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To assess hospital performance, quality perceptions of various stakeholders are increasingly taken into account. However, because of substantial background differences, various stakeholder groups might have different and even contrasting quality perceptions.We test the hypothesis that an overall perception gap exists between employees and patients with respect to perceived hospital quality. We additionally elaborate on how various employee groups differ from each other and from patients.We use primary survey data on perceived hospital quality from 9,979 patients and 4,306 employees from 11 German hospitals. With a multilevel regression and variance analysis, we test the impact of respondent type (employee or patient) on quality perception scores and test the interaction with hospital size. We additionally contrast different employee groups and test differences for various quality dimensions.Hospital employees score hospital quality consistently lower than patients and are also more heterogeneous in their assessments. This makes it from a managerial point of view relevant to subdivide employees in more homogeneous subgroups. Hospital size has no clear effect on the perception gap. Doctors compared to patients and other employee groups have substantially different perceptions on hospital quality.Our findings fuel the practical and ethical debate on the extent that perception gaps could and should be allowed in the context of high-quality and transparent hospital performance. Furthermore, we recommend that the quality perception gap is a substantial part of the overall hospital evaluation for ethical reasons but also to enable managers to better understand the (mis)match between employees’ priorities and patients’ preferences. However, we do warn practitioners that perceptions are only to a limited extent related to the organizational level (in contrast to the individual level), and only minimal improvements can thus be reached by differentiating from other hospitals.