FOR MORE CLASSES VISIT www.tutorialoutlet.com Implementing an Employee Performance Management System in a Nonprofit Organization Karen Becker, Nicholas Antuar, Cherie Everett

1. Implementing an Employee Performance Management System in a Nonprofit
Organization Karen Becker, Nicholas Antuar, Cherie Everett Nonprofit...
FOR MORE CLASSES VISIT
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Implementing an Employee
Performance Management
System in a Nonprofit
Organization
Karen Becker, Nicholas Antuar,
Cherie Everett
Nonprofit organizations are not exempt from the imperatives of
employee attraction, retention, and motivation. As competition
for staff, donors, and funding increases, the need to manage
employee performance will continue to be a critical human
resource management issue. This article outlines a study of the
introduction of a performance management system in an Australian
nonprofit organization and analyzes its design and
implementation. It explores how performance management can
be introduced and used effectively within a nonprofit environment
to benefit staff and the organization. However, the use of
performance management is not without its challenges, and the
research also identified initial employee resistance and a resulting
initial spike in labor turnover. However, findings indicate

2. that if nonprofit organizations are willing to undertake consultation
with staff and ensure that the organization’s specific context,
values, and mission are reflected in the performance
management system, it can be a useful tool for managers and a
direct benefit to employees. T RADITIONALLY, PERFORMANCE management
systems have been implemented as a means of managing and measuring the
performance of individuals or teams by providing clear accountability
and measures on which to assess performance. The intent
is that such systems support the strategy and goals of the
organization, and that by having a transparent system, all employees
are encouraged to contribute, individually or in groups, to the
strategic direction of the organization. While the need for, and benefits
of, performance management can be argued very simply, the
means through which it is achieved is where the complexity exists.
In a nonprofit environment, this complexity can be exacerbated by
potentially differing needs, motives, and values of the paid employees
(Schepers and others, 2005) and by the existence of unpaid
voluntary workers.
Although performance management and performance measurement
are often considered to be closely related, each represents a
specific field of literature in its own right. Performance measurement generally
focuses on quantitative measuring of performance at the
level of organizations or at least organizational divisions (for example,
see Cocca and Alberti, 2010; Taylor, 2009), and even when this
issue is investigated specifically in nonprofit organizations (for example,

3. Brickley and Van Horn, 2002; Moxham, 2009; Steinberg, 1990),
this predominantly financial and organizational focus remains.
Although some forms of performance management may draw on
performance measurement, in the human resource management literature,
performance management typically focuses on the provision
of feedback to individual employees or groups of employees, with
the underlying philosophy of building an effective employment relationship
(Fletcher, 2001; Shields, 2007). The focus of this article
remains on the use of performance management, rather than performance
measurement, in the nonprofit environment.
The goal of this research was to analyze the development and
implementation of a performance management system in a nonprofit
organization to assess the extent to which general performance management
principles and approaches can be applied to a nonprofit
context. The findings identify some critical elements of successful
development and implementation of a performance management
system for nonprofit organizations. Performance Management: The Literature
and a Framework The management of employee performance, regardless of sector or
industry, has long been a contentious issue. Although many espouse
the virtues of performance management systems for aligning employee
effort with the strategic direction of the organization (den Hartog,
Boselie, and Paauwe, 2004; Fletcher, 2001), performance management
also has some vocal critics who claim that its potential is not being
realized; worse still, they charge that ineffective or inappropriate use

4. has detrimental effects (Winstanley and Stuart-Smith, 1996).
Performance management is arguably one of the most contentious
human resource management topics, with much written
about the effective use and misuse of performance management (for
example, see Perrin, 1998). It can be argued that performance management
should be treated like any other organizational change, and
without due regard for organizational culture or effective change The management
of employee
performance,
regardless of
sector or industry,
has long been a
contentious issue.
management processes, it may not deliver the anticipated outcomes
(Mento, Jones, and Dirndorfer, 2002; Waddell and Sohal, 1998).
Warnings have also been issued against the wholesale importing of
performance management systems into nonprofit organizations from
the for-profit sector without regard for the particular context of nonprofit
organizations (Cheverton, 2007). However, very few comprehensive
examples exist highlighting the critical elements for the
successful implementation of performance management in the nonprofit
sector.
Nonprofit organizations have long recognized the importance of
their employees and volunteers in the delivery of services; however,
managing their performance has often eluded or been avoided by

5. managers in the sector. As Kaplan (2001, p. 356) highlights, making
the link between “mission and measures” is a critical issue for
performance management and applies to nonprofit organizations just
as much as it does to public and for-profit organizations. However,
what is often unique to nonprofit organizations is the finding that
employees may sacrifice potentially higher salaries or benefits elsewhere
to work within an organization whose values align with
their own (Cheverton, 2007); in effect, they are providing part of their
labor as a donation to the particular cause of the organization.
Although not all studies have shown decisive pay differentials (for
example, see Goddeeris, 1988; Mocan and Tekin, 2003), it is
nonetheless critical that nonprofit organizations consider the potential
benefits of providing performance feedback to employees.
In addition, researchers have found that employees of nonprofit
organizations experience higher job satisfaction and are more intrinsically
motivated than their for-profit counterparts (Benz, 2005;
Devaro and Brookshire, 2007). Although this is often seen as one of
the greatest strengths of the sector, it also offers a challenge to managers
to develop an environment to retain and motivate these
employees.
A systematic approach to performance management begins with
defining the exact skills, knowledge, and abilities required; classifying
the acceptable behaviors; and identifying how outcomes will be
appraised (Shields, 2007). Shields (2007) identifies that such a system

6. can typically measure one or more of these variables: inputs
(competencies), processes or the way in which these inputs are
applied (behaviors), and outputs (results). All performance management
systems are underpinned by at least one of these variables,
and often a combination of behaviors and outputs (Mwita, 2000).
Recognition is growing that measuring only outputs is not necessarily
the best way to align employee performance with organizational
objectives—in the worst scenario, sending a message that the
end justifies the means. Identifying the critical behaviors for acceptable
performance and the competencies that will contribute to the growth
of human capital within the organization is also essential (Kong, 2007).
As a result of this growing awareness, a more comprehensive and
multidimensional approach to performance management emerged
with the introduction of systems such as the balanced scorecard
approach (Kaplan and Norton, 1996). Although this approach has
been advocated as a means of more effective performance management
in the nonprofit sector (Kaplan, 2001; Manville, 2007), its use
cannot be claimed to be widespread; even within the private sector,
this approach has taken some time to be embraced.
Assistant Professor, Faculty of Management and Accounting, Qazvin Branch, Islamic
Azad University,
Qazvin, Iran Abstract
The present project is a De Waal and Miedema model- based pathological study of
implementing p

7. erformance management system in Regional Water Company of Gazvin. The main
question is whe
ther necessary contexts for implementing performance management system exist in
statistical popu
lation or not. Statistical population includes all employees of regional water company
(n=250) and
the statistical population involves 165 employees selected by simple random
sampling. The main
data gathering tool is a researcher-made questionnaire. This research is an applied and
descriptive
survey. The obtained data has been analyzed by SPSS software, revealing that the
structural and b
ehavioral dimension of the model including responsibility structure, performance
context, integrati
on, managerial power, consistency, accountability, managerial style, implementation
method and o
rganizational communication for implementation of performance management system
is favorable
in statistical population.
Keywords: Pathology, Performance, Performance management, De Waal and
Miedema model
INTRODUCTION
Many studies have been conducted about evaluative methods but none of them has
emphasized on
a certain method, confirming this necessity that organizational objectives and
expectations from
performance evaluation should be first determined based on which appropriate method
should be
selected. Since it is difficult to precisely determine the consequence of individuals’
work and their

8. potential capabilities should be considered, it is better to apply a combination of
individual,
behavioral and functional characteristics in the combinational framework of
evaluation methods
which compensate the lack of work standards and criteria somehow. Establishing
proper
management in each organization involves applying appropriate systems and creating
appropriate
context for optimal use of its available resources. Accepting the fact that human
resources are
considered as the most important capital in each institute reveals that among various
systems and
methods of proper human resources management, performance evaluation system is of
high
importance and its proper implementation causes proper and prompt exploitation of
programs and
efficiency in organizations. In spite of the practical and rational importance of
employees’
evaluation, with respect to the fact that such a managerial action is neglected,
evaluation has been
483 Kuwait Chapter of Arabian Journal of Business and Management Review Vol. 4,
No.1; September. 2014 unsuccessful not only in most of organizations, particularly
state organizations, but also such an
evaluation has been criticized by employees and even mangers for many reasons
(Purbey et al.,
2007).
State management services law approved in 30 September 2007 by common
commission of
inspecting state management services act of the Parliament, according to article 85 of
Constitution
of Islamic Republic of Iran submitted to the Parliament, after the agreement of the
Parliament on

9. its 5-year experimental implementation, was confirmed by Guardian Council in the
open session
dated 10 October 2007 and communicated to the government to be implemented
through a letter
from the Parliament speaker in 17 October 2007.