Peerformance- Performance relative to your peers

In the Olympics, medals are awarded to the top peerformer. Fastest man in the meet wins the gold, next wins the silver, etc. Since we’ve measured the absolute performance of these competitions we know the fastest man in the 100-meter dash in 1964 (10.0 seconds and a then world record), would have barely made the 8-man final for the Olympics in 2016 (9.81 seconds and not a world record).[1] While it’s great to be the world record holder, within this context it’s important to recognize each man’s performance was equally valuable. They both won the gold.

In many situations, high performance is desired, recognized, and rewarded. However, there are two ways to look at performance:

• Absolute Performance- Achievement regardless of context, time, etc.
• Relative Performance aka Peerformance- Achievement in a given situation or within a group

When most folks reference performance they talk about being the best, but in reality they are just trying to beat the competition. To better distinguish between the two, I’m going to recommend we introduce the word peerformance with an extra e – a portmanteau between peer and performance. I would argue that peerformance is what people often mean when they say performance.

In business, what is often called performance is really peerformance. If bonuses are awarded to the highest performing salesperson, you just have to outperform your peers. Not the whole industry, or all salespeople everywhere. Likely the results would also be good in absolute terms, but not necessarily. Or thinking another way, if you want to beat your competitor’s price you want to be just lower than your peers, not the lowest price ever. All else being equal, being a little bit lower in price is as good as being a lot lower in price.

Splitting these two concepts of performance, helps with goal-setting and achievement. If you are the second lowest cost supplier your goal is to meet or beat the costs of the lowest cost supplier. You would likely direct your team to focus on reducing costs. Normally though folks set absolute performance goals (e.g. 10% reduction in costs), but this is only truly success if this is better than the competition’s costs. Long-term it would make sense to continue improving your absolute performance, but it really only matters about your peerformance—being cheaper when someone looks to make a purchase.

Many times an absolute goal is what is set, but in reality success is better reflected by relative goals. Relative goals take into account confounding factors like poor or excellent market conditions, and truly reflect the impact of the individual. And as a leader it’s imperative that your goals align with your objectives.

How peerformance can help you:

• Goal-setting- where do your goals fall on the collaboration-competition continuum. Some goals lead to a competition where there are winners and losers. Other times it might be better to encourage a collaborative environment. Being conscientious of how a goal will be achieved, can improve overall performance and morale.
• Better identifying your peer group- in setting a peerformance goal it’s critical to define the peers (a kind of competitive analysis). Additionally, this leads to some questions around the why of a goal. This added perspective helps align the thinking and actions of those working towards the outcome.

Always open to a good conversation, please don't hesitate to reach out.

**Sometimes I’m a bit too literal, and pronounced a misspelling of performance as peer-formance. I then reverse engineered a definition to this new word. Conceptually this definition made a lot of sense, so naturally I wrote an article to explain my thinking.

[1] https://en.wikipedia.org/wiki/100_metres_at_the_Olympics