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Performance management in the

third sector: a literature-based


analysis of terms and definitions
Voluntary Sector and Volunteering
Research Conference 2014

Lena Maria Wrrlein, University of Hamburg
Barbara Scheck, University of Hamburg

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Introduction
Performance management has recently gained importance in the steering bodies of nonprofit
organizations (NPOs), largely due to changing contextual factors. These are, e.g. the emergence of
efficiency principle in the competition for subsidies (Greiling, 2009), more contracts being based on
performance agreements than general sponsorships, and an increased demand for proof of efficiency
and effectiveness instead of a proof of proper assignment of funds (Greiling, 2009; Meyer & Simsa,
2013; Zimmer et al., 2013)
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. NPOs are today more than ever under pressure to allocate financial
resources efficiently and to communicate their effective performance and their impact to the public
(Greiling, 2009). Additionally, tracking performance is key to the entire performance management
process resulting in positive effects on the quality of work (e.g. Gill, 2010; Phineo gAG, 2013). At the
same time, funders are particularly interested in results, keeping an eye on whether performance is
assessed at all (Dawson, 2010; Gill, 2010; Grimes, 2010).
Furthermore, performance management has taken on greater significance in both consulting and
research. In various policy areas, there is an increasing demand for evaluations, such as in labour
market or development policy, social services, and universities (Toepel & Tissen, 2000). Several
handbooks, toolboxes, and guidelines for practitioners have been published on how to conduct
evaluations, induce performance measurement, or align management with outcome (Asian
Development Bank, 2013; Batliwala & Pittman, 2010; Cabinet Office, 2012; DeGEval, 2010; Impact
Plus Team, 2010; The Urban Institute, 2006; Wainwright, 2003). In academic literature, measuring
performance and results has been the focus of considerable attention. Some authors point out the
advantages and disadvantages of performance measurement (Bell-Rose, 2004; Berman, 2006;
Campbell, 2002; Ebrahim, 2003; Gill, 2010; McEwen et al., 2010; Osborne & Gaebler, 1992;
Osborne et al., 1995; Poister et al., 2013; Waal & Kourtit, 2013), its methods of assessment
(Greatbanks et al., 2010; Greiling, 2010) and its constraints (Bell-Rose, 2004; Kettiger & Schwander,
2011; Mutter, 1998; Osborne et al., 1995; Tuan, 2008). Other authors focus on impact-oriented
reporting, especially in social businesses and social entrepreneurship (Achleitner et al., 2013; Grimes,
2010; Jger, 2010; Leppert, 2013; Roder, 2011). Additionally, several papers address application of
performance measurement or performance management on a case study basis (Barman, 2007;
Dawson, 2010; Lehner, 2011; McEwen et al., 2010).
However, there is no academic article in the context of performance management that gives a
holistic overview of current definitions of terms and shows that central terms are currently used in
contradictory ways. These different definitions are troublesome, since a clear and common
understanding of central terms and definitions is crucial for various reasons: Firstly, for general
credibility and relevance of the topic (e.g. Berger & Luckmann, 1967; Reed & Luffman, 1986; Short
et al., 2009; Short et al., 2008); Secondly, conceptual clarity is important to practitioners for the
strategic development process within their organizations (Gill, 2010), it improves communication
along the team members and enables them to cooperate and indeed assess the data they need for
improving their performance. Furthermore, organizations need clear-cut definitions and equal terms
also for their external communication towards funders. This helps them to communicate the true
value of their actions and thereby contribute to prevent the image of the third sector
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as a pure
expense-factor (Bouri, 2011; Roder, 2011); Thirdly, academics need definitional clarity to enable a
better communication, discussion and common understanding, in pursuance of a further successful
development of the field (Pfeffer, 1993). Fourthly, if academic discussion and professional practice
share the same definitions and terms, it enables an exchange of academic discussion and professional
practice and possible learnings (e.g. Freimann, 1994; Kieler, 1994).
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To bridge this gap, we elaborate on the definition of terms being used currently in in both
academic and practitioners literature. We show that there are great differences in defining terms
along the project cycle of performance management and reveal several strands in academic literature.
By discussing and analysing the very basics of terms, we chop our way through the undergrowth of
highly diverse terms. Thereby we contribute to a better understanding of performance management
for academics, practitioners and we add to lay the foundation for the concept to reach legitimacy.
Furthermore, we provide a normative approach and take up position as to how performance
management should be understood in the third sector.
This position we outlay is guided by literature of development cooperation and therein its driving
force, the Development Assistance Committee (DAC) of the Organisation for Economic Co-
operation and Development (OECD), abbreviated with the acronym OECD/DAC
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. Performance
management and impact assessment has a long tradition within the field of development
cooperation. The reasons why we choose the concept of OECD/DAC are the following: First,
OECD/DAC already aims at unifying terms and definitions in the field of development cooperation
(OECD/DAC, 2002). The field of development cooperation is not immune to terminological
confusions, due to the fact that people from different linguistic backgrounds work together and
definitions are coloured by () faux amis, ambivalence and ambiguity (OECD/DAC, 2002).
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Therefore, since its foundation in the sixties, OECD/DAC is pursuing the objective of clarifying
concepts, terms and definitions in development cooperation. Second, the terms of OECD/DAC are
already being used vastly, due to its large number of members. The committee comprises 30
representatives from OECD member countries and multilateral development agencies, probably
representing the largest existing international understanding of the terms and definitions in question
(OECD/DAC, 2002).
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The paper is organized as follows. First we explain how we identified the most relevant literature
with respect to definitions of terms, and analyse it quantitatively. As a second step, we assess this
literature qualitatively: Along the project cycle of performance management, we move from step to
step and have a closer look on those steps which show most contradictions. First we determine clear
definitions, taken from the concept of OECD/DAC and then refer to authors who vary from this
definition and/or use other terms synonymously. Finally we conclude by summarizing the findings,
referring to contributions and limitations of this study, and identifying areas for further research.
Methodology
To gain an understanding of the state of performance management in current third sector`s literature,
we first identified and reviewed academic journals for detecting keywords for a further literature
survey. It was relevant to scan the articles content, citations in the text, reference lists and endnotes
for getting hold of further relevant articles, handbooks and practitioners literature.
It revealed that books and compilations cannot be excluded from the analysis when dedicating a
paper to fundamental research on definitions and technical terms. Hence, our assessment involved
not only peer-reviewed articles but also books and edited volumes. We therefore searched in the
following three databanks: First, the online catalogue of German National Library of Economics and
Leibniz Information Centre for Economics, named ECONIS, which contains 5.02 million title records
covering the fields business studies, economics and also holds practice-oriented economic literature
constituting the worlds largest databases for economics (ZBW, 2014); Second, the largest academic
library in Hamburg, the Hamburg State and University Library Carl von Ossietzky having 3.5 million
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books and 6,900 journals respectively 56,200 electronic journals (Stabi, 2014); Third, the database
Business Source Complete on the EBSCO Host, which is the superior database for business,
management and economics, beyond other disciplines (EBSCO, 2014).
In the first step of reviewing literature manually, we identified the following key words: performance
management, performance measurement, impact assessment, impact measurement, and evaluation.
In order to ensure that titles were relevant to our research project which focuses on the third sector,
we added as further search terms NPO, nonprofit, third sector or also development cooperation. In
the mentioned databases we searched for records explicitly with these keywords without any time
restriction. The encountered titles were organized and sampled according to the following filters:
duplications of authors and articles, any language other than German or English and relevance to the
study subject: First, articles taken into account had to have a broader or more general scope of
interest, that means articles which concentrated, e.g. on the role of specific stakeholders in driving
nonprofit performance measurement were not considered. Second, considered articles had to
present explicitly or at least implicitly a definition for the terms used.
Quantitative analysis of data
Applying this procedure gave us a total of 45 relevant titles. The sample encompassed books,
compilations, peer-reviewed articles, working papers, internet documents, practitioners guides and
one diploma thesis. These titles were contributed by different authors with three exceptions: two
titles from Bono (2006; 2010); two reports from OECD/DAC (2000; 2002); two contributions from
Proeller, one report (Proeller, 2007) and one joint article (Proeller & Siegel, 2009); This broad
spectrum of literature, both the different types of publication and the various authors contributing to
the topic performance management entails great heterogeneity in a, to the outside, homogenous
sample. Summing up, these 45 titles offer a wide spectrum of 42 different authors or publishers and
an ample range of terminologies and definitions to be discussed.
The titles range from the first one published in 1995 until the last one in 2014. The analysis therefore
encompasses a time frame of nearly twenty years. Furthermore, we analysed the sample according to
the language: 27 titles out of 45 were written in English, 18 in German.
We sorted the sample due to their types of publications and summarized the results under the
umbrella terms practitioner guide and/or academic literature. Titles which were published and
distributed by associations, foundations, consultancies or organizations, which presumably direct their
work to practitioners, were categorized as practitioner guide. Published and peer-reviewed articles,
scientific working papers, books (monographs or compilations) directed primarily to academics were
classified as academic literature. Records which could be directed to both groups are termed as both
practitioner guide and academic literature. Table 1 to 3 gives an overview of the sample, sorted by
academic literature (Table 1), practitioner guide (Table 2) and both (Table 3).

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Table 1: Academic records
Authors Year Title Type of publication Published in or by
Subject area of
publication
Language
(German/English)
Dawson 2010 A case study of impact measurement in a third
sector umbrella organisation
Article International Journal of
Productivity and

Business, Management
and Accounting
English
de Waal et al. 2011 The impact of performance management on the
results of a non-profit organization
Article International Journal of
Productivity and

Business, Management
and Accounting
English
Ebrahim and Rangan 2010 The limits of nonprofit impact: A contingency
framework for measuring social performance
Working paper Harvard Business School Business English
Fojcik 2007 Erfolgsnachweis von Non-Financials bei Social
Entrepreneurs: Mglichkeiten und Grenzen
Diploma thesis Hamburg Business German
Glynn and Murphy 2006 Public management: Failing accountabilities and
failing performance review
Article International Journal of
Public Sector Management
Social Sciences English
Greatbanks et al. 2010 The use and efficacy of anecdotal performance
reporting in the third sector
Article International Journal of
Productivity and

Business, Management
and Accounting
English
Greiling 2009 Performance measurement in Nonprofit-
Organisationen
Monograph Gabler NPO-Management English
Grimes 2010 Strategic sensemaking within funding relationships:
The effects of performance measurement on

Article Entrepreneurship Theory
and Praxis
Economics,
Econometrics and

English
Jger 2010 Managing social businesses: Mission, governance,
strategy, and accountability
Monograph Palgrave Macmillan Business, Management English
Jann and Wegrich 2003 Phasenmodelle und Politikprozesse: Der Policy
Cycle
Compilation Oldenbourg Policy literature German
Kettiger and Schwander 2011 Wirkungsorientierung in der Sozialen Arbeit:
Mglichkeiten und Grenzen
Compilation Nomos Public
management/NPO

German
Lehner 2011 Wirkungsorientierung: eine sterreichische
Perspektive
Compilation Nomos Public
Management/NPO

German
Moynihan 2008 The dynamics of performance management:
Constructing information and reform
Monograph Georgetown University Press Public Management English
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Authors Year Title Type of publication Published in or by
Subject area of
publication
Language
(German/English)
Osborne et al. 1995 Performance management and accountability in
complex public programmes
Article Financial Accountability and
Management
Financial Accountability,
Accounting, and Financial
Management
English
Poister et al. 2013 Does performance management lead to better
outcomes? Evidence from the U.S. public transit

Article Public Administration Review Business, Management
and Accounting
English
Proeller and Siegel 2009 Performance management in der deutschen
Verwaltung - eine explorative Einschtzung
Article dms der moderne staat Public Policy, Law and
Management
German
Roder 2011 Reporting im Social Entrepreneurship: Konzeption
einer externen Unternehmensberichterstattung fr

Monograph Wiesbaden Business, Management
and Accounting
German
Rossi et al. 1999 Evaluation: A systematic approach Monograph Sage Publications Public
Management/NPO

English
Schober et al. 2013 Evaluation und Wirkungsmessung Compilation Schffer-Poeschel NPO-Management German
Stockmann 2006 Evaluation und Qualittsentwicklung: Eine
Grundlage fr wirkungsorientiertes

Monograph Waxmann Development
Cooperation
German
Uebelhart 2011 Das Social-Impact-Modell (SIM): vom sozialen
Problem zur Wirkung
Compilation Nomos Public
Management/NPO

German

Table 2: Practitioner reports
Authors Year Title Type of publication Published in or by
Subject area of
publication
Language
(German/English)
Batliwala and Pittman 2010 Capturing change in womens realities: A critical
overview of current monitoring & evaluation
frameworks and approaches
Report Association for
Womens Rights in
Development (AWID)
NPO-Management,
Development
Cooperation
English
Bertelsmann Stiftung 2008 Engagement mit Wirkung: Warum Transparenz Report Bertelsmann Stiftung Business, NPO- German
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Authors Year Title Type of publication Published in or by
Subject area of
publication
Language
(German/English)
ber die Wirkungen gemeinntziger Aktivitten
wichtig ist
Management
Cabinet Office 2012 A guide to Social Return on Investment Report Cabinet office Public
Management/NPO
literature
English
Clark et al. 2004 Double Bottom Line project report: Assessing social
impact in Double Bottom Line ventures
Report The Rockefeller
Foundation
Business, Management English
Deutsche Gesellschaft fr
Internationale
Zusammenarbeit (GIZ)
GmbH
2011 On the use of results chains in natural resource
governance: Basic concepts and exemplary
applications to the extractive industries
Report GIZ Development
Cooperation
English
Gohl 2000 Prfen und lernen: praxisorientierte Handreichung
zur Wirkungsbeobachtung und Evaluation
Report VENRO NPO-Management,
Development
Cooperation
German
KGSt 2013 Wirkungsorientierte Steuerung Internet KGSt Public
Management/NPO
literature
German
Kurz and Kubek 2013 Kursbuch Wirkung. Das Praxishandbuch fr alle, die
Gutes noch besser tun wollen
Report Phineo gAG NPO-Management German
OECD/DAC 2000 Results based management in the development co-
operation agencies: A review of experience
Report OECD Development
Cooperation
English
OECD/DAC 2002 Glossary of key terms in evaluation and results
based management. Evaluation and aid effectiveness
Series No. 6
Report OECD Development
Cooperation
English
Proeller 2007 Strategische Steuerung fr den Staat: Internationale
Anstze im Vergleich
Report Bertelsmann Stiftung Public Policy, Public
Management
German
Schrder and Kettiger 2001 Wirkungsorientierte Steuerung in der sozialen
Arbeit: Ergebnisse einer internationalen Recherche
Report Bundesministerium fr
Familie, Senioren,
Public
Management/NPO
German
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Authors Year Title Type of publication Published in or by
Subject area of
publication
Language
(German/English)
in den USA, den Niederlanden und der Schweiz Frauen und Jugend literature
Strategic Policy and
Performance Branch
(SPPB)
2014 Results-based management tools at CIDA: A how-to
guide - Foreign Affairs, Trade and Development
Canada (DFATD)
Internet SPPB Development
Cooperation
English
The Social Reporting
Initiative (SRI) e.V.
in print Social Reporting Standard (SRS): Leitfaden zur
wirkungsorientierten Berichterstattung
Report SRI NPO-Management German
The Urban Institute 2006 Building a common framework to measure
nonprofit performance
Report The Urban Institute NPO-Management English
Tuan 2008 Measuring and/or estimating social value creation:
Insights into eight integrated cost approaches
Report Bill & Melinda Gates
Foundation
NPO-Management English
United Nations
Development Program
(UNDP)
2000 Results based management: Concepts and
methodology
Report UNDP Development
cooperation
English
Wainwright 2003 Measuring impact: A guide to resources Report NCVO Publications NPO-Management English

Table 3: Records directed at academics and practitioners
Authors Year Title Type of publication Published in or by
Subject area of
publication
Language
(German/English)
Becker and Vanclay 2006 The international handbook of social impact
assessment: Conceptual and methodological
advances
Compilation Elgar NPO-Management,
Development
Cooperation
English
Bell-Rose 2004 Using performance metrics to assess impact Compilation Jossey-Bass NPO-Management English
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Authors Year Title Type of publication Published in or by
Subject area of
publication
Language
(German/English)
Berman 2006 Performance and productivity in public and
nonprofit organizations
Monograph M.E. Sharpe Public
Management/NPO
literature
English
Bono 2006 NPO-Controlling: Professionelle Steuerung sozialer
Dienstleistungen
Monograph Schffer-Poeschel Public
Management/NPO
literature
German
Bono 2010 Performance management in NPOs: Steuerung im
Dienste sozialer Ziele
Monograph Nomos Public
Management/NPO
literature
German
Hornsby 2012 The Good Analyst: Impact measurement & analysis
in the social-purpose universe
Monograph Investing for good Public
Management/NPO
literature
English


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Qualitative analysis
In the following, a detailed overview of current terms and definitions in these 45 encountered
titles of academic literature and professional practice is given. First, we will present the structuring
model, the project cycle of performance management, including its inherent steps, namely clarifying
objectives, developing results-chains and indicators, collecting and analysing data and learning from
and reporting on performance and results. In the literature, this cycle is the central format for
presenting the different elements of the umbrella term performance management and their
interrelation. Although different authors regroup some steps differently to the four steps presented
here, they all agree on the same content (Bono, 2010; GIZ, 2011; Kurz & Kubek, 2013; OECD/DAC,
2000; Osborne et al., 1995; Proeller, 2007; Schober et al., 2013; SRI e.V., in print; The Urban Institute,
2006; Wainwright, 2003).
Then, we focus on the term performance management itself and the steps 2 and 3 of the project
cycle, which happen to display the most contradicting terminologies. We analyse the sample of 45
titles qualitatively by first presenting the terms and definitions by OECD/DAC and then we refer to
authors who deviate from this definition and/or use other terms synonymously.
We begin by addressing performance management, an umbrella term for a combination of
assessment, documentation of outcome, and reaction on the assessed outcome (Moynihan, 2008;
OECD/DAC, 2000; Waal et al., 2011). Performance management is a framework concept for NPOs
that intend to adjust their performance to outcomes. In this framework, NPOs steer their projects by
applying four steps, as illustrated by the project cycle in Figure 1.


Figure 1: Project cycle of performance management; source: own illustration combining (GIZ, 2011; Kurz & Kubek, 2013; OECD/DAC,
2000; SRI e.V., in print)

First, NPOs conduct a needs assessment, in which they determine the specific societal problem,
explain the consequences for target groups, their living environment and the society as a whole, and
the dimension of the problem. On the basis of these informations, the objectives of the project are
developed. The objectives should be specific, measurable, attainable, realistic and time-bounded
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(SMART). Second, a conceptual framework needs to be elaborated explaining how the NPO is
planning to achieve the objectives, called results-chains. This framework establishes a link between
financial resources invested and planned impacts, via outputs and outcomes. Then, indicators are
developed to measure the progress of the project and the results
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. The actual target to be
accomplished within a given time-frame is also dependent on the baseline, i.e. the initial situation,
before the project started. Depending on the indicator it is necessary to conduct a baseline study.
Third, NPOs collect data on the actual progress of the project (monitoring), complemented by
evaluations and analyse them. In the fourth and last step of this performance management cycle, they
use the assessed data for both internal and external reporting processes (accountability) and for the
intra-organizational learning process, that is, if the actual results do not coincide with the planned
goals, activities may need to be adapted. The findings should stimulate discussion in the management
body of an organization about the chosen strategy and are a trigger for reflection on lessons learned.
Additionally performance management helps to motivate staff and to ensure that resources are used
appropriately (GIZ, 2011; Kurz & Kubek, 2013; OECD/DAC, 2000; SRI e.V., in print)
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.
These four steps are not understood as linear but rather as a continuous development, in which
steps might to some extent proceed simultaneously, therefore the boundaries of the different steps
are rather arbitrary. Authors vary defining the steps of the project cycle and provide somewhat
narrower and broader definitions but most of them share the content of the described four phases
(Bono, 2010; GIZ, 2011; Kurz & Kubek, 2013; OECD/DAC, 2000; Osborne et al., 1995; Proeller,
2007; Schober et al., 2013; SRI e.V., in print; The Urban Institute, 2006; Wainwright, 2003).
Accordingly, some authors use different terms for performance management. Development
cooperation literature uses mainly the term results-based management (OECD/DAC, 2002; SPPB,
2014; UNDP, 2000), whereas Proeller & Siegel (2009) for example, use the term outcome
orientation to sum up an organizations orientation toward all the implied steps of performance
management (Proeller & Siegel, 2009).
Having begun with performance management as the umbrella term for the steps in adjusting an
NPOs performance to outcome and impact, we will now examine steps 2 and 3 of the project cycle
more closely and outlay fundamental controversies as to the definitions used.
In step 2, results-chains are developed that illustrate the link between inputs and impacts, as shown
in Figure 2. Results-chains are sometimes called logical framework, logic model or simply logframe
(GIZ, 2011; Ebrahim & Rangan, 2010; Kurz & Kubek, 2013; OECD/DAC, 2000; The Urban Institute,
2006; Tuan, 2008). The following definitions within the context of results-chains are all guided by the
definitions from the Development Assistance Committee (DAC) of the OECD (OECD/DAC, 2000),
which are widely adopted, not only in development cooperation and practical guidelines, but also in
academic literature (Bertelsmann Stiftung, 2008; Glynn & Murphy, 1996; Hornsby, 2012; Rossi et al.,
1999; Stockmann, 2006).
Figure 2: Result-chain; source: e.g. GIZ, 2011; Kurz & Kubek, 2013; OECD/DAC, 2000;

The term inputs subsumes staff, time, equipment, and all types of resources, especially financial
resources. Using these resources, a NPO launches activities that lead to immediate consequences or
results of those activities, called outputs. These outputs create short- and medium-term changes in
the lives of the target group and coincide with the project goal or objective (outcome), which can still
be causally and quantitatively attributed to the project. Impacts are long-term changes that can occur
during the lifetime of one project and/or after the project. They go beyond the target group and


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therefore can be viewed as a change in society as a whole. Impact as such can be positive and
negative, primary and secondary long-term effects produced by a development intervention, directly
or indirectly, intended or unintended. (OECD/DAC, 2002). A projects contribution up to this level
cannot be attributed causally but rather plausibly (OECD/DAC, 2000).
Following this definition of impact provided by OECD/DAC, we diverge from several authors
(Bono, 2010; Cabinet Office, 2012; Clark et al., 2004) who define impact as () the portion of the
total outcome that happened as a result of the activity of the venture, above and beyond what would
have happened anyway (Clark et al., 2004). This interpretation is favoured by the Social Return on
Investment Network. We consider this definition non-applicable in practice. Besides having to
overcome the widely discussed obstacle in assessing the outcome, NPOs would then also need to
subtract the results that would have occurred anyway in the absence of the project and the societal
change attributed to another organizations effort. Several authors refer to the challenges involved in
this approach (Bell-Rose, 2004; Kettiger & Schwander, 2011; Mutter, 1998). They state that, firstly,
there is a missing causality from what the organization does (output) to the observable outcome and,
secondly, impact and outcome are influenced by these external factors due to the fact that the
project is always exposed to external factors and never acts in laboratory conditions. Thirdly, medium-
term and long-term changes (outcome and impact) need time to find complete expression and
changes are noticeable only after a few years, e.g. in the education sector.
Some authors define impact and outcome as the same thing (Osborne et al., 1995) or define
impact as an umbrella term: () every change resulting from an activity () (Wainwright, 2003).
Therefore, impact would then include all levels that the OECD separates from another: outputs,
outcomes, and impacts (including unintended or negative effects).
Inconsistencies can also be found in the use of the terms output and outcome. Gohl (2000) blurs
the distinction between the terms output and outcome, and defines outcome as a product of the
NPO. Stockmann (2006) criticizes this in stating that products of an organization cannot be the
outcome, as, for example, drunks are never a product of a brewery, but rather a possible outcome.
There are two blocs that deviate from the sequence of terms the OECD/DAC stipulates. There
seems to be a tendency within German, Swiss, and Austrian NPO and public management literature
(Bono, 2006, 2010; Kettiger & Schwander, 2011; KGST, 2013; Lehner, 2011; Schrder & Kettiger,
2001; Uebelhart, 2011) to generally interchange impact and outcome and to refer to outcome as the
level at which societal change is assessed and define impact as the change achieved at the level of
target groups. These authors insert between the levels output and impact another level, effect, which
refers to direct, objectively visible effectiveness (Bono, 2006; Kettiger & Schwander, 2011; KGST,
2013; Lehner, 2011; Schrder & Kettiger, 2001; Uebelhart, 2011). Also, within policy literature
(Jann, 1981; Jann & Wegrich, 2003; Schneider & Janning, 2006), there is a tendency to interchange
terms: impact is the change in behaviour of the target group, and outcome refers to changes within
society, to the solution of a problem, and to non-intended results. For an overview of the different
terms as we define them, following the OECD/DAC in comparison to public management and NPO
and policy literature, see Table 4.

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Table 4: Overview of terms used along results-chains; source: own compilation
Field of research Terms Definition Source
Development cooperation
Output Products, capital goods, and services that result from a development intervention; Output
may also include changes resulting from the intervention that are relevant to achievement
of outcomes.

OECD/DAC (2002);
Bertelsmann Stiftung
(2008); Glynn & Murphy
(1996); Hornsby (2012);
Rossi et al. (1999);
Stockmann (2006);
UNDP, 2000
Outcome Likely or achieved short- and medium-term effects (changes in the lives of the target
group) of an interventions outputs.

Impact Positive and negative, primary and secondary long-term effects produced by a
development intervention, directly or indirectly, intended or unintended.
They go beyond the target group and can be viewed as a change in society as a whole.

Public management/NPO literature
(Germany, Austria, Switzerland)
Output Services provided by the public administration or other service providers.

Bono (2006; 2010);
Kettiger & Schwander
(2011); KGST, 2013
(2013); Lehner (2011);
Schrder & Kettiger
(2001); Uebelhart (2011)
Effect Directly, objectively visible effectiveness of provided services.

Impact Change achieved at the level of target groups (their subjective impression).

Outcome Indirect effects of provided services on society and/or environment as a whole.
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Field of research Terms Definition Source

Policy literature
Output Interventions or services from the state aimed at changing the behaviour of stakeholders
(distribution of resources, public contracts, provision of infrastructure).

Jann (1981); Jann &
Wegrich (2003);
Schneider & Janning
(2006)
Impact Change in behaviour of target groups (intended change in behaviour, adaptation strategy,
resistance).

Outcome Changes within society (achievement of intended results, solution to problem, unintended
results).



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Step 3 of the project cycle entails assessing data on output, outcome and impact, based on the
linear logic model and comparing actual performance to ideal or planned performance. As data
assessment per se is based on the preceding actions of step 1 (clarifying objectives) and step 2
(developing results-chains and indicators), OECD/DAC summarizes this step 3, collecting and
analysing data, together with step 1 and step 2 under the term: performance measurement. OECD
defines performance measurement as () the process an organization follows to objectively measure
how well its stated objectives are being met () [and] () involves several phases, e.g. articulating and
agreeing on objectives, selecting indicators and setting targets, monitoring performance (collecting
data on results), and analysing those results vis--vis targets. (OECD/DAC, 2000). To assess this
performance, both quantitative and qualitative methods can be applied (Greatbanks et al., 2010;
Grimes, 2010).
Additionally, in academic and practitioner literature, there are several terms used synonymously to
performance measurement, for example (social) impact assessment, impact measurement, social
performance assessment, social outcome measurement, and various other combinations (Fojcik,
2007; Roder, 2011).
Some authors, though, do not follow the performance measurement definition of OECD/DAC
and neither do they see impact assessment as a synonym to performance measurement. Dawson
(2010), for example, sees impact assessment as covering () the results of both performance
measurement and performance management systems and therefore as an umbrella term for
measurement and management. In the paragraph where she traces the definition for the term impact
assessment, she cites Wainwright (2003) saying Impact assessment is defined as all change from an
activity, project or organisation. Nevertheless, Dawson disregards that this is how Wainwright
defines impact, while Wainwright is silent on the term impact assessment. In accordance with Dawson
(2010), Jger (2010), citing Vanclay in Becker & Vanclay (2006), states that social impact assessment
is the () process of analysing and managing the intended and unintended consequences of planned
interventions on people so as to bring about a more sustainable and equitable biophysical and human
environment. This is contradictory to our view, as we see performance management as the umbrella
term and performance measurement as one step toward adjusting performance to impact
(OECD/DAC, 2000; OECD/DAC, 2002), and social impact assessment as a synonym to
performance measurement. In contradiction to Vanclays view, his co-author Becker in their joint
book Becker & Vanclay (2006) maintains a different view of social impact assessment. Social impact
assessment is () the process of identifying the future consequences of a current or proposed action
which are related to individuals, organizations and social macro-systems () (Becker & Vanclay,
2006). In his view, social impact assessment does not include performance management in contrast
to his co-author Becker, nor does he include the processes of step 1 until 3 of the management cycle
as OECD/DAC does. Therefore he only comprehends measuring the outcome and impact under the
term social impact assessment.
Greiling (2009) is explicitly in disagreement with using both terms performance measurement and
performance management, and prefers two slight variations of the term performance measurement.
When she addresses measurement, she refers to information-oriented performance measurement,
whereas when Greiling addresses management of project direction, she refers to steering-oriented
performance measurement (performance management).
This listing of various authors shows that the understanding of what is to be comprehended by
performance measurement varies vastly from the definition of OECD/DAC. In addition to that,
15


academic and practitioners` literature in the context of development cooperation, splits up the term
performance measurement into the terms monitoring and evaluation (e.g. Batliwala & Pittman,
2010; Ebrahim & Rangan, 2010; OECD/DAC, 2000; Stockmann, 2006). Monitoring implies the
continuous collection, via indicators, of data concerning the performance of an NPO; this informs
management about the achievement of milestones, and whether they were reached within a given
time frame and within the planned financial scope (OECD/DAC, 2002; Schober et al., 2013;
Stockmann, 2006). It also observes possible negative external influences and unintended results that
might bias achievement of an organizations project goals (Stockmann, 2006). Monitoring is
therefore rather a descriptive activity that establishes a process of development, whereas evaluation
questions and examines hypotheses about causality from an organizations activity to a societal
change
8
. Evaluations therefore are generally one-time activities that analyse systematically and
objectively a project from one organization in view of a specific question (OECD/DAC, 2002;
Schober et al., 2013; Stockmann, 2006). Often, these evaluations meet high scientific standards and
are costly and time-consuming (Stockmann, 2006).
In contradiction to the definitions and terms used by development cooperation literature, some
studies, such as Bell-Rose (2004) and Wainwright (2003), use the term evaluation synonymously to
performance measurement or impact assessment. Nonetheless, we follow the notion of Berman
(2006) and Schober et al. (2013) in defining performance measurement (impact assessment) as
historically tracing back to the roots of evaluation in the 1960s and 1970s; however, it is not the same
as evaluation. The term performance measurement originates in the 1970s in the United States of
America, when efforts were made to find more timely and affordable methods than detailed
evaluations (Berman, 2006). The definition of performance measurement at that time was what we
now call monitoring, whereas, as described above, performance measurement is today used more
broadly and can be seen as an umbrella term for evaluation and monitoring (Batliwala & Pittman,
2010; Ebrahim & Rangan, 2010; OECD/DAC, 2000; Poister et al., 2013; Stockmann, 2006).
However, Schober et al. (2013) and Buschor (1994) still use performance measurement
synonymously to the term monitoring.
Table 5 gives an overview of terms and definitions of various authors discussed in this chapter, in
comparison to our view based upon OECD/DAC.

16


Table 5: Overview of current terms and definitions; source: own compilation
Term Category Definition Authors
performance
management
an umbrella term for a combination of assessment, documentation of outcome, and reaction to the assessed outcome Moynihan, 2008; OECD/DAC, 2000; Waal et al., 2011
Synonymous use
performance management is also named results-based management OECD/DAC, 2002; SPPB, 2014; UNDP, 2000
performance management is also referred to as outcome-orientation Proeller & Siegel, 2009
performance management is named steering-oriented performance measurement
Greiling, 2009

results-chains
illustrate the link between inputs and impacts
GIZ, 2011; Ebrahim & Rangan, 2010; Kurz & Kubek, 2013; OECD/DAC, 2000;
The Urban Institute, 2006; Tuan, 2008; UNDP, 2000
Synonymous use results-chains are sometimes called logical framework, logic model or simply logframe
GIZ, 2011; Ebrahim & Rangan, 2010; Kurz & Kubek, 2013; OECD/DAC, 2000;
The Urban Institute, 2006; Tuan, 2008
impact
Impacts are long-term changes that can occur during the lifetime of one project and/or after the project. They go beyond the target group and
therefore can be viewed as a change in society as a whole. Impact as such can be positive and negative, primary and secondary long-term effects
produced by a development intervention, directly or indirectly, intended or unintended
OECD/DAC, 2002; UNDP, 2000
Different definition

the portion of the total outcome that happened as a result of the activity of the venture, above and beyond
what would have happened anyway
Bono, 2010; Cabinet Office, 2012; Clark et al., 2004
define impact as the change achieved at the level of target groups and refer to outcome as the level at which
societal change is assessed
Bono, 2006, 2010; Kettiger & Schwander, 2011; KGST, 2013; Lehner, 2011;
Schrder & Kettiger, 2001; Uebelhart, 2011; Jann & Wegrich, 2003
define impact and outcome as the same thing
Osborne et al., 1995
Superordinate concept
impact includes all levels that the OECD separates from other outputs, outcomes, and unintended or
negative effects Wainwright, 2003
outcome
Outcomes are short- and medium-term changes in the lives of the target group and coincide with the project goal or objective OECD/DAC, 2000; OECD/DAC, 2002; Stockmann, 2006; UNDP, 2000
Different definition
defines outcome as a product Gohl, 2000
refer to outcome as the level at which societal change is assessed and define impact as the change achieved
at the level of target groups
Bono, 2006, 2010; Kettiger & Schwander, 2011; KGST, 2013; Lehner, 2011;
Schrder & Kettiger, 2001; Uebelhart, 2011; Jann & Wegrich, 2003
17


Subordinate concept add another level between output and impact (change at the level of the target group), named effect
Bono (2006; 2010); Kettiger & Schwander (2011); KGST, 2013 (2013); Lehner
(2011); Schrder & Kettiger (2001); Uebelhart (2011)
performance
measurement
is the process an organization follows to objectively measure how well its stated objectives are being met () [and] () involves several phases, e.g.
articulating and agreeing on objectives, selecting indicators and setting targets, monitoring performance (collecting data on results), and analysing those
results vis--vis targets. OECD/DAC, 2000; OECD/DAC, 2002
Synonymous use
performance measurement is also named information-oriented performance measurement Greiling, 2009
performance measurement is also reffered to as evaluation Bell-Rose (2004); Wainwright (2003)
performance measurement is also named monitoring Schober et al. (2013); Buschor (1994)

synonymously to performance measurement, for example (social) impact assessment, impact measurement,
social performance assessment, social outcome measurement, and various other combinations Fojcik, 2007; Roder, 2011
different definition for impact
assessment
impact assessment as an umbrella term for measurement and management Dawson (2010); Jger (2010); Vanclay in Becker & Vanclay (2006)
social impact assessment does not include monitoring the progress of a project nor does it include
performance management but soley measuring the outcome and impact Becker in Becker & Vanclay (2006)
Superordinate concept performance measurement is split up into the terms monitoring and evaluation
Batliwala & Pittman, 2010; Ebrahim & Rangan, 2010; OECD/DAC, 2000; Poister et
al., 2013; Stockmann, 2006
18


Conclusion
In our study we reviewed the literature on performance management in the context of the third
sector with regard to terms and definitions used. We searched in three databases for academic and
practitioners literature for this topic and identified 45 relevant titles, which define explicitly or
implicitly the relevant terms and are written either in English or in German. These records dispose of a
great heterogeneity due to their broad spectrum of types of publications and the large amount of
different authors or publishers.
In order to structure the qualitative analysis, we used the project cycle which is the central format
for displaying the different steps involved in performance management. Along the different steps of
this model, we revealed and discussed definitional and terminological differences and similarities of 42
different authors or publishers. We provided a definition of the individual terms guided by
OECD/DAC before we presented deviating opinions.
We found that there are tremendous inconsistencies regarding terms and definitions used, starting
with the umbrella term performance management itself and its inherent step 2, developing results-
chains and indicators, and step 3, collecting and analyzing data. While there are authors who use other
terms synonymously to the OECD/DAC ones, there are several other authors who either blur the
lines between definitions or interchange terms or even use the same term with a different meaning.
Furthermore, we revealed different strands in academic literature, wherever it arose from the
discussion.
To the authors best knowledge, this paper provides a unique overview of current terms and
definitions used in both research and professional practice. It contributes to provide more clarity for
practitioners and academics by highlighting inconsistencies, confusions or similarities (Bouri, 2011;
Gill, 2010; Roder, 2011; Pfeffer, 1993). For performance management to progress, there needs to be
a common understanding and terminological and definitional conclusiveness between practitioners
and academics (e.g. Berger & Luckmann, 1967; Short et al., 2008).
Therefore we add to lay the foundation for the concept to reach legitimacy by highlighting
terminologies and definitions published by the Development Assistance Committee (DAC) of the
OECD as an answer to the question of how performance management should be understood in the
third sector. The reasons for alluding to this terminology are the following: Firstly, OECD/DAC leads
the discussion about unification of terms and definitions in the professional practice, mainly within the
field of development cooperation. Secondly, due to its large number of members, the organizations
definitions and terms are being used widely already;
With this paper, we aim at the delegation of the widely spread concept of performance
management of OECD/DAC in development cooperation to the NPO sector and thereby at a more
unified usage of third sector performance concepts in future research and practice.
By comparing terms and definitions of different authors to OECD/DAC, we privileged this
particular concept of performance management and promote it as a common framework on how
performance management should be understood in the third sector. This represents a wide-spread
and internationally acknowledged concept but privileges a certain understanding of terms and the
choice might raise objections. Furthermore, the data collection method relies much on finding the
right keywords. In the flood of different and contradicting terms, it was challenging to identify the
19


suitable keywords and one might criticize the selection or the applied filters. Finally, we scanned
exclusively German and English literature. The results might change slightly when analysing literature
in another language.
Given the long tradition of performance management in the sector, further empirical research
could aim at identifying concepts and best practices within development cooperation, suitable for a
transfer to national NPO context. For example, qualitative studies could be conducted with managers
of NPOs and organizations of development cooperation regarding the use of performance
management for learning, adjusting and decision-making, thus fostering a more effective and
transparent third sector.
NOTES
20




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http://www.ziviz.info/fileadmin/download/zivilgesellschaft_in_zahlen_abschlussbericht_modul_1.pdf
.

1
Further contextual factors are: declining public subsidies, intensification of competition
(Greiling, 2009) and the fact that more funds are provided by the EU (EU-Commission or
structural fund), which increases obligations on accountability (Greiling, 2009).
2
In this paper, the term third sector is being used as a synonym to nonprofit sector understood
as a sector between state and market. For further discussion on these terms, see Etzioni, 1973;
Najam, 1996; Roder, 2011; Zimmer et al., 2013; ZiviZ, 2011.




3 When we refer to literature of development cooperation, we base our arguments on the
source of the Development Assistance Committee (DAC) of Organisation for Economic Co-
operation and Development (OECD), abbreviated with the acronym OECD/DAC.
4 Therefore it might be the case that individual authors in the field of development cooperation
differ from the OECD/DAC terms; however OECD has a wide appeal due to its large number of
members (OECD/DAC, 2002).
5 The working party of OECD/DAC, which elaborated these terms and definitions () consists
of 30 representatives from OECD member countries and multilateral development agencies
(Australia, Austria, Belgium, Canada, Denmark, European Commission, Finland, France,
Germany, Greece, Ireland, Italy, J apan, Luxembourg, Netherlands, New Zealand, Norway,
Portugal, Spain, Sweden, Switzerland, United Kingdom, United States, World Bank, Asian
Development Bank, African Development Bank, Inter-American Development Bank, European
Bank for Reconstruction and Development, UN Development Programme, International
Monetary Fund) (OECD/DAC, 2002).
6 These indicators should also follow the SMART- criterias.
7 For more information towards how accountability mechanisms are related and how they
depend on each other, see the symposium on "Accountability and Organizational Learning" in
Public Performance & Management Review (PPMR), Vol. 36, No. 3 (2013) and therein
especially the articles from Greiling & Halachmi (2013) and Schillemans et al. (2013).
8 There are different types of evaluations. An evaluation can be conducted to analyse different
perspectives on an organizations activity, the organizations relevance, effectiveness,
efficiency, impact, or sustainability of the activity (BMZ, 2006; Schober et al., 2013; Stockmann,
2006).