Not for profit org

Question 1

why measure performance in NFP’s and why it is difficult

Answer 1

1. Public money
2. public interest
3. waste is seen as taxpayers money
4. Huge employers

why it is difficult
1. complex organisations
2. political interference is high
3. lack of agreeable objectives
4. No clear profit driver
5. Many aspects of the business involve variables that are hard to
quantify.

Exam focus
1. KPI/NFI
2. VFM
3. League tables

Question 2

KPI’s/NFI

Answer 2

Government determines the objectives (with public interest and votes in mind).

The organisation decides how to to achieve that. there is usually budget constrain so VFM approach could be used.

kPI’s would need to be consistent with CSF and the objectives and meet criteria for good quality KPI’s

Question 3

Value for Money (VFM) - Exam approach, definition

Answer 3

Exam application includes
1. Performance assessment
2. A decision under consideration - Does proposition deliver VFM.

Definition -3E’s
3 separate assessments including input, process, output
It is possible to be effective but not economic and efficient

1. Economy - This is an input consideration
   can the inputs be bought at lower price for the same quality?
2. Efficiency - This is a process based
   This is a ratio of outputs to inputs or vice versa e.g. if five nurses re being used when only three are required then the clinic is operating inefficiently. pupil/teacher or drugs to patients less input/more output and vice versa
3. Effectiveness - This is an output consideration
   The extent to which output are achieving the objectives of the organisation. If more patients are failing to be cured than expected then hospital could be said to be ineffective.

Question 4

League tables - Definition, criteria, evaluation, problems

Answer 4

League tables are introduced by the government to bring competition and accountability into NFP’S

You will have to evaluate how the league table has been set up. Talk about positives and negatives

Problems with league tables
1. Limited account is taken over the differences between the organisations e.g. police v schools, or organisation in different regions i.e. intelligence levels, crime rates.

2. The measure on the table is often a single indicator (to keep it understandable) but as a result it becomes too simplistic. e.g. portion of students getting a particular grades, this doesn’t take into account the attitude and future aspiration of students. The split is not equal between organisations.
3. Gaming or manipulation of results
4. There is only one winner, everyone else loses.
5. If the measure allows for multiple variables few can actually understand it.