Differences between Cost-Effectiveness and Performance Management Coursework

Differences between Cost-Effectiveness and Performance Management - Coursework Example However, performance management can be done at the beginning of a project, in the course of the project and at the end of the project, unlike cost effectiveness which is mostly done after the conclusion of a project or at the end of a financial period A nonprofit organization is one that conducts activities or charitable projects without financial gains in mind and enjoys tax exemptions from the state. For a long time, it has been thought that it is difficult to measure the performance of nonprofit organizations. According to Anthony and Herzlinger (1980), they noted that the reason there exists a problem in the measurement of performance in nonprofit organizations is the aspect of motivation unlike in profit-making organizations where they are driven by profits. Thus, the lack of motivation leads to financial unsoundness to the nonprofit organizations. However, there are certain elements that are essential in assessing financial soundness in such organizations. Firstenberg and Nitte rhouse (1994), states that programs with measurable objectives and tasks should be created and seen to it that they are accomplished. They insist on the importance of having a budget that funds the tasks, setting time targets to meet those particular tasks and identifying managerial practices in that particular field the organization is involved in, to help in monitoring tasks and progress. Monitoring progress should be done through budget expenditures, completion of tasks and meeting objectives, meeting targets and comparison of the actual cost to the budgeted costs. This is just but a tip of the iceberg in assessing financial soundness of nonprofit organizations.