Human Resources Performance Management 1 — Questions and Answers
Question 1: What is a 'SMART' goal in performance management?
- Simple, Manageable, Achievable, Relevant, Timely
- Specific, Measurable, Achievable, Relevant, Time-bound (Correct answer)
- Strategic, Meaningful, Aligned, Realistic, Tracked
- Supported, Monitored, Assessed, Reviewed, Tracked
Correct answer: Specific, Measurable, Achievable, Relevant, Time-bound
SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound, providing clear criteria for evaluating performance.
Question 2: What is 'halo effect' as a performance appraisal bias?
- Allowing one outstanding trait to positively influence ratings on all other dimensions (Correct answer)
- Rating all employees above average
- Giving better ratings to employees who work overtime
- Focusing only on recent performance rather than the full review period
Correct answer: Allowing one outstanding trait to positively influence ratings on all other dimensions
The halo effect occurs when a rater allows one positive characteristic to overly influence ratings of all other performance dimensions.
Question 3: What is 'management by objectives' (MBO)?
- Managing only through written policies and objectives
- A process where managers and employees jointly set goals, and performance is evaluated against those goals (Correct answer)
- Setting objectives only at the senior management level
- A budgeting process for HR departments
Correct answer: A process where managers and employees jointly set goals, and performance is evaluated against those goals
MBO is a performance management approach in which managers and employees collaboratively establish measurable objectives and evaluate performance against them.
Question 4: What is 'central tendency error' in performance appraisals?
- Rating all employees as exceptional performers
- The tendency to rate all employees near the middle of the rating scale, avoiding extremes (Correct answer)
- Rating employees based on their central job duty only
- Giving the same rating as the previous year
Correct answer: The tendency to rate all employees near the middle of the rating scale, avoiding extremes
Central tendency error occurs when raters avoid using the high or low ends of the rating scale and cluster all ratings near the middle.
Question 5: What is the purpose of a 'performance improvement plan' (PIP)?
- To recognize top performers for advancement
- To document performance deficiencies and establish a structured plan with specific expectations and support for improvement (Correct answer)
- To conduct annual compensation reviews
- To identify training needs across the department
Correct answer: To document performance deficiencies and establish a structured plan with specific expectations and support for improvement
A PIP formally identifies gaps between current and expected performance, sets clear goals, provides support resources, and establishes a timeframe for improvement.
Question 6: What is 'forced ranking' or 'stack ranking' in performance management?
- Rating employees alphabetically
- A system requiring managers to distribute performance ratings on a fixed curve (e.g., top 20%, middle 70%, bottom 10%) (Correct answer)
- Ranking job candidates for open positions
- Ordering employees by seniority for promotion
Correct answer: A system requiring managers to distribute performance ratings on a fixed curve (e.g., top 20%, middle 70%, bottom 10%)
Forced ranking requires managers to distribute ratings across a predetermined distribution, ensuring differentiation between high and low performers.
Human Resources Performance Management 1
What is a 'SMART' goal in performance management?