7 - Performance management

Question 1

What is performance management?

Answer 1

The process through which managers ensure that employees’ activities and outputs contribute to the organisation’s goals.

Question 2

What does performance management require?

Answer 2

• Knowing what activities and outputs are desired
• Observing whether they occur
• Providing feedback to help employees meet expectations

Question 3

What are the stages of the performance management process?

Answer 3

step 1: define performance outcomes for company division and department.
step 2: develop employee goals, behaviour, and actions to achieve outcomes.
step 3: provide support and ongoing performance discussions.
step 4: evaluate performance.
step 5: identity improvements needed.
step 6: provide consequences for performance results.

Question 4

What are the three purposes of performance management?

Answer 4

Strategic purpose, administrative purpose, developmental purpose.

Question 5

What is strategic purpose?

Answer 5

Means effective performance management helps the organization achieve its business objectives.

Question 6

What is administrative purpose?

Answer 6

Refers to the ways in which organisations use the system to provide information for day-to-day decisions about salary, benefits, and recognition programs.

Question 7

What is developmental purpose?

Answer 7

Means that it serves as basis for developing employees’ knowledge and skills.

Question 8

What is the criteria for effective performance management?

Answer 8

• Fit with strategy
• Validity
• Reliability
• Acceptability
• Specific feedback

Question 9

What are the two scales used for measuring performance of traits/attributes?

Answer 9

Graphic rating scale and mixed-standard scale.

Question 10

What is a graphic rating scale?

Answer 10

• Lists traits and provides a rating scale for each trait.
• The employer uses the scale to indicate the extent to which an employee displays each trait.

Question 11

What is a mixed-standard scale?

Answer 11

Uses several statements describing each trait to produce a final score for that trait.

Question 12

What are the three methods of measuring performance of rating behaviours?

Answer 12

Critical-incident method, behaviourally anchored rating scale (BARS) and behavioural observation scale (BOS).

Question 13

What is the critical-incident method?

Answer 13

• Based on managers’ records of specific examples of the employee acting in ways that are either effective or ineffective.
• Employees receive feedback about what they do well and what they do poorly and how they are helping the organization achieve its goals.

Question 14

What is the behaviourally anchored rating scale (BARS)?

Answer 14

Rates behavior in terms of a scale showing specific statements of behavior that describe different levels of performance.

Question 15

What is behavioural observation scale (BOS)?

Answer 15

• A variation of a BARS which uses all behaviors necessary for effective performance to
  rate performance at a task.
• A BOS also asks the manager to rate the frequency with which the employee has exhibited the behavior during the rating period.

Question 16

What is an example of measuring results?

Answer 16

Management by objectives (MBO): people at each level of the organization set goals in a process that flows from top to bottom, so that all levels are contributing to the organization’s overall goals.
These goals become the standards for evaluating each employee’s performance.

Question 17

In fixed standards vs comparisons, what are the absolute measures?

Answer 17

Predefined standard:
- compares each employee to predefined standards
- performance of colleagues does not affect individual scores.

Question 18

In fixed standards vs comparisons, what are the relative measures?

Answer 18

Simple ranking, forced distribution, paired comparison.

Question 19

What is simple ranking?

Answer 19

Requires managers to rank employees in their group from the highest performer to the poorest performer.

Question 20

What is forced distribution?

Answer 20

Assigns a certain percentage of employees to each category in a set of categories.

Question 21

What is paired comparison?

Answer 21

Compares each employee with each other employee to establish rankings.

Question 22

What are the sources of performance information?

Answer 22

360-degree performance appraisal.

Question 23

What is the 360-degree performance appraisal?

Answer 23

Performance measurement that combines information
from the employees’:
- Managers
- Peers
- Subordinates
- Self
- Customers

Question 24

What are the types of performance measurements rating errors?

Answer 24

Contrast errors, distributional errors, rater bias.

Question 25

What are contrast errors?

Answer 25

The rater compares an individual, not against an objective standard, but
against other employees.

Question 26

What are distributional errors?

Answer 26

The rater tends to use only part of a rating scale.

Question 27

What are the three types of distributional errors? Explain each one.

Answer 27

• Leniency: the reviewer rates everyone near the top.
• Strictness: the rater favors lower rankings.
• Central tendency: the rater puts everyone near the middle of the scale.

Question 28

What is rater bias?

Answer 28

Raters often let their opinion of one quality color their opinion of others.

Question 29

What is one types of rater bias? Explain it.

Answer 29

Halo error: when the bias is in a favorable direction. This can mistakenly tell employees they don ́t need to improve in any area.

Question 30

What are the ways to measure job performance?

Answer 30

• Trait approach
• Behavior approach
• Results approach

Question 31

What is the trait approach?

Answer 31

Emphasises individual traits and attributes of employees.

Question 32

What is the behaviour approach?

Answer 32

Emphasises how employees do the job.

Question 33

What is results approach?

Answer 33

Emphasises what employees produce.