult to accomplish. Many times, these will be around personal development opportunities. Alternatively, these can be next-level goals beyond achieving Job Description or Project Goals.

We recommend that goals be created for each Key Result Area (KRA) in the job description. Some KRA’s may end up with behavioral or project goals as well.

According to Gallup estimates, the cost of poor management and lost productivity from employees in the U.S. who are not engaged or actively disengaged is estimated between $960 billion and $1.2 trillion per year.

Gallup – Re-Engineering Performance Management


Smart goals are S.M.A.R.T.

  • Specific, clear, and understandable.
  • Measurable, results-oriented, and verifiable.
  • Attainable, not a slam dunk. Challenging.
  • Relevant to the mission of the department or organization.
  • Time-bound with a schedule and specific milestones.

Examples of smart goals include:

Execute the annual facility maintenance plan with completion at 95% on or before the 11/30. 

Reduce I.T. Accessory expenses by 22% this fiscal year compared to the same line item last fiscal year.

Nonprofit performance management

How to document employee goals

Once you have SMART goals, it is time to document them. Documentation ensures there is no misremembering of the plans later in the year.

Remember, performance management in your nonprofit should not be a once a year discussion. Having regular, periodic reviews are essential.

The performance management monitor cycle has two goals. First, affirm excellent performance. Second, identify poor performance with the hope of turning things around.

Your document should include at least three components. The goal, the date of the review discussion, and the performance observed. More details are okay, but no less than these.

It may be helpful to have a single document with the goal definitions and spots for review and comments. Doing this allows you to have a running scorecard for the review period.

Employee Goals Template

We’ve created an employee goal tracking template to get you started. Feel free to adjust this template to serve your nonprofit performance management needs.

Goal Monitoring Tool Template [Excel]

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