Chapter 6 Appraising and

Managing

Performance

True/False Questions
8-1. Performance management is the method managers use to manage workflow.
Ans: F
Difficulty: E
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8-2. Through performance management, managers can determine whether or not employees are
working to meet organizational goals.
Ans: T
Difficulty: E
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8-3. Performance feedback is a means for employees to adjust their performance to meet organizational
goals.
Ans: T
Difficulty: E
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8-4. The link between performance management and the organizations strategies and goals is often
neglected.
Ans: T
Difficulty: E
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8-5. Performance planning and evaluation systems specify a desired level of performance at the
beginning of the evaluation period.
Ans: T
Difficulty: E
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8-6. Formal performance appraisal systems do not focus on organizational strategy.

Ans: F
Difficulty: E
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8-7. Organizational culture can inhibit the employee from performing effectively.
Ans: T
Difficulty: E
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8-8. The extent to which a performance management system seeks performance consistent with
organizational goals is referred to as strategic congruence.
Ans: T
Difficulty: E
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8-9. Validity is concerned with maximizing the overlap between actual job performance and the
measure of job performance.
Ans: T
Difficulty: E
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8-10. XYZ Corporation uses actual sales figures for evaluating salespeople across different regional
territories. This is an example of a contaminated value.
Ans: T
Difficulty: H
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8-11. Validity refers to the consistency of the performance measure.

Ans: F
Difficulty: M
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8-12. A reliable performance measure yields consistent results over time.

Ans: T
Difficulty: M
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8-13. Subjective measures of job performance tend to exhibit low interrater reliability.
Ans: T
Difficulty: M
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8-14. Specificity refers to the extent which a performance measure instructs employees about what is
expected of them.
Ans: T
Difficulty: E
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8-15. In the forced distribution technique, employees are ranked from highest to lowest.
Ans: F
Difficulty: M
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8-16. In Brito v. Zia, the Supreme Court criticized the subjective nature of graphic rating scales.
Ans: T
Difficulty: M
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8-17. Attribute-based performance methods are the least popular performance evaluation approaches.
Ans: F
Difficulty: M
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8-18. The critical incident technique is a behavioral approach to performance management.

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Ans: T
Difficulty: E
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8-19. The critical incident approach relies on behaviorally anchored rating scales.
Ans: F
Difficulty: M
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8-20. An advantage of behaviorally anchored rating scales is increased interrater reliability.

Ans: T
Difficulty: M
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8-21. The results approach to performance measurement assumes that subjectivity can be eliminated
from the measurement process.
Ans: T
Difficulty: M
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8-22. Management by Objectives (MBO) systems seldom link employee performance to an

organizations strategic goals.
Ans: F
Difficulty: M
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8-23. A disadvantage of the results approach to performance measurement is that individuals may focus
only on aspects of their performance that are measured.
Ans: T
Difficulty: E
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8-24. Supervisors are the most frequently used source of performance information.
Ans: T
Difficulty: E
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8-25. The best use of self-ratings is for administrative purposes.

Ans: F
Difficulty: E
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Multiple Choice Questions

8-26. The system that seeks to tie the performance appraisal process to the firms strategies through
specifying at the beginning of the evaluation period what types and levels of performance must be
accomplished is called the
a. performance appraisal and evaluation system.
b. performance feedback system.
c. performance management system.
d. performance planning and evaluation system.

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Ans: d
Difficulty: M
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8-27. Which of the following is not a purpose of performance management systems?

a. The administrative purpose
b. The developmental purpose
c. The feedback purpose
d. The strategic purpose
Ans: c
Difficulty: M
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8-28. A survey of HR practitioners found that most performance appraisal systems focused on
a. administrative and strategic purposes.
b. strategic and developmental purposes.
c. administrative and feedback purposes.
d. developmental and administrative purposes.
Ans: d
Difficulty: M
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8-29. In performance appraisals, there is a tendency for supervisors to

a. rate all employees low.
b. rate half the employees low and half the employees high.
c. rate all employees high.
d. rate few employees high.
Ans: c
Difficulty: E
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8-30. What performance management evaluation criterion is concerned with maximizing the overlap
between actual job performance and the measure of job performance?
a. Reliability
b. Acceptability
c. Specificity
d. Validity
Ans: d
Difficulty: M
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8-31. A performance management system that evaluates irrelevant aspects of performance is

a. unreliable.
b. invalid.
c. contaminated.
d. inconsistent.
Ans: c
Difficulty: M
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8-32. Which of the following is not a criterion that should be used to evaluate performance
management systems?
a. Acceptability
b. Specificity
c. Complexity
d. Reliability
Ans: c
Difficulty: M
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8-33. The extent to which the performance measure assesses all the relevant aspects of performance is
called
a. reliability.
b. validity.
c. specificity.
d. acceptability.
Ans: b
Difficulty: E
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8-34. The consistency among the different individuals who evaluate the employees performance is
known as
a. internal consistency reliability.
b. interrater reliability.
c. intrarater reliability.
d. test-retest reliability.
Ans: b
Difficulty: H
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8-35. The extent to which all of the items rated are consistent with respect to content refers to
a. internal consistency reliability.
b. interrater reliability.
c. intrarater reliability.
d. test-retest reliability.
Ans: a
Difficulty: H
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8-36. A measure that results in dramatically different ratings over time lacks
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a. internal consistency reliability.

b. interrater reliability.
c. intrarater reliability.
d. test-retest reliability.
Ans: d
Difficulty: H
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8-37. If a performance appraisal method is not reliable, it

a. can still be valid.
b. can still be acceptable.
c. cannot be valid.
d. cannot be acceptable.
Ans: c
Difficulty: M
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8-38. Performance can be managed by focusing on all of the following except

a. behaviors.
b. weaknesses.
c. results.
d. employee attributes.
Ans: b
Difficulty: M
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8-39. The extent to which the performance measure gives guidance to employees about what is
expected of them is called
a. reliability.
b. validity.
c. specificity.
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d. acceptability.
Ans: c
Difficulty: E
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8-40. The approach to measuring and managing performance that consists of techniques requiring the
rater to rank order individuals within a given work group is called the
a. attribute approach.
b. behavioral approach.
c. comparative approach.
d. results approach.
Ans: c
Difficulty: M
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8-41. The technique that ranks employees into groups according to performance is called
a. forced distribution.
b. alternation ranking.
c. paired comparison.
d. ranking.
Ans: a
Difficulty: M
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8-42. Which of the following is not a problem with comparative approaches to performance
management?
a. They may not be legally defensible.
b. Managers can still give high ratings to all employees.
c. They are time consuming.
d. The systems may fail to be linked with the strategic goals of the organization.

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Ans: b
Difficulty: H
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8-43. The approach to measure and manage performance that focuses on the extent to which
individuals possess desirable characteristics is called the
a. attribute approach.
b. behavioral approach.
c. comparative approach.
d. results approach.
Ans: a
Difficulty: M
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8-44. The performance management scales on which managers assign points to a list of traits are called
a. behaviorally anchored rating scales.
b. mixed standard scales.
c. behavior observation scales.
d. graphic rating scales.
Ans: d
Difficulty: M
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8-45. What approach to performance management tries to define desired actions to be effective in the
job?
a. The attribute approach
b. The behavioral approach
c. The comparative approach
d. The results approach
Ans: b
Difficulty: M
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8-46. What is a problem with attribute approaches to performance management?

a. There is usually strategic congruence between the techniques and the firms strategy.
b. These methods are difficult to use.
c. These methods are not generalizable across organizations.
d. Different raters often provide very different ratings and rankings.
Ans: d
Difficulty: H
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8-47. The performance management approach that requires managers to keep a record of specific
examples of effective and ineffective performance is called
a. behaviorally anchored rating scales.
b. behavior observation scales.
c. critical incidents.
d. organizational behavior modification.
Ans: c
Difficulty: M
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8-48. What performance management approach is designed to specifically define performance

dimensions by identifying different levels of performance?
a. Behaviorally anchored rating scales
b. Graphic rating scales
c. Critical incidents
d. Organizational behavior modification
Ans: a
Difficulty: H
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8-49. The performance management method that requires managers to rate the frequency with which
the employee has exhibited a behavior during a rating period is called
a. behaviorally anchored rating scales.
b. behavior observation scales.
c. critical incidents.
d. organizational behavior modification.
Ans: b
Difficulty: H
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8-50. Managing the behavior of employees through a formal system of behavioral feedback and
reinforcement refers to
a. behaviorally anchored rating scales.
b. behavior observation scales.
c. critical incidents.
d. organizational behavior modification.
Ans: d
Difficulty: M
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8-51. Which of the following is not a part of an organizational behavior modification system?
a. Define a range of behaviors that can improve job performance.
b. Use a measurement system to assess whether behaviors are exhibited.
c. Consult employees on how often they should exhibit certain behaviors.
d. Provide feedback and reinforcement to employees.
Ans: a
Difficulty: H
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8-52. The performance management approach that focuses on managing the product of a job or work
group is called the
a. attribute approach.
b. behavioral approach.
c. comparative approach.
d. results approach.
Ans: d
Difficulty: M
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8-53. Which of the following is/are true regarding behavioral approaches to performance
measurement?
a. Link strategy to specific behavior needed to implement strategy
b. Provide specific guidance to employees regarding expected performance
c. Result in techniques that have a high degree of validity
d. All of the above
Ans: d
Difficulty: M
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8-54. In what type of system are annual goals established and passed down through the organization?
a. Productivity measurement and evaluation system
b. Management by objectives
c. Assessment centers
d. Organizational behavior modification
Ans: b
Difficulty: M
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8-55. What performance management system has a specific goal to motivate employees to higher
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levels of productivity?
a. Productivity measurement and evaluation system
b. Management by objectives
c. Assessment centers
d. Organizational behavior modification
Ans: a
Difficulty: M
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8-56. Which is not a component of management by objectives?

a. Specific goals
b. Subordinate participation
c. Managerial feedback
d. Modification of goals
Ans: d
Difficulty: M
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8-57. Which of the following is not a reason why TQM advocates believe U.S. companies
performance management systems are incompatible with the quality philosophy?
a. Most existing systems measure performance in terms of quantity, not quality.
b. Employees are not held accountable for bad results.
c. Companies do not share financial rewards of successes with employees.
d. Rewards are not connected to business results.
Ans: b
Difficulty: H
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8-58. According to performance evaluation in TQM,

a. performance appraisals should avoid discussion of the employees career plans.
b. employees should not be categorized in rating scales or rating groups.
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c. compensation rates should not be based according to seniority.

d. performance appraisal should avoid providing overall evaluation of employees.
Ans: d
Difficulty: H
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8-59. Which statistical process quality control technique is useful to identify redundancy in jobs that
increase manufacturing or service time?
a. Cause and effect diagrams
b. Control charts
c. Pareto charts
d. Process flow analysis
Ans: d
Difficulty: M
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8-60. Which of the following is the most objective performance measure?

a. Attitude
b. Degree of cooperation
c. Initiative
d. Number of errors made
Ans: d
Difficulty: M
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8-61. The quality control technique that lists causes of a problem in decreasing order of importance is a
a. cause and effect diagram.
b. control chart.
c. Pareto chart.
d. process flow analysis.

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Ans: c
Difficulty: M
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8-62. What quality control technique requires employees to identify the different factors that contribute
to an outcome and when they are to occur?
a. Cause and effect diagrams
b. Control charts
c. Pareto charts
d. Process flow analysis
Ans: b
Difficulty: M
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8-63. Identify the evaluation approach to performance measurement that meets the following criteria:
very high strategic congruence, usually high validity, high reliability, high acceptability, and high
specificity.
a. Comparative
b. Attribute
c. Behavioral
d. Results
Ans: d
Difficulty: H
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8-64. Identify the approach to performance measurement that meets the following criteria: poor
strategic congruence, high validity, no reliability, high acceptability, and very low specificity.
a. Comparative
b. Attribute
c. Behavioral
d. Results

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Ans: a
Difficulty: H
Page 300; Table 8.8
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8-65. Identify the approach to performance measurement that meets the following criteria: high
strategic congruence, usually high validity, usually high reliability, moderate acceptability, very high
specificity.
a. Comparative
b. Attribute
c. Behavioral
d. Results
Ans: c
Difficulty: H
Page 300; Table 8.8
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8-66. Identify the approach to performance measurement that meets the following criteria: usually low
strategic congruence, usually low attribute, usually low reliability, high acceptability, very low
specificity.
a. Comparative
b. Attribute
c. Behavioral
d. Results
Ans: b
Difficulty: H
Page 300; Table 8.8
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8-67. When managers are being evaluated, who are especially valuable sources of information?
a. Other managers
b. Subordinates
c. Customers
d. Their bosses

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Ans: b
Difficulty: M
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8-68. Which rater error is made when one judges individuals in the immediate work group higher than
those who are not?
a. Contrast
b. Distributional error
c. Halo/horns
d. Similar to me
Ans: d
Difficulty: M
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8-69. What rater error is a result of a raters tendency to use only one part of the rating scale?
a. Contrast
b. Distributional error
c. Halo/horns
d. Similar to me
Ans: b
Difficulty: M
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8-70. When a rater fails to distinguish among different aspects of performance, what kind of error is
present?
a. Contrast
b. Distributional error
c. Halo/horns
d. Similar to me
Ans: c
Difficulty: M
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8-71. What rater error leads employees to believe that no aspects of their performance need
improvement?
a. Contrast
b. Halo
c. Horns
d. Similar to me
Ans: b
Difficulty: M
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8-72. Which of the following is not an approach to reduce rating errors?

a. Frame of reference training
b. Error reduction training
c. Rater error training
d. Rater accuracy training
Ans: b
Difficulty: H
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8-73. To improve the performance feedback process, employers should not

a. give employees feedback every day.
b. let employees rate their performance before the feedback session.
c. discuss every criticism of the employee.
d. focus on behavior or results.
Ans: c
Difficulty: M
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8-74. In what legal suit would the plaintiff allege that the performance measurement system varies
according to individuals?
a. Harassment suit
b. Reverse discrimination suit
c. Unjust dismissal suit
d. Discrimination suit
Ans: d
Difficulty: M
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8-75. In what legal suit does the plaintiff claim termination was for reasons other than those the
employer claims?
a. Harassment suit
b. Reverse discrimination suit
c. Unjust dismissal suit
d. Discrimination suit
Ans: c
Difficulty: M
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Essay Questions

8-76. Discuss the major components of the performance management system.

Ans: Individual attributes are the raw materials that are transformed into objective results through a
persons behavior.
This performance relationship is linked to and affected by an organizations strategy and situational
constraints.
Difficulty: M
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LO1

8-77. Compare and contrast two comparative approaches of performance measurementranking and
forced distribution.
Ans: 1. Ranking arrives at an overall assessment of an individuals performance; managers rank
employees within their departments from highest to lowest employee. Forced distribution uses a
ranking format, but employees are ranked in groups; managers put a certain percentage of employees
into predetermined categories.
Difficulty: M
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8-78. Discuss the process of developing the Behaviorally Anchored Rating Scales.
Ans: 1. Gather a large number of critical incidents that represent effective and ineffective performance
on the job.
2. Classify the incidents into performance dimensions.
3. Agree on which incidents represent a particular level of performance to be used as a behavioral
examples. Identify anchors to guide the rater.
Difficulty: M
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8-79. How do Behavioral Observation Scales (BOS) differ from Behaviorally Anchored Rating Scales?
Ans: Rather than discarding a large number of the behaviors that exemplify effective or ineffective
performance, BOS uses many of them to specifically define all the behaviors that are necessary for
effective performance.
Rather than assessing which behavior best reflects an individuals performance, BOS requires
managers to rate the frequency with which the employee has exhibited each behavior during the rating
period.
Difficulty: M
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8-80. What is an assessment center? What are the pros and cons of an assessment center?
Ans: Individuals perform a number of simulated tasks while assessors observe the individuals
behavior and make evaluations about their skill or potential as a manager.
Assessment centers tend to be reliable, valid, and highly accepted, and they provide very specific
information regarding an individuals strengths and weaknesses.
Assessment centers do not assess how managers actually perform their jobs on a daily basis, and
they are very expensive to conduct.
Difficulty: H
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8-81. What are the three common components in management by objectives systems?
Ans: 1. MBO systems require specific, difficult, objective goals. Goals are not usually set unilaterally
by management but with the managers and employees participation in deciding on performance
objectives.
2. Goals are not usually set unilaterally by management but with the managers and employees
participation in deciding on performance objectives.
3. The manager gives objective feedback throughout the rating period to monitor progress toward the
goals.
Difficulty: M
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8-82. What is the main goal of Productivity Measurement and Evaluation Systems (ProMES)? What
are the four steps of ProMES?
Ans: The main goal of ProMES is to motivate employees to higher levels of productivity and to
measure and provide feedback productivity information to employees
1. People identify the products and objectives the organization expects to accomplish.
2. The staff defines indicators of the products.
3. The staff establishes the contingencies between the amount of the indicators and the level of
evaluation associated with that amount. A feedback system is developed that provides employees and
work groups with information regarding their specific level of performance on each of the indicators.
Difficulty: M
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LO4
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8-83. Why are most U.S. companies performance management systems incompatible with the quality
philosophy?
Ans: Most existing systems measure performance in terms of quantity, not quality.
Employees are held accountable for good or bad results to which they contribute but do not
completely control.
Companies do not share the financial rewards of successes with employees according to how much
they have contributed to them.
Difficulty: M
Page 296
LO4, 5

8-84. Discuss the differences between the attribute and behavioral approaches to performance
measurement related to the criteria of (a) strategic congruence, (b) validity and (c) reliability.
Ans: (a) Attribute approaches are usually low on strategic link while behavioral approaches are quite
high.
(b) Attribute approaches usually possess low validity while behavioral approaches are high.
(c) Finally, attribute approaches have low reliability while behavioral approaches have high reliability.
Difficulty: H
Page 300; Table 8.8
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8-85. Discuss at least three ways to improve the performance feedback process.
Ans: 1. Feedback should be given every day, not once a year.
2. Ask the employee to rate his or her performance before session.
3. Encourage the subordinate to participate in the session.
4. Recognize effective performance through praise.
5. Focus on solving problems.
6. Focus feedback on behavior or results, not on the person.
7. Minimize criticism.
8. Agree to specific goals and set a date to
Difficulty: M
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