Pads need to be clean, even, and have a high coefficient of friction against the rotor for maximum braking performance. Disc brake pads are available in an array of compounds - all claiming certain benefits. One thing that is consistent is that the pad's compound will have a different coefficient of friction depending on whether it is cold or hot.  As a general rule of thumb, the following compounds exhibit the following coefficients of friction:

Organic – cold 0.44, hot 0.48
Semi-metallic – cold 0.38, hot 0.40
Metallic – cold 0.25, hot 0.35
Ceramic– cold 0.38, hot 0.45
The higher the coefficient of friction, the "softer" the pad is said to be. Keep in mind that there are other factors to consider when selecting pads, such as noise and wear. The softer the pad is, the more rapidly it will wear.
The first letter of the code, sometimes known as the "cold" code, represents the normal friction coefficient. This is defined as the average of four test data points measured at 200, 250, 300 and 400 degrees Fahrenheit.
The second letter of the code, sometimes known as the "hot" code, represents the hot friction coefficient based on a fade and recovery test. Recovery is basically the period where the brakes are gradually cooling off. The hot friction coefficient is defined as the average of multiple data points: 450, 500, 550, 600 and 650°F on the first recovery cycle of the pad; and 500, 400, and 300°F on the second recovery cycle.
The ranges of friction coefficients assigned to each code letter are as follows: C = less than 0.15. D= 0.15 to 0.25. E= 0.25 to 0.35. F= 0.35 to 0.45. G= 0.45 to 0.55, and H= over 0.55.
Each letter grade spans a range of coefficients, but the combination of the two letters and the order in which they come can be a useful indicator of pad performance as it demonstrates the change in coefficient of friction for that pad from cold to hot (and vice versa). For example, an FE pad will grab better when cold (i.e. tends to fade when hot) whereas an EF pad would not grab well when cold (i.e. would need to be warmed up for max performance). Note that the coefficient of friction of steel on steel is 0.25, so EE pads grab only marginally better than no pads at all! FF pads are usually considered the minimum for a high-performance brake pad.