CPM CPM Performance Management & Appraisal 1 — Questions and Answers
Question 1: The PRIMARY purpose of a performance appraisal in management is to:
- Document employee weaknesses for termination
- Provide feedback and support employee development and goal alignment (Correct answer)
- Satisfy legal compliance only
- Compare employees for salary cuts
Correct answer: Provide feedback and support employee development and goal alignment
Performance appraisals are designed to give employees structured feedback that drives development and aligns individual performance with organizational goals.
Question 2: Which performance appraisal method collects feedback from supervisors, peers, subordinates, and the employee themselves?
- Management by objectives (MBO)
- 360-degree feedback (Correct answer)
- Forced ranking
- Critical incident method
Correct answer: 360-degree feedback
360-degree feedback gathers a comprehensive view of performance from multiple sources including peers, direct reports, supervisors, and self-assessment.
Question 3: SMART goals in performance management are defined as goals that are:
- Simple, manageable, achievable, relevant, and timely
- Specific, measurable, achievable, relevant, and time-bound (Correct answer)
- Strategic, motivational, actionable, results-based, and trackable
- Structured, meaningful, aligned, realistic, and thorough
Correct answer: Specific, measurable, achievable, relevant, and time-bound
SMART goals must be Specific, Measurable, Achievable, Relevant, and Time-bound to provide clear direction and enable objective evaluation.
Question 4: Which appraisal bias occurs when a manager rates all employees similarly, ignoring actual performance differences?
- Halo effect
- Recency bias
- Central tendency error (Correct answer)
- Leniency error
Correct answer: Central tendency error
Central tendency error happens when a rater avoids extreme ratings and clusters all evaluations near the middle of the scale.
Question 5: Management by Objectives (MBO) involves:
- Managers unilaterally setting all performance standards
- Employees and managers jointly setting measurable goals (Correct answer)
- Ranking employees against each other
- Evaluating only technical skills
Correct answer: Employees and managers jointly setting measurable goals
MBO is a participative process in which managers and employees collaboratively establish specific, measurable objectives for the evaluation period.
Question 6: A performance improvement plan (PIP) is MOST appropriately used when:
- Preparing a high performer for promotion
- Documenting disciplinary action for termination purposes only
- An employee is not meeting expectations and needs a structured improvement path (Correct answer)
- Onboarding new employees
Correct answer: An employee is not meeting expectations and needs a structured improvement path
A PIP provides underperforming employees with specific expectations, support resources, and timelines to help them improve to acceptable performance levels.
CPM CPM Performance Management & Appraisal 1
The PRIMARY purpose of a performance appraisal in management is to: