This is a step in the process of strategic management. In this step, management is trying to determine if the performance of a production process or a step in that process is at the level that is needed.
A possible example of this could come from the fast food industry. McDonald's knows how many hamburgers a crew of a given size, using standard equipment, should be able to turn out when working a lunch rush period. This is an objective standard. What a manager at a McDonald's could do would be to look at how many hamburgers each of her crews turns out during lunch rush. She could compare this to the standard to determine whether each of her crews is working was efficiently as it should be.