Understanding the Purposes and Effectiveness of Performance Evaluations, Exams of Business Ethics

Download Understanding the Purposes and Effectiveness of Performance Evaluations and more Exams Business Ethics in PDF only on Docsity! Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE Chapter 8 Performance Management MULTICHOICE 1. What is the key purpose of performance evaluations when they are used for pay-for-performance decisions? (A) signalling purpose (B) symbolic purpose (C) administrative purpose (D) developmental purpose SOLUTION : (C) 2. How often should performance feedback be delivered? (A) It should be done at least annually. (B) It depends on the organizational culture, industry, and supervisor's style. (C) It should be done at regular intervals-the more frequent the better. (D) It should be an ongoing, regular part of supervisor-subordinate interactions. SOLUTION : (D) 3. Which of the following is NOT a developmental purpose of performance evaluation? (A) meeting legal requirements (B) providing performance feedback (C) improving communication (D) identifying an individual's strengths and weaknesses SOLUTION : (A) 4. Which of the following are the two primary purposes of performance evaluations? (A) informative and developmental purposes (B) administrative and developmental purposes (C) administrative and informative purposes (D) managerial and administrative purposes Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE SOLUTION : (B) 5. Why is performance evaluation important? (A) because it is key to the validation of selection procedures, which are the foundation of all HR practices (B) because all organizations need to weed out lower-performing individuals at a rate of about 10 percent of employees per annum (C) because employees need to know that they are being evaluated in order to perform at an appropriate level (D) because the success of the entire HR program depends on knowing how the performance of employees compares with the goals established for them SOLUTION : (D) 6. Which of the following is a reason why performance evaluation programs fail? (A) Managers use them for administrative purposes. (B) Performance standards may not be clear. (C) The program is usually based on a job analysis rather than a competency analysis. (D) There is too much employee input into the development of the evaluation program. SOLUTION : (B) 7. Magee was rated higher than she deserved by her supervisor; her supervisor wanted to look good in the eyes of her own superiors. Which of the following is illustrated in this example? (A) criterion deficiency (B) criterion exaggeration (C) criterion contamination (D) organizational politics SOLUTION : (D) 8. What is the foundation for performance standards in the development of effective performance management systems? (A) the knowledge and experience of HR managers (B) feedback from customers Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE 16. ABC Corporation uses several raters to assess their employees' performance, after which the company does correlation analyses on the various ratings. What is ABC Corporation trying to figure out? (A) the level of contamination of the ratings (B) whether the ratings are deficient (C) the rewards that will be associated with good performance (D) the reliability of the ratings SOLUTION : (D) 17. Which of the following processes would help to improve the consistency and reliability of employee ratings? (A) job evaluations (B) external validation (C) strategic rewards (D) calibration SOLUTION : (D) 18. In developing a new performance evaluation system, Organization C made an evaluation plan, decided who would be doing the appraising and how it would be done, and even included evaluation training. Which one of the following is an important step that Organization C missed? (A) clearly communicating in advance the company's plans for employees who do not meet standards. (B) gaining support from top management, which should occur near the beginning of the process (C) informing employees how the process would go to alleviate anxiety (D) examining the performance standards through job analysis SOLUTION : (D) 19. Which of the following has been shown to be true in court? (A) Vague performance standards can be acceptable when clearly written. (B) Organizations should have carefully defined and measurable performance standards. (C) While performance standards should be somewhat specific, there should be room for individual interpretation. Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (D) Descriptions of traits such as attitude and cooperation are acceptable performance standards. SOLUTION : (B) 20. What is the most important thing an organization can do to ensure that a performance evaluation process achieves standards that are legally defensible if challenged in courts? (A) Use calibration and train the managers on how to deliver feedback. (B) Make sure the tool is reliable. (C) Base the standards on a sound job analysis and make sure all involved know what the standards are. (D) Make sure managers are not biased in their delivery of evaluation feedback. SOLUTION : (C) 21. Why are self-evaluations better for developmental versus administrative purposes? (A) because the evaluations are inflated because employees tend to rate themselves highly (B) because the evaluations are accurate (C) because employees prefer using them for developmental purposes (D) because legal challenges would be difficult to successfully defend SOLUTION : (A) 22. Managers tend to be more open to the use of subordinate evaluations when they are used for which of the following? (A) promotional purposes (B) regulatory purposes (C) administrative purposes (D) developmental purposes SOLUTION : (D) 23. Which of the following are peer evaluations best suited for? (A) administrative purposes (B) developmental purposes (C) strategic purposes Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (D) budgetary purposes SOLUTION : (B) 24. What advantage do peer evaluations have over other types of evaluations? (A) Peers may have a more intimate view of the performance of fellow employees. (B) Peers don't have to worry about meeting standards for distributions. (C) Peers know the job better than most managers do. (D) Peers do not have a conflict of interest over honestly appraising a fellow employee. SOLUTION : (A) 25. Tracy was evaluated by multiple raters in her last job, including her supervisor, customers, peers, and clients. What performance evaluation system was most likely used in this instance? (A) whole-team evaluations (B) peer evaluations (C) 360-degree feedback (D) multiplicative feedback SOLUTION : (C) 26. Which of the following is an important weakness of 360-degree feedback? (A) In cases where feedback is not positive, it has been shown to increase voluntary turnover. (B) It is hard to know what to conclude if the evaluation results in conflicting opinions. (C) The quality of information is not as good as other types of evaluation systems. (D) The training can be demoralizing because it is so intense. SOLUTION : (B) 27. Some organizations ask managers to place a percentage of their employees in the bottom performance category on every performance evaluation exercise, which in some cases may mean they are fired. Which type of performance evaluation method does this exemplify? (A) forced-distribution system (B) checklist method (C) percent method Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (C) essay method (D) graphic rating scale SOLUTION : (A) 36. Which of the following is a major advantage of a behaviourally anchored rating scale? (A) It has high acceptance rates by employees, management, and unions. (B) The rating scale can be used across many jobs. (C) It requires a great deal of employee participation, which leads to acceptance. (D) It allows the appraiser to observe rather than judge. SOLUTION : (C) 37. What is a key disadvantage of behaviourally anchored rating scales? (A) They do not involve employee participation. (B) They have low content validity. (C) They can only be used in the public sector. (D) They require considerable time and effort to develop. SOLUTION : (D) 38. Max Weber works for ABC Corporation a sales agent. The company uses his actual sales numbers to rate his performance. What performance evaluation method is ABC Corporation using? (A) trait method (B) behavioural method (C) outcome method (D) results method SOLUTION : (D) 39. Which of the following performance evaluation methods involves a mutual agreement of goals and metrics between supervisor and subordinate? (A) all behavioural methods (B) productivity measures Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (C) forced distribution Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (D) management by objectives SOLUTION : (D) 40. The HR managers at Organization M are very keen to tie all their HR practices in with organizational strategy, and performance evaluation is no exception. They would like to make clear the link between individual performance and organizational performance. Which of the following is the best type of evaluation method for the HR managers at Organization M? (A) trait-based methods (B) results-based methods (C) behaviour-based methods (D) performance-based methods SOLUTION : (B) 41. Which of the following appraisal systems is based on the concept that learning helps organizations improve their internal processes and allows individuals to see how their performance ties in with the firm? (A) balanced scorecard approach (B) 360-degree evaluation (C) customer-oriented approach (D) management by objectives SOLUTION : (A) 42. The evaluation interview should be divided into two sessions. What should those two sessions contain? (A) positive comments and negative comments (B) establishing performance standards and reviewing performance (C) performance review and compensation discussion (D) performance review and employee growth plans SOLUTION : (D) 43. Which of the following is an essential component of an evaluation interview? (A) It should take place in one session in order to give the employee a complete view of his or her performance. Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (D) physical limitation SOLUTION : (B) 51. Which of the following is NOT an environmental factor that may be a source of ineffective performance? (A) rules and policies (B) economic conditions (C) boredom and lack of ability (D) laws and regulations SOLUTION : (C) 52. Managers often first assume poor performance of subordinates is due to which of the following? (A) lack of ability (B) pay dissatisfaction (C) poor motivation (D) poor work?0?life balance SOLUTION : (A) 53. Scenario 8.1 Med Supplies Ltd. is a manufacturer and distributor of over-the-counter medical devices such as blood pressure monitors. Med Supplies relies heavily on its sales team to push these products to pharmacies and medical clinics across Canada. Sales reps are paid a yearly bonus based on the team's performance, coupled with annual performance evaluations done by managers. Over the last three years, they have been paid bonuses based on the previous year's performance if it is similar in dollar figure despite losing shelf space in stores or declining individual performances. The managers claim that they do not have the time to do the evaluations, but their superiors think these evaluations are key and need to be the link between employees' goals and the organization's objectives. Refer to Scenario 8.1. The VP Sales suggests the use of peer evaluations to ensure that each member of the team pulls his or her weight. Which of the following is NOT a reason why peer evaluations are not frequently used? (A) Those receiving low ratings might retaliate against their peers. (B) Peer ratings are simply a popularity contest. (C) Managers want to give up control over the evaluation process. Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (D) Peers rely on stereotypes in ratings. SOLUTION : (C) 54. Scenario 8.1 Med Supplies Ltd. is a manufacturer and distributor of over-the-counter medical devices such as blood pressure monitors. Med Supplies relies heavily on its sales team to push these products to pharmacies and medical clinics across Canada. Sales reps are paid a yearly bonus based on the team's performance, coupled with annual performance evaluations done by managers. Over the last three years, they have been paid bonuses based on the previous year's performance if it is similar in dollar figure despite losing shelf space in stores or declining individual performances. The managers claim that they do not have the time to do the evaluations, but their superiors think these evaluations are key and need to be the link between employees' goals and the organization's objectives. Refer to Scenario 8.1. Med Supplies should consider using team evaluations to evaluate the team as a whole. Which of the following is true about team evaluations? (A) They can help break down barriers and encourage joint effort. (B) They make it easier to separate individual contributions. (C) They readily identify leadership and interpersonal skills. (D) They provide 360-degree feedback. SOLUTION : (A) 55. Scenario 8.2 Jane is manager to 10 direct reports. She is currently concerned that she is perceived as a softy and so she has decided not to give out very many high ratings on this year's performance evaluation exercise. However, she doesn't want anyone to be fired either, so she has also decided not to give out any very low ratings. Refer to Scenario 8.2. Which of the following will Jane's ratings suffer from? (A) similar-to-self bias (B) leniency error (C) forced distribution (D) central tendency error SOLUTION : (D) 56. Scenario 8.2 Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE Jane is manager to 10 direct reports. She is currently concerned that she is perceived as a softy and so she has decided not to give out very many high ratings on this year's performance evaluation exercise. However, she doesn't want anyone to be fired either, so she has also decided not to give out any very low ratings. Refer to Scenario 8.2. How can Jane correct for this error? (A) by rating the reports highly if they displayed characteristics similar to her own (B) by rating everyone leniently (C) by collecting critical incidents (D) by rating everyone highly SOLUTION : (C) 57. Scenario 8.3 Canadian Fasteners Inc. has recently implemented a human resource (HR) system that assists with the recruitment and selection process, as well as administering a pension and benefits program. Included with these programs are training and development programs as well as yearly performance evaluations for both managers and agents who are jointly responsible for bringing in new accounts and maintaining existing ones. While these performance evaluations are done each year, mangers and agents do not receive feedback unless they are unhappy with their salary increases or bonuses. However, HR is now pushing the need for ongoing feedback as it is a key component of its compensation process. Refer to Scenario 8.3. Canadian Fasteners wants to embark on feedback sessions. Which of the following is NOT one of the key points to address? (A) direct the feedback toward behaviour the employee can control (B) give specific examples of desirable and undesirable behaviours (C) provide timely feedback (D) focus feedback on the person, not behaviour SOLUTION : (D) 58. Scenario 8.3 Canadian Fasteners Inc. has recently implemented a human resource (HR) system that assists with the recruitment and selection process, as well as administering a pension and benefits program. Included with these programs are training and development programs as well as yearly performance evaluations for both managers and agents who are jointly responsible for bringing in new accounts and maintaining existing ones. While these performance evaluations are done each year, mangers and agents do not receive feedback unless they are unhappy with their salary increases or bonuses. However, HR is now pushing the need for ongoing feedback as it is a key component of its Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (A) True (B) False SOLUTION : (B) 62. In general, performance evaluation can be classified as either administrative or developmental. (A) True (B) False SOLUTION : (A) 63. Developmental purposes for performance evaluation include validating selection criteria and meeting legal requirements. (A) True (B) False SOLUTION : (B) 64. Administrative purposes for performance evaluations include documenting personnel decisions and identifying individual training needs. (A) True (B) False SOLUTION : (B) 65. Most performance evaluations focus on long-term improvement, rather than short-term achievements. (A) True (B) False SOLUTION : (B) 66. A performance evaluation program can be used for many purposes, including salary recommendations and the retention and termination of employees. (A) True (B) False SOLUTION : (A) Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE 67. If an evaluation program is used to provide a written evaluation for salary action and at the same time used as a means of motivating employees to improve upon their performance, the administrative and developmental purposes may be in conflict. (A) True (B) False SOLUTION : (A) 68. Developmental approaches to performance evaluation recognize that a manager's purpose is to improve job behaviours, not just evaluate past performance. (A) True (B) False SOLUTION : (A) 69. Organizational politics can introduce bias into even the most fairly administered performance evaluations. (A) True (B) False SOLUTION : (A) 70. Ideally, performance evaluations should be linked to the strategic objectives of the organization. (A) True (B) False SOLUTION : (A) 71. Criterion deficiency occurs when performance standards focus on a single criterion to the exclusion of other important but less quantifiable performance dimensions. (A) True (B) False SOLUTION : (A) 72. Criterion contamination occurs when correlations between two raters of an employee are inconsistent. (A) True Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (B) False SOLUTION : (B) 73. Criterion contamination occurs when factors outside an employee's control influence his or her performance. (A) True (B) False SOLUTION : (A) 74. Reliability refers to measures that are consistent across raters and over time. (A) True (B) False SOLUTION : (A) 75. In order to increase employee motivation levels, written performance standards should be objective but not defined in quantifiable and measurable terms. (A) True (B) False SOLUTION : (B) 76. Ineffective handling of performance evaluations may result in court cases or other legal action. (A) True (B) False SOLUTION : (A) 77. In most instances, one person can easily observe and evaluate an employee's performance. (A) True (B) False SOLUTION : (B) 78. Surprisingly, self-evaluations are typically equal to or lower than the traditional approach to evaluations where a manager fills them out. Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (B) False SOLUTION : (A) 90. An error of central tendency is a performance-rating error in which all employees are more or less rated as average. (A) True (B) False SOLUTION : (A) 91. Requiring raters to use a forced distribution reduces the chance of leniency or strictness errors. (A) True (B) False SOLUTION : (A) 92. Contrast errors are most likely when raters are required to rank employees in order from the best to the poorest. (A) True (B) False SOLUTION : (A) 93. The similar-to-me error occurs when appraisers inflate the evaluations of people with whom they have something in common. (A) True (B) False SOLUTION : (A) 94. The similar-to-me error, like contrast, results in less-than-accurate performance ratings, but would not be considered discriminatory. (A) True (B) False SOLUTION : (B) Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE 95. Feedback training for raters should include communicating effectively, diagnosing causes of performance problems, and setting goals. (A) True (B) False SOLUTION : (A) 96. Results-oriented approaches are the most widely used, despite their subjectivity. (A) True (B) False SOLUTION : (B) 97. Trait evaluation approaches continue to be the most popular systems despite their inherent subjectivity. (A) True (B) False SOLUTION : (A) 98. Graphic rating scales include sets of statements between which the rater must choose, such as "works hard" vs. "works quickly." (A) True (B) False SOLUTION : (B) 99. A potential drawback of a trait-oriented performance evaluation is that it may be biased and subjective. (A) True (B) False SOLUTION : (A) 100. One of the benefits of the forced-choice method is the relatively small cost of establishing and maintaining its validity. (A) True Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (B) False SOLUTION : (B) 101. A major drawback of the essay method is that composing an essay that attempts to cover all of an employee's essential characteristics is very time-consuming. (A) True (B) False SOLUTION : (A) 102. Behavioural methods are often useful for providing employees with developmental feedback. (A) True (B) False SOLUTION : (A) 103. One of the disadvantages of the critical incident method is that it tends to lead to recency error. (A) True (B) False SOLUTION : (B) 104. The critical incident method facilitates employee feedback and development. (A) True (B) False SOLUTION : (A) 105. The main advantage of a BARS is that it requires minimal time and effort to develop. (A) True (B) False SOLUTION : (B) 106. Results evaluations give employees more responsibility for outcomes and discretion over how to accomplish them. Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE (A) True (B) False SOLUTION : (A) 118. Performance is a function of ability, motivation, and environment. (A) True (B) False SOLUTION : (A) ESSAY 119. Identify and discuss the two general purposes of performance evaluation. Graders Info : Performance evaluation programs serve many purposes, which in general terms fall into two categories: administrative and developmental. Administrative purposes relate to who will be promoted, transferred, or laid off, and compensation decisions. Developmental purposes relate to improving and enhancing an individual's capabilities (e.g., identifying a person's strengths and weaknesses, eliminating external performance obstacles, and establishing training needs). These two purposes of performance evaluation reflect HRM's larger role, which is to integrate the individual with the organization. 120. Why do employee evaluation programs sometimes fail? Graders Info : In many organizations, performance evaluations are seen as a necessary evil. Managers frequently avoid conducting evaluations because they dislike playing the role of judge. Further, if managers are not adequately trained, subjectivity and politics can distort the reviews. This situation tends to be self-defeating in that such managers frequently do not develop good feedback skills and are often not prepared to conduct an evaluation. As a consequence, the evaluation is done once a year and then forgotten about. 121. What are the four basic considerations for establishing performance standards? Graders Info : Before any evaluation is conducted, the standards by which performance is to be evaluated should Chapter 8 Performance Management correctly SOLUTIONed EXCEL IN YOUR EXM 2024 UPDATE be clearly defined and communicated to the employee. These standards should be based on job- related requirements derived from job analysis and reflected in the job descriptions and job specifications. In establishing performance standards, there are four basic considerations. First, performance standards should have strategic relevance. Strategic relevance refers to the extent to which performance standards relate to the strategic objectives of the organization. A second consideration in establishing performance standards is the extent to which the standards capture the entire range of an employee's responsibilities. When performance standards focus on a single criterion to the exclusion of other important performance dimensions, then the evaluation system is said to suffer from criterion deficiency. Third, performance standards can also be contaminated. When performance standards include factors outside an employee's control that can influence his or her performance, then the evaluation system is said to suffer from criterion contamination. Fourth, performance standards should be reliable. Reliability refers to the stability or consistency of a performance standard, or the extent to which individuals tend to maintain a certain level of performance over time. 122. Why are evaluation interviews important? What are some guidelines for effectiveness? Graders Info : The degree to which the performance evaluation program benefits the organization and its members is directly related to the quality of the evaluation interviews that are conducted. Interviewing skills are best developed through instruction and supervised practice. Although there are various approaches to the interview, research suggests that employee participation and goal setting lead to higher satisfaction and improved performance. Discussing problems, showing support, minimizing criticism, and rewarding effective performance are also beneficial practices. In the interview, deficiencies in employee performance can be discussed and plans for improvement can be made.