Question 1

The larger the number tasks and the greater the authority required in a job, then the evaluation of the person in the job will move from ____ to ____.

Accepted Answer

As the number of tasks and authority required increases, the evaluation of the person in the job will move from subjective to objective. This is because objective measures such as performance metrics and outcomes become more important in evaluating the person's success in their role. On the other hand, subjective evaluations based on personal opinions or biases may not be reliable indicators of job performance in roles with more responsibilities. Risk-based evaluations are not necessarily tied to the size of the job, but rather to the level of risk associated with the job.

Question 2

If a company wants an employee to average about $14.00 per hour to produce 60 units per hour, plus it provides a base salary of $7.00 per hour, what should be the incentive rate per hour?

Accepted Answer

The incentive rate per hour should be $0.117. This is because the company wants the employee to average about $14.00 per hour to produce 60 units per hour, plus it provides a base salary of $7.00 per hour. So, the incentive rate per hour should be $14.00 - $7.00 = $7.00. And, the incentive rate per unit should be $7.00 / 60 units = $0.117.

Question 3

Employee performance evaluation is needed because:

Accepted Answer

Employee performance evaluation is important for determining rewards and sanctions such as wages, raises, bonuses, and dismissals based on employee productivity and performance. It is a fair and objective way to measure employee performance and ensure that employees are meeting the required standards and expectations of the organization.

Question 4

A salesperson's bonus for this year is based on meeting targets based on last year's sales. This year turns out to be an unusually good year. The salesperson is likely to:

Accepted Answer

The answer of A salesperson's bonus for this year is...

Question 5

Objective measures included in an evaluation and incentive system might include:

Accepted Answer

Meeting or exceeding sales goals is an objective measure that can be quantified and measured easily. Improved quality of communications with subordinates, reorganizing a department for improved human relations, and recognition for finding and solving problems are subjective measures that can be difficult to quantify and measure accurately.

Question 6

Gaming refers to a situation where:

Accepted Answer

Gaming refers to when employees inappropriately increase their output to gain commissions.

Question 7

In a very basic principal-agent model, output is contractible if:

Accepted Answer

In a basic principal-agent model, output is usually assumed to be a single measurable output that can be clearly defined and contracted for. If the employee is producing multiple products, it may be difficult to attribute the success or failure of each product to the efforts of the employee alone. If the employee is working in a team, it may be difficult to isolate the contribution of the individual employee to the overall output of the team. Therefore, a single output that can be clearly attributed to the efforts of the employee is contractible.

Question 8

Beyond some minimum level of effort, it usually expected that teamwork will have the impact of _______ relative to individual effort.

Accepted Answer

Teamwork is often beneficial in increasing output beyond what individual effort can achieve. When people work together, they can pool their skills and knowledge, share ideas, and support each other to achieve more than they could on their own. While there may be some reduction in output initially as team members get to know each other and figure out how to work together effectively, the overall impact should be an increase in output.

Question 9

Which of the following should not be on a list of things you should do to get an honest evaluation?

Accepted Answer

Taking your boss to dinner before evaluations would be considered unethical and could compromise the honesty and objectivity of the evaluation. The other options are appropriate for demonstrating your value and contributions to the company.

Question 10

If managers were rewarded for meeting quota, then:

Accepted Answer

While some managers may try to exceed quota significantly in order to impress their superiors or to secure future rewards, others may be content with simply meeting quota and avoiding potential risks associated with overpromising and underdelivering. Therefore, the most likely outcome is that some managers will just barely exceed quota.

Question 11

Employee performance evaluation is needed because:

Accepted Answer

Employee performance evaluation provides feedback on achievement and indicates potential for improvement. This helps in identifying strengths and weaknesses of employees and helps in developing strategies for employee training, development, and career advancement. It also helps in identifying high performers and providing them with suitable rewards and recognition. Performance evaluation is an important tool for ensuring employee engagement and retention, and for improving overall organizational performance. Choices A, B, and C are incorrect as they are not relevant or appropriate justifications for employee performance evaluation.

Question 12

In the model  management cannot observe:

Accepted Answer

The answer of In the model  management cannot observe:
...

Question 13

Employees often limit their output and engage in soldiering because of the fear that if they exceed output levels this time, management will increase output goals for the next time period. This is called the:

Accepted Answer

The situation described in the question is an example of the ratchet effect, where employees limit their performance because of the fear that higher performance standards will be set in the future.

Question 14

Setting performance goals based on historical data and past performance creates:

Accepted Answer

Setting performance goals based on historical data and past performance can create the ratchet effect, which occurs when goals are consistently set based on past performance without consideration for current circumstances or potential improvements. This can lead to complacency and a lack of motivation to improve beyond the established baseline.

Question 15

Which of the following is not a problem with subjective performance evaluations?

Accepted Answer

The ability to rank employees on a standard rating scale is not a problem with subjective performance evaluations. This is actually a benefit of using a standardized scale to evaluate performance as it allows for more objective comparisons between employees. The other options, shirking among supervisors, forced distributions of results by upper management, and use of influence to bias outcomes, are all common problems associated with subjective performance evaluations.

Question 16

While production teams are important sources of productivity in business, they can suffer from the _______ problem.

Accepted Answer

The free rider problem refers to the issue of some members of a team not putting in the same effort as others, which can lead to a decrease in productivity. This is a common problem in production teams where members may feel their individual effort does not contribute significantly to the overall output.

Question 17

Presidents who constantly react to their ratings in the Gallup Poll are:

Accepted Answer

Presidents who constantly react to their ratings in the Gallup Poll are likely to take popular short term actions rather than those with longer historical value. They may prioritize actions that will increase their approval ratings, rather than considering the long-term impact of their decisions.

Question 18

If output Q = 8.5e (e=units of effort) and Wage W = $6.70 + .25Q, then 20 units of effort are worth _____ to the firm.

Accepted Answer

We can use the given formula to find the wage for 20 units of effort:

Q = 8.5e
Q = 8.5(20)
Q = 170

W = $6.70 + 0.25Q
W = $6.70 + 0.25(170)
W = $6.70 + $42.50
W = $49.20

Therefore, 20 units of effort are worth $49.20 to the firm.

Question 19

In a very basic principal-agent model, output is contractible if:

Accepted Answer

The employee works independently and cannot game the process.

Quiz 16: Individual Performance Evaluation

The larger the number tasks and the greater the authority required in a job, then the evaluation of the person in the job will move from to .

If a company wants an employee to average about $14.00 per hour to produce 60 units per hour, plus it provides a base salary of $7.00 per hour, what should be the incentive rate per hour?

Employee performance evaluation is needed because:

A salesperson's bonus for this year is based on meeting targets based on last year's sales. This year turns out to be an unusually good year. The salesperson is likely to:

Objective measures included in an evaluation and incentive system might include:

Gaming refers to a situation where:

In a very basic principal-agent model, output is contractible if:

Beyond some minimum level of effort, it usually expected that teamwork will have the impact of _______ relative to individual effort.

Which of the following should not be on a list of things you should do to get an honest evaluation?

If managers were rewarded for meeting quota, then:

Employee performance evaluation is needed because:

In the model management cannot observe:

Employees often limit their output and engage in soldiering because of the fear that if they exceed output levels this time, management will increase output goals for the next time period. This is called the:

Setting performance goals based on historical data and past performance creates:

Which of the following is not a problem with subjective performance evaluations?

While production teams are important sources of productivity in business, they can suffer from the _______ problem.

Presidents who constantly react to their ratings in the Gallup Poll are:

If output Q = 8.5e (e=units of effort) and Wage W = $6.70 + .25Q, then 20 units of effort are worth _____ to the firm.

In a very basic principal-agent model, output is contractible if: