I want to begin today’s
post with a story that is truly terrifying. Don’t read this by yourself in the dark:
“It was a dark autumn afternoon. Jose, a Program Director, walked into his ED’s office for his annual performance review. Jane’s skin looked pale and ashy, as if she hadn’t seen sunlight for years, her eyes were bloodshot, and her hair was stringy and dull like a wet wombat’s fur. This was nothing unusual, thought Jose, since she is an ED after all, and all EDs look like that. But something about Jane was making him uneasy. Her tone was different; it was harder, more businesslike. ‘Jose, this year, you accomplished many things. But you failed to meet expectations in a few key areas. You didn’t, for example, throw an 80’s-themed volunteer appreciation party, and you didn’t build enough partnerships with gluten-free bakeries to secure in-kind snacks for our gluten-free clients. I also called and talked to some of your staff and they said that you never bring cupcakes to the team meetings.’ Jose tried to scream, ‘I didn’t know those were your expectations! How can I meet expectations I never knew I had?! And that feedback probably came from the one disgruntled staff who doesn’t do anything but whine, whom I’ve been trying to coach and mentor before firing and needed your support on but you kept skipping our one-on-one meetings!’ He tried to scream these and many other things, but no sound came out. He left the office that evening, walking into the darkness, feeling like crap, and no one ever saw him again. Unless they were buying or selling a house. For you see, Jose became a real estate agent…”
Spooky, right? I won’t blame you if you have to sleep with the lights on tonight.
For the past few years, I’ve been talking about the differences between the nonprofit sector and our counterpart, the for-profit sector, and the need for us to carve our own paths and practices. We have unconsciously accepted that practices common in the for-profit sector are by default the standards and that we nonprofits should just learn to adapt to them. In some ways, this is great, because who wants reinvent the wheel?
But there are so many practices we’ve adopted that do not necessarily reflect the challenges and reality that nonprofits face, or what we aspire to do. For example, we need to seriously reconsider our hiring practices in order to make them align better with our values of equity and community.
The annual performance evaluation is one of those practices from the business sector that we’ve adopted at face value that we need to reexamine. So often these evaluations are done so wrong that they end up destroying morale, creating bitterness and resentment, and driving people bonkers and possibly out of the sector. After I told people I was tackling this subject, colleagues emailed me with countless horror stories. Many concern being judged based on expectations that were never established in the beginning. And some concern using other people’s incredibly subjective or disgruntled opinions, usually through anonymous surveys, as basis for evaluation.
Of course, there are also good stories too, from when things are done right. But when they are done wrong—and it seems 9 out of 10 times, they’re done wrong—they could end up feeling like an ambush, or a drive-by wishy-washy waste of time, or an explosion of pent-up resentment, or a focus on insignificant things that have little bearing on what actually matters, or a game of office political intrigues. Annual evaluations do way more damage than they help, and we need to consider whether they are right for our field.
Factors we need to take into consideration
There are several reasons why I think adopting business practices without adapting them to the uniqueness of the nonprofit sector is not just ineffective, but sometimes destructive. Annual performance evaluations have been sucking because we often fail to take into consideration several factors that distinguish our sector from the corporate sector.
Funding is limited, so we are often understaffed and forced to play multiple roles: The more things we take on, the harder it is for us to do each thing well. Sometimes I daydream about just having a job where I don’t have to think about finance, HR, payroll, marketing, programming, evaluation, CRM, office supplies, board management, volunteer management, staff supervision, IT, strategic planning, community engagement, and a bunch of other stuff, usually all in one week, and also freaking out simultaneously about raising enough funds to keep services going and to keep from having to layoff my team. If we can just worry about one or two or even five things, we can do a great job with them, we can exceed expectations. But that is not the world we work in.
Things change constantly, and we must be flexible enough to respond: Except for hummus being present at many meetings, and the annual fundraising event haunting us every year, there is so little predictability in 
this sector. It makes for very creative and oftentimes rewarding work, but the instability of it all sometimes makes rigid goals, outcomes, and structures meaningless or ineffective. Sure, there are bigger nonprofits that may be running like clockwork, but for many of us, we struggle each day for funding, for stability, for the right to continue to do our difficult work of serving our community. To evaluate most nonprofit staff as if we worked in stable businesses is to deny reality.
Our motivations to do this work are different. Theoretically, performance evaluations should be linked to pay increases. However, in this sector, there is no guarantee that this will happen, since funding is never stable. But that might not be the issue. Most of us aren’t just doing this for money (though we should still be paid fairly and well). Many of us pour our heart into this work, oftentimes sacrificing way more lucrative positions at other organizations or outside the sector. So yes, that sometimes makes us more sensitive to criticism. And when it’s done wrong, it may be significantly more demoralizing than for other people. After working so hard in the face of so much stress and uncertainty, getting a bad review becomes the last straw. “I’m actually burning out on all of it, after more than a dozen years,” says an ED colleague, “need to pass it on to someone too young to feel jaded yet.”
I’m not saying our work is harder than those in the corporate sector, or that we’re gentle baby birds who need constant nurturing. Nonprofit professionals are some of the most brilliant, resilient, creative, and thick-skinned people. We have to be in order to do this work effectively. What I’m saying is that there are clear differences between the sectors, and many performance evaluations do not take these factors into consideration.
If not annual performance reviews, then what?
We need to shift from the annual review to a culture of constant, mutual, and holistic feedback based on clear expectations around concrete goals and organizational values.
Concrete goals: All staff should have a work plan that spells out goals and objectives, along with a timeline of important milestones. This plan should be reviewed at least quarterly, and we should expect the plan to change from time to time to respond to changing circumstances.
Organizational values: We all have values, and yet many of us do not spell out what the heck they mean in real life. What are they for then, anyway? I’ll write more about this in another post, but overall, discuss the values and the concrete actions that demonstrate how they manifest at the organization.
Constant feedback: Feedback needs to be delivered constantly in order to be effective. Supervisors should meet regularly, preferably weekly, with their staff one-on-one (even if only for 15 or 30 minutes) and honest feedback—both positive as well as constructive—should be brought up. Sometimes the feedback should be delivered immediately in the moment (in private). It’s way less scary to get constant, but constructive feedback throughout the year; too often supervisors use the annual or semi-annual review as a reason to procrastinate giving important feedback regularly. Boards, assign one of you, usually the chair, to meet with your ED regularly, at least once a month, to give/receive feedback and support.
Mutual feedback: Feedback should not be one-way. If you don’t ask for feedback from people you supervise, or if they feel terrified to give you any, then you suck 
as a supervisor. Build a culture where feedback is not scary, and a way to do that is to ensure that it is a two-way street.
Holistic feedback: Nonprofit work is basically one giant group project, the kind that most of us hate because relying on other people can be aggravating. But the point is that all of us work in teams, and a team needs to evaluate itself as a unit. After major events, we often debrief on what goes well and what can be improved on. We need to do this more regularly in other areas. Boards, for example, should not just evaluate the ED, but also evaluate their own performance, including getting feedback from the ED as part of that process.
Invest in trainings on coaching and supervision: So few supervisors or board members are actually trained on management techniques, including handling reviews or giving feedback or coaching. We can’t keep skimping on this area. As one commenter noted below, if we don’t invest in this, we could potentially trade in one bad practice for another.
If you must do an annual review
I do think there is a place for the annual review. When it is done well, and when it’s a part of constant, mutual, holistic feedback, a review can be a great way to affirm staff, show appreciation, deliver constructive feedback, and set goals and priorities for the coming months. I don’t think formal annual reviews are necessary when the above are followed; but, if you need to do them, I strongly recommend avoiding these things:
Scores/ranks/ratings: Stick to “What’s going well” and “What can be improved.” Ratings such as a scale from 0 to 5, or “meets expectations” and “exceeds expectations” and “fails to meet expectations” are reductive and patronizing. I have never seen anything but bitterness and indignation come from being rated. Our work is so complex that little good can come from making people feel like high school students getting graded on an exam.
Surprises: Nothing you say during an annual review should shock the reviewee. They should have heard all your feedback before. If the annual review is the first time they are hearing something, you’re not giving enough feedback. Says a colleague, “If your staff is filled with dread about sitting down for a ‘performance review,’ you’re doing it wrong.”
Too much weight resting on other people’s opinions: Says this white paper on evaluating EDs, from the First Nonprofit Foundation: “External stakeholders are in the position of the proverbial blind men and the elephant. They see only the very small part of the organization that they interact with—and hence may give unfairly glowing or negative reviews as a result[…]Since one can never know the mood of a respondent in an anonymous survey, attend to comments but don’t take them as gospel.”
Of course, this entire post was written with a caveat that you have awesome staff, like most of the people in the sector tend to be. If you have dead weights on your team, then that’s another matter, for another post.
Let me know if you agree or disagree. Either way, please think careful about how you do reviews. We don’t need more good people leaving our sector to become real estate agents.
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Resources I recommend: Ask a Manager (Alison is knowledgeable, no-nonsense, and sometimes hilarious), First Nonprofit Foundation (great list of white papers on various topics), 501Commons (great list of resources on a variety of topics)
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