Performance Challenges

There is little consensus on the concept of performance. Its multiple definitions and shifting aspects are problematic. Nevertheless, the notion of performance covers certain necessities.

Generalities

The concept of performance is well related to the notion of achieving objectives and removing constraints. Five points of consensus in performance research can be summarized:

• The concept of organizational performance is central and cannot be ignored.
• Different performance models are useful in different circumstances. Their usefulness depends on the goals and constraints that the organization imposes on itself in evaluating its performance. They are complementary.
• The conceptualization of what a performing organization stands for is changing as the view of it as a social contract evolves through metaphors. Metaphors make it possible to be aware of new phenomena and performance variables that previous metaphors would not have yet revealed.
• The criteria for selecting performance indicators are based on individual values ​​and preferences, which are difficult to identify, even by people themselves, and often contradictory between individuals. Depending on who is involved, a different set of criteria can be identified. What people say they prefer and what their behaviors suggest they prefer are not always the same thing.
• Questions of performance are mainly brought about through the problems encountered rather than through theories. The problems of an organization’s performance are not theoretical but practical and respond to criteria.

The Construct

Importantly, performance is a construct. A construct is an abstraction that cannot be pointed to, counted, or directly observed. It exists only because it is inferred from observable phenomena, but it has no objective reality. It is a mental abstraction used to understand ideas or interpretations. A concept, unlike a construct, can be linked to an empirical reality. It can be defined and precisely described by observable events. Constructs, however, cannot be defined in this way. Their boundaries cannot be drawn exactly.

As a construct, performance cannot have a meaning that is definitively known and apprehended by a single model. One model includes elements not found in the other models; each of the models has a value. However, none has sufficient explanatory power to supplant the others. Asking whether an organization is performing or not does not mean much before specifying different aspects that can be relatively independent of each other. Such a construct allows a wide variety of organizations to be simultaneously judged to be successful despite contradictory characteristics. It makes it possible to include criteria that would not have been judged as important by one stakeholder, but which may ultimately turn out to be essential by others.

Narrow Definitions

A too narrow definition of performance limits this advantage. The complexity and ambiguity of organizational performance are necessary to reflect the complexity and ambiguity of organizations. Some have argued that the concept of performance is more for engineering than science. Organizations could be seen as entities involved in a multitude of objectives, which in turn show only a weak ordering of their general preference. At the same time, the underlying preferences depend on stakeholders' values whose positions are accepted by others.

Standards and Indicators

A primary task in questions related to performance is to identify suitable standards and indicators. Closely related is the issue of measurements, which concerns managers and evaluators the most, all with a sense of what they consider effective, even if these ideas are hard to define and put into practice.