Key takeaways:
- Performance measurement frameworks are powerful methods of planning and analysis and can be used to support program managers in monitoring the results and efficiency of their management.
- CPA Canada’s PM4NPO and the Government of Canada’s Performance Measurement Strategy Framework are two existing frameworks that help the organization link their performance to strategy.
- The ultimate purpose of these frameworks is to provide a comprehensive and organized look at how an organization is performing
Performance measurement frameworks are tools for Non-Profit organizations (NPOs) to plan, assess, and scrutinize their own activities. They aim to present targets and actions in relation to organizational goals.
One example of a framework is CPA Canada’s Performance Management for NPOs (PM4NPO). This framework is divided into four stages:
- Planning
- The strategy map
- The balanced scorecard
- Reviewing and assessing
The planning stage of this framework consists of reviewing and confirming the organization’s purpose – its mission, vision, and value proposition – as well as identifying what efficiency and effectiveness look like for the organization. In addition, it helps business to define the goal and how to achieve it throughout the process, as they would consider its competitive advantages, and define metrics to help achieve the goal.
The second stage, the strategy map, is a visual representation of how the organization can achieve its ultimate goal. It considers four perspectives: stakeholders, finances, internal processes, and learning and growth. These perspectives consider smaller-scale strategic objectives and what the organization can do to achieve them.
The balanced scorecard follows the strategy map. First, measures are established to track progress toward the map’s objectives. There are typically four to seven measures, such as the number of clients served or the volunteer turnover rate. Next, weights are assigned to each measure and its goals, depending on how important they are to the organization's purpose. While not an exact science, these weights should be continually assessed and adjusted. Finally, a target and a stretch target can be attached to each strategic goal found on the strategy map. A target is a result the organization would benefit from achieving while a stretch target is simply a more ambitious target to achieve.
The final part of PM4NPO is the reviewing and assessing stage. This stage is the application portion of the process. Questions can be asked about the differences (or lack thereof) between targets and actual performance. It is important to get feedback from all levels of employees in order to ensure that your framework is understood by the whole organization.
The Government of Canada’s Performance Measurement Strategy Framework is another model an NPO can explore. It differs from the PM4NPO model by using the logic model that follows individual projects, listing inputs, activities and expected outputs and outcomes. It looks to establish indicators, data sources, targets and responsibilities for each project. The pros of using this one instead of PM4NPO is that it is more straightforward and easy to understand, while the PM4NPO requires more technical skills to complete the four stages.
An effective performance measurement framework may take time to develop, but once properly implemented, these tools will allow your NPO to find a better footing in managing its activities and planning for the future.
To learn more about how these frameworks can be applied, reach out at npo.consulting@uwaterloo.ca.