Are Performance Reviews Still Relevant? 8 Ways to Make Nonprofit Performance Reviews More Effective

Performance review season can feel like déjà vu: Change the dates on last year’s form and try to remember what happened over the past 12 months. But if an employee hears something for the first time during a performance review, the process has already failed.

A good review should summarize conversations that have happened throughout the year. It should clarify expectations, recognize contributions, address concerns and help employees grow. That matters in any workplace, but especially in a nonprofit, where employee performance ultimately affects the mission.

The workplace has also changed. Hybrid work makes visibility a poor substitute for results. AI can help managers organize information, but it can also introduce errors and bias. And stretched nonprofit teams need useful feedback without another cumbersome process.

The annual performance review form is only one part of the process. What happens during the other 364 days matters even more.

So, what should performance reviews look like now?

That’s why I asked my good friend and fellow Duke MBA alum, John Troy of WorkTogether Talent Consulting, to share practical ways nonprofits can create a process that strengthens accountability, supports growth and produces fewer surprises — for employees and managers alike.

So, it is performance review time again. Didn’t we just do this last year?

Before you dust off last year’s form, take a step back. The question is not simply whether to keep performance reviews. It is whether your process helps people perform, grow and stay.

 

What Is the Goal?

Your overall goal should be a well-run organization that uses its resources, including its talent resources, effectively to deliver excellent results in service to its mission. What does a well-run organization need? Supported, accountable employees who understand the priorities, know how they are doing, have room to grow and want to stay. An effective performance review should answer six questions with evidence, context and specific examples:

1. How am I doing against the goals and expectations we agreed upon?
2. How has my work contributed to the team, organization and mission?
3. Which strengths and contributions should I continue to build on?
4. Where does my performance need to improve, and why does it matter?
5. What actions, support or resources will help me improve?
6. How will the organization invest in my development and future opportunities?

 

Effective performance reviews identify strengths, contributions and growth areas, then turn those insights into a practical performance and development plan for the coming year.

Pro-Tip: A performance plan should not focus primarily on fixing weaknesses. It should also help employees use their strengths more intentionally and build skills tied to future opportunities.

 

Is Your Current System Meeting This Goal?

Unfortunately, probably not. In a nationally representative 2024 study of 18,665 U.S. employees, Gallup found that only one in five described their performance reviews as transparent, fair or inspiring better performance. Just 22 percent strongly agreed that the process was fair and transparent. That does not mean organizations should stop evaluating performance. It means we need to stop treating the review as a once-a-year rating exercise and start building an ongoing performance-development process.

When reviews are vague, delayed or disconnected from daily work, employees may leave the conversation less clear and less motivated. Anxiety rises when the review feels like a verdict delivered to an employee rather than a conversation held with them. That makes it harder to focus on learning, accountability and better results.

Common employee complaints about performance reviews include:

• Being evaluated against expectations or goals that were never clearly established or communicated.
• Being judged primarily on one person’s — possibly biased — opinion of their work.
• Being judged on the most recent or most visible work instead of the full body of results.
• Having goals change during the year without the review criteria changing with them.
• Receiving a rating without a candid conversation about development, resources or workload.

 

How Can We Make Performance Reviews Better?

1. Set Clear, Mission-Aligned Goals

It is difficult to provide constructive feedback without an agreed-upon baseline. Performance management starts when the organization sets goals, not when review forms are due. Employees’ goals and expectations should connect to the organization’s strategic plan and annual action plans. Each goal should define the intended outcome, how progress will be assessed, the timeline and important dependencies. Set goals with employee input and revisit them when funding, staffing or priorities change. No one should be graded against a goal that quietly became obsolete.

Pro-Tip: Measure results, not visibility. For hybrid and remote roles, define outcomes, collaboration and service expectations instead of treating office presence or online activity as a proxy for contribution. In one 2024 randomized trial published in Nature, a two-day hybrid schedule improved retention without harming performance ratings or promotions.

2. Make Feedback More Frequent and Less Formal

Organizations move quickly, and priorities change. A once-a-year check-in is too little, too late. Use regular one-on-ones for coaching and recognition, quarterly conversations to revisit goals, and the annual review to summarize the year. Gallup’s recent analysis found that meaningful weekly feedback is associated with much higher engagement, and the conversations can be brief — often 15 to 30 minutes. The right cadence will vary by role, but the principle is constant: the annual review should contain no major surprises.

Pro-Tip: Keep brief notes throughout the year on goals, achievements, feedback and relevant context, and invite the employee to do the same. This counters the recency effect and keeps the loudest or most visible moments from dominating the review.

3. Give Concrete, Forward-Looking Feedback

After an effective review, team members should understand what to continue, what to change and what happens next. Corrective feedback should be specific: separate observable behavior from assumptions, explain its impact and agree on a next step. Do not invent improvement areas simply to give a strong employee something to work on. And recognize excellent work. Recognition does not replace fair compensation, but specific, timely appreciation tells people what to repeat and that their contribution is seen.

Pro-Tip: Replace the feedback sandwich with clarity and curiosity. The Center for Creative Leadership’s Situation-Behavior-Impact-Intent (SBII) approach asks a manager to name the situation, describe the observed behavior, explain the impact and then ask about intent. That final question gives the employee a chance to add context before both sides agree on next steps.

4. Make It a Two-Way Conversation

Effective performance reviews are not one-sided events. Invite an employee self-assessment and ask where resources, priorities, workload or broken processes are creating barriers. Discuss professional development and career goals. Ask for feedback on your role as manager and listen without immediately rebutting it. End by agreeing on next steps, owners and dates. Where possible, consider separating compensation or promotion decisions from the coaching conversation so that development does not get crowded out.

5. Build in Fairness and More Than One Perspective

Fairness requires more than good intentions. Use job-related criteria communicated in advance, factual examples and a consistent rating scale. EEOC guidance emphasizes communicating standards, applying them consistently and explaining ratings with relevant facts. When the role warrants it, use more than one input — such as the employee’s self-assessment, progress data and feedback from partners, clients or peers who directly observed the work — while keeping the manager accountable for the final evaluation. A calibration conversation among managers or HR can also surface inconsistent standards before ratings are finalized.

Pro-Tip: Do not turn multiple inputs into a popularity contest. Ask sources about specific work they directly observed and distinguish evidence from opinion.

6. Avoid the Traps of the Social Sector

Nonprofit and social-impact leaders face distinctive pressures: constrained resources, urgent missions, emotionally demanding work and close relationships that can make candor feel risky. Avoid these three traps:

• Be Direct, Not Dehumanizing. Mission-driven work can be deeply personal. Deliver candid feedback with respect, connect it to the mission and the role, and focus on behaviors and results rather than identity or assumed motivation.
• Do Not Let Niceness Replace Candor. As Suzanne has written regarding conflict management in the nonprofit sector, avoiding a difficult conversation can feel kind in the moment but create larger problems later. Delayed feedback prevents people from improving and allows resentment or underperformance to grow. Being clear can still be compassionate.
• Do Not Let the Mission Excuse Unsustainable Expectations. Commitment to impact is not a substitute for fair pay, manageable workloads, adequate resources or healthy boundaries. If staffing or funding changes made a goal unrealistic, fix the plan instead of grading the employee down. For more on fair compensation and sustainable retention, see The 5 C’s of Employee Retention.

 

7. Use AI as an Assistant, Not the Evaluator

AI can help a manager organize notes, summarize agreed-upon goals or draft clearer language. It should not become the evaluator. Do not paste confidential employee information into an unapproved tool. Verify every claim, example and conclusion. Do not let an automated output determine a rating, pay decision, promotion or disciplinary action without informed human judgment and review. The EEOC has warned that AI tools used to monitor performance or influence pay and promotion can still create unlawful discrimination.

8. Review the Review

Take time to get feedback about the review system itself. Ask managers and employees: Were expectations clear? Did the process feel fair? Was the conversation useful? Is the form short enough to support the discussion instead of taking it over? Did the agreed-upon next steps actually happen? Track completion, but do not confuse completed paperwork with a high-quality process. Review rating patterns, train managers and simplify the tool. A form should create structure, guidance and consistency — not bureaucracy.

 

Performance reviews are still relevant, but only when they are part of an ongoing system that connects goals, feedback, fairness and development. A strong performance review summarizes a year of honest conversations. It should never be the first time those conversations happen.

The form is not the real work. The real work happens during the other 364 days: setting clear expectations, recognizing contributions, addressing concerns and helping people grow.

Before you dust off last year’s form, ask a better question: What needs to happen throughout the year to make the next performance review useful?

What makes performance reviews useful — or disheartening — at your organization? Share what is working, what isn’t and what you would change.

 

 

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