Perceptual and Objective Performance Measures: An Empirical Analysis of the Difference and its Impact

Abstract

This paper quantifies the extent of bias that occurs in the estimated relationship of performance with other marketing variables when perceptions of both are obtained from the same respondents using the same method. We econometrically separate the bias due to factors like response style and measurement format, which affect all estimated relationships uniformly and are stable over time, from that due to respondents' psychological processes like positive illusions, cognitive consistency, and self-serving attributions, which differentially influence some estimated relationships. We predict the direction of these biases and test our hypotheses using five years of objective data on the performance of the independent agents of a retailer, along with the agents' perceptions of their performance and of other marketing constructs gathered in surveys conducted during the same years.