Chapter 14: Performance Management (CAIIB – Paper 1)
1. Which of the following is the primary purpose of a performance appraisal system?
A. To punish low-performing employees
B. To increase employee workload
C. To evaluate and improve employee performance
D. To decide the company’s marketing strategy
The primary purpose of performance appraisal is to assess and improve employee performance, helping both the organization and employees achieve their objectives.
2. Which appraisal method involves feedback from multiple sources such as peers, subordinates, and supervisors?
A. 360-degree feedback
B. Ranking method
C. Essay method
D. Checklist method
360-degree feedback collects performance information from multiple sources to provide a comprehensive evaluation of an employee.
3. Which of the following is a disadvantage of the traditional ranking method of performance appraisal?
A. It provides detailed feedback for improvement
B. It may create unhealthy competition among employees
C. It involves feedback from multiple sources
D. It encourages employee development planning
The ranking method may create unhealthy competition as employees are compared directly against each other rather than against set objectives.
4. In performance review meetings, the most effective way to provide feedback is:
A. Giving vague general comments
B. Comparing the employee to others
C. Focusing only on weaknesses
D. Providing specific, constructive, and balanced feedback
Effective feedback should be specific, constructive, and balanced, highlighting both strengths and areas for improvement to motivate and guide employees.
5. Which of the following statements best describes “behaviorally anchored rating scales (BARS)” in appraisal?
A. It rates employee performance based on specific behavioral examples for each level of performance
B. It simply ranks employees from best to worst
C. It only focuses on employee attendance
D. It collects feedback only from peers
BARS combines qualitative and quantitative assessment by anchoring ratings to specific examples of observed behaviors, making appraisal more objective.
6. In HR performance management, counselling is primarily aimed at:
A. Assigning more work to employees
B. Evaluating team performance only
C. Helping employees identify and overcome performance-related problems
D. Punishing low-performing employees
Counselling in HR is meant to guide and support employees to improve performance, address personal or professional challenges, and enhance overall productivity.
7. Competency mapping helps an organization primarily to:
A. Decide the salary structure of employees only
B. Identify the key skills, knowledge, and behaviors required for specific roles
C. Replace performance appraisals completely
D. Create organizational charts
Competency mapping identifies the specific skills, knowledge, and behaviors required for each role, helping in recruitment, development, and performance management.
8. Assessment of competencies is usually conducted through:
A. Random surveys of employees’ opinions
B. Observing only attendance patterns
C. Comparing employees’ salaries
D. Structured evaluations like tests, simulations, and performance observations
Competency assessment uses structured methods such as tests, simulations, interviews, and performance observations to objectively measure the skills, knowledge, and behaviors of employees.
9. Which of the following is NOT typically a benefit of competency mapping?
A. Replacing HR policies with automated systems
B. Aligning individual performance with organizational goals
C. Facilitating targeted training and development
D. Identifying skill gaps in the workforce
Competency mapping supports HR planning, development, and performance management, but it does not replace HR policies or systems.
10. A key difference between counselling and performance feedback is:
A. Feedback is informal, while counselling is always written
B. Counselling focuses on problem-solving and support, while feedback focuses on evaluating past performance
C. Feedback replaces performance appraisal entirely
D. Counselling only applies to senior management
Feedback evaluates and communicates past performance, whereas counselling helps employees understand issues and provides guidance for improvement.
11. The primary purpose of an assessment centre is to:
A. Conduct routine performance appraisals
B. Replace training programs completely
C. Evaluate candidates’ competencies through multiple exercises and simulations
D. Only test theoretical knowledge
Assessment centres use various exercises such as role plays, simulations, and group discussions to evaluate candidates’ skills, competencies, and potential for specific roles.
12. Which of the following is a common tool used in an assessment centre?
A. Group exercises, role plays, and in-basket exercises
B. Only written exams
C. Peer ranking surveys
D. Random employee interviews without structure
Assessment centres use structured exercises like group discussions, role plays, and in-basket exercises to evaluate multiple competencies simultaneously.
13. A Behavioral Event Interview (BEI) primarily focuses on:
A. Hypothetical situations only
B. Salary expectations and benefits
C. Company policies and rules
D. Past behavior and experiences to predict future performance
BEI asks candidates to describe past specific events and actions to assess their competencies and predict how they are likely to behave in future similar situations.
14. One advantage of using BEI in selection or appraisal is:
A. It requires no preparation and is informal
B. It provides reliable and evidence-based assessment of competencies
C. It eliminates the need for training programs
D. It focuses only on academic qualifications
BEI focuses on concrete past behavior rather than opinions or hypothetical scenarios, making competency assessment more reliable and evidence-based.
15. Which statement best differentiates assessment centres from traditional interviews?
A. Assessment centres use multiple methods and observers, while traditional interviews rely on a single interviewer’s judgment
B. Traditional interviews include simulations and role plays
C. Assessment centres ignore competencies and focus on appearance
D. Both are identical in approach
Assessment centres provide a multi-method, multi-observer approach to evaluate competencies, unlike traditional interviews which depend on the subjective judgment of one interviewer.
