PHR Performance Management 1 — Questions and Answers
Question 1: Which performance appraisal method collects feedback from a subordinate's supervisors, peers, direct reports, and sometimes customers?
- Management by Objectives (MBO)
- 360-degree feedback (Correct answer)
- Behaviorally Anchored Rating Scale (BARS)
- Forced ranking
Correct answer: 360-degree feedback
360-degree feedback gathers input from multiple rater sources surrounding the employee—supervisors, peers, direct reports, and customers—providing a comprehensive performance view.
Question 2: A performance standard that is Specific, Measurable, Achievable, Relevant, and Time-bound is referred to as a:
- KPI
- SMART goal (Correct answer)
- Balanced Scorecard objective
- Critical incident
Correct answer: SMART goal
SMART is an acronym standing for Specific, Measurable, Achievable, Relevant, and Time-bound, and it describes a well-structured performance goal.
Question 3: Which performance review approach compares employees against each other rather than against a fixed standard?
- Graphic rating scale
- Narrative essay
- Relative ranking/forced distribution (Correct answer)
- Critical incident method
Correct answer: Relative ranking/forced distribution
Relative ranking or forced distribution ranks employees against one another, often placing a set percentage in each performance category.
Question 4: The 'halo effect' in performance appraisal occurs when a rater:
- Rates all employees in the middle of the scale to avoid conflict
- Allows one positive trait to positively influence ratings across all other dimensions (Correct answer)
- Rates recent events more heavily than past performance
- Gives higher ratings at the end of the year than at midyear
Correct answer: Allows one positive trait to positively influence ratings across all other dimensions
The halo effect is a cognitive bias where a single strong positive impression skews the rater's evaluation of all other performance dimensions upward.
Question 5: Under Management by Objectives (MBO), goals are set through a process that primarily involves:
- Top management dictating targets to employees
- HR setting universal company-wide standards
- Collaborative goal-setting between the employee and their manager (Correct answer)
- A committee of peers reviewing job requirements
Correct answer: Collaborative goal-setting between the employee and their manager
MBO is a collaborative process where managers and employees jointly establish specific, measurable objectives aligned with organizational goals.
Question 6: A 'leniency error' in performance appraisals refers to a rater tendency to:
- Rate all employees lower than their actual performance warrants
- Rate all employees higher than their actual performance warrants (Correct answer)
- Use only the midpoint of the rating scale
- Focus only on the most recent performance period
Correct answer: Rate all employees higher than their actual performance warrants
Leniency error occurs when a rater consistently assigns inflated ratings to avoid conflict or to appear supportive, resulting in ratings higher than deserved.
Question 7: Which of the following best describes the purpose of a performance improvement plan (PIP)?
- To document the employee's accomplishments for promotion consideration
- To formally outline specific deficiencies and provide a structured path to meet performance expectations (Correct answer)
- To notify the employee that termination is imminent within 30 days
- To create a record for compensation benchmarking purposes
Correct answer: To formally outline specific deficiencies and provide a structured path to meet performance expectations
A PIP formally identifies performance gaps, sets clear expectations and timelines, and provides resources to help the employee reach required performance standards.
PHR Performance Management 1
Which performance appraisal method collects feedback from a subordinate's supervisors, peers, direct reports, and sometimes customers?