DEFINITION of 'Absolute Performance Standard'

The absolute performance standard is a benchmark for quality control that is only attainable in theory, such as a goal of zero defects. However, although it is unattainable, it can be a good way to measure how well a business and its workers are doing. The organization can measure how far the business and its processes are falling from the mark of perfection the absolute performance standard represents. Optimally, the business would slowly move towards the absolute performance standard as it improves its processes. When used in this way, it is a way of measuring an organization's progress and how effective and efficient it is at running its business.

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.

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