Business strategy, performance management, and compensation systems should be carefully linked.

• True

• False

Accurate performance appraisals can indicate to employees where they are deficient in their work.

• True

• False

Objective performance measures are usually less reliable than subjective ones because of the risk of rater biases.

• True

• False

The recency effect is NOT a performance evaluation bias that occurs in employee performance appraisals.

• True

• False

Performance appraisals are used for compensation adjustments, training needs, and placement decisions.

• True

• False

It is generally agreed that normally the best person to evaluate employee performance is:

• the immediate supervisor

• a specialist from the human resource department

• an outside HR evaluation professional

• a supervisor from another (but similar) department

• a group consisting of various management personnel

Some managers, for various reasons, do not like to evaluate employees as either "effective" or "ineffective" and so tend to rate everyone as "average." This is referred to as the:

• recency effect

• leniency bias

• error of central tendency

• strictness bias

• halo effect

Direct observation occurs when a rater actually sees the employee's __________.

• employment records

• assessments

• rating scale

• performance

• balanced scorecard

Which of the following is NOT one of the six steps for creating a Performance Improvement Plan (PIP)?

• develop an action plan

• bring in other members of the employee's team to coach the employee

• review the performance improvement plan

• follow up

• conclusion

The most used form of performance appraisal (though not necessarily the most effective) that requires a rater to provide a subjective evaluation of an individual's performance is called:

• checklist

• rating scale

• self-assessment scale

• forced-choice method

• paired-comparisons method