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HRIR3021 Exam #3 Study Guide- Fall 2016
Performance Management- Chapter Eight
1. What is the definition of performance management and its purpose?
Performance management = The means through which managers ensure that employees' activities and
outputs contribute to the organization's goals
Purposes:
Strategic – effective performance management helps the organization achieve its business
objectives
Administrative – ways in which organizations use the system to provide information for the
day-to-day decisions about salary, benefits, and recognition problems
Developmental – serves as a basis for developing employee’s knowledge and skills
2. What are the steps in the performance management process? How is this different from the
traditional model?
1. Define performance outcomes for company division and department
2. Develop employee goals, behavior, and actions to achieve outcomes
3. Provide support and ongoing performance discussions
4. Evaluate performance (annual formal performance review)
5. Identify improvements needed
6. Provide consequences for performance results
Traditional model:
3. Compare and contrast types of performance measures, subjective and objective.
What’s wrong with rating traits and attributes?
What are result-oriented measures vs. behavioral?
Behavior-based appraisals: gets the job done, comes to work on time, technically astute; often
comparing people to one another or to a standard; trait focused; work ethic, attitude, initiative
, Results-based appraisals: focus on what employee accomplishes: hired ten people in three
months with satisfactory performance ratings, sold 20 new products
Objectives measures: production measures, sales, business unit performance measures, MBO, SMART
How does opportunity bias affect a seemingly objective measure, such as sales?
This type of bias occurs when, for instance, an employee is not given a good sales
territory like other employees and then is subsequently given a lower performance rating
because of it.
4. Explain criteria used to evaluate an effective performance evaluation system.
a. Fit with the organization’s strategy – support its goals & culture
b. Valid – measure all relevant aspects of performance
c. Reliable – consistency of results
i. Interrater reliability – more than one person measures performance
ii. Test-retest reliability – consistency of results over time
d. Acceptability – meets practical standards
e. Specific feedback – performance measure should specifically tell employees what is
expected of them and how they can meet those expectations
5. Understand the different evaluation methods and their benefits and disadvantages.
Simple ranking – requires managers to rank employees in their group from the highest performer to
the poorest performer
Forced-Distribution – assigns a certain percentage of employees to each category in a set of
categories
Graphic Rating Scale – performance measure that 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.
BARS – method of performance measurement that rates behavior in terms of a scale showing
specific statements of behavior that describe different levels of performance.
Management by Objectives = MBO (cascading goals) – system in which people at each level of the
organization set goals in a process that flows from top to bottom, so employees at all levels are
contributing to the organization’s overall goals. These goals become the standards for evaluating
each employee’s performance.
360 reviews – performance measurement that combines information from the employee’s
managers, peers, subordinates, self, and customers.
6. Why are self-evaluations used?
Typically sent before the review, Major contributions and accomplishments, Strengths and areas of
improvement, What additional resources would help to do your job …
7. What are benefits and disadvantages of merit-based systems?
8. Why do managers inflate and deflate ratings?
Inflation:
• Avoid confrontation.
• Little to no raises? Give employee most money possible.
• Feel sorry for someone.
HRIR3021 Exam #3 Study Guide- Fall 2016
Performance Management- Chapter Eight
1. What is the definition of performance management and its purpose?
Performance management = The means through which managers ensure that employees' activities and
outputs contribute to the organization's goals
Purposes:
Strategic – effective performance management helps the organization achieve its business
objectives
Administrative – ways in which organizations use the system to provide information for the
day-to-day decisions about salary, benefits, and recognition problems
Developmental – serves as a basis for developing employee’s knowledge and skills
2. What are the steps in the performance management process? How is this different from the
traditional model?
1. Define performance outcomes for company division and department
2. Develop employee goals, behavior, and actions to achieve outcomes
3. Provide support and ongoing performance discussions
4. Evaluate performance (annual formal performance review)
5. Identify improvements needed
6. Provide consequences for performance results
Traditional model:
3. Compare and contrast types of performance measures, subjective and objective.
What’s wrong with rating traits and attributes?
What are result-oriented measures vs. behavioral?
Behavior-based appraisals: gets the job done, comes to work on time, technically astute; often
comparing people to one another or to a standard; trait focused; work ethic, attitude, initiative
, Results-based appraisals: focus on what employee accomplishes: hired ten people in three
months with satisfactory performance ratings, sold 20 new products
Objectives measures: production measures, sales, business unit performance measures, MBO, SMART
How does opportunity bias affect a seemingly objective measure, such as sales?
This type of bias occurs when, for instance, an employee is not given a good sales
territory like other employees and then is subsequently given a lower performance rating
because of it.
4. Explain criteria used to evaluate an effective performance evaluation system.
a. Fit with the organization’s strategy – support its goals & culture
b. Valid – measure all relevant aspects of performance
c. Reliable – consistency of results
i. Interrater reliability – more than one person measures performance
ii. Test-retest reliability – consistency of results over time
d. Acceptability – meets practical standards
e. Specific feedback – performance measure should specifically tell employees what is
expected of them and how they can meet those expectations
5. Understand the different evaluation methods and their benefits and disadvantages.
Simple ranking – requires managers to rank employees in their group from the highest performer to
the poorest performer
Forced-Distribution – assigns a certain percentage of employees to each category in a set of
categories
Graphic Rating Scale – performance measure that 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.
BARS – method of performance measurement that rates behavior in terms of a scale showing
specific statements of behavior that describe different levels of performance.
Management by Objectives = MBO (cascading goals) – system in which people at each level of the
organization set goals in a process that flows from top to bottom, so employees at all levels are
contributing to the organization’s overall goals. These goals become the standards for evaluating
each employee’s performance.
360 reviews – performance measurement that combines information from the employee’s
managers, peers, subordinates, self, and customers.
6. Why are self-evaluations used?
Typically sent before the review, Major contributions and accomplishments, Strengths and areas of
improvement, What additional resources would help to do your job …
7. What are benefits and disadvantages of merit-based systems?
8. Why do managers inflate and deflate ratings?
Inflation:
• Avoid confrontation.
• Little to no raises? Give employee most money possible.
• Feel sorry for someone.
