Take Home Exam #2
Due Sunday night in week #7
Name:_____

1. (11 points) Why is it necessary for an organization to appraise performance formally? Performance appraisals are necessary for an organization to understand each employee’s skills, abilities, and competencies. Performance appraisals are used to rate the employee’s performance. Formal performance appraisals are important to organizations because they clarify the employee’s roles and responsibilities, and helps align individual goals with organizational goals. Formal performance appraisals also allows for evaluation of the employee’s performance and contribution towards organizational goals. Formal performance appraisals can also be a learning tool for employees and management through the feedback process of the appraisal. During the feedback process, management should express what the employee has done well and they have not. Management should elaborate on ways the employee can improve performance in areas the employee does not perform well at.

2. (11 points) Identify and describe the different reasons for implementing a short-term bonus. Organizations implement short-term bonuses to improve performance, reduce costs, increase motivation and employee buy-in, and to recruit and retain employees with critical knowledge, skills, and/or abilities. Monetary bonuses for performance and completion of organizational goals can motivate employees to perform at higher rates, and help the organization retain vital employees. Organizations can also implement non-monetary incentives that will help improve job satisfaction, retention, and recruitment rates. Organizations can offer work-life initiatives, flexible work hours, and career development programs.

3. (12 points) Define the differences between skill, knowledge and competencies. A skill is something that is learned