http://www.btinternet.com/~ted.power/esl0320.html

The Communicative Approachthe early theoretical background to CLT
TESL / TEFL theory from the learning and teaching experiences of Ted Power

The Communicative approach - the theoretical background

Competence and performance - Chomsky's terms (1965) used to refer to: a) the native speaker's idealised knowledge of the abstract system of rules of the language, knowledge that can produce and understand an infinite number of sentences.

Performance - the actual use of that language in concrete situations.
Communicative Competence - Term used by Campbell and Wales (1970) and Hymes (1972) to refer to: the relationship and interaction between the native speaker's grammatical competence (or knowledge of the rules of the language) and Sociolinguistic Competence (or knowledge of the rules of language use). It is distinguished from communicative performance which is the realisation of theses competences in actual speech in real situations.

USAGE and USE - Terms used by Widdowson (1978) to refer to two aspects of communicative performance

a) the ability to produce correct sentences, or manifestations of the linguistic system = USAGE.b) the ability to use the knowledge of the rules for effective communication = USE.

SIGNIFICATION and VALUE: Terms used by Widdowson to distinguish the two different kinds of meaning attached to USE and USAGE:A) the meaning attached to a sentence as an instance of language usage, isolated from context = SIGNIFICATION.B) The meaning taken by a sentence when it is put to use for communicative puroposes = VALUE

E.G. Question: Could you tell me the way to the bank?" Answer: The rain destroyed all the crops". The response has signification but no value!
Other contrasting concepts - Linguistic categories v Communicative Categories: usage/use; signification/value; correctness/appropriacy; sentence/utterance; proposition/illocutionary act; cohesion/coherence; linguistic skills/communicative abilities; speaking & hearing/saying, listening & talking.

Widdowson defined the above set of contrasting concepts to distinguish between language as a formal system and language use as effective communication.