Self-reports in nursing homes generally show highly satisfied residents, whereas observational studies provide more nuanced results. In this study, which is based on self-determination theory, the perspective of nursing home residents (self-reports) is compared to the perspective of trained "neutral" observers (video-observations). The experiences of physically frail older residents are measured with regard to the fulfillment of their needs for relatedness, autonomy, and competence. Self-reports of need fulfillment , and of 36 residents (64 % female, mean age 80 years) were compared with observer ratings of resident need fulfillment during the latter caregiving episode. Furthermore, it was investigated which measure relates best to residents' self-reported well-being. The results show that residents rate their need fulfillment higher than observers. There is weak to moderate agreement between resident and observer ratings. Furthermore, only residents' self-reported need fulfillment is related with self-reported well-being. Different explanations are provided, including the "barrier of happiness," the use of cognitive strategies, a change in identity and existing power relations. There seems to be a paradox in caregiving: Residents and their needs should be central, but because residents might adapt their needs and wishes it is hard to assess these. Suggestions for practical applications are given.