Don't worry about it if you don't work at Google.
Every quarter, managers get together to horse-trade "performance points" (or "calibration scores") and generate a company-wide stack ranking of all engineers. If you end up in the bottom 5% (which sometimes happens to people just because their managers don't show up) then you end up on a PIP and your career at Google is over. That monstrosity is called Perf.
The "Perf Room" is a metaphor on most campuses because most of the smaller ones don't actually have a dedicated room "where it happens" for calibration.
"Take you into the Perf Room" is a common managerial threat, but actually everyone is calibrated and the meeting happens in secret (most engineers never learn their scores) so people don't actually literally get taken "into the Perf Room". It's just an expression for a bad review.