Apr 8, 2019 in Economics

Jumpstart Performance Measurement

Executive Summary

Performance measurement is a common practice in profit-based organizations, with moist nonprofit organizations believing that it is less effective in their context. Nevertheless, it is important to note that measuring of performance in non-profit organizations allows for effective and efficient disbursement of services. As such, various measures are employed by different organizations in measuring performance, with some having been borrowed from the profit sector. Some of this measures are effective while others may not fit into the context in which they are employed, thus making them redundant or ineffective. Jumpstart has employed various measures in measuring its performance. Out of all the measures, the most effective measure used is the balanced scorecard. However, the organization has not fully explored it to determine its effectiveness. There is need to drop the AmeriCorps as it is less efficient in the organizations context. On the other hand, the organization should consider adopting the “production of welfare” performance measure as it would allow them to clearly articulate the resources and non-resources to the goals of the organization and the intended outcomes. 

The organization should also consider adopting metric-defined performance measures as they would provide a more effective way of quantifying the performance of not only the staff members within the organization but also the system of operation within the organization. Such metrics would also allow for the standardization of the performance of the staff members, thus promote uniformity in terms of working towards the organizational objectives. The use of metrics would also allow for scaling of the performance and thus provide for an easier framework through which the management can be able to identify projects that are of more value to the organization as opposed to those that are of lesser value. This would allow for increased effectiveness in the organization meeting its core purpose, which is satisfying the needs of its beneficiaries. The organization should also consider using staff based results as measures of performance to allow for appropriateness and measurability of such results, which is important in promoting fairness in the appraisal of the members of the staff. 

Introduction to Discussion

Unlike the profit sector, the non-profit sector presents various challenges in the delivery of results. A typical day for the executive director in the non-profit sector is characterized by board tending, fund-raising, and other non-profit activities. As such, both the employees and leaders within the non-sector organizations are forced to serve various constituencies even as they are pulled in a variety of directions. Such scattering is more characteristic of how non-profit organizations are organized as compared to how such organizations operate. Executives and employees in the business world have things easier for them as they can easily measure performance and make adjustments where necessary in towards facilitating good performance. For companies within this sector, the forces of the market provide them with the feedback they require to ensure top performance and that their activities and products meet the needs of the consumers and the patterns of the market. As such, organizations that show top performance receive their rewards from both the consumers of their products and services and investors, while those that perform poorly receive penalties. Quantification of performance is easier as various metrics are employed through return on investment (ROI), quarterly earnings, customer loyalty scores, and other measures of performance. Things are made even easier by the calibration of such measures and comparing them between companies, an aspect that allows companies with high scores where appropriate to attract talent and capital. Managers easily determine when to invest in infrastructure, people and systems that are needed for the organizations to continue providing superior performance. 

As if that was not enough, there are various internal feedback mechanisms at the disposal of the management, which can be used to rank performance and ensure that the appropriate measures are put in place to facilitate top performance. Such measures range from performance reviews to up-to-the-minute operating data, which allow both the employees and the management to direct their focus towards the company’s critical goals and activities required to achieve such goals. On the other hand, unlike the profit sector where markets are determinants of capital, the non-profit sector relies on missions to attract donors who would provide the organization with resources according to how much they are inspired by the audacious goals of the organization. Such missions would also attract funds from members of the board, who act as volunteers in providing the organizations with their expertise and as significant funders of the projects of the organizations. In addition, the missions are expected to appeal to the employees, who are also contributors to the resources of such organizations through taking home modest paychecks and instead carrying out their work out of the passion that they have for it. However, it is important to note that missions play a major role in inspiring the stakeholders as compared to providing a direction that can be followed through by the organization. As such, in this organizations, most of the stakeholders hold differing views concerning what the priorities of the management should be. Most at times, the mission statement’s aspirations most at times mask such differences in views. Assessment and comparison of performance between entities is highly value-driven and subjective among non-profit organizations as compared to profit-based organizations. 

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Considering the diverse nature of the objectives and goals that are pursued by the non-profit organizations consensus is hardly reached on a common qualitative or quantitative measure through which performance can be ranked or evaluated. Even in case where organizations are running the same projects, lack of measures of standard outcomes mean that it is impossible for the performance between such organizations to be compared. Jumpstart is one of the non-profit organizations that has gone to greater heights in terms of applying measures of performance throughout its operations. Such measures are linked to the organization’s performance, which is characterized by improvements in the reach out to students all over the country and positive achievement of the organizations goals in line with its mission. Nevertheless, there are questions concerning whether the use of the performance measures in the organization is necessary, with some of the measures being viewed as redundant and others being viewed as ineffective in mapping the organization’s performance. This paper is going to review the performance measures applied by the organization in order to determine their effectiveness and to make recommendations concerning changes that can be adopted to promote effective measurement of performance and to facilitate increased performance ion the organization on a broader scale. 

Discussion

Need

One of the most difficult, yet fundamental, decisions that non-profit organizations have to make is determining the kind of results that would define their success. Such a process involves translating the mission of the organization into tangible goals that are both attractive enough to compel stakeholders to offer their support and precise to inform the process of resource allocation. A common approach among nonprofit organizations is agreement among leaders to establish an intended impact statement, which identifies both the benefits that an organization is going to offer and the beneficiaries of such benefits. By specifying such aspects, decision makers are offered a clear lens through which they can be able to determine competing and worthy priorities. It is important to note that there is no standard or template that is uniformly used in the establishment of intended impact statements. In this case, the values of the organization, willingness to make critical decisions, and data, all come into play. In terms of organizational values, there are four types of such values that are of great importance including the target population, the approach, the geography, and the target outcomes. Such dimensions of who, where, what, and who must be well addressed by the administration in order to come up with an intended statement that is practical and applicable. As such, it is important to establish a common ground, shared by all stakeholders, from where the process can start. 

Data is also an important part of the intended impact statement, and forms the mantle of this case study as this is where performance measurement comes in. As such, it is important for the organization to employ objective approaches in establishing information that could be used in establishing the statement. Some of the areas that could be explored in the establishment of such data include: the strengths and weaknesses of the organization; the nature and magnitude of the need for the organization’s activities; the resources required for the outcomes to be achieved; and the likelihood of such resources being available. The acquisition and proper use of data is important in ensuring that the organization sets realistic goals that can be measures and achieved. However, the employment of the wrong measures may lead an organization to obtaining of data that is less helpful in terms of providing direction for the performance initiatives in place. Jumpstart experiences such problems with various challenges observed in its employment of performance measures. Such challenges are as a result of poor application of performance measures, such that some of the measures fail to measure what they were intended for and end up providing information that is less helpful in determining the organization’s performance. Unlike the popular practice among non-profit organizations, Jumpstart has been able to prove that they can effectively employ performance measures in their daily activities. Such measures are important in establishing a framework through which all the stakeholders, both internal and external can be able to view the organizations procession and determine their role in effecting the established goals. However, there is need to ensure that appropriate performance measures are implemented and that such measure provide adequate information that can be used to create the intended-impact statement for the organization, to guide future operations. 

Feasibility

It is important to note that unlike profit-based organizations, which can easily come-up with metrics to use in measuring performance, non-profit organizations face a major challenge for the reasons discussed above – including the availability of varying views on priority and determinants of performance.  As such, determination of whether performance measures are doable is an issue of great significance in the non-profit organizations. After money and time have been allocated to different established activities, performance measures adopted by an organization ought to reflect the needs of such an organization and to create a clear lens through which performance can be viewed and through which an organization can compare such performance to its initial projections to allow for the making of crucial decisions where need be I order to facilitate positive adjustments that would ensure the success of the project. There are many measures of performance that an organization can choose from, but most of these measures are only effective in the profit-based organizations and less effective in non-profit organizations. As such, an important criteria in the selection of the performance measures is to determine the practicability of such measures, in that they suit the context in which they are to be applied and are likely to provide the intended results. Implementation of the performance measures was termed as one of the major challenges that Jumpstart has faced in measuring performance. This is because most of the measures adopted in the organization, being a nonprofit, are not quantitative nor standard, and so, different interpretations of the measures could be made by different entities, bringing up the question of their applicability. 

Being a nonprofit, most of the organization’s systems have not embraced a measurement mentality, and thus embracement of numerical measures to determine performance have turned futile as most of them are not well integrated into the systems and neither are they properly used by the employees. However two of the performance measures implemented by the organization including the managing by information (MBI) and the balanced scorecard have proven to be highly feasible. The MBI measure provides the site managers with a skeleton of the services that they are supposed to perform and other duties that their sites are responsible for, thus offering a plan to the process of managing site activities. It is important to note that planning is an integral part of any process and even though the different projects may develop their own plans within the organization, issuing the managers with a framework that can be followed throughout the project has proven to be a highly effective method of ensuring success in their various activities. This is because the managers can be able to track their performance and that of the people they manage through reference to the provide directions. Such is important in making timely decisions in case the intended outcomes are noted to be lacking in the course of the programs. On the other hand, the balanced scorecard proves to be an effective tool in aligning the available resources with the various activities that are required of the organization. As such, by providing measures of how the organization is performing against the allocated resources and comparing such with the projections, the management can be able to note the areas that require adjustments in order to see increased performance. 

Reliability

The dependability of performance measures is a highly important consideration when selecting the measures to employ within a non-profit organization. This comes as a great challenge in most cases, given that the organization may not have a complete idea of the specific measures of performance due to the variances among the stakeholders. At Jumpstart, most of the employed tools are highly reliable in the nonprofit context, given their scope of performance measurement in relations to the non-profit activities of the organization. One of the most reliable performance measures in the organization is the balanced scorecard. The balanced scorecard when well employed is much more than a mere measure of performance. As such, it can be used in designing of a timetable and establishing measurable goals, and it can be employed in transforming the strategy of the organization. If well utilized at Jumpstart, the BSC can be used be used to observe and measure the cause and effect interaction between the major organizational objectives and provide an accurate report concerning those initiatives that are lagging, as well as those that are leading. Instead of the management guessing which of the various fundraising campaigns at their disposal, services, and events are more of value to the organization, the BSC provides them with substantial evidence that can be used to make such crucial decisions. 

Assigning responsibilities and designing a schedule of tasks that is to be used to implement such responsibilities is a major benefit of the BSC and would allow Jumpstart to become more proactive in its operations, allowing the organizations to promptly react to timely measures of each activity’s success without depending on traditional methods, which cannot a glimpse into what is doing well and what is not, in the course of implementation. As such, the balanced scorecard is a highly reliable tool in non-profit organization, but Jumpstart is yet to realize its full potential, and thus there is need for the organization to embrace all the properties of the measure in planning their activities and in the assessment of progress of such activities in the course of their programs. Another measure employed by Jumpstart that has proved to be effective is the Site Management and Monitoring Tool (SMMT). Like their counterparts from the profit-based sector, non-profit organizations need to maintain congruence among their departments and sites, an aspect that calls for a holistic approach in addressing the various management and implementation tasks that they face. As such, the SMMT provides such an approach by ensuring that all the sites are set at part with each other through establishment of sort of standard that can be used to measure performance and success. By establishing such determinants of success and high performance, the tool allows different sites to work in congruence with each other towards achievement of the specific organizational goal. Like the balanced scorecard, this tool is important in the planning phase of the organization as it involves setting of the projects that are to be implemented by the project and allocating financial managerial responsibilities to site managers, allowing for a decentralized approach in the management of resources and promoting implementation activities that are most likely to lead to the best results. This also allows for the establishment of a performance framework that can be used to measure the performance of the stakeholders within the project according to their roles. 

Practicability

How easy a performance measure is to construct, score, administer, and interpret is an issue of great importance in choosing the measures to use to determine performance. Different tools as employed have different capacity’s in which they can work and some of the tools may be highly effective in one non-profit organization, yet fail to be effective in a different organization, due to differences in scope, organizational structure, or performance indicators. In the case of Jumpstart, one of the tolls that has proven to be less practicable is the AmeriCorps reporting system. As much as it may be viewed as an effective way of engaging quantitative data in establishing performance relationships between individuals within the organization, the tool is less practicable as it involves self-reporting of data about performance.  It is important to understand that measures of performance that establish grounds for comparing different personalities result in a sense of competition among the personalities. As such, embracing of measures that would allow such individuals to report their own performance is likely to lead to collection of subjective data as opposed to the intended objective data, which would be effective in informing key decision processes. This aspect makes the AmeriCorps a less effective tool to apply at Jumpstart. It is important to note that the major difference between non-profit and profit-based organizations is that for the non-profit organizations, service is highly vital, as compared to the profit-based organizations. Such service in the nonprofit organizations is privately organized and decentralized, directed at addressing perceived needs, and grows out of individual’s compassion or sense of duty. Services offered by the non-profit organizations are thus as a result of decisions made by the participants to volunteer and are not based on any attractive incentive. As such, promotion of performance measurements that create a sense of heightened competition and rank individuals as a result of their performance are likely to shift such a course to increased divisions among the participants and the change of motive for participation in the service provision exercises. As such, the AmeriCorps tool forms one of the tools that has to be done away with altogether in order to appraise the spirit that individuals have towards providing services to others in the community and not the skills they have and how better they are positioned in providing such services to the public. The approach promoted by AmeriCorps is less likely to enhance the spirit of volunteerism especially among individuals who will feel that being ranked below others means that they are not up to the task. 

To replace this performance measure, Jumpstart should adopt the Production of Welfare Framework (POW). This measure is characteristic of non-profit organizations and thus hold the potential to succeed in such an environment against all odds as it is flexible enough to go with the changes that take place in terms of the objectives and activities of the organization. The main elements of this approach include the final outcomes, intermediate outcomes or outputs, non-resource inputs, and resource inputs. The finance outcomes include the achieved goals of the project at its closure, while intermediate outputs refer to the various achievements that take place in the course of the project including the tasks that are achieved. Resource inputs include donor investments, volunteers, staff, and any other stakeholders. On the other hand, non-resource inputs include individual attitudes and opinions within and without the organization. Another important factor of the POW framework is that it also involves a macro and meso context. The latter refers to the internal organizational social environment while the former is the external environment, which is includes entities that have an effect on the nonprofit organization even without having a direct connection to the non-profit organization. 

Fairness (Legal, Ethical, Moral)

The ethicality, morality, and legality of performance measures ought to be observed to ensure that all aspect of performance are within such confines. It is important for the measures to be free from offense and to uphold legal provisions of organizational performance and competitiveness. More stress is placed on measuring performance and results without considering how such performance can be measured in an equitable and fair manner. The solution to this question involves determining the the kind of results that each of the employees or volunteers is required to produce. As such, special attention should be directed towards determining which result is valid and then establishing ways through which the performance of such a result can be measured in the course of the activities. Consideration of such items would provide the management of an organization with necessary tools that can be used to evaluate the performance of each of the members of the staff and to give each of them a fair appraisal. To establish results that are valid, it is important for the management of any nonprofit organization to start by asking three major questions with regard to performance measurement. The first question is what is the total output of this individual? Who are the beneficiaries of their activities? What will happen if they are absent? In profit-based organizations, establishment of valued reasons is much easier as most of the jobs have obvious “results”, which can be quickly recognized. Nevertheless, in non-profit organizations, this is a more difficult exercise as the jobs may not be similar for most of the staff members or volunteers, such that each job may yield different results, especially if it involves a unique project that has not been explored before. For fairness to be observed, it is important to ensure that the measure of performance identifies the result that is most suitable for each of the staff members. Case in point, for the student tutors from colleges when one says that “taught ten students in a day”, at a point they may be right. However, it is important to ask oneself whether this is what their performance should be measured by. It may be more productive is, for instance, performance in such a case was measured by the student’s outcomes or performance in a quiz. 

In this perspective, all the measures employed by Jumpstart are fair and thus considering such an angle, should continue to be implemented towards establishing the performance and setting of organizational goals that can be pursued by the organizational projects. It is however important for the management to ensure that all stakeholders are considered in the selection of future performance measures to avert any misconceptions that such stakeholders may hold against the ethicality, legality, and morality of the performance measures. As such, the kind of result that is selected to be used in measuring the performance of a members of the Jumpstart’s staff should be in such a way that it is under the control of the staff member. Case in point one cannot use a result such as the “number of volunteer appointments booked” as a result to measure the performance of a secretary within the organization as such a result is within the control of the management who may decide to stop taking any more appointments, an aspect that will leave the secretary with a score of zero. Instead, a measure such as “improved student grammar” can be used as a result since it can be influenced by the tutors if they take more time to train their tutees in the use of grammar. 

Safety

The SMMT and MBI performance measures employed by Jumpstart uphold safety by reviewing performance not only at the end of the project but through establishment of measures and directions that have to be adhered to in order to affirm the success of the program and to define high performance. By establishing a plan through which the management and the rest of the stakeholders in nonprofits can follow towards achievement of the goals of the organization, the performance measures allow for increased cross-checking of the course of the project and determining if any factors or details that may pose a risk to the safety of the stakeholders. Such risk is well countered early enough and the safety of the stakeholders is guaranteed. 

Value

Each of the performance measures employed by an organization, both in the profit and nonprofit sector is aimed at ensuring that predetermined activities and events are well implemented so that an organization is able to meet its goals. This means that the organizational activities are placed at per with both the resources and the timeline, so that the implementation of the project produces the same or a higher value activities than the finances invested in it. On the other hand, it is the intention of any manager to try and reduce the cost of their projects or programs and thus any efforts in the non-profit sector, which employ performance measurement to cut on the cost of the organization are more than welcome. In this case, all of the approaches embraced by Jumpstart in measuring performance are cost effective except for the AmeriCorps, which proves to hold no significant value given that it ranks individuals and thus establishes distinguishing grounds for conflict and possible reductions in volunteering parties. As such, considering the benefits of the measures in terms of reducing cost, the AmeriCorps proves to be the only measure that should be done away with is it is likely to lead to an increased need to hire individuals based on incentives due to decreased volunteers, an aspect that would lead to high costs incurred by the organization in the hiring of the new staff to cover the gaps left by the volunteering parties.

On a larger scale though, it is important to note that the kind of feedback that is provided by the performance measures in measuring the performance of the tutors and other members of the staff is less effective. Such measures fail to provide a clear scale on which performance can be measured and leave the decision of performance at the mercy of the organization’s management, an aspect that creates a level of subjectivity in the making decisions concerning what indicators show more performance than others. As such, it is highly recommended that Jumpstart embraces metric-drive performance measures as they would provide them with a clearer picture of each entity’s performance, and the performance of other factors including the systems applied and resources allocated to different programs. Embracing metric-drive measures would allow for proper scaling of the various “results” that are appropriate and highly applicable in measuring performance for the different members of the staff, and thus provide a clear framework that basis on objective quantitative data to rate the staff members according to their responsiveness to the metrics. Such metric-driven measures of performance would allow for proper identification of the strengths of the organization and the projects that are more important and of value to the organization, thus facilitate efforts towards achieving such projects. 

Significance

Like earlier noted, performance measures are equally important in nonprofits as they are in profit-based organization. For most organizations within the non-profit sectors, performance measures are important in meting demands of the external stakeholders. This is evident in Jumpstarts case, where the author suggests that the NIP and balanced scorecard and the AmeriCorps performance measures were adopted due to the demand for data and pressure from tow of the major external stakeholders. This notion is does not provide reason enough for the implementation of performance measures. As much as most non-profit organizations may be more interested in attracting investors and donors than they are in identifying the needs of the beneficiaries of the services, it is important for proper measures to be put in place to ensure that such needs are identified and adequately met throughout the implementation process. The balanced scorecard is a highly significant performance measure if well embraced by the organization given that it allows for passing on the right information across the organization to right individuals and at the appropriate time, an aspect that would facilitate the efforts of the tutors among other staff at Jumpstart towards achieving and even surpassing the pre-established organizational goals. One of the most significant benefits of the balanced scorecard is that it clarifies the strategies. As such, it translates objectives adopted by nonprofit organizations into measures that are quantifiable. For Jumpstart, complete embracement of the balanced scorecard will allow for elimination of any feel-good aspirations that are vague and redefinition of the organization’s objectives in a way that can be understood by every individual, thus facilitate achievement of such objectives. The balanced scorecard also allows for communication of strategic objectives, meaning that it translates the broader organizational objectives into operational objectives that are practicable and easier to implement. As such, the balanced scorecard would allow leaders at Jumpstart to identify the specific objectives that ought to be achieved and to effectively communicate to the tutors and other members of the staff on how such objectives can be achieved. The balanced scorecard can also be used at Jumpstart to plan strategies whereby practicable and achievable goals will be set for each organizational initiative and establishing stretch objectives. This is an important part of the balanced scorecard since the objectives and goals can only be met after tasks have been accomplished. 

Jumpstart should consider adopting the “production of welfare” framework in the measurement of the performance of the tutors as this would allow for increased efficiency in their activities. This would provide an effective tool for the organization, given that it establishes a link between the inputs of the stakeholders, the outcomes of such inputs, and the quality of services that are provided. This approach allows for the identification of the non-resources and resources that ought to be incorporated into the project to allow for achievement of the project goals. As such, establishment of a budget with the use of the POW allows for proper monitoring of resources all through the project. The major advantage of this form of performance measure is that in is able to contain various evaluative approaches, theoretical concepts, stakeholder goals, and professional objective. 

Conclusion

It is clear that performance measures are important in both planning and implementation of projects within non-profit organizations. Nevertheless, unlike in profit-based organizations, the process of selecting performance measures in non-profit organizations is difficult as such organizations have varying stakeholders with various interpretations of the indicators of performance and thus believe that the managers ought to implement measures, which are not agreed upon by their counterparts. In addition, the nonprofit organizations use the missions that they establish to attract investors and thus they do not have a clear direction as to what they intend to achieve like it is the case in profit-based organizations which use market indicators to reveal trends and directions that ought to be taken to achieve organizational goals. As such, in Jumpstarts case, all the performance measures have proved to be effective, except for the AmeriCorps measure, which is less practicable and thus should be done away with. In addition, it is a recommendation that the organization should fully embrace all the features of the balanced scorecard as it would prove beneficial not only in measuring performance but also in planning of the various activities of within the organization. 

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