Evaluation of a perceived organisational performance scale using Rasch model analysis

Abstract

Increasingly, researchers are using perceptual or subjective measures of organisational performance, but our review of the literature reveals that these measures are rarely validated. We introduce Rasch model analysis to the management field and apply it to a psychometric analysis of an organisational performance scale developed in 1996 by Delaney and Huselid. Although this scale has been widely used, the present work is the first substantial investigation of its psychometric properties. The results of Rasch model analysis reveal that the original hypothesised two-factor structure was not supported but a revised three-factor structure with good psychometric properties that reflect internal, external and market performance was supported. Evidence for construct validity was found for internal and market performance subscales but not for external performance. This paper presents an important methodological advance for management research by demonstrating the evaluation of the psychometric properties of this scale through Rasch model analysis. The findings expand our understanding of the underlying structure of organisational performance and have implications for a wider application of Rasch model analysis in the management field.