Performance objective refers to target or specific outcome and result that desired to accomplish the things by performing as per strategic vision and mission. It is a company's performance outcome that the company wanted to achieve. It helps to understand the reasons and rationale of vision and mission, and helps to translate long-term direction into specific performance result.

According to Thompson and Strickland- ''Performance objective represent a managerial commitment to achieving specific performance targets within a specific time frame- they are call for results that connect directly to the company’s strategic vision and core values.'' A performance objective is a specific end result that contributes to the success of the unit or organization and that an employee is expected to accomplish or produce. Performance objectives provide focus to an employee’s work to ensure that his or her actions are directed towards achieving important mission-related outcomes. Performance objectives are not work activities, task descriptions, or responsibilities listed in a performance description. It must be stated in;

  • Quantifiable or measurable term
  • Deadline for achievement
  • Specific not generalization
  • Acceptable.

 Strategic objectives versus financial objectives
Strategic objectives and financial objectives are the organizational aim to be strong in competitive position by focusing on sustainability of operational success and financial success. Financial performance and strategic performance are two key factors for the measurement of institutional result. So, the organization needs to set the strategic and financial objectives.

The organization establishes the financial objectives to achieve the desire financial performance. Achieving acceptable financial performance is a must;

  • To fund needed initiatives,
  • To fulfill shareholders’ financial expects, and
  • To assure the creditors.
  • Similarly the organization establishes the strategic objective to achieve performance long lastingly. Achieving acceptable strategic performance is essential;
  • To sustain the company’s long-term market position and competitiveness.
  • To build the company's image in the competitive situation.
    Financial objectives entail short-term benefit to shareholders, whereas strategic objectives entail long-term competitive position. As per strategic management principle, building a stronger long-term competitive position benefits shareholder’s more lastingly than improving short-term profitability.
    Some examples of Financial Objectives
    Growth in revenues and earnings
    Bigger profit margins and higher dividends
  • Higher ROI (return on investment)
    Attractive EVA (economic value addition) performance
    Strong bond and credit ratings
    Bigger cash flow and rising stock price
    A more diversified revenue bases
    Stable earnings during recession period.

Some examples of Strategic Objectives
A bigger market share
Quicker design to market times than rivals
Higher product quality than rivals
Lower cost relative to key competitors
Broader or more attractive product line than rivals
Superior on time delivery
Strong brand name than rival
Stronger global distribution and sales capabilities than rival.