The Nonprofit FAQ

How to do performance appraisals
Jim Taylor, Director of Operations, Land Between The Lakes Association, Friends of the LBL, asked in NONPROFIT (see http://www.rain.org/mailman/listinfo/nonprofit) on March 13, 2004:

Do each of your employees receive annual or semiannual appraisals? Does
this include administration, gift shop, information people, interpreters,
and others? Do you have a single evaluation/appraisal form which is used
for each or are they different based upon function?

Do you have a system of annual or semiannual employee evaluation
(documentation, procedure, forms) about which you would be willing to share?

Dr. Larry Short, an organizational psychologist (see http://www.larryshortassociates.com) responded:

After more of experience than I care to admit working with performance
management systems, I offer the following advice:

  1. use one appraisal form for all employees, while different sections may
    apply to different levels, e.g., management, exempts, non-exempts, volunteer
    staff, etc. there will be sections common to all groups.
    • exempt jobs are
      built on results, i.e., recommendations, decisions;
    • non-exempt jobs are
      built on processes, i.e., the efficiency of performing each step.
    • exempt
      jobs are paid to get the job done;
    • non-exempt jobs are paid for the hours
      worked. -- be they staff, volunteer, consultants, etc.

  2. develop a culture that recognizes changes in performance, be it improved
    or not. the idea is to capture sustained performance (for performance
    purposes, three consecutive months is considered sustained). everyone
    should be reviewed once or twice yearly, but changes in performance should
    be addressed at the point of change.
  3. red/green indicators. I offer this almost as tongue-in-cheek but you'll
    recognize the point after consideration. the goal is to time the assessmete as
    close as possible to the change in performance. so, cut into strips a red and green sheet
    of paper. ask supervisors to note performance this way:
    • when you observe an employee
      performing commendably, walk by and hand the employee a green strip;
    • when you observe an employee performing something needing improvement, walk
      by and hand the employee a red strip.
    at the end of the week/month, the
    employee counts up the green and red strips, more green than red, great,
    keep up the good work; more red than green, we need to talk! three
    consecutive months of green or red counts as sustained performance.


I have watched organizations labor over "the appraisal form". I know of no
perfect form, each brings its share of positives and negatives. so, it's
not the form, it the consistency with which it's administered. develop a
form/system that's right for your organization and provides management a
tool/radar for measuring, then rewarding performance.

Putnam Barber added this observation:

An ED whose management style I greatly admired put one of those plastic 'to be refiled' bins on the side of the welcome counter near the front door. Everyone in the organization was encouraged to put comments on anything affecting its effectiveness into that box and they came and went through the day. "If you get a memo that's well written and clear," she said, "put a sticky on it that says 'Great memo!' and drop it in the box; if you find a typo in our brochure, put a sticky on it that says 'Ouch!' and drop it in the box; if someone tells you we're doing great, jot a note about the compliment and drop it in the box; if you find a mention of our work in someone else's publication, drop it in the box. You get the idea."

At the end of each day, she took everything out of the box and spent half an hour following up -- writing kudos for good work and figuring out what to do the next day if something appeared to be running off the tracks. Then she organized the contents into a file she could use when it came time to do her monthly and annual reports for the board and the community.

Because she stayed on top of the things people put in the box every day (and because she was a strong, fair and friendly administrator), the people who worked in the organization quickly came to rely on this device as a way to strengthen their work.

On a more technical level, Don Griesmann, a consultant with community-based and faith-based organizations in Ventnor, NJ, contributed this discussion of requirement for fair performance appraisals:

There is little disagreement that evaluations are necessary.

There is
significant evidence that they are done poorly if they happen at all.

Most NPOs
find evaluating coworkers to be difficult. They are not prepared or trained for
the duty. There may not be a corporate buyin by supervisors and the other
employees to the system or its value.

The process and the forms have to be legally defensible.

Those ingredients
that make an evaluation process defensible include a formal system that is
standardized and based on actual work being done by the employee. The policy
should state whether an evaluation is necessary prior to a salary increase (merit
pay) or not (longevity). The policy should state whether transfers and
promotions are tied to favorable evaluations. The NPO has to be sensitive that an
employee with a handful of positive evaluations will be difficult to fire on
the basis of poor work. The system has to have a balance between being as
complete as possible and simple enough that people will use it.

The process should cover the goals of a performance appraisal. Those goals
can include making the job important to the employee, establishing
accomplishments since the last evaluation and needs for improvement. The process can help
planning with the employee what will be expected and what training will be
needed and available for the next year. One goal is to help the employee
improve performance. There can be other goals including learning and using new
skills. Another goal has to be looking at what outcomes are desired. Are the
outcomes measurable?

Creating the system and the forms does not happen overnight. There are many
forms in books and on the Internet, but one size does not fit all. The
factors going into the development have to include an examination of each job.

The
people who actually handle the job can help in creating both a realistic job
description but also the evaluation tool. Are the system and forms free of
bias? Always be aware a performance appraisal is an opinion based on standards
that are as objective as possible.

An evaluation system needs periodic review. There was a time in many
organizations that support staff was required to take dictation. If that is still
being measured when no one is dictating letters or other documents, then you
need to update the forms and probably the process.

The system should provide for preparation for the evaluation. E-mail to the
employee saying next Tuesday is your evaluation does not cut it. Set the date
together. The employee has to understand the value of the system and why it
is important. The employee will enter the process with more fear than
necessary if there is no understanding of the underlying values.

  • Give the employee a copy of the material you will use.
  • Suggest the employee perform a self-assessment.
  • Set up the interview face-to-face.
  • Conduct the interview in a neutral area or the employee's office if
    private.
  • Turn off beepers and the telephone.
  • Take the time and dedicate yourself to this particular employee.


There is no greater aspect to separate employee from supervisor than doing it
across the supervisor's desk. It will look like going to the Principal's
office. The supervisor should review any prior evaluations and the standards for
this position.

When performing the appraisal, both the employee and the supervisor should
talk. The session is a problem solving/planning session, not a "tell and sell"
(supervisor is telling and selling ideas to the employee) or a "tell and
listen" (supervisor tells the employee what is good/bad about performance and then
waits for employee to talk and if not, end of appraisal) session.
Communication and listening skills of the supervisor are important in setting the context
and establishing a two-way conversation. It should not be a one-way lecture.

Provide feedback on prior performance. Discuss any perceived weaknesses or
training needs/desires with the employee. Work together on goals and
priorities for the future. Work together on an employee work plan for the next year.

If necessary set a time for follow-up.

When you have finished preparing the written evaluation, provide the employee
with a copy. I have always asked on the form for a signature saying she/he
received the evaluation. I never asked if there was agreement or disagreement.

When an employee refused to sign, I simply marked the date and that I gave
the copy to the employee. The refusal to sign is not cause for problems. Some
employees may want to have a written response placed in the personnel file
with the evaluation. Provide a system for that in the manual. Have the evaluation
placed in the employees appropriate personnel file.

The program should develop written policies, procedures, forms and
recordkeeping capability.

Where do you keep these records? What facts and documents of your
organization are available to the public? If you receive public funds there may be
requirements from your state law or funding source about public accountability.
If you have staff, there are certain personnel records that may not be
released, such as health records. On the other hand, there are personnel records open
for inspection at least to funders. What records should an organization
retain permanently and what format? Who may have access to the records? What
system will be put in place for recalling records? What policy and procedure will
you have for access to the records, retention and destruction of records?

For a more general discussion of policies about access to records, see http://www.nonprofits.org/npofaq/0/1505.html

Many organizations create several personnel files, all of which are open to
the individual employee who is the subject of the files. One file contains
public documents such as IRS Form W-4, INS Form I-9, and an emergency
notification form, resume, application for employment, job description, forms signed by
the employee and so on. A second personnel file contains evaluations, health
records, any garnishment or child support orders, disciplinary actions and so
on. Some organizations maintain a third personnel file containing time sheets,
travel, training and conference expense forms and similar internal logs. An
auditor may review the first and third files listed here; a funding source may
require that the auditor review the second file only for contract compliance.


The appraisal system has to be linked to the job and a job description. Some
organizations have developed workplans rather than job descriptions. The
workplans are team-related. All members of the team are evaluated as to the role,
goals and accomplishments, barriers and weaknesses of both the individual and
the team.

The appraisal system also has to be linked to other policies and procedures
such as discipline, promotion, antidiscrimination, termination and so on.

Finally, the entire staff has to be oriented and trained in the system. There
can be no faster path to an illegal evaluation than through a supervisor who
does not understand what is legally defensible. Employees who will be
evaluated will cooperate more fully when they understand how the system works and what
is expected of them.

For further discussion see -

http://cobrands.business.findlaw.com/human/nolo/faq/EBB2FDB8-D51C-4685-9EA06EDFD801845C.html

http://biz.findlaw.com/employment_employer/nolo/ency/ECDE151A-DC5D-42A6-B58219263F58318D.html

http://biz.findlaw.com/employment_employer/nolo/faq/EBB2FDB8-D51C-4685-9EA06EDFD801845C.html#B11134FB-DE00-4B8A-A90F429DA73EBDEA

http://biz.findlaw.com/employment_employer/nolo/ency/5F59F055-9462-49B3-AA3F7925A394E87D.html



Posted 3/14/04; link updated 7/2/05 -- PB