Performance Management in the Public Sector: Best Practices

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min read
May 17, 2024
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Why performance management is crucial in the public sector

Since effective performance management contributes to higher employee engagement, personal career progression, staff retention and better outcomes for customers amongst many other benefits, the importance of performance management in public sector organisations is paramount as it is in any commercial enterprise.

Whether we’re looking at performance management in local government, law, education, military or even non-profits such as charities and third-sector businesses, each of them can benefit from effective performance management:

  • Alignment between employee career goals and organisational mission
  • Awareness of skills gaps and opportunities to address them
  • Demonstration of value to diverse stakeholders
  • Improved employee engagement, retention and development
  • Higher levels of productivity, efficiency and innovation
  • Clarity for both employees and managers on objectives, expectations and accountability
  • Promotion of organisational culture and values

How can public sector performance management and non-profit performance management provide the framework for these holistic benefits? Let’s look at how a performance management process might look and the obstacles that may need to be overcome.

What’s stopping public sector performance management?

Some public sector and third sector organisations struggle with how to apply a performance model and performance culture to an entity that isn’t focused on sales, costs and profit. Public sector organisations are also more likely to have a broader group of stakeholders as well as complex internal reporting structures which can lead to difficulties rating individual performance. In addition, the customers of public sector and third sector organisations are often not paying directly for the services they receive and so it can be hard to measure customer satisfaction, cost, value or impact. Lastly, it is complicated to measure the overall performance of a public sector body, so this performance data often isn’t available as a benchmark to cascade down into team and individual targets.

Next, we’ll look at how to overcome these obstacles to plan and implement a performance management process suitable for a non-profit or public sector body.

Designing a fit-for-purpose performance management process

Whether you’re looking to implement a new process or update an existing one, this advice based on our experience with public sector clients should set you up for success:

  • Secure commitment from colleagues. As with any new process or change, getting buy-in from colleagues at all levels is essential. Even well-designed projects can fail if they are perceived to be too difficult, too time consuming or require changes to behaviour. At Appraisd, Our customer success team supports customers with implementation and train administrators to be Appraisd Ambassadors for the new process. Another non-profit client uses focus groups to provide ongoing feedback on the process.
  • Focus on outcomes. In public sector performance management and non-profit performance management, outcomes are more important to measure than outputs. For example, can you measure improvement in student achievements rather than the number enrolled? Or, improved outcomes for service users rather than volume of cases managed? Line managers will likely need some training in how to set SMART objectives that are true measures of success.
  • Set the pace. If you already have a process in place that needs updating or perhaps moving from paper-based to online, consider how you can introduce it gradually, by piloting the new process with one team or department. For example, if you’re introducing more frequent manager check-ins, is there an improvement in the engagement and development in that team compared to those only receiving an annual appraisal. What needs to be improved before you roll out the new process more widely?
  • Choose technology that works with your organisation’s systems. A challenge for many public sector and third sector organisations is that they have legacy technology solutions that don’t support newer concepts around performance such as continuous performance management, 360 degree feedback or regular check-ins. A platform like Appraisd works with whatever technology you have; use as many or as few modules as you need.  Appraisd also offers integrations to help with easing of administration and sharing of data across systems.

Despite the size, complexity and matrixed structures in the public sector and non-profits, performance management can be embedded successfully, realising benefits for a broad population of stakeholders.

Why choose Appraisd for public sector performance management

Appraisd has a long-standing track record in helping public sector, local government, non-profits and social enterprises to embed a performance culture. Our platform accommodates different performance management processes and integrates with a wide range of HRIS systems. Appraisd offers public sector and non-profits a performance management system that:

  • Is supported by our customer success team when it comes to integrating and rolling out the solution.
  • Provides clarity on objective setting, progress towards objectives, performance ratings and personal development plans.
  • Offers a secure place to receive, store and analyse 360-degree feedback and other performance data.
  • Allows for different processes such as annual appraisals, regular check-ins and career planning conversations. Choose the process that fits your organisation and add modules as and when you’d like to.
  • Lays the foundation for a connected performance culture in which mentorship and collaboration are encouraged.

Appraisd’s flexible approach to performance management

Using Appraisd you can tailor the software to your organisation’s approach to performance management. Add or remove system features like feedback and recognition, or increase/ or reduce the types and and frequency of check-ins you do in one year, adding or changing each year as your process becomes embedded and it’s time to review.

Check-ins for every stage of the employee lifecycle
Check-ins for every stage of the employee lifecycle

Case studies on performance management in the public sector

If you’re considering updating or improving performance management processes, read on to see how clients we work with have instilled the importance of performance management in public sector and non-profit businesses.

Non-profit performance management at Watford Community Housing

Watford Community Housing is a not-for-profit organisation which owns and manages more than 6,800 homes in Hertfordshire. They aim to provide high-quality homes, and to build friendlier communities, allowing tenants to reach their full potential. Around 60 of their employees work offsite, maintaining the homes in their portfolio, the rest are office/home-based.

Watford Community Housing had an established appraisal process, but it wasn’t supporting the business as well as it could. As it was paper-based, forms were sometimes misplaced, the HR team had to manually chase up managers to complete their reviews, and employees didn’t have a clear picture of their progress.

The HR team selected Appraisd as it’s easy to use and can be customised, allowing flexibility of approach that could accommodate different workflows. Over the past six years, Appraisd has become an integral part of Watford Community Housing. In 2021, 99% of mid-year reviews and 100% of end of year reviews were successfully completed, meaning that every employee had the opportunity to discuss their progress and understand the ratings they received. This has created much greater transparency across the business.

These ratings have helped HR build a talent grid, highlighting those employees with exceptional performance and the rising stars within the business. When new positions become available, the talent grid shows which employees might be suitable for the role, supporting promotions within the organisation.

As part of the reviews, employees are included in any development or training requests. This makes it easier for the senior leaders and HR to identify any skills gaps and which areas employees are most interested in pursuing. With a limited training budget, this information is invaluable as spending can be optimised to ensure that as many individuals as possible receive the correct training.

Read the full case study

Non-profit performance management at Suma Wholefoods

Suma Wholefoods is a specialist distributor in vegetarian, naturally and responsibly sourced products. Founded in 1977, Suma is a cooperative, owned and managed by its workers. It is the UK’s largest worker owned cooperative and Europe’s largest equal pay organisation. There are lots of job roles at Suma and each role is seen as being equally important and valuable.

Suma exists to promote a healthy sustainable lifestyle, selling sustainable produce and also provide employment for the area and support the local community – there are no shareholders to satisfy, members have an equal say, and everyone receives the same wage, no matter what job they are doing.

Employee performance management in the organisation is about being the best that you can be in whatever role you take on, developing your skills to benefit yourself and those around you to positively impact the local community and the environment. Suma is different to most other organisations, where often performance is linked to pay or a bonus.

Suma chose Appraisd as the right partner because it has the flexibility to support Suma’s structure and culture. People can have several different job roles and report to more than one coordinator. This allows objectives to relate to everything that a member is involved in and for no part of their role to be overlooked. As all the information about a member is held in one place, their progress can be easily tracked, highlighting where they are excelling and in what areas they may need more support. The focus is all on their personal development and helping people to bring their best selves to work.

Read the full case study

Ready to try Appraisd?

Performance management is critical to improving efficiency, effectiveness, and accountability in public sector organisations. Appraisd’s flexible solution has a strong track record in local government, non-profit and the third sector.

If you’re ready to try Appraisd, book a call with us:


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