Absolute Versus Relative Performance

Relative performance differs from absolute performance because there is an interpretive or contextual component. 

The first key decision-point deals with how performance can or should be measured.  There are two means of assessing performance: in absolute terms or in relative terms.  For instance, if I told you my daughter shot 90 the last time she played golf, what would you think?  Is this a good score or a bad score?  

If I told you that my daughter plays on the LPGA tour, you would probably offer me condolences.  If I told you she was eight years old, you would either ask me if she only played nine holes, or make some comment about being impressed.  In some cases, 90 is a great score and in some cases 90 is a terrible score.  Measured in absolute terms, 90 is 18 over par.  In relative terms, 90 could range from an awful score to an incredibly good score.  Relative performance differs from absolute performance because there is an interpretive or contextual component. 

ACTION POINT: Understand the distinctions between absolute and relative performance.