Context plays an important role in determining how performance is measured. This includes the relative emphasis on results and behaviors, the use of comparative or absolute systems, and the many other choices and options. In some organizations, the culture is highly competitive. In those organizations, it is unlikely that the performance management system will include measures of contextual performance such as competencies regarding cooperation and working with others.

Another contextual factor that affects choices in terms of performance measurement is the issue of industry trends. Leadership also plays an important role in how performance is measured. There are also contextual factors that play an important role in how performance is measured. These factors are related to the culture of the organization, characteristics of the industry, and the strategic direction chosen by the organization’s leadership.