Test Bank

to accompany

Human Resource
th
Management, 9 edition
by Raymond J. Stone

© John Wiley & Sons Australia, Ltd

Chapter 8
 Human Resource Management, 9th edition

Appraising and managing performance

Multiple choice questions

1. Performance management provides a strategic link by:

a. involving the HR manager in the senior management strategic planning process.

*b. giving management feedback on the strategic alignment of employee behaviours.
c. showing how employee performance can be measured in different ways for different employees.
d. comparing performance appraisals with employee and organisational expectations.

General Feedback:
Learning Objective 8.1: Discuss the relationships between strategy, performance management and
performance appraisal. Performance management is a means to try to see that employees are performing
in line with the strategic direction of the organisation.

2. Unions are critical of pay for performance systems and performance appraisals on the grounds that:

a. performance can never be accurately measured and therefore difficult to reward objectively.
b. such systems discriminate and create inequities amongst the lowest paid and poorly organised
employees.
c. the industrial relations tribunals cannot intervene in these new forms of wage setting systems.
*d. this promotes a competitive culture, coerces higher output and promotes management by control.

General Feedback:
Learning Objective 8.1: Discuss the relationships between strategy, performance management and
performance appraisal. Unions strongly oppose performance appraisals and pay for performance because
it focuses on individual behaviour and that is against the collective thrust of unions.

3. One of the major weaknesses of the team approach to appraising performance is:

*a. social loafing.

b. subordinate evaluations.
c. rater errors.
d. the halo effect.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. When individual contribution to the team's result is difficult to identify, this
may offer the less conscientious group members the opportunity to engage in 'social loafing'. This occurs
when team members make less of an effort when they are part of a group relying on the more diligent
members to compensate for their laziness.

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4. Before conducting a performance review discussion the manager should:

a. review the employee's attendance record and note absences.

*b. list all key points to be discussed in the interview.
c. discuss the employee's performance with their peers.
d. not review past appraisals as they may bias their current ratings.

General Feedback:
Learning Objective 8.7: Understand the importance of an effective performance review. It is vital that a
manager carefully prepares for the performance review discussion. This would include listing the key
points to be discussed in the interview. However, focussing on absences, reviewing the employee's
performance with their peers or ignoring past reviews is not appropriate.

5. Research by Jawahar and Williams found that managers who know they are rating employees for
administrative purposes only:

*a. are likely to be more lenient than when evaluating employment for research, feedback or
employment development purposes.
b. are likely to be more severe than when evaluating employment for research, feedback or employment
development purposes.
c. will rely more on the advice of the HR department than that of peers.
d. will rely less on the advice of the HR department than that of peers.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. The evidence suggests that when managers know they are evaluating
performance for a merit increase or a promotion then they are likely to be more lenient and less accurate
than when they are assessing performance for such reasons as employee development.

6. In appraisal the problem that occurs when a supervisor's rating of a subordinate on one factor biases
the supervisor on all other factors is known as:

a. the recency effect.

b. supervisor prejudice.
*c. the halo effect.
d. strictness bias.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. The 'halo effect' occurs when a supervisor performance appraisal rating on one
factor influences the rating on other factors.

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7. To satisfy EEO requirements, performance appraisals must be:

*a. job-related and non-discriminatory.

b. designed to take into account diversity issues.
c. used to promote and encourage employees from minority groups.
d. conducted at least twice a year.

General Feedback:
Learning Objective 8.8: Appreciate the impact of EEO on performance appraisal. Based on US legal
precedent there are a number of factors which would help organisations defend their appraisal systems:
the system should be developed using job analysis, it should be behaviour rather than trait-oriented,
managers require detailed instructions and training on how to manage the system, results must be
communicated to employees and there needs to be a provision for appeals.

8. Appraisal which involves an individual being evaluated by his/her superiors, peers, subordinates and
others is known as:

a. peer appraisal.
b. probationary review.
*c. 360-degree feedback.
d. subordinate evaluation.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. 360-degree evaluations involve seeking feedback from a range of sources
including colleagues, superiors, customers and subordinates. This is popular in organisations with teams,
TQM and employee involvement programs.

9. When performance appraisal is seen by managers as something imposed on them by the HR

department, this is probably an example of which source of error in performance appraisal?

a. Rater errors
b. Prejudice
*c. Poor management attitude
d. Leniency/strictness bias

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Unfortunately, when managers are not committed to the performance appraisal
system, it is likely to become a form-filling exercise and therefore lacking in credibility and utility.

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10. When managers give everyone an average or acceptable rating in performance evaluations, this is
known as:

*a. central tendency.

b. rater errors.
c. leniency/strictness bias.
d. relationship effect.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Central tendency is a common error that occurs when each employee is
incorrectly rated near the average of the middle of the scale.

11. The major types of performance appraisal include all of the following except:

a. ranking.
b. grading.
c. critical incidents.
*d. sliding scales.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Sliding scales is not a performance appraisal system.

12. Subordinate evaluations are seen as a powerful indicator of:

a. the collective presence and power of teams in an organisation.

*b. how well the organisation's managers are managing others.
c. how willing employees are to openly evaluate their superiors.
d. the emotions that will emerge during any formal evaluation process.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. A sure indication of how effective managers are in conducting appraisals of
staff is to get their subordinates to evaluate their performance.

13. When a manager records occurrences or incidents of employee job behaviour which highlight good
or bad job performance they are using which method of performance appraisal?

*a. Critical incidents

b. Behaviourally anchored rating scales

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 Human Resource Management, 9th edition

c. Assessment centres
d. Essay descriptions

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. The critical incidents system is based on using examples of employee
behaviour that illustrate effective or ineffective performance in the job.

14. Behaviourally anchored rating scales (BARS) are designed to:

a. determine employee attitude towards work and the organisation.

*b. evaluate behaviour demonstrated in performing a job.
c. evaluate and compare the performance of employees with that of their peers.
d. determine the appropriateness of employee performance and behaviour.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. This performance appraisal method combines elements of traditional rating
scales and the critical incident method.

15. A performance appraisal system which uses critical incidents to develop a list of desired behaviours
needed to successfully perform a specific job is:

*a. behaviour observation scale (BOS).

b. behaviourally anchored rating scale (BARS).
c. management by objectives.
d. critical incidents system.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. In the behaviour observation scale system employees are evaluated by their
managers on the basis of how often they demonstrate the desired behaviours in the job.

16. When managers are asked to describe in their own words the employees' performance, covering the
quantity and quality of work performed, job know-how, human relations skills, etc., they are engaging in
a type of appraisal system known as:

a. grading.
*b. essay description.
c. critical incidents.
d. assessment centres.

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General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. The essay description is a written statement by a manager describing an
employee's strengths, weaknesses, past performance and future development.

17. When a manager and subordinate mutually identify common goals, define the subordinate's major
areas of responsibility in terms of expected results, and use these measures in assessing the subordinate's
performance, they are most likely engaging in:

a. behavioural anchored rating scale.

b. an assessment centre.
c. critical incident.
*d. management by objectives.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. MBO involves setting specific measurable goals with each employee and then
periodically reviewing the progress made.

18. A survey of US managers found that one of the major managerial stressors was:

a. a lack of top managerial support for the decisions being made lower in the organisation.
b. poor attitudes by senior managers to occupational health and safety concerns.
c. the inability to reward individuals who had performed outstanding service for the organisation.
*d. the need for evaluating their staff members' performance.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. One of the tasks that managers dislike more than any other is the need to
evaluate the performance of their staff.

19. A study by the Australian Institute of Management in Western Australia found that the major
disincentive to productivity was attributable to:

a. employers clearly discriminating between superior and poor performers in the application of rewards.
*b. everyone getting the same pay rise regardless of how hard they work.
c. employers linking rewards to the achievement or non-achievement of performance appraisal
objectives.
d. only outstanding performers receiving pay increases.

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General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. To motivate improved performance, it is important that employers discriminate
between high achievers and poor performers and that those employees who have contributed the most to
the achievement of strategic objectives receive the highest pay increases or bonuses. Paying everyone
the same amount is demotivating to high achievers.

20. In which of the following countries, in the matter of performance appraisal, do employees prefer a
greater degree of ambiguity, do not want their weaknesses discussed and want appraisal results kept
secret?

a. China
b. North America
c. Australia
*d. Japan

General Feedback:
@ Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Japanese employees are most concerned that details of their performance not
be publicised for fear of loss of face.

21. Who is most commonly responsible for performance appraisals?

a. Teams
b. Colleagues
c. A group consisting of the supervisor, peers, subordinates and customers
*d. The immediate supervisor.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. In the vast majority of cases, the immediate supervisor is the person
responsible for the conduct of performance appraisals.

22. Which of the following is a problem associated with using self-evaluation in performance
appraisals?

a. Strictness
b. Central tendency
c. Commonality between self-ratings and ratings by the supervisor
*d. Leniency.

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General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Unfortunately, one of the disadvantages of employees evaluating their own
performance is that they tend to inflate their ratings.

23. The forced distribution scheme is a refinement of which performance appraisal system?

*a. Grading
b. Critical incidents
c. Graphic scales
d. Behaviourally anchored rating scales.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Forced distribution is a refinement of the grading system where a fixed
percentage of employees are allocated to each grade, thereby overcoming some of the problems
associated with negative bias, leniency or central tendency.

24. For evaluating employees, those organisations employing total quality management (TQM) concepts
are increasingly using:

a. subordinate evaluation.
b. supervisor evaluation.
*c. peer evaluation.
d. self-evaluation.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. One of the characteristics of TQM is its reliance on some form of peer
evaluation.

25. The performance management technique that evaluates organisational performance in the four key
areas of people, internal operations, customer satisfaction and financial is known as:

a. management by objectives.
b. SMART objectives.
*c. balanced scorecard.
d. behaviour observation scales.

General Feedback:

© John Wiley & Sons Australia, Ltd 2017 Chapter 8 Appraising and managing performance 9
 Human Resource Management, 9th edition

Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. The balanced scorecard evaluates organisational performance in four areas,
with objectives and performance measures set for each area.

26. SMART is an acronym for:

a. smart/stretching, measurable, agreed/achievable, reviewable, team-based.

b. specific/smart, mutual, agreed, realistic, time-bounded.
*c. specific/stretching, measurable, agreed/achievable, realistic, time-bounded.
d. specific/stretching, mutual, autonomous, reviewable, team-based.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Some organisations employ SMART objectives to make management by
objectives easier to understand.

27. Rapid change, tighter budgets, downsizing and restructuring, and pressures for greater accountability
are placing greater emphasis on:

a. employee selection.
*b. performance management.
c. participative management.
d. employee empowerment.

General Feedback:
Learning Objective 8.1: Discuss the relationships between strategy, performance management and
performance appraisal. Increasing competitiveness and economic pressures means that there is a greater
emphasis on performance management and translating overall organisational strategic objectives into
individual job objectives and performance standards.

28. The evaluation of organisational and employee performance permits managers to:

a. monitor the skills of employees and ensure they are regularly updated.
b. determine the need for organisational restructuring and process re-engineering.
*c. check that strategic business objectives are valid, are being successfully communicated throughout
the organisation and are being achieved.
d. ensure that rewards and benefits provided for employees are appropriate and equitable.

General Feedback:
Learning Objective 8.1: Discuss the relationships between strategy, performance management and
performance appraisal. Performance management enables managers to evaluate whether organisational

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objectives have been adequately communicated and are being translated into individual goals and
performance.

29. An essential factor in determining the overall value of 360-degree feedback is:

a. the willingness of employees to give an open and honest assessment of their supervisors.
b. the extent to which HR managers are permitted to conduct the necessary interviews with all staff.
*c. the follow up on the required training and development activities identified by the feedback.
d. how the results compare with benchmarks established in international studies of 360-degree feedback.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. A measure of success of a 360-degree appraisal system is the extent to which it
initiates training and development activities identified by the feedback.

30. While research suggests that managers can discriminate between performing and non-performing
employees, the managers' ratings will not necessarily reflect their actual judgements because:

a. the time and effort taken to complete the reviews causes managers to make mistakes in assessment.
b. employees will put pressure onto managers to give them favourable appraisals.
c. they are keen to protect their own reputations with senior management levels.
*d. they often distort their evaluations when completing performance appraisal forms.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. The validity and accuracy of managers' ratings of their subordinates may be
adversely affected by a number of influences and it is important that they are aware of this.

31. All of the following except _________ should be primary objectives of performance appraisal.
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Performance appraisal shouldn't focus on judging past behaviour but rather on
examining how the employee can improve future performance, grow and develop.

a. development
*b. judgement
c. feedback
d. reward.

32. Which of the following would be considered a membership based reward?

Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of

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 Human Resource Management, 9th edition

error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. A seniority payment is based on the number of years served with the
organisation and is thus unrelated to merit or performance.

*a. Seniority payments

b. Piecework payments
c. Commissions
d. Merit payment

33. A benefit of upward appraisal is:

a. information may be limited.

b. the authority of some managers might be undermined.
*c. enhanced employee job satisfaction.
d. more accurate feedback is provided.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Upward appraisal may improve employee satisfaction with the process as they
can shed light on the strengths and weaknesses of their superior's managerial performance.

34. When using an upward performance appraisal it is important to:

a. ensure that employees are not subject to peer pressure to not participate.
b. provide constructive and timely feedback to those employees who have taken part.
c. allow employees plenty of time to complete the evaluation and to make amendments if necessary.
*d. ensure that everyone clearly understands who will see the results and what will be done with the
information.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. To implement upward appraisal effectively, it is important that participants are
informed as to who will view the results and that they are given reassurances that some action will
ensue.

35. Which of the following statements is NOT an advantage of 360-degree feedback systems?

a. Supports team initiatives

*b. Simplifies the performance review system
c. Assesses developmental needs
d. Increases the credibility of the performance review process.

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General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Applied. 360-degree appraisals have the disadvantage of being time consuming
and administratively complex.

36. One of the major problems with the ranking system for evaluating performance is that it:

a. it is far too complex and time-consuming.

b. managers have to provide detailed justifications for their ranking decisions.
c. it is only suitable for organisations with a large number of employees.
*d. involves considerable difficulty in discriminating between employees in the middle ranks.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. The ranking system can make it very difficult to discriminate between those
performers in the middle of the ranking and does not give any indication as to why one performer is
superior to another.

37. A disadvantage of multisource evaluations is that:

a. they discourage employee self-development and motivation.

*b. they do not ensure follow-up on development plans.
c. they do not support team initiatives.
d. they promote hierarchical relationships.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Although multi-source evaluations are able to effectively identify development
needs, there is no guarantee that development plans will be carried out.

38. Performance review discussions can be stressful and unpleasant because managers:

*a. do not undertake sufficient preparation.

b. give objective feedback.
c. listen to the needs of the employee.
d. focus on development needs.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic

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performance monitoring. Unfortunately, both managers and subordinates can find the performance
review discussion very stressful and this in part may be due to inadequate preparation by the reviewer.

39. Just before appraisal time an employee submits an outstanding piece of work. If the supervisor is
heavily influenced by this piece of work it is known as:

a. halo effect.
b. prejudice.
c. leniency/strictness bias.
*d. recency effect.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. The recency effect occurs when a manager's perception of performance is
distorted by recent events without sufficient reference to the rest of the performance review period.

40. Many traditional performance appraisal systems place emphasis on subjective criteria such as:

*a. personality, loyalty and initiative.

b. initiative, sales volume, costs incurred.
c. attendance record, enthusiasm for the job, number of clients.
d. leadership ability, attendance record, work attitude.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. A study by Nankervis and Leece found that subjectivity was one of the most
commonly reported difficulties with performance appraisals.

41. The performance criteria against which performance is measured is determined by:

a. market and competitor performance.

*b. the nature of the job and the purposes of the assessment.
c. the work processes and importance of the job.
d. the type of performance appraisal to be used.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Although subjective criteria are best avoided in performance appraisal,
ultimately the criteria used will be guided by the culture of the organisation and the type of job being
assessed. Thus it is common for many organisations to use a combination of subjective and objective
criteria.

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42. The main characteristic of a static appraisal program is:

*a. its focus on the past.

b. that it is concerned with maintaining the status quo.
c. its focus on developmental issues.
d. the use of traditional forms of performance review.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. An effective appraisal program should be dynamic; that is, it should be setting
new goals and emphasising employee growth and development. Static appraisals focus on critiquing and
judging past actions.

43. Which of the following statements about the role of goal-setting in performance appraisal is LEAST
likely to be correct?

a. The setting of specific goals is more likely to lead to higher performance than simply telling an
employee to 'do your best'.
*b. Goals that are perceived to be easy to achieve tend to result in better performance than goals that are
perceived as difficult.
c. Employee participation in goal-setting tends to lead to higher goals being set than when the manager
unilaterally sets the goals.
d. Frequent performance feedback results in higher performance.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. In fact, goals that are perceived to be difficult to accomplish or require stretch
tend to result in better performance than when goals are perceived to be easy (as long as the goals have
been mutually agreed upon).

44. The effectiveness of performance appraisal schemes can be restricted by:

*a. inconsistency in reward allocation.

b. utilising objective criteria for evaluation of performance.
c. too much focus on employee development plans.
d. adopting a multi-source evaluation system.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic

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performance monitoring. Where rewards linked to the performance appraisal scheme are applied
inconsistently or do not appear fair, then the credibility of the overall system can be compromised.

45. Recent research suggests that when managers are required to account for their performance appraisal
ratings in person (as opposed to in writing):

a. the appraisal ratings are less accurate.

b. the appraisal ratings tend to be the same for each of the supervisor's employees.
*c. the appraisal ratings are more accurate.
d. their subordinates are less willing to accept the ratings given.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. It has been suggested that when the manager and subordinate meet face-to-face
to discuss the performance review and the appraisal ratings, then it is likely that the resultant ratings will
more accurately reflect actual performance.

46. Which characteristic is NOT a characteristic of the subjective performance criteria?

*a. Attendance
b. Attitude
c. Cooperation
d. Dependability

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Attendance is an objective performance indicator.

47. Which is an advantage of using the subjective performance appraisal method?

*a. Apparent universal application to all jobs

b. Quantifiable and measureable
c. Can be clearly defined
d. Can be tied to specific targets

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Apparent universal application to all jobs and can use the same evaluation
sheet for all employees are advantages of the subjective performance appraisal method.

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48. In a 360-degree performance appraisal, identify an 'external customer' that the HR manager seeks
information from.

a. Union shop stewards

b. Employees
c. CEO
*d. Trade union officials

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. University representative, professional association representatives, suppliers of
services, employer association representatives, trade union officials, industrial tribunal representatives,
and HRM counterparts are examples of 'external customers'.

49. In a 360-degree performance appraisal, identify an 'internal customer' that the HR manager seeks
information from.

a. University representatives
b. Suppliers of services
*c. CEO
d. Industrial tribunal representatives

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Union shop stewards, employees, subordinates, board of directors, CEO,
functional managers, and other managers are examples of 'internal customers'.

50. Numeric feedback is perceived as:

*a. more specific, easy to read.

b. confusing to most employees.
c. not concise and somewhat demanding.
d. limiting as it only identifies faults and weaknesses.

General Feedback:
Learning Objective 8.3: Identify and explain the objectives of performance appraisal, the sources of
error in performance appraisal, the major types of performance appraisal systems and electronic
performance monitoring. Numeric feedback is perceived as more specific, easy to read and helpful with
clearly identifying strengths and weaknesses.

Essay questions

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51. Critically discuss the role that job analysis has in the design of an effective performance appraisal
process.

Correct Answer:
There is a close link between job analysis and the design of an effective performance evaluation system.
The job analysis will set the parameters of the position and the person for the job in question and will
result in a job description outlining the requirements of the position and a job specification that will
outline the requirements looked for in the person to fill a position. A performance evaluation system can
only be effective if it seeks to measure in an objective manner the behaviours of the person in the job
and it is the job description that will determine what these expected responsibilities are against which
performance can be measured.

52. Identify the characteristics of performance management and examine how this approach differs from
performance appraisal.

Correct Answer:
There is often a lot of confusion about the difference between performance management and
performance appraisal and to many people they mean the same thing. However, performance
management is a much broader concept than performance appraisal and is concerned more with strategic
planning issues and is aimed at improving the performance of the organisation as a whole and/or its
major functional units. It may incorporate many of the major HR functions. Performance appraisal on
the other hand focuses on the individual and measures that are used to assess how this individual is
performing against a set of predetermined criteria. In this sense performance appraisal is a subset of the
performance management system.

53. Critically discuss the role of constructive feedback in the performance review discussion.

Correct Answer:
The performance review discussion should be a positive experience for both the appraiser and appraisee
and not a stressful situation. The stressful outcomes are less likely to occur if the appraiser has used an
instrument in reviewing performance that gives an objective assessment of job-related behaviour. In the
discussion problems should be discussed as problems not criticisms. Moreover, the appraiser must allow
the person being evaluated to talk and to express their views and feelings about the assessment under
consideration. The feedback will be more objective if performance improvement goals are jointly
agreed-upon, and should focus on only those things in the job which can be changed.

54. Discuss the importance of goal setting in employee motivation and performance improvement.

Correct Answer:
Employee motivation and performance are improved if the employee clearly understands and is
challenged by what is to be achieved. Research has indicated that the setting of specific goals is more
likely to lead to higher performance than simply telling employees in general terms what is expected;
goals that are perceived to be difficult to achieve tend to produce better performance than easier to

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achieve goals; employee participation in goal setting has positive effects; and frequent feedback on the
achievement (or non-achievement) of goals results in higher performance.

55. Outline the main objectives of a performance appraisal system.

Correct Answer:
There are four main objectives of an appraisal system. Firstly, it must be able to differentiate between
the performance of individuals. Those who are contributing to the achievement of goals must be able to
be distinguished from those who are not contributing. Secondly, to encourage performance those who
are achieving goals must be able to be rewarded otherwise there will be no motivation to perform.
Thirdly, a performance review should identify those areas of activity where an employee could benefit
from development. To this end reviews need to be forward thinking and not only reflecting on the past.
Finally, a critical goal of appraisal is to provide meaningful and objective feedback on how well the
employee is performing and this is often achieved through a regular performance review interview.

56. Identify and discuss rater errors that arise in performance appraisal.

Correct Answer:
Rater errors include the halo effect (a problem that occurs during performance appraisal, when a
supervisor's rating of a subordinate on one factor biases the rating of that person on other factors),
central tendency (occurs when every employee is incorrectly rated near the average or middle of the
scale), strictness bias (occurs when employees are rated lower than their performance justifies),
prejudice (where a manager demonstrates a positive or negative bias), the recency effect (the use of most
recent events to evaluate employee performance instead of using a longer, more comprehensive time
frame), and relationship effect (occurs where the nature of the superior/subordinate relationship
influences a performance rating).

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