Performance measurement is a series of ongoing processes in which organizations track, analyze, and derive learnings from important program and operational data, which allow them to maximize their desired result. In the social sector, measuring performance allows nonprofits, funders, and other agencies to track progress towards intended outcomes, ensure programs are being implemented as designed, unearth new areas and avenues of improvement, communicate success and progress to funders and partners, and over time gain new insights about what works.
Central to effective use of performance measurement is the development of a performance measurement framework, a culture of learning which encourages performance measurement, and a workable system for integrating performance measurement into an organization’s existing structure. With these three components in place, organizations can implement and adapt their own performance measurement processes to help them track, understand, and improve their impact on the individuals and communities they serve.
Best Practices for Performance Measurement
Develop a Framework
The first step when beginning the process of measuring performance is to create a framework which articulates the organization’s goals and vision of success, what activities and operations it currently performs, and a cycle of measurement, learning, reporting, and improving. Frameworks position measurement within an organization’s larger theory of change, identifying key indicators which relate to the organization’s mission to be tracked and analyzed and outlining an ongoing process for quality improvement.
Establish a Culture of Learning
A strong culture of learning is equally critical to ensuring the long-term success of any performance measurement system. It is important for an organization’s leadership to embrace performance measurement as a tool for greater success and for staff members to be centered in the learning process. The strongest performance measurement systems are typically a core responsibility of an organization’s own staff and allow organizations to use measurement not just for compliance, but for ongoing adjustment and growth towards maximum social impact.
Create Tools & Systems
Building a performance measurement system is a multi-step process. Organizations first assess what data they are currently capturing and their processes for doing so. The next step is to understand what additional indicators are required to track the organization’s progress towards its desired outcomes and determine the tools that the organization will employ to capture this data. Once these initial stages of the measurement system are in place, organizations can build dashboards to visualize their data and report the findings from their performance measurement systems.
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