Performance Indicators in Non-Profit Organisations

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Table of Contents

Background
Literature Review
Summary
Methodology
Works Cited

Background

Performance indicators are measurement tools that are used in organizations to monitor development strategies. They define various organizational strategies by providing information on the possibilities of successful realization of various objectives that are set for projects. They are also used to clarify the possibility of failure in idealistic situations. Various studies have revealed several changes in theoretical concepts of performance measurements. In the olden days, many organizations implemented ancient performance indicators that included cost, time, and outcome of projects to foresee the future of their impending operations. However, such indicators have been gradually replaced by the development of modern methods of measuring performance such as the balanced scorecard (BSC) model to counter the limitations of the old techniques. This research proposal elaborates on the implementation of performance indicators in non-profit organizations with a view of foreseeing the feasibility of their business endeavors shortly.

Statement of the Problem

In most cases, nongovernmental organizations (NGOs) measure their performance using both the progress and result indicators to foresee the future of their business activities. The progress indicators are mainly implemented for measuring the progress of various project activities that can involve training workshops in the awareness of human rights, gender equity, and embracement of cultural diversity among others (Ogunlana 228). On the other hand, the result indicators focus on measuring the success of the ongoing business activities. This indicator is always used as a post-activity to determine the nature of the outcome. It needs a detailed implementation process since it is vulnerable to failure if the executors delay or miss some of its essential steps (Ogunlana 229). Although the performance indicators have improved significantly, some organizations still face challenges of deciding the right techniques to foresee the possibility of successful business operations shortly. The performances of various organizations, especially in the social aspects, are still perceived as tales when there are no clarities on the overall operations, acceptable assessment frameworks, and integrity (Ogunlana 230).

Research Questions

The study is meant for foreseeing the feasibility of non-profit organizations shortly using various performance gauging factors. For that reason, the following research questions were expressed.

What are the key performance indicators used in foreseeing impending processes, management, and outcome quality?
What key performance indicators used to foresee the future of business activities in the non-profit organizations?
What are the perceptions of the management about the key indicators currently used by the non-profit organizations in foreseeing the near future of their activities?
What are the perceptions of the employees on the key indicators currently used to foresee the future of the non-profit organizations?
Do the performance indicators provide clarity on the foreseeable performance of the non-profit organizations shortly?

Rationale for the Study

The study will provide useful information on better methods for foreseeing the performance of non-profit organizations shortly. It will contribute to the development of value-added strategies and objectives that are achievable by the organizations by providing a basis for successful business frameworks. The proper implementation of the highlighted performance indicators will ensure the effective determination of different measurable aspects and the consensus degree of the performance to foresee future operations.

Aim and Objectives of the Study

About the context and rationale for the study, the objectives of this study include the following.

To identify the key performance indicators used in the determination of the foreseeable processes, management, and outcome quality.
To identify the key performance indicators used in foreseeing the future of the non-profit organizations.
To capture the perception of the management and employees on the performance indicators used to foresee the future of the non-profit organization.
To determine whether various performance indicators provide clarity on the future performance of the non-profit organizations

The above-highlighted objectives will be based on a critical literature review of various performance indicators used in foreseeing the future of the non-profit organizations and perceptions of the management and employees. The relevant conceptual frameworks will also be used to explain the perceptions of the management and employees towards the performance indicators in the determination of impending business activities. Lastly, it will entail a description of the methodology that will be used to accomplish the proposed research, synthesis of the findings on the performance indicators as per the stipulated objectives, and analysis of the results with a view of providing recommendations for improvement.

Scope of the Study

The scope of this project will entail proposal writing, conducting both primary and secondary data collection, analysis of the results, and providing recommendations for further research. The aforementioned objectives form the basis of the scope of the project (De Choudhury et al. 34).

Assumptions, Limitations, and Considerations of the Study

The assumptions of the study include the delivery of the project within the stipulated time and budget. It is also assumed that the plan of the study is valid. The researcher also presumes that there is up-to-date information for the literature review. Lastly, it is expected that there are adequate resources for the successful implementation of the project (De Choudhury et al. 34).

The limitations that can arise include scarce information on the primary research on the proposed topic, inadequate skills and experience on the part of the researcher, and time constraints. The study is limited to the use of performance indicators in foreseeing the future operations of non-profit organizations; hence, other entities that aim at profitability will not be taken into account. Various factors that will be considered during the study include the perceptions of the management and employees towards the usability of the performance indicators in foreseeing the future of non-profit organizations.

Benefits

The projects of earlier organizations were mostly measured in terms of time, cost, results, and/or conformity to the set objectives. Such factors have been numerously criticized because they marginally elaborate on the organizational performance details. Many projects executed by the non-profit entities do not have common aims or objectives. As a result, they adopt different development approaches. The perceptions of the management and employees and identification of the relevant performance indicators used in various non-profit organizations should be particularised for better predictability of future activities and the probability of their success. The most important aspect of the future of non-profit organizations about this study is the determination of the performance and sensitivity of managers and employees to the performance indicators.

Hypotheses

The context of the project, rationale, and literature review considered has led to the generation of the following hypotheses.

H₀₁: Performance indicators used in the non-profit organization do not help to foresee the future performance of the organization.

H₀₂_:The perceptions of the managers and employees on the performance indicators are not frequently applied to the non-profit organizations to foresee their future performance.

Risk Management Plan

Due to the random nature of uncertainty in contemporary business affairs, organizations have to adopt stringent risk management plans. As a result, the researcher will play a central role in identifying and effectively implement various seeks that influence the feasibility of goal achievement shortly. The plan is to use the results of the research to find out ways that can be applied to the reduction of such risks. Various activities the researcher will conduct include the identification of the preventive measures for the perceived risks, listing contingents and plans to reduce the effects of risks, scheduling the correct timeframe for the activities, and observation of the statuses of various risks during the research period.

Literature Review

This section elaborates on various literature relevant to the topic under study. About the research, the literature review seeks to justify the objectives of the study based on the performance indicators and perceptions of the managers and employees.

Viewpoints of Managers and Employees on the Performance Indicators in foreseeing the Success of the Organisation

The performance indicators are currently implemented by most non-profit organizations in projects to forecast their success. Managers and employees make decisions on different kinds of foreseeing performance indicators for success since most of the organizations vary in terms of objectives, aims, and missions among other characteristics. A research that was conducted by Nguyen et al. revealed that the success of a project depended on the achievement of the current stipulated objectives, definite beginning, and timeframe for its operations and completion (405). Furthermore, the budget and satisfaction of the stakeholders were deemed crucial in examining the probability of a project having a future continuation (Nguyen et al. 404).

A combination of the interests of managers and perceptions of employees towards the future operations is essential in the success of non-profit organizations. This state of play is seen as a performance indicator or success factor since it embraces collective involvement and effective communication. The time to avail resources, operational activities, and management of risks, efficiency, and resolution of misunderstandings among others are dependent on the successful participation by each stakeholder with a view of achieving shared success. The future operations of the organization are highly dependent on such factors (Nguyen et al. 404).

Managers are faced with challenges of selecting the best performing indicators in foreseeing the future of non-profit organizations. Most of them embrace multiple decision-making procedures that require detailed relations among other factors. Furthermore, the indicator should be measurable, specific, practical, beneficial, adequate, and appropriate to the organization’s culture among other characteristics (Nguyen et al. 404).

Performance Indicators

Performance management in an organization is an important aspect that defines the feasibility of a project. Designing of such performance indicators to the point is crucial to guarantee proper prediction of the operations shortly (Nguyen et al. 404). The future performance of the non-profit organization can be detected if the indicator used to foresee its performance is related to the entity’s strategies and objectives (Nguyen et al. 404). Cavalluzzo and Ittner warned of the adverse effects that can arise when the performance indicator is used to foresee the wrong objective or an unrelated strategy to the entity (433). Such cases also occur if too many indicators are used in the running project where minimal results matter out of the whole process. It was concluded that such actions eat into the invested resources. This set of circumstances can jeopardize the future operations of the organization. Later, it was recommended that the use of a structured method such as the performance measure record sheet was suitable for the implementation and foreseeing the progress of the project. The sheet contains detailed information based on researches, purposes, formulae, frequencies of measurement, and reviews among others (Cavalluzzo and Ittner 432).

The record sheet is only limited to a constructive means and framework that can be used to design and measure the performance to gauge the future operations of the non-profit entity. Issues that are related to the evaluation of the performance about objectives and strategies among other measures are not captured.

Foreseeing the future of Non-Profit Organisations using Performance Indicators

A research that was conducted by Brown to foresee the success and survival of the organization was based on time, cost, and budget allocation about the requirements of the project (317). The three pillars were used to predict the efficiency of various operations of the project (Brown 317). Current organizations fail to embrace the three factors as the only indicators of foreseeing future performance. Instead, the managers embrace both short and long-term measurements to measure the practicability of non-profit organizations (Brown 317). Most of such establishments currently implement both direct and indirect measurements to assess the progress of the project. The future performance of an enterprise cannot be foreseen exclusively using the traditional indicators such as quality, time, and costs. There is a need to embrace various techniques of project management to guarantee the success of the project (Brown 317).

Beloit and Gauvreau affirmed that risk management and the resolutions of various challenges encountered in the implementation of a project increase the chances of realizing the success of non-profit organizations (4). It was further noted that other criteria to measure the performance of charitable organizations included the consideration of factors such as the technical performance, efficiency of execution, personal development, qualitative indicators, and management implications among others. Although qualitative indicators are used for measuring performance as mentioned by Beloit and Gauvreau, much of the emphasis cannot be bestowed on such tools due to their inability to show future forecasting effectively (4). Other methods that can be used to foresee the future performance of the non-profit organizations include process quality monitors such as strategic plans, programs, and goals that are aimed at effective functioning administration, criteria for regular discussions of various measurements, and motivational systems concerning good performance. Also, other indicators are aimed at evaluating the organizational targets and communication strategies that exist between the entity and beneficiaries among others (Duy Nguyen, Ogunlana, and Thi Xuan Lan 407).

Summary

Various literature reviewed for this study is only limited to their scopes. They do not provide detailed information on the implications of their recommendations to non-profit organizations. The prospective study will elaborate on the performance indicators as elements to be used for determining the future performance of the non-profit organizations by examining their benefits and applications.

Methodology

Research Design and Sampling Plan

Since the study emphasizes on foreseeing the future through the implementation of performance indicators in non-profit organizations, the research will only focus on the qualitative research design (De Choudhury et al. 34). Data will be obtained using questionnaires that will be administered to the managers and employees within the selected organizations.

Sampling Strategy

The selected sample size will comprise 400 respondents. 300 of the respondents will consist of employees from different cultural backgrounds and multinational non-profit organizations. The rest of the participants will comprise100 managers from the upper, middle, and lower management of the organizations. The respondents will be selected using the quasi-sampling method. Online questionnaires will be administered to them randomly. The questionnaires will then be submitted online based on the agreement with the respondents (De Choudhury et al. 34).

Instrument to be used

Online questionnaire tools will be used in the collection of data. The questionnaire will be structured to indicate the personal information of the respondents. It will have both closed and open-ended questions. It will also include several multiple choices to seek selected information about the non-profit organizations (De Choudhury et al. 34).

Rationale for the Selection

Non-profit organizations were selected as the study site since they are highly dependent on the donors and commitment of the employees. As a result, the perceptions of such people towards social performance indicators are important for the study. The sampling design chosen is also appropriate since the study will focus on the qualitative design. The performances of the organizations are also measured in terms of returns and profits but the scope of the study is limited to non-profit establishments. Therefore, it requires other means to determine the future performance without relying on the profits; hence, the non-profit organizations are suited for the study.

Data Analysis for Demographic Variables

The demographic variables that will be considered in the study include age, education, experience, and cultural background among others. These variables will be analyzed using univariate analysis and tables. This objective will be easily facilitated by the SPSS version 21. The univariate analysis will indicate the details about age distribution frequencies, central tendencies (mean, mode, and median), and dispersions such as the range, standard deviation, and variance (De Choudhury et al. 34).

Data Analysis for Study Variables

Inferential statistics will be used to elaborate on what one can infer to the general condition of the study. Some of the assessments that will be conducted include the t-test, Chi-Square test, and one-way ANOVA among other multivariate methods (De Choudhury et al. 34).

Validity and Reliability

The Pearson Moment Correlation will be included for testing the validity of the existing questionnaire. A mark of 0.5 R-value will be set for the validity. This value is above the mark; hence, the instrument was valid (De Choudhury et al. 34). The reliability of the questionnaire will be measured using Cronbach’s Alpha at 0.5. Both the validity and reliability of the instrument will be ensured to be positive to be endorsed for the survey.

Research Ethics

The study will take place after seeking authorization from the selected organizations through their top management. The relevant authorities will also be contacted to grant permission for the research. The respondents will be issued with consent forms to seek their inclination to the study.

Works Cited

Belout, Adnane and Clothilde Gauvreau. “Factors influencing project success: the impact of human resource management.” International journal of project management 22.1(2004): 1-11. Print.

Brown, William. “Exploring the association between board and organisational performance in non-profit organisations.” Non-profit Management and Leadership 15.3(2005): 317-339. Print.

Cavalluzzo, Ken and Christopher Ittner. “Implementing performance measurement innovations: evidence from government.” Accounting, Organisations and Society 29.3(2004): 243-267. Print.

De Choudhury, Munmun et al. “How does the data sampling strategy impact the discovery of information diffusion in social media?.” ICWSM 10.1(2010): 34-41. Print.

Duy Nguyen, Long, Stephen Ogunlana and Do Thi Xuan Lan. “A study on project success factors in large construction projects in Vietnam.” Engineering, Construction and Architectural Management 11.6(2004): 404-413. Print.

Ogunlana, Stephen. “Beyond the ‘iron triangle’: Stakeholder perception of key performance indicators (KPIs) for large-scale public sector development projects.” International Journal of Project Management 28.3(2010): 228-236. Print.

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