Performance measurement is a necessary component of employee management. Without a reliable way of measuring performance, businesses would not know whom to promote and whom to fire. Objective measures of performance are standards that can be measured in exact terms, such as sales volume or attendance. These kinds of measures have many advantages and disadvantages.


Objectively verifiable performance standards are generally much more reliable than subjective standards. Objective standards include quantity, speed and efficiency. These standards can be measured mathematically. For example, if your performance standard for a telemarketing agent is sales volume, you can measure this in dollars. If you have a subjective standard, such as "assertiveness," you need to rely on the supervisors' judgment.


Objective performance standards are more egalitarian than subjective standards. Subjective standards, like diligence or effort, can be influenced by biases, because it is easy to selectively focus on the flaws and ignore the strengths of someone you don't like. Measurable standards, on the other hand, cannot be twisted by latent bias (racism, sexism etc.) because they are not susceptible to errors in human judgment. Take units of output as an example. If you get a report that someone is not reaching target, you can safely conclude that there is a problem that needs to be addressed. This is true regardless of your relationship with the person.


Objective standards can be somewhat superficial. If you limit your performance appraisal standards to those that can be measured exactly, you leave out some of the most important aspects of performance. Ultimately, a person's willingness to learn and dedication to the job are better than than IQ and other measurable standards at indicating future performance. These factors are hard to measure objectively, because you need to rely on your own observations in order to evaluate them.


In some fields, objective performance measures are not very useful or applicable. In fields such as psychotherapy or psychiatry, for example, objective standards can be misleading. If a hospital has a policy of evaluating its psychiatrists by whether the patients to whom they prescribe medication stop complaining about symptoms, they could simply be rewarding psychiatrists who overprescribe strong medications that carry heavy side effects. In fields where practitioners deal with people one-on-one and address complex, long-term issues, subjective performance assessment is usually needed.