- Email: [email protected]
Mirror, mirror on the wall, am I the greatest performer of all? Narcissism and self-reported and objective performance
Personality and Individual Differences 108 (2017) 182–185
Contents lists available at ScienceDirect
Personality and Individual Differences journal homepage: www.elsevier.com/locate/paid
Short Communication
Mirror, mirror on the wall, am I the greatest performer of all? Narcissism and self-reported and objective performance Maria João Coelho Guedes ISEG (School of Economics and Management), Universidade de Lisboa, Rua do Quelhas 6, 1200-781 Lisboa, Portugal
a r t i c l e
i n f o
Article history: Received 17 August 2016 Received in revised form 13 December 2016 Accepted 16 December 2016 Available online xxxx Keywords: Narcissism Performance Self-report Return on assets (ROA) Return on sales (ROS)
a b s t r a c t Narcissists are individuals whose personality exudes excessive self-love and inflated views of the self. To date, there is no clear understanding how this excessive love for the self is related to performance. The present study examines whether narcissists' inflated views of their own performance are substantiated by objective accounting performance. Our results show that individuals who score high on narcissism over-evaluate their performances and that their self-assessment is not correlated with objective indicators. Indeed, away from the magic mirror on the wall, narcissists are not the greatest performers after all. © 2016 Elsevier Ltd. All rights reserved.
1. Introduction Interest in the relationship between narcissism and performance has long attracted the attention of scholars, because they identify narcissism as a key ingredient in organizational success (Grijalva, Harms, Newman, Gaddis, & Fraley, 2015). To date, however, the research has not rendered a consensus regarding the role narcissism plays in organizational performance. Some studies have found a positive association (e.g., Maccoby, 2000), others a negative association (e.g., Soyer, Rovenpor, & Kopelman, 1999), and still others have suggested no relation at all (e.g., Judge, LePine, & Rich, 2006). The mixed evidence emanates in part from the use of different measures of both narcissism and performance (either self-reported or objective measures) (Campbell, Hoffman, Campbell, & Marchisio, 2011).
2. Narcissism and (self-reported and objective) performance Narcissism is defined as excessive self-love, admiration, and exaggerated attention to the self. Narcissists tend to highly value their worth and accomplishments and are obsessed with power and recognition (Emmons, 1987; Tamborski, Brown, & Chowning, 2012). There are two forms of narcissism: grandiose and vulnerable. Vulnerable narcissism describes individuals who are hostile and highly neurotic, and who have low self-esteem and are depressed and anxious (e.g., Miller et al., 2011). Grandiose narcissism is the most studied form of narcissism and relates to the classic view of the condition, especially in the E-mail address: [email protected].
http://dx.doi.org/10.1016/j.paid.2016.12.030 0191-8869/© 2016 Elsevier Ltd. All rights reserved.
context of leadership. As with most studies to date, the present study focuses solely on grandiose narcissism. Narcissists are attracted to leadership positions (e.g., Harms, Spain, & Hannah, 2011) and are commonly found in top positions. The top ranks better suit their ambitions and influence and are a place where they can exert authority and leave behind a grandiose legacy of achievement (Wales, Patel, & Lumpkin, 2013). Not surprisingly, prior research has focused on the relationship between top management, in particular at the chief executive officer (CEO) level, and narcissism (e.g., Chatterjee & Hambrick, 2007). But are these exacerbated views of the self, ambition, and power in narcissists related to better performance? The empirical research has generated mixed conclusions. Some researchers contend that narcissism is detrimental to performance (e.g., Soyer et al., 1999). Others conclude that there is a bright side to narcissism, which translates into positive outcomes related to narcissism (e.g., Maccoby, 2000). Furthermore, other studies find no relationship (e.g., Judge et al., 2006). Thus, can narcissism, per se, account for a firm's performance? According to Wales et al. (2013), narcissism itself is not sufficient to explain a firm's performance but can certainly play an important role. According to the self-regulation models for grandiose narcissism, narcissists have an inflated view of themselves and often think they are better than they are (Campbell et al., 2011). However, this inflated view is present mainly in agentic domains, such as power or status. Narcissistic individuals focus on achieving success and glory. To that end, they use self-regulating strategies such as bragging or showing off “trophy” romantic partners (Campbell, 1999). As part of this strategy, narcissists also have inflated self-views. Some studies find that narcissism is positively associated with self-reported descriptions (e.g., Gabriel,
M.J.C. Guedes / Personality and Individual Differences 108 (2017) 182–185
Critelli, & Ee, 1994), performance ratings (e.g., John & Robins, 1994), and positive acts (Gosling, John, Craik, & Robins, 1998) but are unrelated to other objective measures (Judge et al., 2006). The evidence shows that narcissists “work for themselves” (Hornett & Fredericks, 2005), are quite confident about themselves and their capacities, and rank their performance and skills above others (Oliver & Robins, 1994; Wallace & Baumeister, 2002). Given these self-enhancement tendencies in narcissism, we therefore assert that narcissists inflate their self-reported performance (Campbell, Reeder, Sedikides, & Elliot, 2000). Therefore, we posit: Hypothesis 1. Narcissism positively correlates with self-reported performance. Despite narcissists considering themselves superior to others (Gabriel et al., 1994), the grandiose nature of such beliefs does not necessarily translate into reality. Research has shown that for organizational contexts, narcissists do not outperform non-narcissists (Judge et al., 2006). The performance is neither related to the self-view of the narcissist, nor to the exaggerated view of the self. Instead, performance is related to reality. In light of the scarce evidence that relates objective (accounting) performance measures and narcissism, and as an exploratory hypothesis we predict: Hypothesis 2. Narcissism is not correlated with objective (accounting) measures of performance.
3. Method 3.1. Participants The present study uses a sample of 968 top managers (670 males and 298 females) from non-listed firms in all industries in Portugal. We collected the data through an online survey that uses contacts from Informa D&B. The mean age of the participants is 45.04 (SD = 9.70, with a range of 21–74) and with a mean of 21.80 years of work experience (SD = 9.98, with a range of 1 to 57) and a tenure with the firm of 12.73 years (SD = 8.93, with a range of 0 to 54). On average, women are younger and with a lower tenure in the organization. The most representative industry is “other services” at 26% of the sample, followed by “wholesale and retail sales” at 12% of the total participants. The least representative industry is “extraction industries” and “international organization bodies” at 0.5% each. The average number of employees is 20 (SD = 110.25 with a range of 1–2493); the average size of assets is 6,062,525 euros (SD = 83.000,000 with a range of 65.91– 2,180,000,000 euros). 3.2. Measures 3.2.1. Narcissism We adopt a validated measure of narcissism: the Narcissistic Personality Inventory (NPI-16) proposed by Ames, Rose, and Anderson (2006). This self-reported measure of grandiose narcissism comprises 16 paired statements related to leadership, dominance, grandiose beliefs, and a sense of entitlement in a forced choice between a narcissistic response (=1) and a non-narcissistic response (=0). Table 1 presents the results for the NPI-16 and shows that the reliability of the measure is good with a Cronbach's alpha coefficient of 0.73 (DeVellis, 1991). 3.2.2. Performance We have two measures for performance: self-reported and objective. For the self-reported performance, we build on the work of Wiklund and Shepherd (2003). The scale has ten items, which are presented in Table 1. The participants compare themselves to their main competitors over the last three years of business. They then indicate how they think their firm has performed in several areas, such as
183
Table 1 Scale summary, means, SDs, and reliabilities (N = 968).
Mean SD Narcissism (NPI 16) Performance (for the last three years and comparing to main competitors) Sales growth Revenues growth Number of employee growth Return of assets Innovation of products and services Innovation in the processes adopted by the firm Adoption of new technologies Qualities of the products and services Variety of the products and services Customer satisfaction
Cronbach's α
4.22 3.51
2.96 0.73 0.53 0.86
3.39 3.37 3.31 3.30 3.57 3.59 3.53 3.82 3.60 3.89
0.84 0.85 0.76 0.76 0.79 0.78 0.82 0.72 0.79 0.70
sales, revenues, and innovation, on a scale that ranges from 1 = much lower to 5 = much higher. The Cronbach's alpha coefficient is 0.86 and shows very good reliability (DeVellis, 1991). For objective performance, we use two different accounting performance measures (e.g., Reina, Zhang, & Peterson, 2014). The first is the average return on assets (ROA) that is defined as the ratio of net income to assets for the last three years of business. The second is the return on sales (ROS) that is defined as the ratio of net income to sale, also for the last three years. 4. Results In Table 2 we present the correlations between the self-reported performance, ROS, ROA, and narcissism for the entire sample and compare the lower quartile with the higher quartile of narcissism. The table shows that narcissism is significantly and positively correlated with self-reported performance, but only for those individuals who show higher levels of narcissism. But, do these elevated self-views correlate into real accounting performance? The results show that there is a non-significant correlation between narcissism and the objective performance measures. This absence of correlation means that individuals who score high on narcissism over-evaluate their performance and that their self-assessment is not correlated with objective indicators. Finally, the self-reported and objective measures of performance are not significantly correlated, not even when separated into quartiles. The separation by sex does not change the results. Overall, our results are consistent with the self-enhancement view of narcissism. 5. Discussion Our results contribute to the related literature by showing that firms should use objective performance measures that do not depend on the self-views of the top manager. One could argue that top managers may manipulate accounting measures. In fact, there is evidence that narcissists engage in some form of manipulation in order to elevate earnings (e.g., Olsen, Dworkis, & Young, 2013). However, investors can use publicly available information to detect earnings manipulations by managers but cannot detect the narcissism level of managers. Even more difficult is to understand if managers incorporate their inflated views in the self-reported measures and how that affects performance. One could also argue that managers may become more narcissistic because of past successes. However, the evidence here is to the contrary. Using a three-year window, our evidence shows that self-reported performance does not coincide with objective performance. We also use 1and 2-year windows as robustness checks for the objective accounting performance and have similar results. Overall, this study provides an important lesson: do not trust the mirror that narcissistic top managers use, because the reality is quite different. Investors should use objective measures to assess a firm's
1 0.5124⁎⁎⁎ 1 −0.0226 −0.0274 1 0.5217⁎⁎⁎ 1 −0.0025 −0.0558⁎ 1 0.0038 0.0630⁎ 0.0753⁎⁎ 1 0.1271⁎⁎⁎ −0.0314 0.0008 −0.0010 −0.036 −0.0213 0.1690⁎⁎⁎ −0.1150⁎⁎⁎ −0.1457⁎⁎⁎ 2 3 4 5 6
performance but must always keep in mind that manipulation is possible, especially if they suspect that the top managers have narcissistic characteristics. 6. Limitations and future research
All sample (Women = 298 and Men = 670); Low narcissism (Women = 106 and Men = 211) and high narcissism (Women = 58 and Men = 149) correspond to the first and last quartiles of NPI16, respectively. ⁎ p b 0.1. ⁎⁎ p b 0.05. ⁎⁎⁎ p b 0.01.
1 0.4934⁎⁎⁎ 1 0.1257⁎ 0.0798 1 0.3967⁎⁎⁎ 0.6780 −0.0206 −0.0242 1 0.0290 −0.0642 −0.0380 1 0.5483⁎⁎⁎ 0.0830 −0.0037 0.0801 −0.0271 −0.0188 0.0479 −0.1134⁎⁎ −0.1284⁎⁎
1 1
Self-reported performance ROA ROS Narcissim Age Tenure in firm
1
2 1
All sample Table 2 Pearson correlations.
0.0137 −0.0502 0.1768⁎⁎ −0.1431⁎⁎ −0.1649⁎⁎
2 1
1 5 4 2 5 4 3
Low narcissism
1
3
High narcissism
3
1 0.0744 −0.0740 0.1088
5
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This study has some potential limitations. First, our measure of narcissism is self-reported, but other measures could potentially be used, such as unobtrusive measures of narcissism or inviting subordinates to evaluate the perceived narcissism of their top managers. Second, we use objective accounting measures of performance. We encourage future work to use market-based measures, such as earnings-per-share or dividend payout. Third, future work might incorporate our self-reported performance measure as a control variable. Fourth, longitudinal or experimental studies could provide new insights and lessons from the relationship between narcissism and performance, particularly studies that are multidisciplinary and use larger samples. Another line of future research would be to confront the managers with the disparity in the results between their perceived value and actual accounting performance. Would narcissistic managers reiterate their evaluations or would they blame another source? 7. Conclusions The present study's results show that the inflated self-view of narcissistic top managers is not a good proxy for actual performance. Our study shows that narcissistic top managers self-report higher performance, but that performance does not translate into actual accounting numbers. Overall, we recommend that self-reported performance measures should not be used to reflect top managers' performance; indeed, narcissistic managers portray what they want to see, which is glory and success. Unfortunately, this is a distorted image of what the numbers reveal regarding their actual performance. Acknowledgments This work was supported by FCT (Fundação para a Ciência e a Tecnologia, Portugal), Grant: UID/SOC/04521/2013. The author gratefully thanks Ana Teresa Filipe for her assistance with data collection and to the Editor and Referees for their constructive comments and recommendations. References Ames, D. R., Rose, P., & Anderson, C. P. (2006). The NPI-16 as a short measure of narcissism. Journal of Research in Personality, 40(4), 440–450. Campbell, W. K. (1999). Narcissism and romantic attraction. Journal of Personality and Social Psychology, 77, 1254–1270. Campbell, W. K., Reeder, G. D., Sedikides, C., & Elliot, A. J. (2000). Narcissism and comparative self-enhancement strategies. Journal of Research in Personality, 34(3), 329–347. Campbell, W. K., Hoffman, B. J., Campbell, S. M., & Marchisio, G. (2011). Narcissism in organizational contexts. Human Resource Management Review, 21(4), 268–284. Chatterjee, A., & Hambrick, D. C. (2007). It's all about me: Narcissistic chief executive officers and their effects on company strategy and performance. Administrative Science Quarterly, 52(3), 351–386. DeVellis, R. F. (1991). Scale Development: Theory and Applications. Newbury Park, CA: Sage Publications. Emmons, R. A. (1987). Narcissism: Theory and measurement. Journal of Personality and Social Psychology, 52, 11–17. Gabriel, M. T., Critelli, J. W., & Ee, J. S. (1994). Narcissistic illusions in self-evaluations of intelligence and attractiveness. Journal of Personality, 62(1), 143–155. Gosling, S. D., John, O. P., Craik, K. H., & Robins, R. W. (1998). Do people know how they behave? Self-reported act frequencies compared with on-line codings by observers. Journal of Personality and Social Psychology, 74, 1337–1349. Grijalva, E., Harms, P. D., Newman, D. A., Gaddis, B. H., & Fraley, R. C. (2015). Narcissism and leadership: A meta-analytic review of linear and nonlinear relationships. Personnel Psychology, 68(1), 1–47. Harms, P. D., Spain, S. M., & Hannah, S. T. (2011). Leader development and the dark side of personality. The Leadership Quarterly, 22(3), 495–509. Hornett, A., & Fredericks, S. (2005). An empirical and theoretical exploration of disconnections between leadership and ethics. Journal of Business Ethics, 59, 233–246.
M.J.C. Guedes / Personality and Individual Differences 108 (2017) 182–185 John, O. P., & Robins, R. W. (1994). Accuracy and bias in self-perception: Individual differences in self-enhancement and the role of narcissism. Journal of Personality and Social Psychology, 66, 206–219. Judge, T. A., LePine, J. A., & Rich, B. L. (2006). Loving yourself abundantly: Relationship of the narcissistic personality to self-and other perceptions of workplace deviance, leadership, and task and contextual performance. Journal of Applied Psychology, 91(4), 762–776. Maccoby, M. (2000). Narcissistic leaders: The incredible pros, the inevitable cons. Harvard Business Review, 78(1), 68–78. Miller, J. D., Hoffman, B. J., Gaughan, E. T., Gentile, B., Maples, J., & Campbell, W. K. (2011). Grandiose and vulnerable narcissism: A nomological network analysis. Journal of Personality, 79(5), 1013–1042. Oliver, J. P., & Robins, R. W. (1994). Accuracy and bias in self-perception: Individual differences in self-enhancement and the role of narcissism. Journal of Personality and Social Psychology, 66(1), 206–219. Olsen, K. J., Dworkis, K. K., & Young, S. M. (2013). CEO narcissism and accounting: A picture of profits. Journal of Management Accounting Research, 26(2), 243–267. Reina, C. S., Zhang, Z., & Peterson, S. J. (2014). CEO grandiose narcissism and firm performance: The role of organizational identification. The Leadership Quarterly, 25(5), 958–971.
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Soyer, R. B., Rovenpor, J. L., & Kopelman, R. E. (1999). Narcissism and achievement motivation as related to three facets of the sales role: Attraction, satisfaction and performance. Journal of Business and Psychology, 14(2), 285–304. Tamborski, M., Brown, R. P., & Chowning, K. (2012). Self-serving bias or simply serving the self? Evidence for a dimensional approach to narcissism. Personality and Individual Differences, 52(8), 942–946. Wales, W. J., Patel, P. C., & Lumpkin, G. T. (2013). In pursuit of greatness: CEO narcissism, entrepreneurial orientation, and firm performance variance. Journal of Management Studies, 50(6), 1041–1069. Wallace, H. M., & Baumeister, R. F. (2002). The performance of narcissists rises and falls with perceived opportunity for glory. Journal of Personality and Social Psychology, 82(5), 819–834. Wiklund, J., & Shepherd, D. (2003). Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses. Strategic Management Journal, 24(13), 1307–1314.
Contents lists available at ScienceDirect
Personality and Individual Differences journal homepage: www.elsevier.com/locate/paid
Short Communication
Mirror, mirror on the wall, am I the greatest performer of all? Narcissism and self-reported and objective performance Maria João Coelho Guedes ISEG (School of Economics and Management), Universidade de Lisboa, Rua do Quelhas 6, 1200-781 Lisboa, Portugal
a r t i c l e
i n f o
Article history: Received 17 August 2016 Received in revised form 13 December 2016 Accepted 16 December 2016 Available online xxxx Keywords: Narcissism Performance Self-report Return on assets (ROA) Return on sales (ROS)
a b s t r a c t Narcissists are individuals whose personality exudes excessive self-love and inflated views of the self. To date, there is no clear understanding how this excessive love for the self is related to performance. The present study examines whether narcissists' inflated views of their own performance are substantiated by objective accounting performance. Our results show that individuals who score high on narcissism over-evaluate their performances and that their self-assessment is not correlated with objective indicators. Indeed, away from the magic mirror on the wall, narcissists are not the greatest performers after all. © 2016 Elsevier Ltd. All rights reserved.
1. Introduction Interest in the relationship between narcissism and performance has long attracted the attention of scholars, because they identify narcissism as a key ingredient in organizational success (Grijalva, Harms, Newman, Gaddis, & Fraley, 2015). To date, however, the research has not rendered a consensus regarding the role narcissism plays in organizational performance. Some studies have found a positive association (e.g., Maccoby, 2000), others a negative association (e.g., Soyer, Rovenpor, & Kopelman, 1999), and still others have suggested no relation at all (e.g., Judge, LePine, & Rich, 2006). The mixed evidence emanates in part from the use of different measures of both narcissism and performance (either self-reported or objective measures) (Campbell, Hoffman, Campbell, & Marchisio, 2011).
2. Narcissism and (self-reported and objective) performance Narcissism is defined as excessive self-love, admiration, and exaggerated attention to the self. Narcissists tend to highly value their worth and accomplishments and are obsessed with power and recognition (Emmons, 1987; Tamborski, Brown, & Chowning, 2012). There are two forms of narcissism: grandiose and vulnerable. Vulnerable narcissism describes individuals who are hostile and highly neurotic, and who have low self-esteem and are depressed and anxious (e.g., Miller et al., 2011). Grandiose narcissism is the most studied form of narcissism and relates to the classic view of the condition, especially in the E-mail address: [email protected].
http://dx.doi.org/10.1016/j.paid.2016.12.030 0191-8869/© 2016 Elsevier Ltd. All rights reserved.
context of leadership. As with most studies to date, the present study focuses solely on grandiose narcissism. Narcissists are attracted to leadership positions (e.g., Harms, Spain, & Hannah, 2011) and are commonly found in top positions. The top ranks better suit their ambitions and influence and are a place where they can exert authority and leave behind a grandiose legacy of achievement (Wales, Patel, & Lumpkin, 2013). Not surprisingly, prior research has focused on the relationship between top management, in particular at the chief executive officer (CEO) level, and narcissism (e.g., Chatterjee & Hambrick, 2007). But are these exacerbated views of the self, ambition, and power in narcissists related to better performance? The empirical research has generated mixed conclusions. Some researchers contend that narcissism is detrimental to performance (e.g., Soyer et al., 1999). Others conclude that there is a bright side to narcissism, which translates into positive outcomes related to narcissism (e.g., Maccoby, 2000). Furthermore, other studies find no relationship (e.g., Judge et al., 2006). Thus, can narcissism, per se, account for a firm's performance? According to Wales et al. (2013), narcissism itself is not sufficient to explain a firm's performance but can certainly play an important role. According to the self-regulation models for grandiose narcissism, narcissists have an inflated view of themselves and often think they are better than they are (Campbell et al., 2011). However, this inflated view is present mainly in agentic domains, such as power or status. Narcissistic individuals focus on achieving success and glory. To that end, they use self-regulating strategies such as bragging or showing off “trophy” romantic partners (Campbell, 1999). As part of this strategy, narcissists also have inflated self-views. Some studies find that narcissism is positively associated with self-reported descriptions (e.g., Gabriel,
M.J.C. Guedes / Personality and Individual Differences 108 (2017) 182–185
Critelli, & Ee, 1994), performance ratings (e.g., John & Robins, 1994), and positive acts (Gosling, John, Craik, & Robins, 1998) but are unrelated to other objective measures (Judge et al., 2006). The evidence shows that narcissists “work for themselves” (Hornett & Fredericks, 2005), are quite confident about themselves and their capacities, and rank their performance and skills above others (Oliver & Robins, 1994; Wallace & Baumeister, 2002). Given these self-enhancement tendencies in narcissism, we therefore assert that narcissists inflate their self-reported performance (Campbell, Reeder, Sedikides, & Elliot, 2000). Therefore, we posit: Hypothesis 1. Narcissism positively correlates with self-reported performance. Despite narcissists considering themselves superior to others (Gabriel et al., 1994), the grandiose nature of such beliefs does not necessarily translate into reality. Research has shown that for organizational contexts, narcissists do not outperform non-narcissists (Judge et al., 2006). The performance is neither related to the self-view of the narcissist, nor to the exaggerated view of the self. Instead, performance is related to reality. In light of the scarce evidence that relates objective (accounting) performance measures and narcissism, and as an exploratory hypothesis we predict: Hypothesis 2. Narcissism is not correlated with objective (accounting) measures of performance.
3. Method 3.1. Participants The present study uses a sample of 968 top managers (670 males and 298 females) from non-listed firms in all industries in Portugal. We collected the data through an online survey that uses contacts from Informa D&B. The mean age of the participants is 45.04 (SD = 9.70, with a range of 21–74) and with a mean of 21.80 years of work experience (SD = 9.98, with a range of 1 to 57) and a tenure with the firm of 12.73 years (SD = 8.93, with a range of 0 to 54). On average, women are younger and with a lower tenure in the organization. The most representative industry is “other services” at 26% of the sample, followed by “wholesale and retail sales” at 12% of the total participants. The least representative industry is “extraction industries” and “international organization bodies” at 0.5% each. The average number of employees is 20 (SD = 110.25 with a range of 1–2493); the average size of assets is 6,062,525 euros (SD = 83.000,000 with a range of 65.91– 2,180,000,000 euros). 3.2. Measures 3.2.1. Narcissism We adopt a validated measure of narcissism: the Narcissistic Personality Inventory (NPI-16) proposed by Ames, Rose, and Anderson (2006). This self-reported measure of grandiose narcissism comprises 16 paired statements related to leadership, dominance, grandiose beliefs, and a sense of entitlement in a forced choice between a narcissistic response (=1) and a non-narcissistic response (=0). Table 1 presents the results for the NPI-16 and shows that the reliability of the measure is good with a Cronbach's alpha coefficient of 0.73 (DeVellis, 1991). 3.2.2. Performance We have two measures for performance: self-reported and objective. For the self-reported performance, we build on the work of Wiklund and Shepherd (2003). The scale has ten items, which are presented in Table 1. The participants compare themselves to their main competitors over the last three years of business. They then indicate how they think their firm has performed in several areas, such as
183
Table 1 Scale summary, means, SDs, and reliabilities (N = 968).
Mean SD Narcissism (NPI 16) Performance (for the last three years and comparing to main competitors) Sales growth Revenues growth Number of employee growth Return of assets Innovation of products and services Innovation in the processes adopted by the firm Adoption of new technologies Qualities of the products and services Variety of the products and services Customer satisfaction
Cronbach's α
4.22 3.51
2.96 0.73 0.53 0.86
3.39 3.37 3.31 3.30 3.57 3.59 3.53 3.82 3.60 3.89
0.84 0.85 0.76 0.76 0.79 0.78 0.82 0.72 0.79 0.70
sales, revenues, and innovation, on a scale that ranges from 1 = much lower to 5 = much higher. The Cronbach's alpha coefficient is 0.86 and shows very good reliability (DeVellis, 1991). For objective performance, we use two different accounting performance measures (e.g., Reina, Zhang, & Peterson, 2014). The first is the average return on assets (ROA) that is defined as the ratio of net income to assets for the last three years of business. The second is the return on sales (ROS) that is defined as the ratio of net income to sale, also for the last three years. 4. Results In Table 2 we present the correlations between the self-reported performance, ROS, ROA, and narcissism for the entire sample and compare the lower quartile with the higher quartile of narcissism. The table shows that narcissism is significantly and positively correlated with self-reported performance, but only for those individuals who show higher levels of narcissism. But, do these elevated self-views correlate into real accounting performance? The results show that there is a non-significant correlation between narcissism and the objective performance measures. This absence of correlation means that individuals who score high on narcissism over-evaluate their performance and that their self-assessment is not correlated with objective indicators. Finally, the self-reported and objective measures of performance are not significantly correlated, not even when separated into quartiles. The separation by sex does not change the results. Overall, our results are consistent with the self-enhancement view of narcissism. 5. Discussion Our results contribute to the related literature by showing that firms should use objective performance measures that do not depend on the self-views of the top manager. One could argue that top managers may manipulate accounting measures. In fact, there is evidence that narcissists engage in some form of manipulation in order to elevate earnings (e.g., Olsen, Dworkis, & Young, 2013). However, investors can use publicly available information to detect earnings manipulations by managers but cannot detect the narcissism level of managers. Even more difficult is to understand if managers incorporate their inflated views in the self-reported measures and how that affects performance. One could also argue that managers may become more narcissistic because of past successes. However, the evidence here is to the contrary. Using a three-year window, our evidence shows that self-reported performance does not coincide with objective performance. We also use 1and 2-year windows as robustness checks for the objective accounting performance and have similar results. Overall, this study provides an important lesson: do not trust the mirror that narcissistic top managers use, because the reality is quite different. Investors should use objective measures to assess a firm's
1 0.5124⁎⁎⁎ 1 −0.0226 −0.0274 1 0.5217⁎⁎⁎ 1 −0.0025 −0.0558⁎ 1 0.0038 0.0630⁎ 0.0753⁎⁎ 1 0.1271⁎⁎⁎ −0.0314 0.0008 −0.0010 −0.036 −0.0213 0.1690⁎⁎⁎ −0.1150⁎⁎⁎ −0.1457⁎⁎⁎ 2 3 4 5 6
performance but must always keep in mind that manipulation is possible, especially if they suspect that the top managers have narcissistic characteristics. 6. Limitations and future research
All sample (Women = 298 and Men = 670); Low narcissism (Women = 106 and Men = 211) and high narcissism (Women = 58 and Men = 149) correspond to the first and last quartiles of NPI16, respectively. ⁎ p b 0.1. ⁎⁎ p b 0.05. ⁎⁎⁎ p b 0.01.
1 0.4934⁎⁎⁎ 1 0.1257⁎ 0.0798 1 0.3967⁎⁎⁎ 0.6780 −0.0206 −0.0242 1 0.0290 −0.0642 −0.0380 1 0.5483⁎⁎⁎ 0.0830 −0.0037 0.0801 −0.0271 −0.0188 0.0479 −0.1134⁎⁎ −0.1284⁎⁎
1 1
Self-reported performance ROA ROS Narcissim Age Tenure in firm
1
2 1
All sample Table 2 Pearson correlations.
0.0137 −0.0502 0.1768⁎⁎ −0.1431⁎⁎ −0.1649⁎⁎
2 1
1 5 4 2 5 4 3
Low narcissism
1
3
High narcissism
3
1 0.0744 −0.0740 0.1088
5
M.J.C. Guedes / Personality and Individual Differences 108 (2017) 182–185
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This study has some potential limitations. First, our measure of narcissism is self-reported, but other measures could potentially be used, such as unobtrusive measures of narcissism or inviting subordinates to evaluate the perceived narcissism of their top managers. Second, we use objective accounting measures of performance. We encourage future work to use market-based measures, such as earnings-per-share or dividend payout. Third, future work might incorporate our self-reported performance measure as a control variable. Fourth, longitudinal or experimental studies could provide new insights and lessons from the relationship between narcissism and performance, particularly studies that are multidisciplinary and use larger samples. Another line of future research would be to confront the managers with the disparity in the results between their perceived value and actual accounting performance. Would narcissistic managers reiterate their evaluations or would they blame another source? 7. Conclusions The present study's results show that the inflated self-view of narcissistic top managers is not a good proxy for actual performance. Our study shows that narcissistic top managers self-report higher performance, but that performance does not translate into actual accounting numbers. Overall, we recommend that self-reported performance measures should not be used to reflect top managers' performance; indeed, narcissistic managers portray what they want to see, which is glory and success. Unfortunately, this is a distorted image of what the numbers reveal regarding their actual performance. Acknowledgments This work was supported by FCT (Fundação para a Ciência e a Tecnologia, Portugal), Grant: UID/SOC/04521/2013. The author gratefully thanks Ana Teresa Filipe for her assistance with data collection and to the Editor and Referees for their constructive comments and recommendations. References Ames, D. R., Rose, P., & Anderson, C. P. (2006). The NPI-16 as a short measure of narcissism. Journal of Research in Personality, 40(4), 440–450. Campbell, W. K. (1999). Narcissism and romantic attraction. Journal of Personality and Social Psychology, 77, 1254–1270. Campbell, W. K., Reeder, G. D., Sedikides, C., & Elliot, A. J. (2000). Narcissism and comparative self-enhancement strategies. Journal of Research in Personality, 34(3), 329–347. Campbell, W. K., Hoffman, B. J., Campbell, S. M., & Marchisio, G. (2011). Narcissism in organizational contexts. Human Resource Management Review, 21(4), 268–284. Chatterjee, A., & Hambrick, D. C. (2007). It's all about me: Narcissistic chief executive officers and their effects on company strategy and performance. Administrative Science Quarterly, 52(3), 351–386. DeVellis, R. F. (1991). Scale Development: Theory and Applications. Newbury Park, CA: Sage Publications. Emmons, R. A. (1987). Narcissism: Theory and measurement. Journal of Personality and Social Psychology, 52, 11–17. Gabriel, M. T., Critelli, J. W., & Ee, J. S. (1994). Narcissistic illusions in self-evaluations of intelligence and attractiveness. Journal of Personality, 62(1), 143–155. Gosling, S. D., John, O. P., Craik, K. H., & Robins, R. W. (1998). Do people know how they behave? Self-reported act frequencies compared with on-line codings by observers. Journal of Personality and Social Psychology, 74, 1337–1349. Grijalva, E., Harms, P. D., Newman, D. A., Gaddis, B. H., & Fraley, R. C. (2015). Narcissism and leadership: A meta-analytic review of linear and nonlinear relationships. Personnel Psychology, 68(1), 1–47. Harms, P. D., Spain, S. M., & Hannah, S. T. (2011). Leader development and the dark side of personality. The Leadership Quarterly, 22(3), 495–509. Hornett, A., & Fredericks, S. (2005). An empirical and theoretical exploration of disconnections between leadership and ethics. Journal of Business Ethics, 59, 233–246.
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