Study Guide Chapter 3

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1)
Which of the following is an advantage of seniority pay systems?
1)
_______ A) they reward exemplary performance B) they encourage employees to continue to increase their skillsets C) they reward employees on an objective basis D) they help to promote product quality

2)
This term refers to a difference between the output of a human judgment processes and that of an objective, accurate assessment. This difference could be due to bias, prejudice, or other subjective, extraneous influences.
2)
_______ A) content validity
B)
a first-impression effect C) rating error
D)
the performance appraisal process

3)
In 2009, employees were expected to earn average merit increases of what percent?
3)
_______ A)
8.3%
B)
2.9%
C)
5.2%
D)
1.3%

4)
Management by objective is part of which type of performance appraisal system?
4)
_______ A) behavioral observation scale
B)
behaviorally-anchored rating scale C) goal-oriented system
D)
trait system

5)
This occurs when a rater generalizes good performance behavior in one aspect of the job to all aspects of the job.
5)
_______ A) negative halo effect
B)
positive halo effect C) first-impression effect
D)
similar-to-me effect

6)
Which comparison system requires the rater to place a specific number of employees into groups that represent the entire range of performances?
6)
_______ A) the critical incident technique
B)
hierarchical C) paired comparison
D)
forced distribution

7)
Among the various performance appraisal techniques, this appraisal system is the most defensible in court because it is based on actual observable job performance behaviors.
7)
_______ A) behaviorally-anchored rating scales
B)
forced distribution C)
360 degree performance appraisals
D)
paired comparison

8)
Which evaluation system requires that supervisors compare each employee to every other employee, identifying the better performer in each pair?
8)
_______ A) paired comparison
B)
the critical incident technique C) forced distribution
D)
hierarchical

9)
Which performance appraisal system displays illustrations only of positive behaviors shown by an employee in various job dimensions?
9)
_______ A) behavioral observation scales (BOS) B) behaviorally-anchored rating scales (BARS) C) critical incident technique (CIT) D) management by objectives (MBO)

10)
Who determines the particular objectives in a management by objectives (MBO) appraisal system?
10)
______ A) the supervisors
B)
the employees C) the board of directors
D)
both the employees and supervisors

11)
This type of behavioral performance appraisal system requires the review of past performance behaviors and outcomes in order to identify them as either successful or unsuccessful.
11)
______ A) critical incident technique (CIT) B) management by objectives (MBO) C) behaviorally anchored rating scales (BARS) D) behavioral observation scales (BOS)

12)
As of 2008, what percentage of the US civilian workforce (in both public and private sectors) was unionized?
12)
______ A)
41.7%
B)
24.3%
C)
33.1%
D)
12.4%

13)
Which pay system is most widely used in America today?
13)
______ A) merit pay
B)
skill based pay
C)
longevity pay
D)
seniority pay

14)
The collective bargaining system was established by passage of which federal Act?
14)
______ A)
National Labor Regulations Act
B)
Union Labor Relations Act C)
National Labor Relations Act
D)
Union Labor Regulations Act

15)
With these errors, supervisors tend to rate employees' performances lower than they would be if compared against objective criteria.
15)
______ A) leniency errors
B)
strictness errors
C)
critical errors
D)
contrast errors

16)
Which performance appraisal tool is most often used with managers and professional employees?
16)
______ A) trait systems
B)
behavioral systems C) comparison systems
D)
management by objectives

17)
The halo effect and similar-to-me effects are considered examples of which type of rating error?
17)
______ A) illegal discrimination errors
B)
contrast errors C) bias errors
D)
trait system errors

18)
This term refers to the minimum pay increase that employees view as a significant change in their compensation amount?
18)
______ A) minimal pay incident
B)
halo effect increase C) satisfactory compensation payment
D)
just-meaningful pay increase

19)
This performance appraisal system relies on many appropriate sources of information and works well for team-based work teams.
19)
______ A) comparison system
B)
critical incident technique C) trait systems
D)
360-degree performance appraisal

20)
Which of the following is based on the human capital theory?
20)
______ A) merit pay system
B)
BARS C) seniority pay system
D)
BOS

21)
This type of performance rater's error occurs when the rater generalizes bad behavior on one aspect of the employee's job performance to the employee's over-all performance.
21)
______ A) negative impression errors
B)
error of strictness C) negative leniency error
D)
negative halo effect

22)
This type of appraisal error takes place when managers rate employee's performance more highly than they should compared with objective criteria.
22)
______ A) errors of strictness
B)
contrast errors C) errors of central tendency
D)
errors of leniency

23)
Which two factors should compensation professionals consider before endorsing the use of merit pay systems?
23)
______ A) supervisor's rating bias & stock price B) job analysis & stock price C) commitment from top management & job design D) job design & supervisor's rating bias

24)
If an employee is rated as outstanding on her leadership ability she was probably rated using which appraisal system?
24)
______ A) behavioral system
B)
comparison system C) trait system
D)
goal-oriented system

25)
Which performance appraisal error reflects the tendency to rate every employee at the low end of the rating scale, regardless of actual performance?
25)
______ A) contrast errors
B)
error of central tendency C) errors of strictness
D)
negative halo error

26)
This performance appraisal system is based on employees and supervisors identifying on-the-job behaviors and behavioral outcomes that distinguish successful from unsuccessful performances.
26)
______ A) forced distribution system
B)
behaviorally anchored rating scales C) behavioral observation scales
D)
critical incident technique

27)
This ratings error term refers to managers who have a tendency to allow their initial judgment about an employee to ignore or distort their appraisal of that employee's actual performance?
27)
______ A) the similar-to-me effect
B)
critical incident error C) bias error
D)
the first-impression effect

28)
For a merit pay system to work for a company using the lowest-cost competitive strategy which two conditions must be met?
28)
______ A)
Pay increases are tied to productivity & productivity levels are maintained over time. B)
Employees are creative risk takers & the company's competitive strategy has a long term focus. C)
Productivity levels are maintained over time & employees are creative risk takers. D)
Employees are creative risk takers & pay increases are tied to productivity.

29)
Similar-to-me effects and halo effects are part of which type of rater's errors?
29)
______ A) errors of strictness
B)
contrast errors C) illegal discriminatory bias
D)
bias errors

30)
This term is defined as added pay for employees who have reached the maximum of a pay grade and who are unlikely to move into higher grades.
30)
______ A) merit pay
B)
longevity pay C) seniority-based pay
D)
incentive pay

SHORT ANSWERS. Write your answer in the space provided or on a separate sheet of paper.

31)
Discuss the concept of "just-meaningful pay increase."

32)
A company of 15 employees has recently decided to overhaul its performance appraisal system. Which plan would be most appropriate for the company to adopt? Why?

33)
List and discuss four possible limitations of merit pay programs.