PERFORMANCE
MEASUREMENT &
METRICS
Adopted: October 2013
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What is a professional
practice statement?
This Professional Practice Statement, developed by the
Association Forum, is provided as a management tool for
associations and individual association professionals,
developed by experts in the industry, and recommended as
a means to achieve excellence in managing associations
and other not-for-profit organizations.
BACKGROUND
This document will introduce the reader to the concept of
performance measurement and metrics as applied to
associations. As associations work to increase member
value, there is an increasing need to measure effectiveness
with respect to programs, marketing campaigns and
personnel performance. Since association work often
involves staff and volunteer leaders working together on a
common goal, it is helpful to have tools in place to guide
and evaluate this work. Following is a discussion of some
methods currently being used to evaluate performance.
PERFORMANCE MEASUREMENT SYSTEMS
Performance measurement is an important cornerstone for
any organization and can help ensure that:
1. Best practices in the organization are identified and
expanded,
2. Processes are benchmarked against the performance
of outside organizations,
3. Resources are used efficiently and effectively, and
4. Strategic activities are aligned to the strategic plan.
Performance measurement needs to involve both senior
management who understand the long-range goals of the
organization, and front line staff who know the kinds of
measures needed for thoughtful decision making. Although
there is no “perfect set” of measures, organizations should
experiment with a “starter” set of metrics and evolve these
measures over time. The biggest challenges in
measurement are not in the collection and analysis of data,
but in interpretation of results and making decisions based
on the information. Education is an essential part of all
measurement. Knowing what to measure, how to measure,
how to use measurement and how to link these measures
to other knowledge of organizational performance are
critical to the successful use of performance measurement.
Provide training to the teams in how to do this and set up a
process for reporting, reviewing and improving.
Today, there are many business performance measurement
systems in use, several of which can be adapted to
nonprofits and associations, depending upon the desired
outcomes of the organization. Performance management
effectiveness depends on identifying and integrating
appropriate business metrics that are customized to an
organization’s business, strategy and industry. One system
recommended by several experts in the application of
performance metrics to the nonprofit and association field
— the Balanced Scorecard Metrics (BSC) — will be
described briefly within this statement.
Leadership is critical in designing and deploying effective
performance measurement systems. Clear, consistent and
visible involvement by senior executives and managers is a
necessary part of successful performance measurement
and management systems. Senior leadership should be
actively involved in both the creation and implementation of
its organization’s systems.
A conceptual framework is needed for the performance
measurement and management system. Every organization
needs a clear and cohesive performance measurement
framework that is understood by all levels of the
organization and that supports objectives and the
collection of results.
Effective communication with employees, process owners,
customers and stakeholders is vital to the successful
development and deployment of performance measurement
systems. It is the customers and stakeholders of an
organization, whether public or private, who will ultimately
judge how well it has achieved its goals and objectives.
And it is those within the organization entrusted with and
expected to achieve performance goals and targets who
must clearly understand how success is defined and what
their role is in achieving that success. Both organization
outsiders and insiders need to be part of the development
and deployment of performance measurement systems.
Accountability for results must be clearly assigned and
well-understood. High-performance organizations clearly
identify what it takes to determine success and make sure
that all managers and employees understand what they
were responsible for in achieving organizational goals.
Performance measurement systems must provide
intelligence for decision makers, not just compile data.
Performance measures should be limited to those that
relate to strategic organizational goals and objectives, and
that provide timely, relevant and concise information for
use by decision makers at all levels to assess progress
toward achieving predetermined goals.
Compensation, rewards and recognition should be linked to
performance measurements however this linkage should be
positive not punitive. Such a linkage sends a clear and
unambiguous message to the organization as to what’s
important.
NONPROFIT/ASSOCIATION CONSIDERATIONS
In today’s association management world, there is an
increasing demand for accountability from leaders,
members, the public and other stakeholders. According to
Paul Arveson, in his article Translating Performance
Metrics from the Private to the Public Sector (1999)1, there
are differences in the application of performance
management systems from the private sector to the public
sector. He explains the differences in the following chart
(association specifics have been added and are noted in
parentheses):
Strategic
Private Sector Public Sector
Feature
General Strategic
competitiveness mission effectiveness
Goal
General profit; growth;
cost reduction; efficiency; (budget compliance)
Financial Goals market share
innovation;
Values accountability to public; (members) integrity
recognition
Desired Outcome customer satisfaction customer satisfaction
stockholders; taxpayers; inspectors; legislators (members,
Stakeholders
owners; market leaders, key stakeholders)
Budget Priorities leadership; legislators; planners (members,
customer demand
Defined by: leadership, other stakeholders)
growth rate; best management practices; (strategic priorities
earnings; market linked to organizational mission; member
Key Success share satisfaction; member retention and growth; sales)
Factors
uniqueness sameness; economies of scale
advanced technology standardized technology
ASAE’s website provides a multitude of articles under
“performance management” that address various aspects of
performance management systems. One article, written by
Francie Dalton, details the application of a metrics-based
management system, which she defines as a form of
managing processes, outcomes and performance that relies
on three components:
1. Current state: Establishes the right now regarding key
association priorities.
2. Desired state: Establishes clear targets for those
priorities.
3. Evidence-based performance measures: Establishes
measurable outcomes to bridge the gaps between the
current and desired states.
METRICS
A metric is a meaningful measurement taken over a period
of time that communicates vital information about a
process or activity, leading to fact-based decisions. Metrics
are usually specialized by the subject area. In business,
they are sometimes referred to as key performance
indicators (KPI). Performance metrics should be
constructed to encourage performance improvement,
effectiveness, efficiency and appropriate levels of internal
controls. They should incorporate “best practices” related
to the performance being measured.
Characteristics of a good metric:
Drives appropriate action
Meaningful to the customer (member, donor, etc.)
Simple, understandable, logical and repeatable
Clearly defined
Data that’s economical to collect
Shows how organizational goals and objectives are
being met
DEVELOPING METRICS
Since it is not resource-effective to measure everything,
organizations should therefore select and monitor the key
metrics. To identify those key metrics you must identify
your key work processes or those processes which create
the most value for the organization. To identify those, look
at those products and/or services you provide to your
members and document the internal steps that design,
produce, and deliver those products and services. Then
consider the support processes that make these member-
driven processes possible, such as your key support
processes in sales, marketing, finance, human resources,
IT, etc. Once you’ve identified your key processes and their
current state, identify areas to improve (desired state), and
determine measurements to bridge the gap.
You will want to provide training for staff on how to develop
metrics. Metrics should pass the “SMART” test, in that they
should be Smart, Measurable, Attainable, Realistic
and Timely.
Ask the following questions when developing performance
metrics:
1. Is the metric objectively measurable?
2. Does the metric include a clear statement of the end
results expected?
3. Does the metric support member requirements,
including compliance issues where appropriate?
4. Does the metric focus on effectiveness and/or
efficiency of the system being measured?
5. Does the metric allow for meaningful trend or
statistical analysis?
6. Have appropriate industry or other external stands
been applied to the metrics?
7. Does the metric include milestones and/or indicators
to express qualitative criteria?
8. Are the metrics challenging but at the same time
attainable?
9. Are assumptions and definitions specified for what
constitutes satisfactory performance?
10. Have those who are responsible for the
performance being measured been fully involved in the
development of this metric?
While not comprehensive, a list of some common areas
measured by association metrics include: membership
numbers, event and education attendance, growth in
certification programs, member satisfaction, service and
benefit usage, grants and scholarships utilized, media
imprints, Web site trends, impacts of advocacy programs,
retail sales, and sponsorships. Below are some examples
of performance measures.
Example 1: Members’ Professional Development Program
Goal A community for valuable connections and enhanced professional and
technical skills.
Enhance professional development skills of members to make them
Objective
more marketable to industry.
Target new graduates. Create easily accessible and successful methods
of delivering education for new graduates by conducting two web casts
Action Plan
for students about professional development issues. Two webcasts held
by June, 20XX
Responsibility Staff, local association presidents and industry professional liaisons.
1. More than 50 students attend each webcast.
Metrics/Key
Performance 2. Evaluation feedback yields an average 4.0 (out of 5.0 scale) for
Indicators usefulness and applicability of the content.
EXAMPLE 2: ASSOCIATION COMMITTEE MEMBERSHIP
ENHANCEMENT PROJECT
Goal An ongoing, sustainable pool of members for all association volunteer
roles.
Engage members in association volunteerism through a leadership
Objective
development initiative
Action Plan 1. By second quarter 20XX, create a volunteer component of the
member profile in the member database where members may
indicate their volunteer interests and preferences.
2. By third quarter 20XX, develop and distribute via email to all
members a marketing piece making a professional and a
personal case for volunteering
3. By fourth quarter 20XX, develop and deploy an annual
invitation to volunteer, encouraging use of the volunteer
database to indicate preferences and interests
4. By fourth quarter 20XX have the nominating committee use
the member database as a resource for identifying new leaders
5. By first quarter 20XX, develop and deploy online and
classroom volunteer orientation modules
6. By third quarter 20XX, develop and deploy annually a
classroom chairperson’s training module
7. Spotlight current volunteer involvement and achievements in
the monthly member newsletter beginning first quarter 20XX
8. By 2nd quarter 20XX, begin issuing press releases on new
volunteer appointments to the volunteers’ local media outlets
Staff, Professional Development Committee and Nominating
Responsibility
Committee
1. A 20% return by year end 20XX in the number of volunteers
who complete the interest/preference section of their member
Metrics/Key record
Performance 2. An increase of 5% in the number of members volunteering for
Indicators committee service at the national level
3. An increase of 10% in the number of members volunteering for
committee service at the local level
BALANCED SCORECARD METRICS
An alternate system for developing metrics is the Balanced
Scorecard Metrics system (BSC). It was developed by Dr.
Robert Kaplan (Harvard Business School) and Dr. David
Norton in the early 1990s. Traditional performance metrics
provide information on an organization’s past results. BSC,
by contrast, can better predict future performance or how
well the strategic plan is being executed.
The BSC process is a continuous, cyclical process focused
on internal processes and external outcomes. The system’s
control is based on performance metrics that are tracked
continuously over time to look for trends, best and worst
practices, and areas for improvement. It delivers
information to managers for guiding their decisions. BSC
provides a view of an organization from four perspectives:
1. User (voice of the customer/member)
2. Financial objectives
3. Internal processes
4. Change & growth potential
From each of these four perspectives the association must
define its strategic objectives. It should then define three
or four elements it will measure for each objective and
define the target value sought for each measure. Lastly, the
organization should define the initiatives it will undertake
to reach those targets. BSC relies on a well-defined
strategy and an understanding of the linkages from
objectives to initiatives. Organizations should identify both
past and lagging measures that can be used as a measure
for future performance. Finally, organizations should
determine those measure most appropriate for their goals
and not simply adopt the successful metrics of another
organization.
SIX SIGMA PROCESS
Six Sigma is another tool organizations can use to help
them improve work flow, minimize redundancy and
inefficiencies, and improve the quality of the customer
experience. Six Sigma is a blend of metrics and strategy,
changing data into knowledge that leads to new
opportunities. Six Sigma’s success within an organization
is having the core concepts be integrated into the overall
business strategy. “Six Sigma should not replace other
initiatives, but instead offer a tactical methodology to
determine the best approach for a given
situation/process.” (Breyfogle, et. al, 2001).
The following information is an overview of the Six Sigma
process. For more details, references have been cited at
the end of this practice statement that can help guide you
in the use of the Six Sigma process. After reviewing the
various tools, it will be up to the organizational leadership
to decide which tool works best for you.
Six Sigma stands on the basic premise: Define, Measure,
Analyze, Improve, Control (DMAIC). This is the problem
solving approach often used by those who implement the
tool.
Define: This is the overall problem definition. This should
be as specific and complete as possible.
Measure: Accurate and sufficient measurements and data
are needed. Data are the essence of many Six Sigma
projects.
Analyze: The measurements and data must be analyzed to
see if they are consistent with the problem definition and to
see if they identify a root cause. The problem solution is
then defined.
Improve: Once a solution is identified, it must be
implemented. The results must then be verified with
independent data. Past data are seldom sufficient.
Control: A verification of control must be implemented. A
robust solution will be easier to keep in control than a
qualitative solution. (Brusse, 2010)
Investing in Six Sigma is most successful when there is
complete commitment to the process and six sigma
personnel support. This will generate the results an
organization is seeking. The commitment includes:
“Creating an infrastructure with executive
management that supports cultural change
Using “30,000 foot level” metrics and cost of poor
quality when selecting projects
Selecting the “right” people and realigning resources
as needed
Selecting the right provider with an effective training
approach
Selecting the right projects that meet customer needs
and provide bottom-line benefits
Developing project metrics that yield insight into the
process and discourage the “firefighting” approach to
solving problems
Applying the right tools at the right time
Setting SMART goals (Simple, Measureable, Attainable,
Realistic, Timely)
Making holistic process improvement through wisdom
of the organization.” (Breyfogle, et.al 2001)
There are many resources that go into great detail on Six
Sigma. Like any improvement process, champions and
supporters are needed for the success of the program.
Training and dedication are also needed so the process is
implemented correctly and effectively. Evaluating the
process is valuable to determine the effectiveness of the
process.
DISCLAIMER
The Association Forum expressly disclaims any warranties
or guarantees, expressed or implied, and shall not be liable
for damages of any kind, in connection with the material,
information, or procedures set forth in these Statements or
for reliance on the contents of the Statements. In issuing
these Statements, the Association Forum is not engaged in
rendering legal, accounting, or other professional services.
If such services are required, the services of a competent
professional should be sought.
REFERENCE LIST
1
What is the Balanced Scorecard; The Balanced Scorecard and Measurement-
Based Management, Paul Arveson 1998-2008 Balanced Scorecard Institute, a
Strategy Management Group
company, http://www.balancedscorecard.org . Reprinted by permission of
the author.
Metrics-based Management, Francie Dalton, Journal of Association Leadership,
Summer 2005, ASAE & the Center for Association Leadership
Strategic Score-Keeping, Jim Dalton, CAE, Association Management, June 2002
Developing Performance Metrics, University of California Approach, 2005, Oak
Ridge Associated Universities
Key Performance Indicators: How an organization defines and measures
progress toward its goals, F. John Reh, http://www.about.com
How to Measure Success: Uncovering the Secrets of Effective Metrics, Dave
Trimble, Senior Partner, ProSci, http://www.prosci.com/metrics.htm
The Balanced Scorecard, NetMBA, http://www.netmba.com
Serving the American Public: Best Practices in Performance Measurement -
Benchmarking Study Report, National Performance Review, June 1997
http://www.balancedscorecard.org/BSCResources/
ArticlesWhitePapers/WhyManagePerformance/tabid/122/
Default.aspx
Extensive resource for information on the Balanced Scorecard Metrics system is
the Balanced Scorecard Institute Web
site: http://www.balancedscorecard.org .
Epstein, Marc J. and McFarlan, F. Warren. Efficiency and effectiveness of a
nonprofit’s performance. Strategic Finance, October 2011 Vol. 93, Issue4 pp.
27-34.
Breyfogle III, Forrest W., Cupello, James M., and Meadows, Becki. Managing Six
Sigma: A Practical Guide to Understanding, Assessing, and Implementing the
Strategy that Yields Bottom –line Success. John Wiley & Sons, Inc. 2001.
Brusse, Warren. Six Sigma on a Budget: Achieving More with Less Using the
Principles of Six Sigma. McGraw Hill. 2010.
Balanced Scorecard Institute: Translating Performance Metrics from the Private
to the Public
Sectorhttp://www.balancedscorecard.org/BSCResources/Performanc
eMeasurement/TranslatingMetrics/tabid/139/Default.aspx
Designing Metrics for Government Agency
http://www.balancedscorecard.org/BSCResources/Perfo
Performance:
rmanceMeasurement/DesigningMetrics/tabid/140/Default.aspx
Building a Performance Measurement
System:http://rootcause.org/documents/Building-a-Performance-
Measurement-System.pdf
http://www.inc.com/john-
Performance Metrics - Get the Numbers Right:
treace/performance-metrics-get-the-numbers-right.html
Type: Professional Practice Statement
