DEFINITION of 'Absolute Performance Standard'

A way of measuring an organization's progress and how effective and efficient it is at running its business. The absolute performance standard is a benchmark for quality control that is only attainable in theory. However, it is a good way to measure how well a business and its workers are doing.

BREAKING DOWN 'Absolute Performance Standard'

Many organizations implement different forms of performance standards that measure different aspects. Some companies use "pay for performance" incentive programs based on merit for workers who do well in their job. Performance standards should be attainable, specific, observable, meaningful, measurable and stated in terms of quality, quantity, timeliness or cost.

RELATED TERMS
  1. Risk Measures

    Statistical measures that are historical predictors of investment ...
  2. Metrics

    A wide variety of tools that managers and executives can use ...
  3. Absolute Return

    The return that an asset achieves over a certain period of time. ...
  4. Absolute Percentage Growth

    An increase in the value of an asset or account expressed in ...
  5. Benchmark

    A standard against which the performance of a security, mutual ...
  6. Quality Control

    A process through which a business seeks to ensure that product ...
Related Articles
  1. Small Business

    Explaining Quality Control

    Businesses use quality control to ensure their products and services meet a certain standard, as well as any industry regulations.
  2. Insights

    Standard Of Living Vs. Quality Of Life

    What is the difference between a standard of living and quality of life? Find out in this breakdown.
  3. Investing

    What Is Financial Performance?

    Financial performance measures a firm’s ability to generate profits through the use of its assets.
  4. Small Business

    What's Involved in Quality Management?

    Essentially, quality management entails overseeing all activities and tasks needed to maintain excellence.
  5. Investing

    What’s the Difference Between Standard Of Living and Quality Of Life?

    Knowing the difference between standard of living and quality of life can dictate where and how someone invests.
  6. Investing

    A Simplified Approach To Calculating Volatility

    Though most investors use standard deviation to determine volatility, there's an easier and more accurate way of doing it.
  7. Investing

    Explaining Absolute Return

    Absolute return refers to an asset’s total return over a set period of time. It’s usually applied to stocks, mutual funds or hedge funds.
  8. Investing

    What's a Benchmark?

    A benchmark is a standard investors choose to gauge the performance of their portfolios.
  9. Investing

    5 Ways To Measure Mutual Fund Risk

    These statistical measurements highlight how to mitigate risk and increase rewards.
  10. Investing

    A Simplified Approach To Calculating Volatility

    Volatility is sometimes greater than anticipated, but the way it’s measured can compound the problems that occur when it’s unexpected.
RELATED FAQS
  1. What's the difference between absolute and relative return?

    Knowing whether a fund manager or broker is doing a good job can be a challenge for some investors. It's difficult to define ... Read Answer >>
  2. What is standard deviation used for in mutual funds?

    See how standard deviation is helpful in evaluating a mutual fund's performance. Use it in combination with other measurements ... Read Answer >>
  3. What does standard deviation measure in a portfolio?

    Dig deeper into the investment uses of, and mathematical principles behind, standard deviation as a measurement of portfolio ... Read Answer >>
  4. What is the difference between standard deviation and average deviation?

    Understand the basics of standard deviation and average deviation, including how each is calculated and why standard deviation ... Read Answer >>
  5. How is standard deviation used to determine risk?

    Understand the basics of calculation and interpretation of standard deviation and how it is used to measure risk in the investment ... Read Answer >>
  6. What is the difference between efficiency ratios and profitability ratios?

    Learn about efficiency and profitability ratios, what these ratios measure and the main difference between efficiency and ... Read Answer >>
Hot Definitions
  1. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center