Organizational performance referents: An empirical examination of their content and influences

Although the mechanisms by which individuals make judgments about personal success have been studied extensively, theoretical and empirical development of performance referents in organizations has been sparse. To address this shortfall, we utilized a two-study design to explore performance referents used by CEOs along with characteristics influencing referent orientation (internal vs. external). Referent use was identified through content analysis of 119 CEO annual shareholder letters in the restaurant industry. Results suggest that CEOs use a wide variety of primarily internal referents to assess performance. CEOs who integrate external referents into their performance sensemaking efforts tend to be from larger and more highly performing organizations. Post hoc analysis revealed that CEOs of larger and younger organizations used a higher percentage of external referents.