Performance Management: Four Components for Success

Performance Management is a year-round cycle of setting goals, and measuring and rewarding results, for each individual in an organization. There are five steps to effective performance management for nonprofits and four major components: establishing business and developmental goals at the individual level, providing ongoing coaching and feedback to maximize performance, conducting formal reviews and evaluations, and sharing awards and recognitions with employees after formal reviews. Follow these steps for maximum employee engagement and overall organizational performance.

1.) Establish business/developmental goals at the individual level

  • Set “smart” goals—goals that are specific, measurable, achievable, relevant and time-bound.
  • Decsribe success and measurement from both the “what” and the “how” perspective
  • Include individual developmental goals to improve role performance and to identify specific activities or tactics

2.) Provide ongoing coaching and feedback to maximize performance


  • When giving feedback, realize it is a gift to move employees toward success
  • Be positive and corrective—what’s going well and where is adjustment needed?
  • Focus feedback on performance, not personality
  • Feedback is owned by the giver using “I” statements; make it theirs
  • Continually check for comprehension
  • Make feedback timely so that it has maximum impact—act quickly and efficiently


  • Take advantage of one-on-one meetings to coach employees
  • Can be combined with feedback if related
  • Opportunity to check for alignment on “where we’re going”
  • Exchange of information and ideas
  • Development discussion
  • There are three types of coaching conversations: Corrective/Feedback, Problem-Solving/Planning, and Teaching/Instructive
  • Benefits of Coaching: improved engagement, increased motivation, best for retention

3.) Conduct formal reviews and evaluations

Key components of review and evaluation:

  • Employee self-assessment
  • Feedback of key stakeholders
  • Your observations (as manager/superior/etc.): be sure to compare all results to goals set; share final assessment, evaluation and adjust if needed based on discussion with employee; and inform employee of reward, if any

4.) Share rewards and recognition

  • When it comes to reward and recognition, the definition is up to you
  • You must push past any discomfort or insecurity about offering recognition—even giving something as small as a genuine thank you.
  • Think of one time you received recognition for something you did well: What was the recognition? How did it make you feel? Use your past experience to choose the positive reinforcement you’ll show to your employee

5.) Repeat steps 1-4

A robust Performance Management Process is just one key to engagement in reversing nonprofit employee burnout. If your organization would benefit from learning hands-on tactics for retaining and recruiting top talent, an ESC consulting project may be a logical step forward.

ESC of New England offers a complimentary two-hour evaluation to all interested nonprofits—contact Ulea Lago, ESCNE Director of Consulting, for more details at or call 617-357-5550.

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