PERFORMANCE AGREEMENT DEFINITION:Merriam-Webster dictionary defines "performance" as the "execution of an action.

" The quality of the execution is left up to the interpreter and the people who witness the execution. In the business world, performance expectation can't be left up to interpretation. A performance agreement is often used to ensure quality performance criteria are met.

What is a Performance Agreement?

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A performance agreement is a method of establishing expectations, accountability and consequences for not meeting a set standard of execution excellence. Two or more parties agree on the actions the performer will execute and agree on the expected results from executing those actions. Oftentimes, there are consequences if the performer doesn't deliver as agreed.

Business Partners
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Business partners have used performance agreements to define each members' role in the partnership. This helps to avoid any disputes about who is putting more work into the company. In the event of a legal dispute between the partners, this document can also serve to make the case for the partner who feels wronged. Each partner signs the agreement and details his own performance objectives.

Entertainment
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Performance agreements are common between businesses and the entertainers they may hire for club performances, office parties, etc. In the book Music Law writes that a performance agreement works in favor more so for the performer than it does for the business. If a band or act is not paid by a club or other business, the signed agreement may trump any verbal amendments that the business owner can claim he made as a reason for not paying.

Developing the Agreement

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Performance agreements should be negotiated before either party signs. The manager or business owner should encourage feedback from the performer to eliminate discrepancies later. To make it easier for the performer to meet the criteria, attempt to align those goals and actions with her career plan. The manager should also list his own responsibilities to the performer. Establish a follow-up date to re-visit the issue with the performer and check progress.