CH8

Question 1

What is performance management?

Answer 1

A continuous process of setting goals, providing feedback, and improving employee performance.

Question 2

How is performance management different from performance appraisal?

Answer 2

PM is ongoing coaching & feedback 🏆, while PA is a formal evaluation (e.g., annual review) 📋.

Question 3

Why is performance management important?

Answer 3

Ensures employees contribute effectively, improves motivation, and supports career growth.

Question 4

What are common problems with performance appraisals?

Answer 4

Bias, focusing on past vs. future, inaccurate ratings, & one-time reviews instead of ongoing feedback.

Question 5

What is the Halo Effect?

Answer 5

One good trait overshadows all other performance factors.

Question 6

What is the Horn Effect?

Answer 6

One bad trait negatively impacts the entire evaluation.

Question 7

What is the Recency Effect?

Answer 7

The most recent actions (good or bad) are weighted too heavily.

Question 8

What is Leniency Bias?

Answer 8

Rating everyone too high (being too nice).

Question 9

What is Severity Bias?

Answer 9

Rating everyone too low (being too harsh).

Question 10

What is Central Tendency Bias?

Answer 10

Rating everyone as “average” to avoid extremes.

Question 11

What are the four key elements of a strong performance management system?

Answer 11

1️⃣ Strategic Relevance, 2️⃣ Criterion Deficiency, 3️⃣ Criterion Contamination, 4️⃣ Reliability.

Question 12

What is Strategic Relevance in performance evaluation?

Answer 12

Ensures individual performance standards align with company goals.

Question 13

What is Criterion Deficiency?

Answer 13

When not all job responsibilities are considered in the evaluation.

Question 14

What is Criterion Contamination?

Answer 14

When external factors unfairly affect performance ratings.

Question 15

What does reliability mean in performance management?

Answer 15

Ratings should be consistent and measurable over time.

Question 16

What is calibration in performance appraisals?

Answer 16

Managers compare employee ratings to ensure consistency and fairness.

Question 17

What are the main sources of performance feedback?

Answer 17

Managers, self-evaluations, peers, subordinates, customers, 360-degree feedback.

Question 18

What is 360-degree feedback?

Answer 18

A feedback system that incorporates multiple sources (supervisors, peers, subordinates, customers).

Question 19

What is Management by Objectives (MBO)?

Answer 19

Employees and managers set specific goals together 🎯.

Question 20

What are the four areas of the Balanced Scorecard?

Answer 20

1️⃣ Financial, 2️⃣ Customer, 3️⃣ Internal Processes, 4️⃣ Learning & Growth.

Question 21

What is the best performance evaluation method for objective results?

Answer 21

Results-based methods (e.g., MBO & Balanced Scorecard).

Question 22

What is the Graphic Rating Scale?

Answer 22

Employees are rated on a numerical scale (e.g., 1 to 5).

Question 23

What is the Critical Incident Method?

Answer 23

Focuses on specific events of excellent or poor performance.

Question 24

What is the Behaviorally Anchored Rating Scale (BARS)?

Answer 24

Uses specific behavioral examples to rate performance.

Question 25

What is the Behavioral Observation Scale (BOS)?

Answer 25

Measures how often specific behaviors occur.

Question 26

Why are behavior-based methods better than trait-based methods?

Answer 26

They focus on actions instead of personality traits, making them more objective.

Question 27

What is the biggest issue with trait-based evaluations?

Answer 27

They are too subjective and prone to bias.

Question 28

What are the three main categories of performance evaluation methods?

Answer 28

1️⃣ Trait-Based, 2️⃣ Behavior-Based, 3️⃣ Results-Based.

Question 29

What is a performance improvement plan (PIP)?

Answer 29

A structured plan for helping struggling employees improve performance.

Question 30

What are SMART goals?

Answer 30

Specific, Measurable, Achievable, Relevant, Time-bound goals for performance improvement.

Question 31

What are the three types of performance review meetings?

Answer 31

1️⃣ Tell-and-Sell, 2️⃣ Tell-and-Listen, 3️⃣ Problem-Solving.

Question 32

What should managers do before a performance review meeting?

Answer 32

Gather data, prepare examples, and create a structured plan.

Question 33

What is the best way to start a performance review?

Answer 33

Begin with positive feedback before discussing areas of improvement.

Question 34

How should managers handle negative feedback in reviews?

Answer 34

Be specific, use examples, and provide solutions instead of just criticism.

Question 35

What should you avoid saying in a performance review?

Answer 35

‘You need to improve.’ (Too vague!) Instead, say ‘Your project deadlines were missed 3 times this quarter; let’s create a plan to improve time management.’

Question 36

How do performance evaluations help with employee motivation?

Answer 36

They set clear expectations and provide feedback for growth & development.

Question 37

What is forced ranking?

Answer 37

Employees are ranked from best to worst, often leading to cutting the bottom performers.

Question 38

What is self-evaluation in performance management?

Answer 38

Employees assess their own performance before the formal review.

Question 39

What are the risks of customer evaluations?

Answer 39

Customers may be biased or uninformed about an employee’s full responsibilities.

Question 40

What are the best practices for continuous performance management?

Answer 40

Regular check-ins, real-time feedback, and goal updates.

Question 41

What is the most common legal risk in performance reviews?

Answer 41

Discrimination (reviews must be job-related & unbiased).

Question 42

What is the best way to avoid bias in performance reviews?

Answer 42

Use multiple feedback sources & standardized rating criteria.

Question 43

Why do companies avoid annual reviews?

Answer 43

They are too infrequent, biased, and fail to encourage continuous improvement.

Question 44

What is the main goal of performance management?

Answer 44

To help employees reach their full potential while meeting company goals.

Question 45

What should managers do after a performance review meeting?

Answer 45

Follow up with ongoing coaching and progress tracking.