Why the annual performance review has no place in the nonprofit sector


Since Halloween almost here, and NWB has a scary nonprofit story contest running (due 10/19; scroll to the bottom of this post for details), I want to begin today’scastle-862700_640 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 tornado-572504_640this 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 american-football-63109_640as 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

OK, I lied with the title of this post (But look, it did get you to read this far!). 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. 


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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  • Michal Nortness

    well said, and thank you. There’s just one statement which bothers me, and that is, “Most of us aren’t doing this for the money…” We are doing this for the money AND we are doing it for any number of other reasons as well: justice, affinity for the population we serve, passion for a cause – you name it. To say we don’t do it for the money seems to imply (though I am convinced you didn’t mean it this way) that we don’t need the money.
    I do it (have always done it) because it matters to me HOW I earn the money that pays my rent, puts food on my table. I do it because I tried to just make lots of money, and couldn’t make it matter that I was helping very high income people remodel their fancy office spaces with spiral staircases and fountains in the lobby. I do it because what I’m doing right now (literacy) is my passion.
    But make no mistake: I also do it for the money. Because to say otherwise implies I don’t care if I’m paid a fair and equitable wage for my work. And that just isn’t true.

    • Thanks Michal, I accidentally left out the word “just” and have added it. I agree with you, and have been encouraging the field to pay increase salaries to reflect the work and skills people put in.

      • Michal Nortness

        I’m glad to hear it. I feel much better now – didn’t seem at all consistent with what you are writing in general. Thanks.

  • Tuyet Duong

    nonprofits do need to become more like small businesses in the private sector but agreed that reviews as done in private sector don’t make sense in the nonprofit sector

    • verucaamish

      I think feedback is a really good example of where nonprofits can learn from the tech sector at least. Right now there’s a big shift towards giving clients and supervisors “early slices” of a project. A small taste of the end product at the front end to make sure that the team is on the right track. It really helps save a lot of time to do that early in the process to make sure everyone is in alignment. I hate when managers expect an early slice to be perfect because that’s not the point.

      When giving feedback. My core question as a supervisor is to ask what do you need to get this done. What could have helped to make it better? It’s so funny in so much of our work the frame is around systems change but we don’t apply that to our own internal management.

      • Agreed! A supervisor should be ready to help remove barriers preventing work from being done. That way, if the same barriers are popping up repeatedly the manager can figure out how to address the underlying issues. And finding patterns takes more than a once a year review.

  • Devra Thomas

    Have you read Ken Blanchard’s _One Minute Manager_? Very much lays out these same ideas. No one likes a Seagull Manager: screeching in when something goes wrong.

  • Katie Kosseff

    Great post. The one thing I would add based on my observation is that nonprofits don’t tend to invest enough in building good managerial and supervisory skills. Regardless of whether performance reviews are used in an organization, I think some of the types of problems you refer to above could be mitigated by good coach approach supervisory skills. In most places I’ve worked, when folks have been promoted or hired into managerial positions, they haven’t necessarily been promoted based on their ability to manage people and haven’t been given training in this area.

  • contronymble

    can i share an annual eval horror story? this happened to my coworker, not me (perfect horror story beginning right?)..

    my coworker was the admin asst for our ED, who was pretty disorganized. like, thousands of emails in her inbox because she couldn’t bear to delete anything and also couldn’t be bothered to put them in folders. so she wouldn’t be able to ever find anything she needed in her email and emails would get lost in the wilderness never to be seen again. yet, if she sent the admin an email that wasn’t responded to within 30 seconds, she would call her up (and clear her throat into the phone a bunch of times) and complain.

    so when the admin had a performance review one year, the ED forced her to turn on a notification noise for whenever a new email came in. the end result was that the admin was distracted from all the notifications and couldn’t focus on the non-answering-emails-from-the-ED part of her job. oh, and the ED’s best piece of advice? if the admin should keep her desk cleaner and she’d be more productive.

    • Effandineffable

      I was once given a book called ‘Clear Your Desk!’ as part of a review… I don’t work there anymore.

      • contronymble

        what? when you were getting such useful advice? unbelievable!

        (I don’t work at the nonprofit I mentioned anymore either)

  • Joshua Joseph

    To build on a couple of your themes, thoughtful folks in the for-profit sector recognize that relying on annual reviews alone doesn’t work there either…for a number of the same good reasons you mention in nonprofits. A challenge is that the alternatives… while better…aren’t really easier. In any sector, it takes caring & practice to give regular, constructive feedback and sometimes quite a bit of time and energy to do it well. Since it’s not intuitive for many managers, orgs should plan to give meaningful guidance & support, otherwise they’ll end up trading one poor practice for another.

  • Laura Carpenter Myers

    Brilliant! The hardest part is finding the alternative to “no annual reviews” that will work for my organization. They are afraid of anything even remotely confrontational or “messy”.

  • Barbara West

    I’m not sure what you’ve been reading about the value or efficacy of annual performance reviews in the for-profit world, but in my experience they are also 90%, or 99%, dysfunctional.
    Having come to the decision earlier this year that annual reviews don’t work for us, my nonprofit is going with a board mentor for our ED-equivalent. They work together regularly and constructively so there’s a solid base for this. Quarterly she will brief the board. If this doesn’t work well we’ll have to find another way to both satisfy the board and constructively support the ED. The internal community evolves, as does the external.

  • Rachel Brookhart

    Ugh, this is the hardest part: “The more things we take on, the harder it is for us to do each thing well.” While I like getting to be all over the place, I do daydream about being able to focus on one thing and do it well.

    • Thanks for the inflatable unicorn horn, Rachel!

    • Lea

      It reminds me of the question I was asked during a Walmart interview:

      “Which is more important? Quality or quantity/speed?”

      Uhh…No. Don’t ask me that.

  • Jesmlet

    I wish I could forward this to my supervisor without seeming super passive-aggressive. A lot of it hits home, particularly the points about surprises, ratings and mutual feedback. When I got my review this year, it was pretty clear that the negative points came from her poor communication and not setting clear goals or rules for us, but I certainly don’t feel comfortable enough to mention that. It’s pretty clear that she doesn’t actually pay attention and was just picking apart little details while ignoring the big picture. She gave me no actionable suggestions and the only thing my review made me want to do was start looking for a new job. This is why the position has such high turnover.

    • contronymble

      That’s really hard to deal with! One of the other things I’ve noticed is that in small nonprofits, there often isn’t really a separate HR department where you can go and speak in confidence about personnel issues. That makes it even more difficult to deal with these issues.

      • Jesmlet

        Yeah, we’re not technically small but my department is in a totally different city from our headquarters and headquarters is the only place with HR so we’re pretty isolated. There’s really no one to go to with these issues. As much as I like what I do, I figure I’ll tough it out for a few more years then switch over to the corporate world.

      • Too Many Seasons

        Unfortunately even having an HR in larger organizations can be unhelpful. The HR director at my previous place was only concerned with how SHE was perceived by leadership that our complaints were never taken up the chain.

  • Jon Gould

    I’m a strong believer in creating a culture of feedback…and I see a unique niche for annual reviews….

    Children’s Alliance performance reviews contain a section (for all staff) about QUALITIES OF WORK, which is were we assess performance related to Undoing Institutional Racism, check in on past goals in this area, and construct future ones.

    Also, our reviews are a dedicated place to discuss professsional development opportunities.


  • S NV Nonprofit Info Ctr

    My library recently went from annual reviews (canned software with a business slant – eg Yes/No: customer sales increased more than 50% from two years ago) to monthly “work plan reviews”.
    All I’ve seen so far is that every month the #1 road block to accomplishing my goals is “not enough time” 🙂

  • David Fuehrer

    This is a provocative article and DANGEROUS to the success of non-profits.
    Here’s why:
    I spent 10 years as a consultant to for-profits (Pfizer, GE and other biggies) and studied Building New Ventures at Harvard.
    The last 2 years I’ve worked in non-profit because I need to make a difference for young adults affected by cancer. I’m a two-time young adult survivor myself.
    Saying Annual Performance Reviews have no place in non-profits hurts our ability to make a real and sustainable difference for people who need it most for 2 reasons!
    Annual reviews are an important part of helping people develop their skills, setting goals and achieving them. AND they are usually done poorly in for-profits. Surprise feedback, unclear responsibilities, etc. are equally damaging to for-profits as they are to non-profits. They can also really hurt morale. Instead of arguing they don’t belong in non-profits, a more impactful position would be that organizations need to invest in doing them right if they ever hope to create loyalty and help people grow skills.
    BUT the more dangerous reason is…
    NON-PROFITS ARE THE ENGINE OF SOCIAL CHANGE!! They do the work where for-profits haven’t figured out how to profit from people. If we’re ever going to make a true impact (and improve lives), we need to measure exactly what we’re accomplishing. Non-profit employees should be screaming for reviews!! Asking the questions; what is my role? What are my goals? How and what do I need to accomplish them?! Most importantly… How will we measure the goal so we know when I’ve achieved it?
    I ask you: if we don’t nurture the people and skills that make lives better, how will we ever make a real difference at doing it? And the only way of doing that is assessing where someone is today, collaborating on what they want to accomplish with the non-profit and then assessing how they did at it.
    I’ll end with this final thought.
    It’s easy to blame a Performance Review (or any of the challenges we face in non-profit) for being imperfect. But it gets us nowhere. Instead, create the system in your own organization that shows everyone how to do it properly. “You don’t fight for ‘a new system’. You create something that makes the old system obsolete”.
    Thank you to all the non-profit people who believe in making the world a better place for those who need it most – Dave Fuehrer

  • Susan Detwiler

    Whew. I was really worried there. I think there definitely is a place for reviews, with the very, very key part is setting expectations and only evaluating on the known expectations. that line from the horror story tells the biggest problem with reviews gone bad: “‘I didn’t know those were your expectations! How can I meet expectations I never knew I had?!”

  • Patricia Garza

    One great book is “The First 90 Days” for those who are newly entering a job. They talk about how to set up a work plan and check-in with your supervisors about it effectively. Worked SO well for me instead of a typical review process. Another is this tactic of SBI for giving feedback. Should be specific (give exact date/time/meeting), address the behavior (you were late), and how it impacted the work or you as a supervisor. SBIs should be both positive and address areas for growth! Has really helped me give more feedback throughout the year and not just at once in a review and also takes away the personal attack feeling-you are addressing a behavior and not coloring it with your opinion.

  • Caroline Tyler Robertson

    Amen! As an ED I try hard to offer feedback and communicate expectations, but know I do not succeed 100%. I find myself only doing the “annual review” only when there is money available for increases, as was the case just last week. The Finance Committee approved releasing the budged performance adjustment hold. It was a bad 2014 and tighter than normal early 2015…so I did the standard form, poor to exceeds expectations, to divvy up the approved funding increases.
    I am equally frustrated with the process of ED evaluation from a Board Member who as you state in the blog only sees a sliver of the work that is my job. Also while we do not “do it just for the money” that is still important.

  • I wholeheartedly support your conclusion, Vu, but it’s as valid for the for-profit world as the nonprofit sector. Many progressive companies, with Adobe leading the charge, are moving away from a traditional annual review process to one where feedback is ongoing.
    I respectfully disagree with the distinction you make between nonprofit and for-profit. The vast majority of for-profit companies have the very same “wear many hats” environment as for-profits. Resources are constrained and limited virtually everywhere. It’s just a fact of life in the modern world.
    Again, I agree with your conclusion, but the argument that “nonprofits are different” is almost never productive.
    As always, thanks for highlighting an important issue for nonprofits to consider!

  • Astrid Hepner

    You absolutely spoke my mind with this paragraph….this describes the dilemma of the nonprofit world perfectly:

    “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.”

  • Sherrie Smith

    The problem IS without program evaluations managers are just sooo busy that there isn’t time for that detailed feedback.
    Our staff discussed evals this year and voted on whether or not they’d like to have them. It was almost unanimously yes. Why? We give good, fair, honest evaluations. We are not computers plugging in mindlessly how somebody is rated on each element of their workplan, rather we take the time to thoughtfully consider how a person is doing. And NOTHING should catch an employee by surprise.
    Evals can be a great time to think about goals, give praise, and trouble-shoot larger problems. My staff deserve the time I dedicate to them in this process.

  • DallasRising

    If I ween’t sitting here in shock, I would probably be weeping with relief after having read this post. A friend sent it to me, knowing it mirrors my own experience as a (very recently former) Executive Director. Thank you so very much for putting this out there as it has validated my experience and spoke to it so accurately as to be a little bit creepy, but in a totally awesome way because I needed it so much.

    It’s been just over a month since I resigned from my position as Executive Director at a small non-profit where I was the only employee for most of my nearly eight years there and I’ve been grieving the loss a lot. My job was my passion and a huge part of my identity. It’s hard not to second guess during this time when I miss my work so much and wonder if maybe I really was as awful as my last review made me out to be, despite the outpouring of kind words from my volunteers at the notice of my resignation.

    The review had EVERYTHING you wrote out in this article and I cannot thank you enough for giving me something that can help me make sense of and validate my feelings around the whole thing.

  • alice evans

    Vu, do you (or does anyone else here) have a format/process (or parts/elements of a format/process) that you feel good about, that you can recommend? Anything concrete is helpful. What do you review and how do you measure it (and what does the person review about him/her/them-self, and how to they measure it)? How do you structure the process so that people have space and safety to be real, and so that both parties leave feeling like it was worthwhile? Do you use the same process (more or less) for the board to review the ED, as you do for intra-staff reviews (ED of managers, etc)?

  • David Jordan

    Thanks for this. I find dedicating the time to regular structured conversations to be key. And it’s the structure at the outset that is really key because if you start with something that doesn’t reflect your actual work, then the discussion will tank inevitably. Any leads on a staff engagement survey? I have been looking at this one, which seems to have the right idea. http://www.custominsight.com/employee-engagement-survey/sample-survey-items.asp

  • Maria Svart

    I’m an ED. I just did a six month review of my Deputy Director (a couple months late), which was a new position we recently created. The steering committee of my board wants me to share the review with them or at least a summary. Is that a standard practice? I can see both pros and cons.

  • lanvy

    I agree with this philosophy until after 6 years, we have this situation:

    1) ED had been taking money from one funder (A) to cushion a separate program which is “underfunded” from another funder (B). Neither A nor B knows this is happening. “A” stipulates clearly that all funding needs to be program related.

    2) Manager for program “A” no longer wanted to comply with this type of funny financial movement and recently quits

    3) ED became enraged and went on a witch-hunt bringing in legal forces to have Manager “A” audited…etc.

    4) ED rightly assumed that Funder A would not continue program without Manager A rushed to “fire” the funder and she did all this without the board’s knowledge or consultation (OUTRAGEOUS!!!)

    5) There are enough good reasons to suspect that ED had been using budget for travels

    Now, we’ve lost 60% of our funding and a great hardworking manager of 5+ years. Worst, I fear that the hell raised by ED will lead to a law suit. As a standing board member, I feel it’s necessary to do an internal investigation, That said, does anyone know California’s law regarding NGO rules and recourse when directors go rouge??

  • Rita Ulrich

    How did I miss this?? Once again, you have read my mind, Vu. Excellent piece, and from what I’ve been reading, some people in the for-profit sector are starting to catch on and see that “Annual evaluations do way more damage than they help.”
    A belated “Thank you!”