The Magic Numbers: Examining the Role of Cognitive Reference Points in Performance Information Processing

• In Event: Government Performance Information and Management

Abstract

Performance management reforms have equipped public managers with abundant performance data, but they also have introduced cognitive challenges in interpreting the data. This study investigates the role of cognitive reference points—specific numbers with numeric or cultural significance—in shaping public managers' interpretation of performance information. While prior research has focused on social, historical, and political reference points, the impact of cognitive reference points in public administration remains underexplored.
This study addresses this gap by employing a quasi-experimental design to examine how local governments in Beijing, China, respond to performance scores and rankings. Three cognitive reference points were identified: the median, the mean, and the culturally significant score of 60, which is the passing score on the 100-point scale in Chinese education system. These three numbers have numeric or cultural significance, but no formal incentives were associated with them. In fact, they were not even highlighted in the performance rankings. The regression discontinuity results show that local governments whose performance scores were slightly below the median and the score of 60 significantly improved their performance in the following time periods. We suggest that the median and the score of 60 influence how local government officials perceive their performance. Although there were no formal incentives tied to these benchmarks, they acted as psychological milestones, signaling to officials that their performance might be lagging and prompting them to improve.
Our research contributes to the literature in three key ways. First, we deepen the understanding of how public managers process performance information, demonstrating that cognitive reference points can trigger significant performance improvements. Second, we show that the influence of these cognitive reference points remains robust, even in the presence of institutionalized incentives. Finally, we introduce a new dimension to performance feedback research by highlighting the role of cognitive reference points in public managers' decision-making processes.

Authors

• Siyuan Gao, Tsinghua University
  Presenting Author

• Weijie Wang, Texas A&M University
  Non-Presenting Co-Author

• Xiaoli Lu, Tsinghua University
  Non-Presenting Co-Author