Performance Management

is the formal structural system of measuring, evaluating, and influencing an employee's job-related attributes, behaviors, and outcomes.

Salary increases or decreases

Demotions

Layoffs

Promotions/transfers

Terminations

Identifying training needs

Motivating employees to improve

Providing feedback

Counseling employees

Spotting performance deficiencies

Identifying and acknowledging strengths

Answer: Feedback

Information from performance appraisals can be used for developmental purposes:
1) identifying training needs
2) motivating employees to improve
3) providing feedback
4) counseling employees
5) spotting performance deficiencies
6) identifying and acknowledging strengths

Answer: True
When performance evaluation is used to serve evaluation and development purposes, it can have a direct impact on the strategic goals of the organization.

Answer: False

Performance appraisals attempt to determine how well an employee does a job in relation to a set of predetermined standards. The standards are set before the appraisals are completed, and then the employees are measured against them.

are used to refer to the person doing the appraising

are used to refer to the employee who is being appraised.

Performance appraisal provides a framework for future employee development by identifying and preparing individuals for increased responsibilities.

Performance appraisal establishes the relative value of an individual's contribution to the company and helps evaluate individual accomplishments.

Performance appraisal outlines what performance is expected from employees.

Performance appraisal audits management talent and potential to evaluate the current supply of human resources for replacement planning.

Performance appraisal helps establish the validity of employment decisions made on the basis of performance-based information. (Also helps to defend management actions such as demotions, transfers, or terminations.)

Performance appraisal provides a format for dialogue between superior and subordinate and improves the understanding of personal goals and careers.

Performance appraisal encourages superiors to be aware of what their subordinates are doing.

Answer: Superior

It's important to note that the terms supervisor and manager are generally not used in discussing performance appraisal systems, because the appraiser and the appraisee may both be managers or supervisors. Thus, the terms superior or rater are used to refer to the person doing the appraising, and the terms subordinate or ratee are used to refer to the employee who is being appraised.

Answer: When the rater is a colleague

360-degree evaluations take place where the rater may be a colleague or subordinate to the person being appraised. 360-degree evaluations are meant to help the employee get a complete interpretation of their performance from those people who see them daily.

Answer: Establish the relative value of an individual's contribution to the company

Performance appraisals establishes the relative value of an individual's contribution to the company and help evaluate individual accomplishments.

Answer: Providing a framework for past employee development

Performance appraisal provides a framework for future employee development, so it is helpful in management development. It also helps to improve the organization's productivity, as well as performance measurement, feedback (outlining what performance is expected), HR planning, legal compliance, and communication and enhanced supervisory understanding of the job (forcing supervisors to be aware of what their employees are doing).

job analysis, selection and placement, compensation, and training and development.

The foundation of performance appraisal (PA) is job analysis. If a formal job analysis has not been conducted to establish the validity of the PA form, and thus the job-relatedness of an evaluation criterion, the company may be accused of discrimination.

Many companies take the opportunity during performance appraisals to review and revise job descriptions. The job description should reflect the critical knowledge, skills, and abilities (KSAs) of the job. The employee and managers' discussion during a performance appraisal may result in an update to job tasks and functions on the formal job description. Those updates may create a need to change the selection steps or testing. Also, if performance appraisals for a particular job are finding gaps in recently hired employee success, managers may collaborate with the HR department to assess and identify root causes. If the feedback identifies a gap in job matching, the HR department may adjust the selection process.

One purpose of PA is to motivate employees. PA can be used as a basis upon which to distribute compensation. A valid appraisal is necessary for an organization to provide contingent rewards (rewards based on performance). Furthermore, PA information can be used in the determination of pay levels as well as pay increments.

Answer: Using the information from the evaluation for future planning

Performance management begins with understanding the organization's strategy. The strategy dictates the important tasks that should be the focus of each unit and subsequently dictate the requirements for each employee's job. Once job requirements are known, competencies are established, expected performance standards are set, and the approach to evaluate the results and behaviors (performance appraisal) are then chosen, then the performance of employees or teams is reported back to top management, which uses that information for future strategic and operational planning.

Answer: Job analysis

The foundation of the performance appraisal (PA) is job analysis. If a formal job analysis has not been conducted to establish the validity of the PA form, then the company may be accused of discrimination.

Answer: It helps ensure the company job description is accurate

Many companies take the opportunity during performance appraisals to review and revise job descriptions. The employee and managers' discussion during a performance appraisal may result in an update to job tasks and functions on the formal job description. Those updates may create a need to change the selection steps or testing.

Answer: All of these

One purpose of Performance Appraisals (PA) is to motivate employees. PA can be used as a basis upon which to distribute compensation. A valid appraisal is necessary for an organization to provide contingent rewards (rewards based on performance). Furthermore, PA information can be used in the determination of pay levels as well as pay increments.

Answer: False

Used in conjunction with job analysis, performance appraisal is necessary for implementing effective pre-employment training programs. The assessment of performance can also help the employee make a decision about changes in his/her career. Providing the appropriate training can significantly improve employee performance, but if the employee finds out that, in spite of training and aptitudes, he/she is unable to deliver a satisfactory performance, a change in career may be sought. This can be done internally (through a transfer) or externally (change to another organization).

Answer: They are the most familiar with the subordinate's work

An advantage to using the supervisor is that they are the most familiar with the job of the subordinate and with his/her performance. Some drawbacks are that because they have reward and punishment power, the subordinate may feel threatened; also without training the supervisor may not have the skills to give good feedback; and by giving punishments the supervisor may alienate the subordinate.

Answer: They are subject to biases and distortions when used for evaluative purposes

Self-appraisals are subject to systemic biases and distortions when used for evaluative purposes. On the other hand, self-appraisals are often effective tools for programs focusing on self-development, personal growth, and goal commitment. They also may help the subordinate become more involved and committed to the goals of the organization and can help clarify employee roles and reduce conflict. Another advantage is that self-appraisals can open dialogues regarding performance.

Answer: Restaurants

Appraisal information can come from customers or clients of the job incumbents, especially for workers who have direct contact with the customers. Car dealerships and restaurants are two such industries where this may be beneficial.

Answer: When the culture is highly participatory

Peer appraisals appear to be useful predictors of performance. However, the validity of peer appraisals is reduced somewhat if the organizational reward system is based on performance and is highly competitive, or if there is a low level of trust among subordinates. On the other hand, peer-appraisal can be very useful when teamwork and participation are part of the organizational culture.

Answer: Computer monitoring

With advances in technology, many organizations are now gathering performance data through computers. Although this method is fast and objective, it has raised a number of ethical issues such as an employee's right to privacy. Nevertheless, many organizations have found such data to be a critical part of performance appraisals.

a superior lists the subordinates in order from best to worst, usually on the basis of overall performance. Incumbents can also be ranked with regard to their performance on specific duties, such as attendance, record of meeting deadlines, quality of reports, etc. This type of ranking is useful in small organizations. However, as the number of incumbents increases, it becomes difficult to discern differences in the performance of all incumbents--particularly those incumbents that are "average."

Alternative ranking normally takes place in several steps. The first step is to put the best subordinate at the head of the list and the worst subordinate at the bottom, usually on the basis of overall performance. The superior then selects the best and worst from the remaining subordinates. The middle position on the list is the last to be filled. Alternative ranking approaches can be used quite efficiently not only by a single supervisor, but by the subordinates themselves.

The paired comparison method involves comparing each employee to another incumbent, two at a time on a single standard, to determine which is better. A rank order can be obtained by counting the number of times each individual is selected as the better of a pair. The subordinate with the most favorable comparisons is thus ranked in the first place. The subordinate with the second-greatest number of favorable comparisons is ranked second, and so on. An advantage to this approach over is that it overcomes the problem of an "elevation set." That is, it forces the assessor to compare the performance of each incumbent to all other incumbents, one by one.

The forced distribution method was designed to overcome a frequent complaint leveled against the various ranking methods, namely, that the methods give each employee a unique rank and does not allow for two (or more) incumbents' performances to be very close to each other. However, in many instances it is very hard to differentiate between two employees. The forced distribution method overcomes this problem and incorporates several factors or dimensions (rather than a single factor) into the ranking process. The term "forced distribution" is used because the superior must assign only a certain proportion of subordinates to each of several categories with respect to each other.

One of the simplest forms for evaluating employees is the narrative essay. Using this form, the rater can describe the employee's strengths and weaknesses and suggest methods for improving performance. Certainly, if the essay is unstructured, the evaluation will often vary in length and detail. As a result, comparisons within a department, or across departments, can be difficult. Another limitation to the narrative essay is the fact that the essay only provides qualitative data and not quantitative data. Including behavior criteria on the form, such as critical incidents, behavioral checklist and forced-choice forms, can significantly enrich the appraisal.

Conventional rating (also called graphic rating scales or Likert scales) is the most widely used form of performance evaluation. Conventional forms vary in the number of performance dimensions they measure. The term performance is used advisedly here because many conventional forms use personality characteristics or traits, rather than actual behaviors, as indicators of performance. Frequently-used traits include aggressiveness, independence, maturity, and a sense of responsibility, to name a few. Many conventional forms also use output indicators such as quantity and quality of performance. Conventional forms vary in the number of traits and output indicators they incorporate. They also vary in the range of choices for each dimension and the extent to which each dimension is described.

Answer: True

Alternative ranking normally takes place in several steps. The first step is to put the best subordinate at the top of the list and the worst subordinate at the bottom, usually on the basis of overall performance. The superior then selects the next best and worst from the remaining subordinates, and so on. The middle position on the list is the last to be filled.

The most common error committed by raters occurs when superiors rate employees on several dimensions of performance, but allow one measure to influence all other dimensions. Also known as the halo effect, this occurs because supervisors allow one positive characteristic (or behavior) of the employee to overshadow all other characteristics (or behaviors) of the employee. The opposite of the halo error is referred to as a horn error. A horn error occurs when a poor rating in one area unjustly affects ratings in other job performance areas, resulting in a poor overall appraisal.

Another common—and often intentional—error is called leniency. Leniency occurs when, to avoid conflict, a manager rates subordinates higher than they should be rated. This is especially likely to happen when there are no organizational sanctions against high ratings, when rewards are not part of a fixed and limited pot, and when organizational calibration of ratings does not occur.

At the opposite extreme of the spectrum is a situation where raters give unfavorable ratings, regardless of the performance level of employees. Also known as error of strictness, this error may occur when either inexperienced raters, raters who are attempting to impress their own superiors by their strict standards, or raters who are trying to "settle accounts" with employees, are involved in the evaluation process.

Rather than using extremes in ratings, there is a tendency on the part of many raters to "play it safe" and evaluate employees as average, even when performance varies. This bias is referred to as the error of central tendency. Raters with a large span of control and little opportunity to observe behavior are likely to rate the majority of incumbents in the middle of the scale rather than too high or too low. Central tendency may also be a byproduct of the rating method. For example, the various ranking formats, and more particularly the forced distribution, require that most employees be rated average

A contrast effect occurs when the evaluation or observation of one subordinate's performance is affected unjustly by an earlier evaluation or observation of another employee's performance. When compared to weak employees, an average employee will appear outstanding; when evaluated against outstanding employees, an average employee will be perceived as a low performer. As with other errors, the solution is to have specific performance criteria established prior to the evaluation period.

The spillover effect occurs when past performance appraisal ratings, whether good or bad, are allowed to unjustly influence correct ratings. It happens most often when new managers are being briefed on current employees by departing managers. Thus the information provided, which is already biased, is being carried on. One solution to the problem is to avoid examining past appraisal records/information prior to conducting the assessment. Past records, on the other hand, can be consulted in conjunction with current appraisal for the purpose of detecting trends and for giving feedback to the incumbent.

A similarity error (also known as the "like me" bias) occurs when raters evaluate more positively those whom they perceive to be similar to themselves. The implicit assumption underlying this error is that they themselves are (or have been) "model" employees and thus subordinate similarity will most likely reflect good performance.

Answer: False

One reason that performance appraisals are problematic is that supervisors and incumbents often view the process from different perspectives.

Answer: False

In general, the more subjective the PA approach, the more it is vulnerable to legal challenges. As there are no solid facts to back up the appraisal.

Answer: False

Despite the most well thought-out plans for performance appraisal, HR professionals are often frustrated by the failure of line managers to consistently apply and use them.

Answer: True

On the basis of assessments of an organization's entire performance appraisal system, revisions in current appraisal methods can be made and more effective strategies for improving performance can be developed and implemented. Once completed, an organization has a much better basis upon which to make other HR decisions, particularly those associated with compensation and training and development.

Answer: Performance appraisal

The performance appraisal (or PA) is the formal structural system of measuring, evaluating, and influencing an employee's job-related attributes, behaviors, and outcomes.

Answer: All of these

Performance appraisal is directly influenced by several HR activities: job analysis, selection and placement, compensation, and training and development.

Answer: True

Alternative ranking approaches can be used quite efficiently not only by a single supervisor, but by the subordinates themselves.

Answer: To inform incumbents where they stand; To future develop and guide individuals to perform better

An effective performance appraisal system depends on several components of appraisal, but it generally serves two purposes: 1) to inform incumbents where they stand, and 2) to further develop and guide individuals to perform better.

a group of related projects designed to accomplish a common goal over an extended period of time

a temporary endeavor undertaken to create a unique product, service, or result

The stages found in all projects— definition, planning, execution, and delivery.

An individual who has met specific education and experience requirements set forth by the Project Management Institute, has agreed to adhere to a code of
professional conduct, and has passed an examination designed to objectively assess and measure project management knowledge. In addition, a PMP must
satisfy continuing certification requirements or lose the certification.