Gaining knowledge on the utilization of different performance management components enhance a non-profit organization enables them meet their managerial objectives, and those of their frontline staff. This includes adhering to different practices and lessons that foster the organization to plan for improving their performance in the future. Renz argues that the management is expected to conduct performance assessments to explore the alignment of employees to achieving the organization’s success (Renz, 2016). This also helps in introducing favorable management models learnt through the study. Researchers argues that managers often use assessments outputs and performance inputs through training its employees to meet the current demands of the organization in achieving success (Renz, 2016). Managers are mandated to align employee’s individual performance to that of the organization, and ensure that they lead to achieving similar goals and objectives (Selden and Sowa, 2011).
Renz supports Sally and Jessica’s argument that non-profit organizations in the private and public sector encounter many challenges as they are hit with the pressure of proving its capabilities to improve their performance and plans in the future (Renz, 2016). Non-profit organizations are expected to foster and measure their effectiveness through assessment of the organizational members (Renz, 2016). The authors compare the non-profit to the profit sectors in the private and public sector. They argue that their performance management is studied extensively to overcome all challenges that deter their development practices (Selden and Sowa, 2011). Prentice argues that managers are able to approximate an organization’s performance, capacity, and financial health through simple measures, from an empirical basis (Prentice, 2016). These activities are based on its predictability to fund opportunities and activities in the organization, and prevent its failure in the future. Internal Revenue Service For, 990 explores the question whether accounting measures can be used theoretically to intuitive defensible and constructs that improves the organization’s likelihood to succeed (Selden and Sowa, 2011). Christopher explains that the current financial performances of non-profit organizations is evaluated through careful examination if its solvency, liquidity, profitability, and margin (Prentice, 2016). These constructs are always useful as they guarantee how the non-profit organizations accrue their debts, monitor the finances of the organization, and measure their progressiveness towards attaining a sustainable future. The non-profit organization managers are mandated to understand the profitability, margin, liquidity, and solvency concepts and examine them to understand their performance (Prentice, 2016).
Sally and Jessica supports these claims, arguing that performance appraisals in human service organizations are as necessary, as in the profit organizations, from a staff and managerial perspective (Selden and Sowa, 2011). The authors argue that managing individual performances in the organization starts from the top to bottom levels. Every employee in the non-profit organization is expected to abide to the stipulated managerial standards to increase their performance. Employees must meet the organization goals, keep to its priorities and expectations in order to achieve success in the long-run. Renz argues that performance management processes in the organization also foster competitiveness (Renz, 2016). This includes adhering to different practices and lessons that foster the organization to plan for improving their performance in the future. Sally and Jessica supports these claims, arguing that performance appraisals in human service organizations are as necessary, as in the profit organizations, from a staff and managerial perspective (Selden and Sowa, 2011). Introduction of performance appraisals ensure that employees develop unique theories and ideas on how to make themselves better. This is effective as it leads to better organizational performance (Selden and Sowa, 2011).
“The ultimate objective of a performance management process is to align individual performance with organizational performance; the process should signal employees about the organization’s goals, priorities, and expectations and how well they are contributing to them. (252)” (Selden and Sowa, 2011)
Renz supports Tuckman and Chang’s argument that the non-profit organization is always vulnerable in its financial health (Chang and Tuckman, 1994). Consequently, managers need to often carefully evaluate the practices needed to achieve an overall improved financial health. The authors argue that probabilities of vulnerability in the non-profit organizations include the use of efficiency variables including the administrative total expenses, the revenue variables such as diversification, and accounting variable that support improvement for the majority (Renz, 2016). The authors provides an account of the nine common accounting measures that aim are enhancing the dimensional reduction process. This include the factor analysis, subsector analysis, index construction, and correlation analysis, among others (Prentice, 2016).
Jessica and Sally explain that performance management refers to set of activities that are adopted to enhance performance improvements of individual employees in the organization (Renz, 2016). The human resource team is expected to develop processes that motivate employees towards being better (Selden and Sowa, 2011). Commonly, setting employee expectations and ensuring that they provide frequent feedback on essential issues affecting the organization motivate them towards being exceptional. Target training in the organization should be conducted to improve employee weaknesses in their identified areas of growth (Renz, 2016). This increases the likelihood for potential success. Research argues that compensation systems are always rewarding to employees, as they motivate them towards attaining organizational goals (Renz, 2016). Employees are also more satisfied when the human resource team maintains a close relationship with each of them. This includes offering formal and non-formal information that improves their performances. Their turnover rate is also expected to increase steadily (Selden and Sowa, 2011). Research carried out in a number of public organizations prove that performance appraisals are very necessary to the organization, in a staffing and managerial perspective. The informal consent is expected to stimulate the formal consent to achieving satisfaction in human service evaluations (Selden and Sowa, 2011).
“Given the shortcomings of the traditional conceptualization of financial measures, this
section applies inductive reasoning to explore the viability of establishing underlying
constructs from a purely data-driven perspective. Multiple exploratory factor analyses
were performed to uncover latent constructs, and once again, the results affirm the
disjunction between our conceptual understanding of the accounting measures and
empirical data (726)” (Prentice, 2016).
Young lee examines the nature of non-profit organizations, and their ability to achieve success through implementation of good governance policies. Research conducted from the National Center for Charitable Statistics in the year 2010 proved that organizations that were engaged on lobbying activities and those that operated in metropolitan regions were more likely to achieve success through adoption of good policies and governance systems that steered high profile standards (Renz, 2016). The United States federal governance is determined in ensuring that all non-profit organizations meet the state legal mechanisms of good governance policies. “The US federal and state governments have legal mechanisms to ensure good governance in
nonprofit organizations. State nonprofit corporation law enables a nonprofit “to exist as a
legal entity, with its board as its animator (97)”
“Indeed, empirical research finds that the reported ratings affect the financial support an organization receives (Gordon, Knock, and Neely 2009 ; Silvergleid 2003 ; Sloan 2009 ). Hence, the failure to have such policies in place may lead to a loss of funding or damages to an organization ’ sreputation in the increasingly competitive marketplace (Eaton and Akers 2007 ). (97).
Conclusively all non-profit organizations should embark on collectively invest strategies that grant them competitive advantages in the market. All non-profit organizations are also expected to meet the required external characteristics and conditions in order to survive. This is only possible through written and good governance practices (Renz, 2016). Christopher argues that all financial measurements must convey a long term sustainability plan for the non-profit organization. All financial measures must also be examined to ensure that they meet the underlying concept of profitability construct. Annual surplus expenditures must be reduced to ensure that the percentage of operational spending reduces (Prentice, 2016). Commonly, setting employee expectations and ensuring that they provide frequent feedback on essential issues affecting the organization motivate them towards being exceptional. Conclusively, the current financial performances of non-profit organizations must be evaluated through careful examination if its solvency, liquidity, profitability, and margin (Prentice, 2016). These constructs are always useful as they guarantee how the non-profit organizations accrue their debts, monitor the finances of the organization, and measure their progressiveness towards attaining a sustainable future. The managers in non-profit organization are mandated to understand the profitability, margin, liquidity, and solvency concepts to steer the firm towards achieving success (Selden and Sowa, 2011).