How a Structured Performance Management System Drives Organizational Success

When it comes to talent management, mission-driven organizations often face challenges such as limited budgets, high burnout rates, and competition with the private sector for skilled professionals, which can make it difficult to build and retain a stable team. Every year, talented young adults enter the nonprofit sector excited, and hungry to make a difference. However, without clear career growth opportunities and support, enthusiasm can wane, leading to turnover that disrupts organizational impact. For many professionals in the nonprofit sector (whether new or tenured) these are very real challenges. However, with a little planning, most organizations can mitigate these issues and help their teams grow, while maintaining their mission-critical work.

Recently, we collaborated with Third Plateau to demonstrate how organizational culture and a structured performance management system are essential building blocks for supporting your organization’s strategic vision and long-term success. Learning how to create, implement, and maintain a system that works for your organization is key to ensuring the longevity of your staff and the success of your strategic goals. And today, we’re giving you the tools to get started – let’s dive in. 

Performance Management and Strategic Vision

Performance management, organizational culture, and strategic vision serve as a strong foundation for your ultimate objective: a successful, sustainable organization that meets or exceeds the goals defined by your mission statement. When one of these “building blocks” is weak or absent, it puts your mission in jeopardy. 

Defining your internal cultural goals is often the best first step in creating a stable ‘organizational structure’. We encourage you to read the partner to this blog, “How a Defined Workplace Culture Supports Strategic Vision,” for suggestions on curating your workplace culture. But once you’ve established the values that you want to shape internal culture, you can move onto the next building block: performance management. This is where you can create systems that promote transparency and accountability. A well-designed performance management system can also act as a bellwether of employee satisfaction and your success in building the culture you’re aiming for. Most importantly, it will help you adjust if you are not achieving your intended targets. 

What Makes A Successful Performance Management Program 

When done well, a performance management program will demonstrate that employees are an organization’s greatest asset. One of the key indicators that you’ve achieved this is that honest and authentic lines of communication are encouraged. Edgility’s Marissa McNeil describes it this way:

“Honest feedback about what’s working well and where there are areas of opportunity are really important from a business strategy perspective. Answering strategic questions about talent in an actionable way…can inform strategic growth plans for staff and lead to meaningful career advancement.”

This ties into another important element of a successful performance management system: it clarifies the bar for success. Knowing what qualifies as good performance also makes candidate sourcing simpler in two ways. First, it allows you to critically evaluate which team members could take on a new role (and hiring from within is generally simpler and more cost-effective). Two, it creates a scorecard for evaluating external candidates, streamlining the process of going from open role to filled and saving human and financial resources. 

Best Practices In Performance Management 

Building an effective and sustainable performance management system for your organization involves three key aspects:

• First, develop a framework. Determine how you will track and measure Key Performance Indicators (KPIs), competencies (what is needed to perform the role well), and values (does this person embody organizational values?). You can weigh each of these pillars equally or choose to weigh some higher than others so that employees’ ratings accurately reflect their achievement as you’ve defined it.
• Second, your performance management system should answer the big questions (i.e. who’s under or overperforming).  
• Third, it should establish habits for how and with what frequency you check in on performance. This could also include less structured feedback sessions. 

Developing your performance management system will take thought, effort, and time. But it can also drive outsized progress towards your mission if staff are better qualified, more engaged, and more likely to stay with the organization. 

Equity In Performance Management  

At Edgility, we frequently discuss the value of equity in driving change. While this term is sometimes framed negatively, we firmly believe that at its core, equity is essential, and the building blocks of equity remain the backbone of strong organizations. These building blocks are a) inclusion and belonging, b) clarity and transparency, and c) fairness and consistency. Each organization will prioritize these in different ways, but knowing which are the most important to your mission and vision can help you know what to focus on when building your ideal performance management system. Leveraging these building blocks will allow you to create a program that ensures all employees are heard and that feedback is given in the same way across the organization. By prioritizing your values and fostering a fair and supportive environment, organizations can create sustainable systems that bolster their mission both internally and externally. This approach enables vital work to continue unimpeded through a team of engaged and mission-driven individuals. 

When you partner with Edgility, our team will assist you in determining how your team prioritizes each of these values and how that translates into practical application. Because we know that developing a strong, values-aligned performance management system will attract and retain the qualified human capital your organization needs to thrive. If you’re ready to be externally competitive, internally equitable, and fiscally sustainable, let’s talk. Send us a message to learn more or get started.