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MBA - HRM Human Resource Management 2017 - Mondy 14th Edition - Chapter Exercise - 07

HRM Human Resource Management

MBA - Human Resource Management 2017

R. Wayne Mondy, 2016, Human Resource Management, 14th Edition






7-1.      Visit an HR manager in your local area.  What performance appraisal method does this firm use?  Ask how well the performance appraisal method is accepted in the organization.


You will likely discover a wide range of performance appraisal methods ranging from no appraisal system at smaller organizations to more sophisticated systems in larger ones. When asking management whether or not their performance appraisal is accepted by its employees, they may say that it is fairly well accepted. You may also want to question some employees to get their opinion regarding acceptance of the system. There may be a wide difference of opinion.


7-2.      Your PA uses a rating form with the following characteristics:  leadership, public acceptance, attitude toward people, appearance and grooming, personal conduct, outlook on life, ethical habits, resourcefulness, capacity for growth, mental alertness, and loyalty to organization.  Could any of these characteristics pose a problem with regard to a legal challenge?  Why?  Discuss.


All of these characteristics have the potential to pose a problem with regard to a legal potential challenge. Should management want to use these characteristics, they need to be shown to be job related, a task that may prove quite difficult for several of the items.





  • Define performance management and performance appraisal.


            Performance management: Goal-oriented process directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization.


            Performance appraisal: Formal system of review and evaluation of an individual or team’s job performance.


  • What are the uses of performance appraisal?


Human resource planning: In assessing a firm’s human resources, data must be available that describe the promotability and potential of all employees, especially key executives.


Recruitment and selection: Performance evaluation ratings may be helpful in predicting the future performance of job applicants.


Training and development: Performance appraisal should point out an employee’s specific needs for training and development.


Career planning and development: Career planning and development may be viewed from either an individual or organizational viewpoint.


Compensation programs: Performance appraisal results provide the basis for decisions regarding pay increases.


Internal employee relations: Performance appraisal data are also frequently used for decisions in areas of internal employee relations including motivation, promotion, demotion, termination, layoff, and transfer.


Assessment of employee potential: Some organizations attempt to assess employee potential as they appraise job performance.


  • What are some reasons that people give for getting rid of performance appraisal?


Discussion Question in MyManagementLab. Student responses will vary.


  • What are the steps in the performance appraisal process?


            Identify the specific performance appraisal goals.

            Establish performance criteria (standards) and communicate them to employees.

            Examine work performed.

            Appraise performance.

            Discuss appraisal with employee.


  • What aspects of a person’s performance might an organization evaluate?



  • Traits: Traits are usually thought of as resulting from biology such as appearance and initiative.


  • Behaviors: Behaviors are typically viewed as resulting from life experiences such as what may have been learned from parents, significant friends, or from a certain work environment.


  • Competencies: Broad range of knowledge, skills, traits, and behaviors that may be technical in nature, relate to interpersonal skills, or be business oriented.


  • Task outcomes: If ends are considered more important than means, task outcomes become the most appropriate factor to evaluate.


  • Improvement potential: Some attention must be given to the future and the behaviors and outcomes that are needed to not only develop the employee, but also achieve the firm’s goals. This involves an assessment of the employee’s potential.


  • Many different people can conduct performance appraisals. What are the various alternatives?


  • Immediate supervisor: Traditionally, immediate supervisors have been the most common choice for evaluating performance.


  • Subordinates: Managers in a few firms have concluded that evaluation of managers by subordinates is feasible.


  • Peers and team members: Peer appraisal has long had proponents who believed that such an approach is reliable if the workgroup is stable over a reasonably long period of time and performs tasks that require considerable interaction.


  • Self-appraisal: Many people know what they do well on the job and what they need to improve. If they are given the opportunity, they will objectively criticize their own performance and take action needed to improve it.


  • Customer appraisal: Behavior of customers determines the degree of success a firm achieves. Therefore, some organizations believe it is important to obtain performance input from this critical source.


  • What appraisal intervals are often used in appraisal reviews?


Formal performance evaluations are usually prepared at specific intervals. Although there is nothing magical about the period for formal appraisal reviews, in most organizations they occur either annually or semiannually. However, in the current business climate, it may be well for all firms to consider monitoring performance more often.


  • Briefly describe each of the following methods of performance appraisal: a. 360-degree feedback evaluation, b. Rating scales, c. Critical incidents, d. Essay, e. Work standards, f. Ranking, g. Forced distribution, h. Behaviorally anchored rating scales, and i. Results-based systems.


  • 360-degree feedback evaluation method: Popular performance appraisal method that involves evaluation input from multiple levels within the firm as well as external sources.


  • Rating scales method: Performance appraisal method that rates employees according to defined factors.


  • Critical incidents method: Performance appraisal approach that requires keeping written records of highly favorable and unfavorable employee work actions.


  • Essay method: Performance appraisal method in which the rater writes a brief narrative describing the employee’s performance.


  • Work standards methods: Performance appraisal method that compares each employee’s performance to a predetermined standard or expected level of output.


  • Ranking methods: Job evaluation method in which the rater places all employees from a group in order of overall performance.


  • Forced distribution method: Performance appraisal method in which the rater is required to assign individuals in a workgroup to a limited number of categories similar to a normal frequency distribution.


  • Behaviorally anchored rating scales method: Performance appraisal method that combines elements of the traditional rating scale and critical incident methods; various performance levels are shown along a scale with each described in terms of an employee’s specific job behavior.


  • Results-based system: A performance appraisal method in which the superior and subordinate jointly agree on objectives for the next appraisal period, in the past a form of management by objectives (MBO). Although all aspects of an MBO system did not work effectively, there were sections that remain as part of an effective appraisal system.


  • What are the various problems associated with performance appraisal? Briefly describe each.
  • Appraiser discomfort—Going through the procedure cuts into a manager’s high-priority workload and the experience can be especially unpleasant when the employee in question has not performed well.


  • Subjectivity of performance evaluations—Potential weakness of traditional methods of performance appraisal is that they lack objectivity.


  • Bias errors: Evaluation errors that occur when the rater evaluates the employee based on a personal negative or positive opinion of the employee rather than on the employee’s actual performance.


  • First impression effect: An initial favorable or unfavorable judgment about an employee’s performance which is ignored or distorted.


  • Positive halo effect: Evaluation error that occurs when a manager generalizes one positive performance feature or incident to all aspects of employee performance, resulting in a higher rating.


  • Negative halo effect: Evaluation error that occurs when a manager generalizes one negative performance feature or incident to all aspects of employee performance, resulting in a lower rating.


  • Similar-to-me effect: A bias error for which a supervisor rates members of his or her race, gender, nationality, or religion more favorably than members of other classes.


  • Contrast errors: A rating error in which a rater (e.g., a supervisor) compares an employee to other employees rather than to specific explicit performance standards.


  • Errors of central tendency error: Evaluation appraisal error that occurs when employees are incorrectly rated near the average or middle of a scale.


  • Leniency error: Giving an undeserved high performance appraisal rating to an employee.


  • Strictness error: Being unduly critical of an employee’s work performance.


  • What are the legal considerations associated with performance appraisal?


Discussion Question in MyManagementLab. Student responses will vary.


  • Explain why the following statement is often true: “The Achilles’ heel of the entire evaluation process is the appraisal interview itself.”


Discussion Question in MyManagementLab. Student responses will vary.


  • How might different countries’ cultures view performance appraisal?


Discussion Question in MyManagementLab. Student responses will vary.



                                    DISCUSSION OF CHAPTER 7 INCIDENTS


HRM Incident 1: These Things Are a Pain


“There, at last it’s finished,” thought Rajiv Chaudhry, as he laid aside the last of 12 performance appraisal forms. It had been a busy week for Rajiv, who supervises a road maintenance crew for the Georgia Department of Highways.

            In passing through Rajiv’s district a few days earlier, the governor had complained to the area superintendent that repairs were needed on several of the highways. Because of this, the superintendent assigned Rajiv’s crew an unusually heavy workload. In addition, Rajiv received a call from the human resource office that week telling him that the performance appraisals were late. Rajiv explained his predicament, but the HR specialist insisted that the forms be completed right away.

            Looking over the appraisals again, Rajiv thought about several of the workers. The performance appraisal form had places for marking quantity of work, quality of work, and cooperativeness. For each characteristic, the worker could be graded outstanding, good, average, below average, or unsatisfactory. As Rajiv’s crew had completed all of the extra work assigned for that week, he marked every worker outstanding in quantity of work. He marked Joe Blum average in cooperativeness because Joe had questioned one of his decisions that week. Rajiv had decided to patch a pothole in one of the roads, and Joe thought the small section of road surface ought to be broken out and replaced. Rajiv didn’t include this in the remarks section of the form, though. As a matter of fact, he wrote no remarks on any of the forms.

            Rajiv felt a twinge of guilt as he thought about Roger Short. He knew that Roger had been goofing off, and the other workers had been carrying him for quite some time. He also knew that Roger would be upset if he found that he had been marked lower than the other workers. Consequently, he marked Roger the same to avoid a confrontation. “Anyway,” Rajiv thought, “these things are a pain, and I really shouldn’t have to bother with them.”

            As Rajiv folded up the performance appraisals and put them in the envelope for mailing, he smiled. He was glad he would not have to think about performance appraisals for another six months.




  • What weaknesses do you see in Rajiv’s performance appraisals?


One week of outstanding work does not provide an appropriate sample of the work effort for each worker over the previous twelve months. The total effort over the appraisal year should have been taken into consideration. Also, he certainly should not have given Roger the same evaluation just to avoid a confrontation. Rajiv seems to have used the PAs as a method of vengeance against Joe which was quite inappropriate.


Another serious mistake Rajiv made was not backing up his decisions with remarks. Decisions about any promotions, pay raises, terminations, transfers, and admission to training programs are based upon the PAs, and thus a correct documentation is needed to avoid legal ramifications.


  • Should HR have the ability to “insist that the forms be completed right away”? Discuss.


If anyone should have insisted that the performance appraisals should be completed right away, it should have been Rajiv’s immediate superior. HR is a staff position and typically has no formal authority to direct a line manager to accomplish a task.


  • Many managers would agree with Rajiv in saying that “these things are a pain, and I really shouldn’t have to bother with them.” What are the disadvantages in doing away with performance appraisal?


Some managers might do away with performance appraisals if they did not need to provide feedback, encourage performance improvement, make valid decisions, justify terminations, identify training and development needs, and defend personnel decisions. Performance appraisal serves many purposes, and improved results and efficiency are increasingly critical in today’s globally competitive marketplace. Therefore, abandoning the only program with performance in its name and employees as its focus would seem to be an ill-advised overreaction. On top of these considerations, managers must be concerned about legal ramifications. Developing an effective performance appraisal system has been and will continue to be a high priority for management.


HRM Incident 2: Performance Appraisal?


As the production supervisor for Sweeny Electronics, Nakeisha Joseph was generally well regarded by most of her subordinates. Nakeisha was an easygoing individual who tried to help her employees in any way she could. If a worker needed a small loan until payday, she would dig into her pocket with no questions asked. Should an employee need some time off to attend to a personal problem, Nakeisha would not dock the individual’s pay; rather, she would take up the slack herself until the worker returned.

            Everything had been going smoothly, at least until the last performance appraisal period. One of Nakeisha’s workers, Bill Overstreet, had been experiencing a large number of personal problems for the past year. Bill’s wife had been sick much of the time, and her medical expenses were high. Bill’s son had a speech impediment, and the doctors had recommended a special clinic. Bill, who had already borrowed the limit the bank would loan, had become upset and despondent over his circumstances.

            When it was time for Bill’s annual performance appraisal, Nakeisha decided she was going to do as much as possible to help him. Although Bill could not be considered more than an average worker, Nakeisha rated him outstanding in virtually every category. Because the firm’s compensation system was heavily tied to performance appraisal, Bill would be eligible for a merit increase of 10 percent in addition to a regular cost-of-living raise.

            Nakeisha explained to Bill why she was giving him such high ratings, and Bill acknowledged that his performance had really been no better than average. Bill was very grateful and expressed this to Nakeisha. As Bill left the office, he was excitedly looking forward to telling his work buddies about what a wonderful boss he had. Seeing Bill smile as he left gave Nakeisha a warm feeling.




  • From Sweeny Electronics’ standpoint, what difficulties might Nakeisha’s performance appraisal practices create?


Performance appraisals should not be charity. Some of Bill’s friends will think of Nakeisha as a great person when they hear about the favor she has done for Bill. Others, though, will feel let down because their performance appraisals are not as high as they should be in relation to Bill’s. Not only is Nakeisha likely to receive complaints about this, but the performance appraisal can hardly serve as a motivational device. In short, Nakeisha has made a serious blunder and should reconsider the purposes of performance appraisal.


  • What can Nakeisha do now to diminish the negative impact of her evaluation of Bill?


The best thing she can do is to turn over a new leaf. She should commit herself to evaluating her subordinates’ performance as objectively as possible. If the subject comes up in her interactions with subordinates or superiors, she should admit her mistake and state her intentions to take a correct course of action in the future.


  • Might a forced distribution performance appraisal system overcome the problem that Nakeisha has created? Discuss.


The forced distribution method of performance appraisal requires the rater to assign individuals in a work group to a limited number of categories, similar to a normal frequency distribution. The purpose of forced distribution is to keep managers from being excessively lenient and having a disproportionate number of employees in the “superior” category.

            If Nakeisha had been using a forced distribution method of performance appraisals from when she became a supervisor, the system may have reduced the problem. If she wished to provide Bill with a “Superior” rating, she would have a truly superior worker as average. She may have not wanted to get into that trap. Going to a forced distribution method of performance appraisal now is not going to solve the problem.







Human Resource Management
Human Resource Management, 15th Edition, 2017, Gary Dessler,
Strategic Compensation: A Human Resource Management Approach, 9th Edition, 2017, Joseph J. Martocchio
Fundamentals of Human Resource Management, 4th Edition, 2016, Gary Dessler
Human Resource Management, 14th Edition, 2016, R. Wayne Dean Mondy, Retired, Joseph J. Martocchio
Mastering Project Human Resource Management: Effectively Organize and Communicate with All Project Stakeholders, 2015, Harjit Singh
Managing Human Resources, 8th Edition, 2016, Luis R. Gomez-Mejia, David B. Balkin, Robert L. Cardy


PART 1: Setting the Stage for Strategic Compensation
1. Strategic Compensation: A Component of Human Resource Systems
2. Contextual Influences on Compensation Practice
PART 2: Bases for Pay
3. Seniority Pay and Merit Pay
4. Incentive Pay
5. Person-Focused Pay
PART 3: Designing Compensation Systems
6. Building Internally Consistent Compensation Systems
7. Market-Competitive Compensation Systems
8. Building Pay Structures that Recognize Employee Contributions
PART 4: Employee Benefits
9. Discretionary Benefits
10. Legally-Required Benefits
PART 5: Contemporary Strategic Compensation Challenges
11. Compensating Executives
12. Compensating the Flexible Workforce
PART 6: Compensation Around the World
13. Compensating Expatriates
14. Pay and Benefits outside the United States
15. Challenges Facing Compensation Professionals
Managing Human Resources Today
Managing Equal Opportunity and Diversity
Human Resource Strategy and Analysis
Job Analysis and Talent Management
Personnel Planning and Recruiting
Selecting Employees
Training and Developing Employees
Performance Management and Appraisal
Managing Careers
Developing Compensation Plans
Pay for Performance and Employee Benefits
Maintaining Positive Employee Relations
Labor Relations and Collective Bargaining
Improving Occupational Safety, Health, and Risk Management
Managing HR Globally
Managing Human Resources in Small and Entrepreneurial Firms
PHR and SPHR Knowledge Base
Comprehensive Cases
Human Resource Management: An Overview
Business Ethics and Corporate Social Responsibility
Equal Employment Opportunity, Affirmative Action, and Workforce Diversity
Strategic Planning, Human Resource Planning, and Job Analysis
Performance Management and Training
Performance Management and Appraisal
Training and Development
Direct Financial Compensation (Core Compensation)
Indirect Financial Compensation (Employee Benefits)
Labor Relations, Employee Relations, Safety, and Health
Labor Unions and Collective Bargaining
Internal Employee Relations
Employee Safety, Health, and Wellness
Operating in a Global Environment
Global Human Resource Management
Lectures, Test Bank, Case Study, Video Guides
Equal Opportunity,
Recruitment, Placement, Talent Management,
Job Analysis, Talent Management Process,
Personnel Planning, Recruiting,
Employee Testing, Selection,
Training, Development,
Developing Employees,
Performance Management, Appraisal,
Managing Careers, Retention,
Establishing Strategic Pay Plans,
Pay for Performance, Financial Incentives,
Benefits, Services,
Labor Relations,
Human Resource Management Lectures




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