Comparing subjective and objective data on workplace performance (WIAS Technical Paper No 2 )

Understanding what determines workplace performance is important for a variety of reasons. In the first place, it can inform the debate about the UK's low productivity growth. It is also enables researchers to determine the efficacy of different organisational practices, policies and payment systems. In this paper we examine not the determinants of performance but how it is measured. Specifically, we assess the alternative measures of productivity and profitability that are available in the 2004 Workplace Employment Relations Survey (WERS). Previous WERS have been an important source of data in research into workplace performance. However, the subjective nature of the performance measures available in WERS prior to 2004 has attracted criticism. In the 2004 WERS, data was again collected on the subjective measure but, in addition, objective data on profitability and productivity was also collected. This allows a comparison to be made between the two types of measures. A number of validity tests are undertaken and the main conclusion is that subjective and objective measures of performance are weakly equivalent but that differences are also evident. Our findings suggest that it would be prudent to give most weight to results supported by both types of measure.