Chapter 9: Performance Management and Appraisal

Multiple Choice

1. The process of evaluating an employee’s current and/or past performance

relative to his or her performance standards is called ________.
a. recruitment
b. employee selection
c. performance appraisal
d. organizational development
e. training
(c; easy; p. 336)

2. When goal setting, performance appraisal, and development are

consolidated into a single, common system designed to ensure that
employee performance supports a company’s strategy, it is called
________.
a. strategic organizational development
b. performance management
c. performance appraisal
d. human resource management
e. strategic management
(b; easy; p. 336)

3. Performance management combines performance appraisal with ________

to ensure that employee performance is supportive of corporate goals.
a. goal setting
b. training
c. incentive systems
d. all of the above
e. none of the above
(d; moderate; p. 336)

4. Managers following a performance management approach to appraisals

will usually meet with employees on a ________ basis.
a. weekly
b. monthly
c. bi-annual
d. yearly
e. bi-monthly
(a; moderate; p. 336)

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5. Managers following a traditional performance appraisal system will
typically meet with employees on a ________ basis.
a. daily
b. weekly
c. monthly
d. bi-monthly
e. yearly
(e; moderate; p. 336)

6. The component of an effective performance management process that

communicates the organization’s higher level goals throughout the
organization and then translates these goals into departmental goals is
called ________.
a. role clarification
b. goal alignment
c. developmental goal setting
d. direction sharing
e. coaching and support
(d; difficult; p. 338; AACSB: communication)

7. The component of an effective performance management process that

explains each employee’s role in terms of his or her day-to-day work is
called ________.
a. role clarification
b. goal alignment
c. developmental goal setting
d. direction sharing
e. coaching and support
(a; difficult; p. 338; AACSB: communication)

8. Which of the following is not one of the guidelines for effective goal
setting?
a. assign specific goals
b. assign measurable goals
c. assign challenging but doable goals
d. assign consequences for performance
e. encourage participation
(d; moderate; p. 339)

9. The S in the acronym for SMART goals stands for ________.

a. specific
b. straightforward
c. strategic
d. source
e. support
(a; easy; p. 339)

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10. The M in the acronym for SMART goals stands for ________.
a. moderate
b. measurable
c. meaningful
d. mid-range
e. merit
(b; moderate; p. 339)

11. The A in the acronym for SMART goals stands for ________.
a. actionable
b. appropriate
c. attainable
d. attitude
e. asset
(c; moderate; p. 339)

12. Participatively set goals result in higher performance than assigned goals
when ________.
a. participatively set goals are more difficult
b. assigned goals are more difficult
c. the rewards are also higher
d. participatively set goals are used consistently
e. the goals are doable
(a; moderate; p. 339)

13. When using goal setting in performance management, the goals should be
________.
a. difficult
b. challenging
c. doable
d. specific
e. all of the above
(e; easy; p. 339)

14. Who is the primary person responsible for doing the actual appraising of
an employee’s performance?
a. the employee’s direct supervisor
b. the company appraiser
c. the human resource manager
d. the EEO contact person
e. none of the above
(a; moderate; p. 340)

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15. Which of the following is not a role played by the HR department
regarding performance appraisals?
a. training of supervisors
b. monitoring the appraisal system
c. appraising of employees
d. ensuring compliance with EEO laws
e. advising regarding appraisal tools and procedures
(c; moderate; p. 340)

16. When designing an actual appraisal method, the two basic considerations
are ________.
a. who should measure and when to measure
b. when to measure and what to measure
c. what to measure and who should measure
d. what to measure and how to measure
e. when to measure and how to measure
(d; moderate; p. 341)

17. The most popular technique for appraising performance is the

__________________ method.
a. alternation ranking
b. graphic rating scale
c. Likert
d. MBO
e. constant sum rating scale
(b; moderate; p. 341)

18. Which performance appraisal technique lists traits and a range of

performance?
a. alternation ranking
b. graphic rating scale
c. Likert
d. MBO
e. constant sum rating scale
(b; moderate; p. 341)

19. What do performance appraisals measure?

a. generic dimensions of performance
b. performance of actual duties
c. employee competency
d. achievement of objectives
e. all of the above
(e; moderate; p. 341)

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20. If a performance appraisal focuses on an employee’s ability to “identify
and analyze problems” or to “maintain harmonious and effective working
relationships,” then the performance appraisal is focused on measuring
________.
a. generic dimensions of performance
b. performance of actual duties
c. employee competency
d. achievement of objectives
e. all of the above
(c; moderate; p. 344; AACSB: reflective thinking)

21. If a performance appraisal focuses on an employee’s quality and quantity

of wok, then the performance appraisal is focused on measuring
________.
a. generic dimensions of performance
b. performance of actual duties
c. employee competency
d. achievement of objectives
e. all of the above
(a; moderate; p. 344; AACSB: reflective thinking)

22. The ________ method of performance appraisal involves listing all the
subordinates to be rated, crossing out the names of any not known well
enough to rank, indicating the employee who is the highest on each
characteristic being measured and who is the lowest, and then alternating
between the next highest and lowest until all employees have been ranked.
a. alternation ranking
b. graphic rating scale
c. Likert
d. MBO
e. constant sum rating scale
(a; moderate; p. 344)

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23. Alternation ranking refers to an appraisal method, which ________.
a. is based on progress made toward the accomplishment of measurable
goals
b. combines the benefits of narratives, critical incidents, and quantified
scales by assigning scale points with specific examples of good or
poor performance
c. requires that the supervisor keep a log of positive and negative
examples of a subordinate’s work-related behavior
d. requires a supervisor to evaluate performance by assigning
predetermined percentages of those being rated into performance
categories
e. involves listing all the subordinates to be rated, crossing out the names
of any not known well enough to rank, indicating the employee who is
the highest on each characteristic being measured and who is the
lowest, and then alternating between the next highest and lowest until
all employees have been ranked
(e; moderate; p. 344)

24. The most popular method for ranking employees is the ________ method.
a. graphic ranking scale
b. constant sum ranking scale
c. alternation ranking
d. paired comparison
e. forced distribution
(c; moderate; p. 344)

25. Suppose you have five employees to rate. You make a chart of all possible
pairs of employees for each trait being evaluated. Then, you indicate the
better employee of the pair for each pair. Finally, you add up the number
of positives for each employee. In this case, you have used the ________
method of performance appraisal.
a. graphic ranking scale
b. constant sum ranking scale
c. alternation ranking
d. paired comparison
e. forced distribution
(d; moderate; p. 344)

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26. Forced distribution refers to an appraisal method, which ________.
a. is based on progress made toward the accomplishment of measurable
goals
b. combines the benefits of narratives, critical incidents, and quantified
scales by assigning scale points with specific examples of good or
poor performance
c. requires that the supervisor keep a log of positive and negative
examples of a subordinate’s work-related behavior
d. requires a supervisor to evaluate performance by assigning
predetermined percentages of those being rated into performance
categories
e. involves listing all the subordinates to be rated, crossing out the names
of any not known well enough to rank, indicating the employee who is
the highest on each characteristic being measured and who is the
lowest, and then alternating between the next highest and lowest until
all employees have been ranked
(d; moderate; p. 345)

27. When a supervisor evaluates performance by assigning predetermined

percentages of ratees into performance categories, he or she has used the
________ method of performance appraisal.
a. graphic ranking scale
b. constant sum ranking scale
c. alternation ranking
d. paired comparison
e. forced distribution
(e; moderate; p. 345)

28. John, the supervisor of the manufacturing department, is in the process of

evaluating his staff’s performance. He has determined that 15% of the
group will be identified as high performers, 20% as above average
performers, 30% as average performers, 20% as below average
performers, and 15% as poor performers. John is using a ________
method.
a. graphic rating scale
b. constant sum ranking scale
c. forced distribution
d. alternation ranking
e. paired comparison
(c; moderate; p. 345)

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29. Which of the following measurement methods rates employee
performance relative to other employees?
a. graphic rating scale
b. forced distribution
c. likert scale
d. constant sums rating
e. critical incident method
(b; moderate; p. 346)

30. With the ________ method, the supervisor keeps a log of positive and
negative examples of a subordinate’s work-related behavior.
a. alternation ranking
b. constant sums rating
c. forced distribution
d. narrative forms
e. critical incident
(e; easy; p. 348)

31. The critical incident technique refers to an appraisal method, which

________.
a. is based on progress made toward the accomplishment of measurable
goals
b. combines the benefits of narratives, critical incidents, and quantified
scales by assigning scale points with specific examples of good or
poor performance
c. requires that the supervisor keep a log of positive and negative
examples of a subordinate’s work-related behavior
d. requires a supervisor to evaluate performance by assigning
predetermined percentages of those being rated into performance
categories
e. involves listing all the subordinates to be rated, crossing out the names
of any not known well enough to rank, indicating the employee who is
the highest on each characteristic being measured and who is the
lowest, and then alternating between the next highest and lowest until
all employees have been ranked
(c; moderate; p. 348)

32. All of the following are advantages of using the critical incident method
for appraising performance except that ________.
a. it provides examples of good performance
b. it does not include a numerical rating
c. it provides examples of poor performance
d. it reflects performance from throughout the appraisal period
e. incidents can be tied to performance goals
(b; moderate; p. 348)

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33. Which appraisal method combines the benefits of narratives, critical
incidents, and quantified scales by assigning scale points with specific
examples of good or poor performance?
a. behaviorally anchored rating scale
b. graphic rating scale
c. constant sums rating scale
d. alternation ranking
e. none of the above
(a; easy; p. 350)

34. Behaviorally anchored rating scale (BARS) refers to an appraisal method,

which ________.
a. is based on progress made toward the accomplishment of measurable
goals
b. combines the benefits of narratives, critical incidents, and quantified
scales by assigning scale points with specific examples of good or
poor performance
c. requires that the supervisor keep a log of positive and negative
examples of a subordinate’s work-related behavior
d. requires a supervisor to evaluate performance by assigning
predetermined percentages of those being rated into performance
categories
e. involves listing all the subordinates to be rated, crossing out the names
of any not known well enough to rank, indicating the employee who is
the highest on each characteristic being measured and who is the
lowest, and then alternating between the next highest and lowest until
all employees have been ranked
(b; moderate; p. 350)

35. The first step in developing a behaviorally anchored rating scale is to

________.
a. develop performance dimensions
b. generate critical incidents
c. reallocate incidents
d. scale incidents
e. develop a final instrument
(b; moderate; p. 350)

36. Which step in developing a behaviorally anchored rating scale involves

clustering critical incidents into a smaller set of performance dimensions?
a. first
b. second
c. third
d. fourth
e. fifth
(b; moderate; p. 350)

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37. Which step in developing a behaviorally anchored rating scale involves
clustering definitions and critical incidents, reassigning each incident to
the cluster where it fits best and then determining the level of agreement
among the group as to the allocation of incidents?
a. first
b. second
c. third
d. fourth
e. fifth
(c; moderate; p. 351)

38. All of the following are advantages of behaviorally anchored rating scales
(BARS) except that they ________.
a. are more accurate
b. provide clearer standards
c. are time consuming
d. are reliable
e. help explain performance appraisal ratings to appraisees
(c; easy; p. 353)

39. Management by objectives (MBO) refers to an appraisal method, which

________.
a. is based on progress made toward the accomplishment of measurable
goals
b. combines the benefits of narratives, critical incidents, and quantified
scales by assigning scale points with specific examples of good or
poor performance
c. requires that the supervisor keep a log of positive and negative
examples of a subordinate’s work-related behavior
d. requires a supervisor to evaluate performance by assigning
predetermined percentages of those being rated into performance
categories
e. involves listing all the subordinates to be rated, crossing out the names
of any not known well enough to rank, indicating the employee who is
the highest on each characteristic being measured and who is the
lowest, and then alternating between the next highest and lowest until
all employees have been ranked
(a; moderate; p. 353)

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40. Which of the following is a problem with using MBO?
a. a tendency to set unclear objectives
b. a tendency to set unmeasurable objectives
c. it is time consuming
d. tug of war between subordinate and manager regarding goals
e. all of the above
(e; moderate; p. 353)

41. Graphic rating scales are subject to all of the following problems except
________.
a. unclear standards
b. halo effects
c. complexity
d. central tendency
e. leniency
(c; difficult; p. 356)

42. When different supervisors define levels of performance (good, fair, poor)
differently, unfair appraisals could result due to a problem with ________.
a. unclear standards
b. halo effects
c. complexity
d. central tendency
e. leniency
(a; moderate; p. 355)

43. ________ is defined as the influence of a rater’s general impression on

ratings of specific ratee qualities.
a. Impression management
b. Halo effect
c. Central tendency
d. Stereotyping
e. Bias
(b; moderate; p. 356)

44. Jason is generally considered unfriendly at work. His supervisor rates him
low on the trait “gets along well with others” but also rates him lower on
other traits unrelated to socialization at work. Jason’s performance
appraisal may be unfair due to ________.
a. impression management
b. bias
c. stereotyping
d. halo effects
e. strictness
(d; difficult; p. 356)

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45. Some supervisors, when filling in rating scales, tend to avoid the highs and
lows on the scale and rate most people in the middle. This ________
means that all employees may be rated average.
a. halo effect
b. stereotyping
c. central tendency
d. strictness
e. leniency
(c; moderate; p. 356)

46. The best way of reducing the problem of central tendency in performance
appraisals is to ________.
a. rank employees
b. be aware of the problem
c. train supervisors to avoid it
d. impose a distribution for performance
e. consider the purpose of the appraisal
(a; difficult; p. 356)

47. The ________ problem occurs when supervisors tend to rate all their
subordinates consistently high.
a. central tendency
b. leniency
c. strictness
d. bias
e. halo effect
(b; easy; p. 356)

48. The ________ problem occurs when supervisors tend to rate all their
subordinates consistently low.
a. central tendency
b. leniency
c. strictness
d. bias
e. halo effect
(c; easy; p. 356)

49. Which big five personality trait is associated with performance appraisal
ratings that are too strict?
a. agreeableness
b. extraversion
c. conscientiousness
d. openness
e. neuroticism
(c; difficult; p. 356)

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50. Which big five personality trait is associated with performance appraisal
ratings that are too lenient?
a. agreeableness
b. extraversion
c. conscientiousness
d. openness
e. neuroticism
(a; difficult; p. 356)

51. The best way of reducing the problems of leniency or strictness in

performance appraisals is to ________.
a. rank employees
b. be aware of the problem
c. train supervisors to avoid it
d. impose a distribution for performance
e. consider the purpose of the appraisal
(d; difficult; p. 356)

52. When an employee’s personal characteristics such as age, race, and gender
influence a supervisor’s evaluation of his or her performance, the problem
of ________ has occurred.
a. bias
b. stereotyping
c. central tendency
d. halo affect
e. strictness
(a; easy; p. 356)

53. Which of the following could result in a legally questionable appraisal

process?
a. conduct a job analysis to establish criteria and standards for successful
performance
b. base appraisals on subjective supervisory observations
c. administer and score appraisals in a standardized fashion
d. use clearly defined job performance dimensions
e. avoid abstract trait names when using graphic rating scales
(b; difficult; p. 360; AACSB: analytical skills)

54. Who is in the best position to observe and evaluate an employee’s

performance for the purposes of a performance appraisal?
a. peers
b. customers
c. rating committees
d. top management
e. immediate supervisor
(e; easy; p. 359)

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55. Performance appraisals may be conducted by ________.
a. the immediate supervisor
b. peers
c. rating committees
d. subordinates
e. all of the above
(e; easy; p. 359)

56. Rating committees, made up of an employee’s immediate supervisor along

with other supervisors, usually have ________ members.
a. 1-2
b. 3-4
c. 6-7
d. 8-9
e. 10 or more
(b; easy; p. 359)

57. While peer appraisals have many benefits, one problem is ________,
when several peers collaborate to rate each other highly.
a. social loafing
b. group think
c. logrolling
d. alliance forging
e. impression management
(c; moderate; p. 359)

58. Peer appraisals have been shown to result in a(n) ________.

a. reduction of social loafing in the team
b. reduction of group cohesion
c. decrease in satisfaction with the group
d. lower task motivation
e. tendency to inaccurately predict who would be promoted
(a; moderate; p. 359)

59. What usually occurs when employees rate themselves in a performance

appraisal?
a. interrater reliability is higher
b. appraisals are subject to halo effects
c. logrolling could occur
d. ratings are higher than when rated by supervisors or peers
e. ratings are about the same as when determined by peers
(d; easy; p. 360)

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60. Firms that use ________ let subordinates anonymously rate their
supervisor’s performance.
a. downward feedback
b. upward feedback
c. MBO
d. narratives
e. critical incidents
(b; moderate; p. 361)

61. What process allows top management to diagnose the management styles
of supervisors, identify potential “people” problems, and take corrective
action with individual supervisors as necessary?
a. strategic performance appraisal
b. organizational development
c. upward feedback
d. MBO
e. critical incidents
(c; moderate; p. 361)

62. When subordinates provide feedback for supervisors, the comments

should be anonymous because identifiable responses tend to result in
________.
a. more critical ratings
b. increased comfort with the process on the part of the subordinate
c. more negative attitudes from managers receiving the feedback
d. more inflated ratings
e. all of the above
(d; difficult; p. 361; AACSB: communication)

63. What is another term for 360-degree feedback?

a. feedback loop
b. multi-source assessment
c. upward feedback
d. circle feedback
e. wheel feedback
(b; easy; p. 362)

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64. You are conducting an appraisal interview with an employee who is
satisfactory, but not promotable. Which incentive listed below would
likely be the least effective for maintaining satisfactory performance in
this situation?
a. time off
b. small bonus
c. compliments
d. additional professional development
e. additional authority
(d; difficult; p. 363)

65. Which is the easiest type of appraisal interview to conduct?

a. satisfactory-not promotable
b. satisfactory-promotable
c. unsatisfactory-correctable
d. unsatisfactory-uncorrectable
e. final warning
(b; moderate; p. 363)

66. When conducting an appraisal interview, supervisors should do all of the

following except ________.
a. talk in terms of objective work data
b. compare the person’s performance to a standard
c. encourage the employee to talk
d. give specific examples of poor performance
e. compare the person’s performance to that of other employees
(e; difficult; p. 363; AACSB: communication)

67. Which of the following responses is not typical during a negative appraisal
interview?
a. denial
b. anger
c. relief
d. aggression
e. retreat
(c; easy; p. 364)

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68. When a supervisor must criticize a subordinate in an appraisal interview, it
is best to ________.
a. hold the meeting with other people who can diffuse the negative
situation
b. provide examples of critical incidents
c. acknowledge the supervisor’s personal biases in the situation
d. provide feedback once per year
e. surprise the employee so they cannot develop excuses for poor
performance
(b; difficult; p. 365)

69. Subordinates may feel dissatisfied with their appraisal interview when
they ________.
a. feel threatened during the interview
b. have an opportunity to express their ideas
c. have an opportunity to influence the course of the interview
d. have a constructive interviewer conduct the interview
e. are shown specific examples of their poor performance
(a; moderate; p. 365)

70. When an employee’s performance is so poor that a written warning is

required, the warning should ________.
a. identify the standards by which the employee is judged
b. provide examples of employees who met the standards
c. provide examples of times when the employee did meet the standards
d. be sent to the employee in question, to the manager’s superior, and to
the EEO office
e. all of the above
(a; difficult; p. 365)

True/ False

71. Performance appraisals assume that the employee understood what his or
her performance standards were. (T; easy; p. 336)
72. Supervisors should provide employees with feedback, development, and
incentives necessary to help employees eliminate performance
deficiencies or to continue to perform well. (T; easy; p. 336)
73. A properly designed performance management system utilizes yearly
meetings to ensure continuous improvement in the employee’s capacity
and performance. (F; moderate; p. 336)
74. Goals should be challenging, but not so difficult that they appear
impossible or unrealistic. (T; easy; p. 339)
75. The evidence suggests that participatively set goals consistently result in
higher performance than assigned goals. (F; moderate; p. 339)

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76. The HR department conducts performance appraisals, develops the
appraisal tools, and monitors the appraisal system. (F; difficult; p. 340)
77. The alternation ranking method is the simplest and most popular technique
for appraising performance. (F; moderate; p. 341)
78. When actual job duties are appraised, the idea is to focus on the extent to
which the employee exhibits the competencies that the employer values.
(F; difficult; p. 344)
79. The forced distribution method is similar to grading on a curve meaning
that predetermined percentages of those being rated are placed into
performance categories. (T; moderate; p. 345)
80. The basic problem with rankings is that while it is not difficult to identify
the extreme good and bad performers, it is difficult to differentiate
meaningfully between the others. (T; moderate; p. 347)
81. Top employees often outperform the average employees by as much as
100%. (T; moderate; p. 346)
82. BARS is a rating approach that involves keeping a record of uncommonly
good or undesirable examples of an employee’s work-related behavior and
reviewing it with the employee at predetermined times. (F; easy; p. 348)
83. MBO relates an employee’s work goals to his or her departmental goals
and to the organization’s goals. (T; moderate; p. 353)
84. Electronic performance monitoring (EPM) allows supervisors to
electronically monitor the amount of computerized data an employee is
process each day. (T; easy; p. 354; AACSB: use of IT)
85. The advantages of the BARS appraisal tool include accuracy, clear
standards, and consistency. (T; moderate; p. 353)
86. Graphic rating scales are the most reliable for rating performance. (F;
moderate; p. 355)
87. Central tendency is defined as the influence of a rater’s general impression
on ratings of specific ratee qualities. (F; moderate; p. 356)
88. Performance appraisal ratings tend to be more positive when the purpose
is to award promotions and/or pay raises than when the purpose is to
determine employee development needs. (T; moderate; p. 356)
89. Rater idiosyncratic biases account for the largest percentage of the
observed variance in performance ratings. (T; difficult; p. 356)
90. Courts have often found that inadequacies in an employer’s appraisal
system were related to illegal discriminatory actions in cases involving
layoffs, promotions, and discharges. (T; moderate; p. 360)
91. Peer appraisals have been shown to have an immediate positive impact on
improving task motivation, cohesion, and satisfaction, while reducing
social loafing. (T; moderate; p. 359)
92. Managers who receive feedback from subordinates who identify
themselves view the upward appraisal process more negatively than do
managers who receive anonymous feedback. (F; difficult; p. 361)
93. An appraisal interview is used to make plans for new hires as they move
through the selection and training process. (F; moderate; p. 362)

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94. 360-degree feedback is generally used for development purposes, rather
than for pay increases. (T; moderate; p. 362)
95. 360-degree feedback is sometimes called the wheel of feedback because
ratings are collected from all around an employee. (F; easy; p. 362)
96. The goal for a supervisor conducting a satisfactory-not promotable
appraisal interview is to maintain satisfactory performance by finding
incentives that are important to the person. (T; easy; p. 363)
97. The goal for a supervisor conducting an unsatisfactory-correctable
appraisal interview is to encourage the employee by providing
reinforcements like job enlargement and compliments. (F; difficult; p.
363)
98. While formal written warnings are provided too late to salvage an
employee’s performance and position at the company, they are useful in
court proceedings. (F; moderate; p. 362; AACSB: communication)
99. Written formal warnings of poor performance should make it clear that the
employee was aware of the standards and show the employee had an
opportunity to correct the behavior. (T; easy; p. 362; AACSB:
communication)
100. Performance appraisals are a link between corporate strategy,
departmental goals, employee goals and employee performance in the
overall performance management process. (T; moderate; p. 366)

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Essay/ Short Answer

101. There are several components important for an effective performance

management process. Name and explain five of these components.
(moderate; p. 338; AACSB: communication)

Answer: There are eleven components identified in Figure 9-2 for an

effective performance management process. They are listed and explained
below:
 Direction sharing means communicating the organization’s higher
level goals throughout the organization and translating these into
doable departmental goals.
 Role clarification means clarifying each employee’s role in terms
of his or her day-to-day work.
 Goal setting and planning means translating organizational and
departmental goals into specific goals for each employee.
 Goal alignment means having a process in place that allows any
manager to see the link between an employee’s goals and those of
the department and organization.
 Developmental goal setting involves ensuring that each employee
understands what must be done to accomplish the goals.
 Ongoing performance monitoring means using computer-based
systems to measure and report on employee progress toward
meeting performance goals.
 Ongoing feedback includes face-to-face and computer-based
feedback regarding progress toward goals.
 Coaching and support should be an integral part of the feedback
process.
 Performance appraisals should focus on planning and focusing
employee performance to improve company results.
 Rewards, recognition, and compensation provide the consequences
necessary to keep employee performance on target.
 Workflow and process control and return on investment
management means making sure that the employee’s performance
is linked a meaningful way via goal setting to the company’s
overall measurable performance.

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102. Explain what the SMART acronym tells us about goal setting. (easy; p.
339)

Answer: SMART stands for specific, measurable, attainable, relevant, and

timely. Goals should be specific and the desired result should be clearly
stated. The goals should be measurable and answer the question “how
much.” The goals should be attainable and not too difficult or too easy.
The goals should be relevant and clearly derive from what the manager
and the company want to achieve. The goals should be timely and reflect
deadlines and milestones.

103. Why is it important for managers to appraise subordinates’ performance?

Provide three reasons for performance appraisals. (moderate; p. 339)

Answer: There are four reasons for conducting performance appraisals.

First, appraisals play an integral role in the performance management
process. Second, it lets the manager and subordinate develop a plan for
correcting any deficiencies that might exist and to reinforce and support
things that are done well. Third, appraisals can serve a useful career
planning purpose by providing the opportunity to review the employee’s
career plans in light of his or her strengths and weaknesses. Finally, the
appraisal usually plays a part in salary and promotion decisions.

104. Explain the three steps in the performance appraisal process. (easy; p. 340)

Answer: The performance appraisal process itself contains three steps: 1)

define the job, 2) appraise performance, and 3) provide feedback. Defining
the job means making sure that the manager and employee agree on his or
her duties and job standards. Appraising performance means comparing
the employee’s actual performance to the standards that have been set.
Finally, the performance appraisal process requires one or more feedback
sessions. In these sessions, the manager and employee discuss the
employee’s performance and progress and make plans for any
development required.

105. What are the three types of performance that performance appraisals can
measure? Explain each one. (moderate; p. 341)

Answer: The employer may measure generic dimensions of performance

such as quantity or quality of work. The performance appraisal may focus
on the job’s actual duties and assess how well the employee did in
exercising his or her specific job duties. Competency-based appraisals
focus on the extent to which the employee exhibits the competencies that
the employer values. The employer could also appraise the employee
based on the extent to which he or she is achieving his or her objectives.

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106. What is a behaviorally anchored rating scale (BARS)? How would one go
about developing a BARS? (difficult; p. 350)

Answer: A behaviorally anchored rating scale is a rating scale that is

anchored with specific behavioral examples of good or poor performance.
Because of the anchors, which are based on the dimensions of
performance illustrated by critical incidents, a BARS combines the
benefits of narratives, critical incident, and quantified scales. There are
five steps required for developing a BARS. Each step is explained below.

 Step 1: Generate critical incidents. In this step, people who know

the job are asked to describe specific illustrations of effective and
ineffective performance.
 Step 2: Develop performance dimensions. The people who know
the job are then asked to cluster the incidents into a smaller set of
performance dimensions and to define each dimension with a
name.
 Step 3: Reallocate incidents. Another group of people, who also
know the job, should reallocate the original critical incidents. They
will receive the cluster definitions and the list of critical incidents.
They will then reassign each incident into the cluster they think it
fits best. If the assignments made by the first group and second
group match well, then that critical incident is retained.
 Step 4: Scale the incidents. The second group then rates the
behavior described by the incident as to how effectively or
ineffectively it represents performance on the dimension.
 Step 5: Develop a final instrument. Six or seven of the incidents as
the dimension’s behavioral anchors.

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107. Explain how an MBO program works and describe the six steps involved
in this type of program. (moderate; p. 353)

Answer: MBO programs basically require managers to set specific and

measurable goals with each employee and then to periodically discuss the
employee’s progress toward these goals. It is usually a comprehensive,
organization-wide goal setting and appraisal program. The six steps it
consists of are listed below.

 Step 1: Set the organization’s goals. The first step involves the
establishment of an organization-wide plan for the coming year
and to set company goals.
 Step 2: Set departmental goals. Next, department heads will take
these company goals and, in conjunction with their superiors, set
goals for their departments.
 Step 3: Discuss departmental goals. Department heads will discuss
the departmental goals with all subordinates and ask employees to
set their own preliminary individual goals. These individual goals
should show how each employee can contribute to the
department’s goals.
 Step 4: Define expected results. Department heads and their
employees set short-term individual performance targets.
 Step 5: Performance reviews. Department heads compare each
employee’s actual and targeted performance.
 Step 6: Provide feedback. Department heads and employees
discuss and evaluate the employee’s progress.

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108. Describe the four basic types of appraisal interviews. (moderate; p. 363)

Answer: The first type of appraisal interview is the satisfactory-

promotable appraisal interview. This occurs when the person’s
performance is satisfactory and there is a promotion ahead. The objective
is to discuss the person’s career plans and to develop a specific action plan
for the educational and professional development the person needs to
move to the next job.

The second type of interview is the satisfactory-not promotable appraisal

interview. This is for employees whose performance is satisfactory but for
whom promotion is not possible. The objective is to maintain satisfactory
performance. The best option is to find incentives that are important to the
person.

The third type of interview is the unsatisfactory but correctable interview.

In this situation, the objective is to develop an action plan for correcting
the unsatisfactory performance.

The final type of interview is the unsatisfactory-uncorrectable interview.

In this situation, the interview may even be skipped. The person’s poor
performance is tolerated or the person is dismissed.

109. What four techniques can help to avoid and/or minimize appraisal
problems like bias, leniency, and central tendency? (moderate; p. 357)

Answer: The first technique is to learn and understand the potential

problem and possible solutions. Simply understanding the potential for the
problem can help to avoid it. Second, using the right appraisal tool for
each situation is important. Third, supervisors should be trained to reduce
rating errors such as halo, leniency, and central tendency. Finally,
supervisors can keep a diary of critical incidents to file and use for later
reference for subordinate’s appraisals. This technique helps to ensure that
both negative and positive incidents are recorded.

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110. There are several guidelines for developing an appraisal process that is
legally defensible. Identify four of these guidelines. (moderate; p. 360)

Answer: Thirteen guidelines are suggested in the text.

 Conduct a job analysis to establish criteria and standards for
successful performance.
 Incorporate these criteria and standards into a rating system.
 Communicate performance standards to employees and supervisors
in writing.
 Avoid abstract trait names when using graphic rating scales.
 Use subjective supervisory ratings for no more than one part of the
overall appraisal process.
 Allow appraisers substantial daily contact with the employees they
are evaluating
 Base appraisals on separate ratings for each job performance
dimension.
 Have more than one appraiser conduct the appraisal.
 Give employees the opportunity to review the appraisal, make
comments, and appeal the decision.
 Document all information and reasons bearing on any personnel
decision.
 Provide corrective guidance to assist poor performers in improving
performance.

Of these fourteen guidelines, research of court decisions suggests that

the important guidelines are to perform a job analysis, provide raters
with written instructions, permit employees to review the results, and
obtain agreement among multiple raters.

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