Performance is an often-used term in the business and legal worlds. It can refer to an individual’s work output or the goals an organization strives to achieve. It also carries a legal meaning in which a party must meet certain obligations when engaging in certain contracts.
Performance in Business
In business, performance is measured relative to two factors—how well an employee has completed their assigned duties, and how well an organization has met its goals. Performance in this context is usually judged by leadership or other supervisors. A high performing employee or organization would demonstrate above-average results on all relevant metrics.
Performance in Legal Contracts
Performance can also have a legal connotation. When parties enter into contracts, they agree to certain duties which they are obligated to attend to; failure to comply with the duties of a contract is called a breach of performance. This is an especially important element of contracts that involve services, as performance is evaluated according to how well the service was fulfilled. When one party fails to live up to their end of the agreement, the other party can potentially seek legal recourse.
Measuring Performance
It is important to remember that performance is always relative to the context. In business, team success is measured by the goals set forth for the team. Similarly, an individual’s performance is judged relative to their job description, not against the results of their team members. In the legal context, performance is measured against the contractual obligations set forth by parties. It is also important to remember that performance can take many forms—including quality, speed, customer satisfaction, and efficiency.
Conclusion
Performance is a term that carries many meanings, but the one constant is that performance measures how well an individual or organization has met expectations. In the business context, measuring performance is done relative to job descriptions and organizational goals. In a legal context, performance refers to parties meeting their obligations when engaging in a contract. Understanding the various aspects of performance can help business professionals make informed decisions and aid in reaching success.