Chapter 14

Question 1

What is performance management?

Answer 1

The process through which managers ensure employees’ activities and outputs contribute to organizational goals.

Question 2

Performance management requires

Answer 2

Knowing desired activities/output, evaluating them, and providing feedback for improvement.

Question 3

Difference between performance management and performance evaluation

Answer 3

Performance management is broader and ongoing; evaluation is one-time measurement.

Question 4

True or False: Performance management ensures alignment of employee actions with organizational goals.

Answer 4

✅ True

Question 5

Pay dispersion positive view

Answer 5

Encourages competition and motivation (Goal Setting, Expectancy, and Tournament theories).

Question 6

Pay dispersion negative view

Answer 6

Can create inequity, dissatisfaction, and turnover (Equity theory).

Question 7

Contingent view of pay dispersion

Answer 7

Explained vs. unexplained pay gaps determine equity perceptions (Trevor et al., 2012).

Question 8

True or False: Explained dispersion is performance-related and maintains fairness.

Answer 8

✅ True

Question 9

Focus shift in performance management

Answer 9

From scale development to rater behavior and holistic management.

Question 10

Examples of early performance scales

Answer 10

Behavioral Anchored Rating Scale (BARS), Behavioral Observation Scale (BOS), ranking, critical incident, and checklists.

Question 11

What is range restriction?

Answer 11

Limited variation in ratings due to inappropriate scale difficulty or uniformity.

Question 12

Common rater biases

Answer 12

Halo/Horns effect, contrast effect, leniency, strictness, central tendency, “similar-to-me” error, recency, stereotypes.

Question 13

Halo effect definition

Answer 13

Judging overall performance based on one positive trait.

Question 14

Contrast effect definition

Answer 14

Rating influenced by comparison to others instead of objective criteria.

Question 15

Leniency effect definition

Answer 15

Rating all employees too highly.

Question 16

Strictness effect definition

Answer 16

Rating all employees too low.

Question 17

Central tendency effect definition

Answer 17

Rating all employees as average.

Question 18

“Similar to me” error

Answer 18

Favoring employees who share characteristics with the rater.

Question 19

Political behavior in appraisals

Answer 19

Intentional manipulation of ratings for personal or organizational motives.

Question 20

True or False: Leniency occurs more often in self-appraisals than peer reviews.

Answer 20

✅ True

Question 21

True or False: Halo effect occurs when raters lack sufficient information.

Answer 21

✅ True

Question 22

True or False: Ranking methods can reduce central tendency bias.

Answer 22

✅ True

Question 23

True or False: Forced distribution ensures real-world performance distribution matches preset ratios.

Answer 23

❌ False

Question 24

Reliability in performance management

Answer 24

Consistency of results across raters or over time.

Question 25

Interrater reliability

Answer 25

Consistency between multiple evaluators.

Question 26

Test-retest reliability

Answer 26

Consistency of results across time.

Question 27

Validity in performance measurement

Answer 27

Measures relevant performance aspects and omits irrelevant ones.

Question 28

Deficiency

Answer 28

Missing relevant performance information.

Question 29

Contamination

Answer 29

Including irrelevant information in performance ratings.

Question 30

True or False: Reliability measures accuracy, not consistency.

Answer 30

❌ False

Question 31

Relative performance measures

Answer 31

Simple ranking, forced distribution, paired comparison.

Question 32

Absolute performance measures

Answer 32

Rating attributes (graphic/mixed-standard scales) or rating behaviors (BARS/BOS).

Question 33

Measuring results approach

Answer 33

Management by Objectives (MBO); employees set and align goals across levels.

Question 34

Problem with simple ranking

Answer 34

Does not define what is good or bad about performance, raises fairness issues.

Question 35

Problem with forced distribution

Answer 35

May not reflect actual performance spread among employees.

Question 36

Problem with paired comparison

Answer 36

Time-consuming with many employees.

Question 37

Example of forced distribution

Answer 37

Assigning fixed percentages to performance categories (e.g., top 10%, middle 60%, bottom 30%).

Question 38

Graphic rating scale definition

Answer 38

Lists traits with rating scales to assess the degree of each trait displayed.

Question 39

Mixed-standard scale definition

Answer 39

Uses descriptive statements for each trait to generate composite scores.

Question 40

Problem with graphic rating scale

Answer 40

Low interrater reliability due to vague definitions.

Question 41

Behaviorally Anchored Rating Scale (BARS)

Answer 41

Rates specific behaviors linked to performance levels.

Question 42

Behavioral Observation Scale (BOS)

Answer 42

Uses frequency of observed behaviors to evaluate performance.

Question 43

Management by Objectives (MBO)

Answer 43

Aligns individual goals with organizational goals through cascading objectives.

Question 44

Advantages of MBO

Answer 44

Improves alignment and reduces subjectivity.

Question 45

Sources of performance information

Answer 45

Managers, peers, subordinates, self, customers, and 360-degree feedback.

Question 46

360-degree appraisal

Answer 46

Combines multiple sources for comprehensive evaluation.

Question 47

True or False: Peers may provide the most day-to-day observation.

Answer 47

✅ True

Question 48

True or False: Self-appraisals should occur before feedback sessions.

Answer 48

✅ True

Question 49

Purposes of performance management

Answer 49

Strategic (align with goals), administrative (salary/promotion decisions), developmental (improvement and growth).

Question 50

Performance management process steps

Answer 50

1. Define goals, 2. Set individual goals/actions, 3. Provide support, 4. Evaluate, 5. Feedback and reiteration.

Question 51

Instructional function of feedback

Answer 51

Clarifies roles and expected behaviors.

Question 52

Motivational function of feedback

Answer 52

Reinforces good performance and builds self-efficacy.

Question 53

Sources of feedback

Answer 53

Self, others (supervisors/peers/customers), and the task itself.

Question 54

Criteria for effective performance management

Answer 54

Fit with strategy, acceptability, and specific actionable feedback.

Question 55

True or False: Effective feedback should provide clear expectations and improvement goals.

Answer 55

✅ True