The Validity of Subjective Performance Measures

Public management studies are increasingly using survey data on managers’ perceptions of performance to measure organizational performance. The perceptual measures are tempting to apply because archival performance data or surveys of target group outcomes and satisfaction are often lacking, costly to provide, and are highly policy specific rendering generalization difficult. But are perceptual performance measures valid, and do they generate unbiased findings? We examine these questions in a comparative study of middle managers in schools in Texas and Denmark. The findings are remarkably similar. Managers are systematically overestimating the performance of their organizations, perceptual performance is only weakly associated with archival performance, and managers do not provide sophisticated assessment of performance by giving their organization credit for the constraints it meets or discounting the resources it has. Even worse, the use of perceptual performance measures seems to provide biased estimates when examining how management affects performance.