Tell Me How I’m Doing:
The Annual Executive Director
Performance Evaluation

One of the most basic responsibilities of a board of directors is to evaluate the performance of the executive director.  Ideally, there is a job description and annual goals and objectives that guide the executive director’s work.  As long as the executive director (ED) is doing a good job and the board is happy with her performance, it’s easy to forego this duty.  In fact, quite often it is dissatisfaction with the ED’s performance that prompts the board to do an evaluation.

This is a disservice to the executive director, and to the organization. The ED needs feedback on her job performance – in order to improve and grow, and to feel good about her work – and to know if she is doing the job as expected. A board of directors should not wait until there is a problem – or until the ED asks for an evaluation – to plan and implement this essential obligation of board responsibility. 

Yet many boards fail to do this.  The lack of a performance evaluation process is often due to uncertainty about who should perform the evaluation, what aspects of the position should be evaluated and how the evaluation should be done. 

There are many ways for a board to complete the ED evaluation, but certain practices are better than others.  Here are a few recommendations to get the process going.

Who Should Perform the Evaluation?

Key recommendations:
  • All board members should have an opportunity to give their feedback
  • The executive committee should be the core group to perform the evaluation

In most organizations, the executive director does not have equal interaction with all board members. The ED will talk to and meet with the board president, other members of the executive committee, and committee chairs more often than other members of the board. But the full board still needs to be involved in the evaluation.

The executive committee should be the core group to perform the evaluation. They would:

  • Establish the process for the evaluation, with input from both the executive director and other board members.
  • Decide what aspects of the ED’s job will be evaluated, incorporating annual performance goals, if they exist
  • Be the group that meets with the executive director to discuss the outcome of the evaluation process – including setting the salary for the coming year.

Should other groups be involved in the evaluation?

Key Recommendations:
  • If the evaluation process is new, keep it simple
  • 360° evaluations are best utilized after an ED has been in the position for several years

Most boards of directors involve only board members directly in the evaluation process. Others choose to also utilize feedback from the staff. Still others go outside the agency to gather information regarding the performance of both the agency and the executive director; for example, to funders, collaborating agencies, volunteers, and clients. Sometimes these comprehensive evaluations – which include not only the board and staff, but outside entities as well – are called “360°” evaluations. Anytime individuals or groups other than the board of directors are asked to participate in the ED evaluation, careful consideration must be given to the nature of their input and to factors that might influence their responses.

To get feedback on the ED’s performance that goes beyond the board, an organization should consider utilizing an “annual employee satisfaction survey,” with several questions related to the executive director position. This can be used as a tool to get feedback from staff on the ED’s performance, without focusing solely on the ED.

After an ED has been on the job for several years, the board might consider a more comprehensive feedback mechanism such as the 360° evaluation. This type of information gathering only needs to be done every few years and is best accomplished by hiring an outside consultant to develop and conduct the evaluation.

Encouraging board member participation

Key Recommendations:
  • The best evaluation tool combines a questionnaire with open-ended questions
  • The executive director should do a self-evaluation

To get input from all board members, many organizations use questionnaires with a rating component, which are easy to use, but have one important shortcoming.

The quantitative nature of the questionnaire tends to attribute the same level of importance to all activities, and success with smaller tasks can inappropriately compensate for a big failure. For example, if an executive director does wonderful program and community work, but has incurred a huge deficit leading the agency to the brink of bankruptcy, the problem will only show up as one or two negative "grades" and won't affect the "grade point average." Because of this shortcoming, it's important to consider the questionnaire (if used) not as the evaluation itself, but as one of the tools that would be used in the evaluation process.

Another way to solicit feedback from board members is to ask them to address several open-ended questions, such as:

  1.  How do you think the ED performed compared to the goals established for her during the past year? (this would include a list of those goals)
  2. What areas of performance should the ED work on?
  3. What are her strengths?

The executive director should be asked to write a self-evaluation, based on the same questionnaire or open-ended questions that board members utilize.

What Aspects of the Position Should Be Evaluated?

Key recommendations:
  • Recognize that many aspects of the job are difficult to evaluate and lend themselves to subjectivity
  • Be sure to include some quantitative measures in the evaluation
  • Evaluate performance against the ED’s annual performance goals, if they exist
  • If using a questionnaire, use the job description to define areas to be evaluated

The job of executive director of a nonprofit organization is one of the most complex, difficult jobs there is. It requires multiple talents, the ability to multi-task to the maximum, and the need to answer to many constituents.

Making a decision about what specifics to include in the evaluation should be a process of give-and-take between the ED and board. If the ED has annual performance goals (which include quantitative measures) these should be evaluated in this process.

Keep in mind that you don’t want the evaluation process to be onerous, go on forever, or feel overwhelming. It should be seen as a process that will give the ED much-needed feedback, encouragement, and opportunities for growth and improvement.

How the Evaluation Should Be Done

Key recommendations:
  • Develop a timeline and share it with all involved parties
  • Don’t rush it
  • Schedule the face-to-face in time for salary changes to be included in the coming year’s budget
  • Hold the face-to-face discussion in a comfortable space and plan plenty of time
  • Be ready to discuss salary and other compensation issues

The annual performance evaluation is a process, not just one document or questionnaire. It’s an opportunity to continue to solidify and grow the relationship between the ED and the board.

The face-to-face meeting is a “report back” to the ED, but is also a discussion of ideas, thoughts and feelings. I recommend posing some reflective questions to the ED prior to that meeting, such as:

  • What was the most satisfying accomplishment for you in the past year?
  • What was the most challenging?
  • What could the Board have done to better support you?
  • What do you need in terms of professional or personal development?
  • Is there any aspect of your job situation that could have been changed to improve your job satisfaction or performance?

A Final Thought

While the formal annual performance evaluation is extremely important, it is only one component of the ongoing communication that should occur between the executive director and the board. Executive directors need feedback all year round.

Like any employee, executive directors need praise and acknowledgment for work well done, and immediate feedback when problems arise. In the best situations, the board president and officers have established good working relationships with the executive director where constant feedback flows in both directions. A once-a-year formal evaluation is no substitute for this essential relationship.

 

Subscribe to Soto's Smart Solutions!

Soto's Smart Solutions Newsletter

 

Winter 2010

 

Download PDF version
of this newsletter.