Deck 10: Pay for Performance: Performance Appraisal and Plan Design

Question 1

Which of the following errors means consistently rating someone higher than is deserved?

A)central tendency error
B)leniency error
C)spillover error
D)recency error
E)halo error

Answer 1

B

Question 2

Which of the following is a key element essential for a good outcome in the appraisal process?

A)Employees should not be kept in the dark about how the appraisal system operates.
B)Employees should not be involved in developing performance dimensions.
C)Raters should not attempt to diagnose the reason for performance problems in advance.
D)Raters should be discouraged from maintaining a diary of employee performance.
E)Performance dimensions should be isolated from the strategic plan of the company.

Answer 2

A

Question 3

When the organization wants to encourage employees to work together cooperatively, it may consider offering:

A)allowances
B)individual incentives
C)cost-of-living adjustment
D)group incentives
E)merit increase

Answer 3

D

Question 4

An appraiser giving favourable ratings to all job duties based on impressive performance in just one job function is committing a error.

A)recency
B)leniency
C)spillover
D)halo
E)first impression

Question 5

Which of the following theories focuses more on content and less on the nature of the exchange?

A)agency theory
B)Maslow's Hierarchy of Needs theory
C)reinforcement theory
D)expectancy theory
E)equity theory

Question 6

Which of the following wage components is most risky to the employee?

A)a-the-board increase
B)profit-sharing
C)lump-sum bonus
D)merit pay
E)g-sharing

Question 7

Which of the following is true of a performance appraisal method where peers act as raters?

A)Leniency errors in this method are absent.
B)In situations where teamwork is promoted, this method is ideal.
C)An accurate perspective of typical performance can be obtained by this method.
D)This is the most reliable of all methods
E)Scope for group tensions is absent in this method.

Question 8

In which of the following situations are larger incentive components appropriate?

A)when organizations have a highly variable annual performance and employees have jobs that fluctuate greatly in terms of what's expected of them
B)when organizations have a stable annual performance and employees have jobs that are fairly stable
C)when organizations work in an unstable external environment and employees have stable jobs with little fluctuations
D)when organizations have a stable annual performance and employees have jobs that fluctuate greatly in terms of what's expected of them
E)organizations have a highly variable annual performance and employees have jobs that are fairly stable

Question 9

According to the theory of motivation, challenging performance targets influence greater intensity and duration in employee performance.

A)expectancy
B)goal setting
C)equity
D)Maslow's Hierarchy of Needs
E)Herzberg's Two-Factor

Question 10

theory of motivation states that people cognitively evaluate potential behaviours in relation to rewards offered in exchange.

A)Two-factor
B)Equity
C)Expectancy
D)Reinforcement
E)Agency

Question 11

theory of motivation states that employees and management/owners both will act opportunistically to obtain the most favourable exchange possible.

A)Two-factor
B)Reinforcement
C)Agency
D)Equity
E)Expectancy

Question 12

error in the performance appraisal process rates all employees as average.

A)Strictness error
B)Recency error
C)Central tendency
D)Halo error
E)Spillover error

Question 13

Which of the following factors cannot motivate performance according to Herzberg's Two-Factor theory?

A)achievement
B)empowerment
C)promotion
D)recognition
E)security

Question 14

is a ranking process that involves ranking the best employee, then the worst employee, then the next best and worst, and so on.

A)Paired comparison ranking
B)Behaviourally anchored rating scale
C)Alternation ranking
D)Management by objectives
E)Performance outcome scale

Question 15

theory of motivation states that people are concerned about fairness of the reward outcomes exchanged for employee inputs.

A)Two-factor
B)Reinforcement
C)Agency
D)Equity
E)Expectancy

Question 16

According to Herzberg's Two-Factor theory, factors prevent behaviours in their absence, but cannot motivate performance in their presence.

A)instrumentality
B)expectancy
C)valence
D)satisfaction
E)hygiene

Question 17

is a performance rating method that is based on meeting objectives set at the beginning of the performance review period.

A)Behaviour rating scales
B)Paired comparison performance objectives
C)Adjective rating scales
D)Management by objectives
E)Behaviourally anchored objectives

Question 18

refers to a ranking process that forces raters to make ranking judgments about discrete pairs of people.

A)Simple ranking
B)Paired comparison performance ranking
C)Behaviourally anchored paired rating
D)Management by objectives
E)Alternation ranking

Question 19

Perceived fairness of pay or other work outcomes received is called:

A)haloed justice.
B)distributive justice.
C)qualitative justice.
D)procedural justice.
E)objective justice.

Question 20

is a process involving the determination of what is important to a person, and offering it in exchange for desired behaviour.

A)Evaluation
B)Procedural justice
C)Socialization
D)Motivation
E)Workflow

Question 21

Lump-sum bonus is granted to all employees irrespective of performance.

Question 22

What is the effectiveness of reward systems dependent on?

Question 23

One of the major drawbacks of using peers as raters is that they have a distorted perspective of typical performance.

Question 24

Which of the following wage components refers to wage increase granted regardless of performance?

A)group incentive
B)individual incentive
C)lump-sum bonus
D)profit-sharing increase
E)cost-of-living increase

Question 25

Which of the following is an essential feature of Maslow's theory?

A)Employees are motivated when perceived outputs are equal to perceived inputs.
B)Challenging performance goals influence greater intensity and duration in employee performance.
C)Employees will react negatively if they perceive that others are paid more for the same effort.
D)Motivation is the product of three perceptions: expectancy, instrumentality, and valence.
E)Higher-order needs become motivating after lower-order needs have been met.

Question 26

Seniority increases relate pay increases to a preset progression pattern based on seniority.

Question 27

A low incentive component is appropriate in organizations with highly variable annual performance.

Question 28

The actual appraisal process should provide coaching and suggestions for improving future performance.

Question 29

Employee turnover is much higher for poor performers when pay is based on:

A)company performance
B)departmental performance
C)individual performance
D)project performance
E)team performance

Question 30

Distributive justice refers to perceived fairness of pay or other work outcomes received.

Question 31

Seniority increases tie pay increases to a preset progression pattern based on:

A)how long after 65 years of age that an employee stays with the company
B)incentives
C)seniority
D)pay range
E)age of the organization

Question 32

Turnover is much higher for poor performers:

A)when pay is based on industry standards
B)when pay is based on individual performance
C)when pay is based on relational returns
D)when pay is based on company profits
E)when pay is based on group incentive plans

Question 33

According to the reinforcement theory of motivation, rewards do not affect performance.

Question 34

Operationally, the key to designing a pay-for-performance plan rests in setting performance standards.

Question 35

A 360-degree feedback assesses employee performance from five points of view: supervisor, peer, self, customer, and subordinate.

Question 36

One compromise in the use of self-ratings is to use them for administrative rather than developmental purposes.

Question 37

Raters should notice only performance-related factors when they observe employee behaviour.

Question 38

According to Maslow's Hierarchy of Needs theory, higher-order needs motivate even if lower-order needs are not met.

Question 39

Evaluation forms that produce numerical ratings cause administrative inconveniences.

Question 40

A behaviourally anchored rating scale (BARS)is a performance rating scale that uses behavioural descriptions as anchors for different levels of performance on the scale.

Question 41

What are the two common elements in the various rating formats?

Question 42

List some common errors in the appraisal process.

Question 43

Identify 7 items that a successful appraisal process should provide.

Question 44

What are the different strategies to better understand and measure job performance?

Question 45

Discuss the issue between merit pay and employee performance.

Question 46

Describe how management by objectives (MBO)is carried out.

Question 47

What are the three general factors on which employee performance depend on?

Question 48

What is merit pay's level of risk to an employee?

Question 49

Discuss the two types of motivation theories.

Question 50

What is a pay-for-performance plan?

Question 51

What type of performance appraisal method includes feedback from up to five sources: supervisor, peers, self, customers, and subordinates?