Performance Assessment in the Public Sector – The Issue of Interpretation Asymmetries and Some Behavioral Responses

Purpose This exploratory study aims to contribute to theory extension regarding the unique factors that characterize performance evaluation in the public sector. Methodology/approach The chapter reviews the Public Sector and the Interpretation literatures and develops a framework that introduces the concept of interpretation asymmetries , and then uses two case studies and a survey applied to both South American and European public managers to illustrate and analyze propositions derived from the framework. Findings Public agencies and managers are not assessed by their activities and outcomes but by how the general public may come to interpret and perceive them. Public officers – besides getting their organizations’ job done – struggle to show the truth of their organizations and preserve their organizations’ legitimacy due to the conditions of interpretation asymmetry and the dynamics of politicization prevalent in the public domain. Research limitations/implications This study was designed to be exploratory and fundamentally oriented to theory extension. As such, the findings and conclusions are tentative and require further research. Practical implications Governments, public officers, politicians, and researchers would benefit from going beyond usual considerations of information asymmetries and start paying attention to, understanding, and managing interpretation asymmetries. Originality/value This chapter contributes to the increasing research on the intersection of performance management and the public sector, and provides new concepts that enhance our understanding of the dynamics of assessment in environments prone to politicization. While prior research has been mainly focused on agent’s dysfunctional responses to performance measures, this chapter illustrates functional behaviors through which agents aim to increase the dimensionality and integrity of principals’ interpretations.