Measure Management and the Masses: How Acceptability of Operating and Reporting Distortion Varies with Justification, Demography, and Moral Consequences

In three studies totaling almost 5000 subjects, we present respondents with scenarios in which employees manage performance measures by distorting how they report performance or how they operate their organizations. We measure respondents’ judgments about the scenarios and their broader moral values, and interpret statistical associations in light of Moral Foundations Theory (Graham, Nosek, et al 2011) to draw inferences on how respondents view the ‘moral terrain’ of morally-relevant features depicted by the scenarios we present. In our business, public school and hospital settings, we conclude that respondents see reporting distortion as a more appropriate remedy than operating distortion to inequity, and see operational distortions as improving underlying performance more effectively when measures capture true performance more accurately. In our public school and hospital settings, we also conclude that respondents see the organization, (i.e. school or hospital), rather than outside stakeholders, (i.e. students or patients), as representing the in-group to which managers owe loyalty. Respondents also see a sacred element both in reporting and in supporting a school or hospital.