Older lady with playing childrenDo performance managers need to be external to the program?

No. Performance management systems can be internal or external to an organisation or program of service(s). Which is more appropriate will depend on the particular case.

Is this about new services or can it be used for a codified service model?

Some programs have been established to do things differently – to change how prior services have been delivered, particularly in areas where many services have failed.

In contrast, some programs have been established to test a particular model of service. For these services, performance management will be valuable to ensure successful implementation of a codified model, particularly in relation to key variables such as staff. It will also enable continuing improvement.

What about small organisations?

Services delivered and managed by only one person have almost perfect information. All feedback is received by them, they start to process trends when they see people behaving the same way or saying the same things, can adjust their service in response and see what happens when they do. A performance management system almost tries to replicate this access to information, but with more people and more organisations. Small organisations will likely have something to learn about managing performance, but their need for a formal system may be far less than larger organisations or collaborations where information does not flow so freely. As they grow, so too will their need for increased performance management capabilities.

Is this all about social impact bonds and pay-for-success contracts?

No. These contracting models are the most commonly referred to in this paper because the author and her interviewees have the bulk of their experience in this very tiny segment of service delivery models. Some social impact bonds are excellent examples of iterative improvement, but performance management is a much bigger agenda and relevant to many organisations that will never need nor want to engage in a social impact bond or pay-for-success contract. Performance management is relevant to those working in development, microfinance, social business, domestic welfare and the public service.

How does Performance Management relate to Social Impact Measurement

Performance management is social impact measurement that happens during service delivery so that services have a greater impact. The G8 Working Group on Impact Measurement produced seven best practice guidelines for investors that support the performance management systems described in this paper. They encourage investors to:

  • Set Goals
  • Develop Framework & Select Metrics
  • Collect & Store Data
  • Validate Data
  • Analyse Data
  • Report Data
  • Make Data-Driven Investment Management Decisions[i].

No matter what perspective is chosen, Isaac Castillo captures the basic purpose well, “The first (and perhaps most critical) step in creating a culture of outcomes measurement is getting everyone to understand this simple statement: A nonprofit should measure outcomes for a single reason: to improve the quality of services for clients.[ii]

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[i] Working group on impact measurement (2014). Measuring Impact. Social Impact Investment Taskforce.

[ii] Castillo, I (2012). First Do No Harm… Then Do More Good. In Morino, M. Leap of Reason.