What is performance?
There is general agreement that the concept of performance is somehow
linked with the process of organizational strategy, but confusion about its
exact meaning. The Oxford Paperback Dictionary[1] defines performance in
two ways:
(1) the process or manner of performing;
(2) a notable action or achievement.
In the world of work, these definitions of performance may be taken to mean
either the way in which business is conducted or a successful outcome.
Managers must be concerned with each interpretation because both processes
and outcomes affect organizational success. Individuals are constantly
assessing performance and outcomes in daily life using personal sets of scales
based on aspirations and previous performance. This means that performance
is often judged against subjective criteria that vary from person to person. In
one sense, the supply of goods and services is a performance too, with
employees as actors and the “show” rated by the “audience” of customers.
Performance as system outputs
Performance in organizations is most commonly understood to mean system
outputs. Every business feeds inputs such raw materials, people or resources
and transforms them into finished goods or services that have the aim of
satisfying the consumer for whom they are intended. Customer satisfaction is
therefore a system output that is directly related to another important system
output – profit.