CAIIB ABM Module B UNIT 14 MCQ – Performance Management

Correct Answer: C. To develop employees and create an environment for their best contribution. Human Resource Development focuses on nurturing employee potential and fostering a work atmosphere where employees can perform optimally.

Correct Answer: B. To know and communicate employee contributions and identify areas for improvement. Measuring performance helps understand individual contributions and provides a basis for development and enhancement.

Correct Answer: B. Whether or not to appraise personnel and their performance. Flippo states that evaluation of employee performance is inevitable; the choice lies only in the method used.

Correct Answer: C. A systematic evaluation of the work performed by employees against predefined standards. Performance appraisal involves a structured assessment of employee work based on established criteria like knowledge, performance, attitude, etc.

Correct Answer: C. Actions like placement, promotion selection, financial rewards, and other differential treatment. Heyel highlights that appraisal outcomes inform various administrative decisions requiring differentiation among employees.

Correct Answer: C. Counselling. McGregor specifies counselling by the superior as a distinct need involving feedback and addressing performance issues, although some experts group it under the developmental need.

Correct Answer: B. To improve the efficiency of the organisation. While specific objectives exist, the ultimate goal of performance appraisal is to enhance the overall effectiveness and productivity of the organisation.

Correct Answer: C. To maintain an inventory of employee skills and identify training needs. Appraisals help organisations understand their human resource capabilities and pinpoint areas requiring development.

Correct Answer: B. By applying the same rating scales to all employees, making them comparable. A key use is to rate employees consistently using common criteria, allowing for fair comparisons.

Correct Answer: B. By requiring supervisors to become keen observers of employee performance. The process encourages supervisors to pay closer attention to their team’s work and behaviours, enhancing their observational skills.

Correct Answer: C. Setting the performance standards in advance. The process begins by establishing clear, realistic, and measurable benchmarks against which performance will be assessed.

Correct Answer: D. Initiating corrective measures and acting on positive performance (e.g., rewards, training). The process concludes with taking appropriate actions based on the appraisal results, such as development plans or rewards.

Correct Answer: B. Traditional methods emphasise rating personality traits, while modern methods focus on job achievement results. Modern approaches shifted towards evaluating actual results and achievements, considering it more objective than assessing personality.

Correct Answer: C. Free Form Essay Method. This method is unstructured, allowing the appraiser complete freedom to write comments, but suffers from subjectivity and difficulty in comparison.

Correct Answer: C. Paired Comparison Method. This technique simplifies ranking large groups by comparing employees in pairs and determining overall rank based on how often an employee is preferred.

Correct Answer: B. Graphic or Linear Rating Method. This common method evaluates both personal traits and work output, although it can be subjective and assumes equal importance of traits across jobs.

Correct Answer: C. To minimise appraiser bias by requiring ratings to fit a predetermined distribution scale. This method forces ratings into categories (e.g., top 10%, middle 80%, bottom 10%) to counteract tendencies like leniency or central tendency.

Correct Answer: C. It involves multiple raters, leading to a more thorough assessment with less bias. Having a group evaluate an employee provides multiple perspectives, reducing individual bias, although it is time-consuming.

Correct Answer: C. Assessment Centre Workshops. Assessment centres employ various simulation exercises and multiple observers to assess candidates’ skills and potential in job-related scenarios.

Correct Answer: C. To conduct routine daily performance monitoring. Assessment Centres are intensive evaluations for specific purposes like potential assessment, selection, or identifying development needs, not for day-to-day performance tracking.

Correct Answer: B. Minimising external controls and increasing motivation through joint goal setting and participation. MBO focuses on results achieved through collaborative goal setting between employee and superior, aiming to boost motivation.

Correct Answer: C. Jointly setting short-term performance goals by employees and their superiors. A key feature of MBO is the collaborative process where employees and managers agree on specific, measurable objectives.

Correct Answer: B. The overall human performance of the organisation by valuing personnel as capital. This method assesses the collective value of human resources to the organisation, not individual performance appraisals.

Correct Answer: C. Critical incidents illustrating specific examples of effective and ineffective job performance. BARS uses specific behavioural examples (anchors) derived from critical incidents to make ratings more concrete and objective.

Correct Answer: C. A wide range of stakeholders including seniors, peers, subordinates, customers, and the employee themself. This method gathers feedback from multiple sources surrounding the employee for a comprehensive view.

Correct Answer: C. It essentially involves conducting the 360 Degree appraisal twice, with feedback and guidance provided between the two rounds. The 720 Degree method adds a follow-up appraisal and feedback session to the standard 360 Degree process.

Correct Answer: C. A three-part system involving self-appraisal, appraisal by the reporting authority, and review by the reporting authority’s superior. This multi-layered approach incorporates employee input, supervisor assessment, and higher-level review for balance.

Correct Answer: C. The skills required for a higher position may differ significantly from those needed for the current job. An employee might excel in their current role but lack the different skills or attributes needed for promotion, necessitating separate potential appraisal.

Correct Answer: B. It assumes past performance guarantees future success in a different, higher role, which may not be true. Relying only on current performance for promotion is a prediction that might fail if the higher role requires different competencies, leading to potential mismatches like losing a good specialist to create a poor manager.

Correct Answer: C. Assessment Centre Method. Assessment Centres, with their focus on simulating higher-level tasks and observing relevant behaviours, are highlighted as particularly useful for evaluating an employee’s potential for advancement alongside their current performance.

Correct Answer: C. Lack of transparency and feedback, often perceived as mysterious. The traditional confidential report was kept secret from the employee, offering no feedback or developmental input.

Correct Answer: C. It does not consider employee development needs. The secrecy and lack of feedback inherent in confidential reports mean they typically ignore the developmental aspect of appraisal.

Correct Answer: C. It reveals concern for performance and can foster openness and trust. Properly executed appraisals show organisational commitment to performance and can build trust through transparency and feedback.

Correct Answer: B. Allowing one prominent trait (positive or negative) to influence the entire assessment. The halo effect occurs when an appraiser lets a single characteristic overshadow all other aspects of performance, leading to a biased overall rating.

Correct Answer: C. Central tendency problem. This error involves clustering most ratings around the midpoint of the scale, avoiding high or low ratings, thus failing to differentiate performance levels.

Correct Answer: B. Sincerity, faithfulness, and objectivity. Effective appraisal requires the appraiser to be honest, dedicated to the process, and capable of setting aside personal likes or dislikes.

Correct Answer: C. It should be transparent and provide timely feedback. Transparency and providing regular, constructive feedback are essential components of an effective appraisal system.

Correct Answer: B. Discriminate effectively between high and low performers. A robust system must clearly differentiate varying levels of performance to be useful for development and decision-making.

Correct Answer: C. Latest Impression (Recency Effect). This error occurs when the appraiser gives undue weight to recent events or performance, ignoring the employee’s performance over the entire evaluation period.

Correct Answer: B. Horn Effect. This is the opposite of the halo effect, where a single negative characteristic unfairly biases the entire appraisal negatively.

Correct Answer: B. Appraising the employee’s performance over a period, often by the superior. Performance review is the act of evaluating how an employee has performed their job duties during a specific timeframe.

Correct Answer: B. Gather information like past goals, performance data, and form a preliminary view. Preparation involves collecting relevant data and understanding the context before meeting the employee, though final judgment should await discussion.

Correct Answer: C. To gather information, clarify performance, identify development areas, and agree on targets. The interview is a dialogue aimed at understanding performance, discussing development, and setting future goals collaboratively.

Correct Answer: D. Choosing a neutral venue or the appraisee’s workspace to ensure comfort. The environment should make the employee feel comfortable and free to speak openly, which is less likely in the superior’s office.

Correct Answer: C. Listener, encouraging the employee to speak. The appraiser should facilitate discussion by listening actively and encouraging the employee to share their perspective before offering feedback.

Correct Answer: C. Being suggestive, focusing on development needs, and adopting a problem-solving approach. Effective feedback is constructive, aimed at development, and collaboratively seeks solutions rather than simply assigning blame.

Correct Answer: B. A fault-finding approach. The aim of feedback should be constructive improvement, not simply identifying and highlighting faults or placing blame.

Correct Answer: A. Allowing the employee to do the maximum talking initially. Encouraging the employee to share their perspective first fosters a more open and collaborative discussion.

Correct Answer: C. Adopting a judgmental stand without providing reasoning. Making conclusive statements without explaining the basis or evidence erodes trust and hinders constructive dialogue.

Correct Answer: C. When an employee’s performance requires immediate and major corrective actions. Counselling is usually reserved for situations where performance issues are significant and require focused intervention beyond standard feedback.

Correct Answer: B. An activity where one individual helps another manage their own work-related decision-making. Counselling aims to empower the employee to take responsibility for and improve their performance or behaviour.

Correct Answer: B. To communicate performance feedback and expectations to help the employee improve. The core goal is clear communication about performance concerns and collaborative efforts towards improvement.

Correct Answer: C. Centre the discussion on performance issues, not the person, and aim to assist. Effective counselling addresses specific behaviours or performance gaps constructively, avoiding personal attacks.

Correct Answer: C. “Criticising without crippling.” Criticism should be delivered constructively, aiming to correct behaviour or performance without damaging the employee’s confidence or motivation.

Correct Answer: B. Continuing them in jobs that suit their capabilities, especially if devoted and loyal. Organisations often find suitable roles for reliable average performers rather than taking drastic measures, though performance pay may differ.

Correct Answer: B. By removing performance hurdles, enabling them to perform to their capability, leading to confidence. By addressing issues, counselling can help employees achieve better results, boosting their confidence and motivation.

Correct Answer: B. A knowledge, skill, or attitude (KSA) related to job performance. Competency refers to the underlying characteristics (knowledge, skills, attitudes) that enable effective job performance.

Correct Answer: C. Competence is task-oriented (job outputs), while Competency is person-oriented (attributes/behaviours). Competence relates to the ability to do the tasks of a job, whereas competency relates to the underlying traits enabling superior performance.

Correct Answer: B. Technical Competencies (Hard Skills). Technical or hard skills pertain to the specific knowledge and abilities required to perform technical aspects of a job.

Correct Answer: B. A definition of the competency and specific behaviour indicators. A good description defines the competency clearly and provides examples of observable behaviours that demonstrate it.

Correct Answer: C. Fully Effective Level. This level represents the standard proficiency expected from someone experienced and fully functional in their role.

Correct Answer: B. A catalogue containing definitions of general and specific competencies relevant to the organisation. It serves as a reference guide to the competencies valued and required across different roles within the company.

Correct Answer: B. Identifying the key competencies required for specific positions and the organisation. Competency mapping is the systematic identification of skills, knowledge, and behaviours crucial for success in various roles.

Correct Answer: B. Recruitment, training, performance management, and succession planning. Identified competencies inform decisions across the employee lifecycle, from hiring to development and promotion.

Correct Answer: B. Behavioural Event Interview (BEI). This approach uses BEI to gather detailed examples of past behaviours from performers to identify competencies linked to success.

Correct Answer: D. AT&T (Bell System). AT&T’s research and operational use of assessment centres starting in 1958 heavily influenced modern practices.

Correct Answer: C. A process using multiple testing techniques and simulations to evaluate job-relevant skills. It’s a methodology involving various exercises observed by multiple assessors to gauge suitability for a role.

Correct Answer: B. More than one assessor for every activity. Using multiple assessors for each activity helps ensure objectivity and reduces individual bias in evaluation.

Correct Answer: C. In-tray or In-basket Exercise. This exercise assesses skills like prioritisation, decision-making, delegation, and time management by simulating a realistic workload.

Correct Answer: C. Organisation of thoughts, logic, and attitude. Extempore presentations test the ability to think quickly, structure arguments logically, communicate clearly, and reveal attitudes under pressure.

Correct Answer: B. Identifying and clearly stating the purpose for conducting the centre. Defining the objective (e.g., recruitment, promotion) is the foundational step that guides all subsequent planning decisions.

Correct Answer: C. Preparing the list of critical competencies to be assessed. The specific competencies targeted for evaluation determine the choice of appropriate assessment methods and exercises.

Correct Answer: C. Test and validate them in the present context before use. Pre-existing tools need validation to ensure they are relevant and reliable for the specific purpose and context of the assessment centre.

Correct Answer: B. To ensure they strictly follow the specific criterion and procedure for that centre, ensuring uniformity. Training reinforces the specific standards and procedures for the current assessment, promoting consistency among assessors.

Correct Answer: C. An assessment manual. The manual serves as a comprehensive guide detailing all procedures, instructions, and criteria for conducting the assessment centre.

Correct Answer: C. Provide a briefing to the candidates about the purpose of the assessment centre. Briefing participants on the purpose helps set expectations and ensures they understand the context of the exercises.

Correct Answer: C. Making the reports of the assessment centre available to management for action. The process concludes with delivering the assessment results to decision-makers for subsequent actions like selection or development planning.

Correct Answer: B. Trained external experts or trained existing line managers. Assessors are usually specialists or managers who have received specific training in assessment methodologies.

Correct Answer: B. To avoid potential role conflict. HR’s involvement in outcomes (like promotion or recruitment) could conflict with the need for objective assessment if they also act as assessors.

Correct Answer: B. Ability to observe behaviour accurately and suspend judgment until all information is gathered. Objectivity requires careful observation, accurate recording, and withholding final judgment until all data is pooled and reviewed.

Correct Answer: C. The best predictor of future behaviour is past behaviour. BEI operates on the principle that how a person acted in past situations is the most reliable indicator of how they will act in the future.

Correct Answer: C. To gather detailed descriptions of behaviours demonstrating job-relevant abilities. The aim is to elicit specific examples (stories) that illustrate the candidate’s competencies in action.

Correct Answer: B. It provides the richest source of data about competencies predicting superior performance. BEI yields detailed behavioural data considered highly valuable for identifying job-critical competencies.

Correct Answer: B. Their description of a past situation, the task involved, the action they took, and the result. STAR provides a framework (Situation, Task, Action, Result) for recounting specific behavioural examples completely.

Correct Answer: C. To establish trust and rapport with the interviewee. This initial step aims to create a comfortable atmosphere where the interviewee feels relaxed and open to sharing experiences.

Correct Answer: C. Behavioural Events. This is the main part of the interview where detailed behavioural examples are elicited and explored.

Correct Answer: B. The respondent might provide biased or self-serving information. Since recall is subjective, interviewees might consciously or unconsciously present experiences in a more favourable light.

Correct Answer: B. The interpretation of responses relies heavily on the interviewer’s expertise and judgment. Extracting competencies and finding patterns from the interview data depends significantly on the interviewer’s skill, introducing potential subjectivity.

Correct Answer: C. Objective, fair, open, and trustworthy. The summary emphasizes that fairness, objectivity, and transparency are crucial for an effective appraisal process.

Correct Answer: C. Time-consuming and costly, requiring trained assessors. The summary acknowledges the reliability of ACs but also points out their significant resource requirements.

Correct Answer: C. Efficiently and effectively. The summary links identifying competencies to ensuring efficient and effective job performance.

Correct Answer: B. It influences the selection of relevant competencies and design of exercises. Understanding the specific job position is essential for tailoring the assessment to evaluate the most critical skills and behaviours needed for that role.

Correct Answer: B. To ensure candidates understand the task requirements and evaluation basis. Clear instructions are necessary for candidates to perform the exercises correctly and to ensure the assessment is fair and consistent.

Correct Answer: C. Accurately interpret candidate behaviours in relation to job demands. Understanding the job helps assessors evaluate whether observed behaviours are relevant and effective within the specific work environment.

Correct Answer: B. The concepts of ‘Competence’ (task-oriented) and ‘Competency’ (person-oriented). The summary highlights understanding the difference between job task proficiency (competence) and underlying behavioural attributes (competency) as important.

Correct Answer: B. Actions provide concrete evidence of behaviour and competence application. The BEI rationale is that actual past behaviour is a more reliable indicator of skills and motives than self-reported claims.

Correct Answer: C. Pooling of information. This principle requires assessors to integrate their observations and discuss discrepancies to reach a consensus rating, enhancing reliability.

Correct Answer: B. Specific past actions and behaviours in relevant situations. BEI delves into concrete past experiences to understand how a candidate actually behaved and performed.

Correct Answer: C. It provides diverse opportunities to observe behaviours related to different job dimensions. Using various exercises allows for a more comprehensive evaluation across a range of required competencies.

Correct Answer: C. Get the interviewee’s perspective on required KSA, potentially uncovering overlooked critical incidents. Asking the interviewee what they think is needed can prompt recall of additional relevant examples and validate previously identified competencies.