Performance

The term “performance” refers to outputs and their outcomes obtained from processes, products, and customers that permit evaluation and comparison relative to goals, standards, past results, and other organizations. Performance can be expressed in non-financial and financial terms.

The Baldrige Criteria address four types of performance: (1) product, (2) customer-focused, (3) financial and marketplace, and (4) operational.

"Product performance" refers to performance relative to measures and indicators of product and service characteristics important to customers. Examples include product reliability, on-time delivery, customer-experienced defect levels, and service response time. For nonprofit organizations, "product performance" examples might include program and project performance in the areas of rapid response to emergencies, at-home services, or multilingual services.

“Customer-focused performance” refers to performance relative to measures and indicators of customers’ perceptions, reactions, and behaviors. Examples include customer retention, complaints, and customer survey results.

“Financial and marketplace performance” refers to performance relative to measures of cost, revenue, and market position, including asset utilization, asset growth, and market share. Examples include returns on investments, value added per employee, debt-to-equity ratio, returns on assets, operating margins, performance to budget, the amount of reserve funds, cash-to-cash cycle time, other profitability and liquidity measures, and market gains.