PHR Performance Management 2 — Questions and Answers
Question 1: Which appraisal method requires managers to document specific examples of especially effective or ineffective employee behavior throughout the rating period?
- Graphic rating scale
- Forced ranking
- Critical incident method (Correct answer)
- Paired comparison
Correct answer: Critical incident method
The critical incident method involves recording specific behavioral examples—both positive and negative—that illustrate how well an employee performs key job duties.
Question 2: When developing performance standards, HR should ensure that they are primarily derived from:
- Industry salary surveys
- The organization's strategic goals and job analysis data (Correct answer)
- Competitor performance benchmarks only
- Employee self-assessments
Correct answer: The organization's strategic goals and job analysis data
Valid performance standards must reflect what the job actually requires, so they should be grounded in job analysis and aligned with organizational strategic goals.
Question 3: The 'recency effect' error in performance appraisals means the rater:
- Rates employees based only on events that occurred close to the review date (Correct answer)
- Rates employees based on events that occurred at the beginning of the rating period
- Gives identical ratings to all employees reviewed on the same day
- Inflates ratings for newer employees
Correct answer: Rates employees based only on events that occurred close to the review date
The recency effect causes raters to overweight events that occurred just before the review, distorting the evaluation of performance across the full rating period.
Question 4: A Behaviorally Anchored Rating Scale (BARS) improves upon graphic rating scales primarily by:
- Replacing numeric scores with written narratives only
- Tying scale points to specific observable behavioral examples (Correct answer)
- Allowing peers to set the performance criteria
- Eliminating all subjectivity from the appraisal process
Correct answer: Tying scale points to specific observable behavioral examples
BARS anchors each point on the rating scale to specific behavioral descriptions, making ratings more objective and consistent by giving raters concrete examples to reference.
Question 5: In the context of performance management, 'calibration sessions' are conducted to:
- Train employees on new software tools used in their jobs
- Ensure rating consistency and fairness across managers and departments (Correct answer)
- Determine merit pay budgets for the next fiscal year
- Document disciplinary actions across the organization
Correct answer: Ensure rating consistency and fairness across managers and departments
Calibration sessions bring managers together to discuss and align their employee ratings, reducing inconsistency and bias across different raters.
Question 6: Which federal law most directly requires that performance appraisals used as a basis for employment decisions be validated and job-related?
- Fair Labor Standards Act (FLSA)
- Title VII of the Civil Rights Act of 1964 (Correct answer)
- Occupational Safety and Health Act (OSHA)
- Employee Retirement Income Security Act (ERISA)
Correct answer: Title VII of the Civil Rights Act of 1964
Title VII prohibits employment discrimination, and courts have held that appraisals used in personnel decisions must be job-related and applied consistently to avoid disparate impact or treatment claims.
Question 7: Which component is most critical to ensure employees perceive a performance management system as fair?
- Using an online appraisal tool
- Conducting appraisals annually rather than quarterly
- Providing timely, specific, and consistent feedback linked to objective criteria (Correct answer)
- Having HR complete the appraisal rather than direct managers
Correct answer: Providing timely, specific, and consistent feedback linked to objective criteria
Perceived fairness (procedural justice) depends on timely, specific, consistent feedback based on objective, job-related criteria that employees understand and find credible.
PHR Performance Management 2
Which appraisal method requires managers to document specific examples of especially effective or ineffective employee behavior throughout the rating period?