CME Performance Management & Metrics 2 — Questions and Answers
Question 1: A manager notices that a high-performing employee's output has declined after a promotion. Which performance management concept best explains this phenomenon?
- Regression to the mean
- The Peter Principle (Correct answer)
- Dunning-Kruger Effect
- Hawthorne Effect
Correct answer: The Peter Principle
The Peter Principle states that employees are promoted until they reach their level of incompetence, explaining performance decline after promotion.
Question 2: Which metric measures the percentage of time a machine or system is operational compared to total scheduled time?
- Utilization rate
- Overall Equipment Effectiveness (OEE)
- Availability rate (Correct answer)
- Throughput efficiency
Correct answer: Availability rate
Availability rate specifically measures the ratio of actual operating time to planned production time, isolating downtime losses.
Question 3: In a Balanced Scorecard framework, which perspective focuses on employee skills, technology, and organizational culture?
- Financial perspective
- Customer perspective
- Internal process perspective
- Learning and growth perspective (Correct answer)
Correct answer: Learning and growth perspective
The learning and growth perspective addresses the intangible assets that enable the other three BSC perspectives to succeed.
Question 4: A company's net promoter score (NPS) is calculated using which formula?
- Total promoters divided by total detractors
- % Promoters minus % Detractors (Correct answer)
- % Promoters plus % Passives divided by 2
- Total responses minus % Detractors
Correct answer: % Promoters minus % Detractors
NPS = % Promoters (score 9-10) minus % Detractors (score 0-6), resulting in a score from -100 to +100.
Question 5: What is the primary purpose of a performance calibration session in organizations?
- To set individual performance targets for the coming year
- To ensure consistent and fair application of performance ratings across teams (Correct answer)
- To identify employees eligible for immediate termination
- To conduct 360-degree feedback collection
Correct answer: To ensure consistent and fair application of performance ratings across teams
Calibration sessions bring managers together to compare and align performance ratings, reducing bias and ensuring consistency across departments.
Question 6: Which type of performance standard is expressed in quantitative terms and can be objectively measured?
- Subjective standard
- Behavioral standard
- Objective standard (Correct answer)
- Comparative standard
Correct answer: Objective standard
Objective standards use measurable quantities like units produced, error rates, or revenue generated, leaving no room for interpretation.
Question 7: A dashboard shows a KPI is 'in the red.' In most performance management systems, what does this indicate?
- The metric is trending upward
- Performance is meeting or exceeding target
- Performance is significantly below target threshold (Correct answer)
- Data collection for this metric is incomplete
Correct answer: Performance is significantly below target threshold
Red in traffic-light reporting systems signals that a KPI has fallen below an acceptable threshold and requires immediate management attention.
CME Performance Management & Metrics 2
A manager notices that a high-performing employee's output has declined after a promotion.
Which performance management concept best explains this phenomenon?