Chapter 10 - Performance management in not-for-profit organisations Flashcards
1
Q
What is the main difference between NFP and private sectors organisations?
A
Maximising shareholder wealth is not the primary objective
Maximising the benefit to its beneficiaries is.
2
Q
What are the three E’s
A
Economy
Efficiency
Effectiveness
3
Q
What is economy?
A
Are the appropriate quantity and quality of
resources (inputs) bought at the lowest cost possible?
4
Q
What is efficiency?
A
How well are the inputs converted into outputs?
5
Q
What is effectiveness?
A
How well do the outputs help achieve the stated objectives of the organisation
6
Q
What are four benefits of benchmarking in NFP’s?
A
- Stimulates competition
- Ensure accountability
- Enables comparison
- Information is readily available
7
Q
What are five drawbacks of benchmarking in NFP’s?
A
- Dysfunctional alignment
- Differences in organisations
- Ranking subjective
- Quality of data provided may make comparison hard
- Poor results may lead to downward spiral (funding etc)
8
Q
What are five advantages of targets?
A
- Improve the 3 E’s
- Reduce expenditure
- Increase accountability
- Increase responsiveness to stakeholder needs
- Increase motivation of managers if staff rewarded well
9
Q
What are the 9 disadvantages of targets in NFP’s?
A
- Central control
- Difficulty level
- All or nothing
- Too many targets
- Targets not always appropriate
- Cost
- Lack of ownership
- Gaming
- Conflict between targets
