Exam 16: Individual Performance Evaluation

A few years ago the state legislature of a particular state passed a bill that increased funding for only those public universities that showed an increase in graduation rates. In two years, the bill was retracted. Why was the bill enforced in the first place just to be withdraws so soon?

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Question 1

Correct Answer:

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Remember that local politicians are dancing to the tune of the voting public. Consequently, anything that woos the public's sentiments, will be entertained. Trying to increase funding for those schools that graduate more sounds great, and technically no one is going to object to this policy. But the universities are the greatest beneficiaries from this policy. If graduation rates have to go up, then all they have to do is to reduce the requirements, admit anyone and everyone, and let them out in quick time, without too many requirements to fulfill. Obviously, graduation rates soared across universities, and public funds had to be coughed up. A good lesson: graduation rates are manipulable outputs and were gamed by everyone involved.

In the TruLite boxing department, management finds that the production team maintains several boxes of lights in a nearby storage closet. On days when the assembly line breaks down, the boxes are added back at the end of day to meet production goals. This is an example of:

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Question 2

Correct Answer:

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Employee performance evaluation is needed because:

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Question 3

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If managers were rewarded for meeting quota, then:

(Multiple Choice)

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Question 4

Most organizations provide a standard budget for every department, which must be spent during the fiscal year, usually in mid-May. A department forfeits any unspent amount. Every department's annual allocation depends upon the previous year's allocation. Is this an efficient allocation procedure? Are there more efficient allocation rules?

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Question 5

The larger the number tasks and the greater the authority required in a job, then the evaluation of the person in the job will move from to .

(Multiple Choice)

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Question 6

If an employee is paid a fixed wage in a production environment where the wage is independent of output, then the employee has an incentive to:

(Multiple Choice)

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Question 7

At Always Round Tire, managers and professional employees are evaluated each year with the Subjective Information Performance Survey (SIPS). SIPS allows bosses to rank their employees on several issues including achieving budget objectives, communication quality, continuing education and training activities, and emphasis of teamwork among subordinates. SIPS software computes means and standard deviations, and benchmarks each employee relative to all others in the same evaluation system. But nobody at the company believes in SIPS output. Why?

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Question 8

In a very basic principal-agent model, output is contractible if:

(Multiple Choice)

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Question 9

In the model management cannot observe:

(Multiple Choice)

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Question 10

If the output of an employee is dependent on the marginal productivity of the employee, the effort of the employee, and random elements (changes) in the production environment, which one(s) is (are) actually easily observable to management?

(Multiple Choice)

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Question 11

Give examples of how government intervention helps reduce moral hazard and adverse selection problems in internal labor markets.

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Question 12

While production teams are important sources of productivity in business, they can suffer from the _______ problem.

(Multiple Choice)

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Question 13

Which of the following is not a problem with subjective performance evaluations?

(Multiple Choice)

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Question 14

If performance evaluation of work is used to change wages, raises, bonuses, or dismissals, then the system is designed to:

(Multiple Choice)

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Question 15

Setting performance goals based on historical data and past performance creates:

(Multiple Choice)

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Question 16

In a very basic principal-agent model, output is contractible if:

(Multiple Choice)

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Question 17

TruLite is managed by Fred Powell. It has three stages of production: (1) light fabrication, (2) switch assembly, and (3) boxing. Chris Self works in the switch assembly department. He is productive and seems to work hard. Powell decides to change Chris Self's pay system to a performance system based on output per hour. Chris resists the change and asks for increase in his base pay. What is Chris Self's problem? Is he irrational or does he understand something about the production system that Fred Powell does not understand?

(Essay)

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Question 18

If output Q = 8.5e (e=units of effort) and Wage W = $6.70 + .25Q, then 20 units of effort are worth _____ to the firm.

(Multiple Choice)

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Question 19

At TruLite Fred Powell is responsible for organizing a detailed review of each professional employee and manager by May 1 of the year. The rankings can then be computed and raises can be given right before Independence Day. But upon review, he finds that all of his employees are above average. Most probably this is indicative of:

(Multiple Choice)

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Question 20

Showing 1 - 20 of 39

A few years ago the state legislature of a particular state passed a bill that increased funding for only those public universities that showed an increase in graduation rates. In two years, the bill was retracted. Why was the bill enforced in the first place just to be withdraws so soon?

In the TruLite boxing department, management finds that the production team maintains several boxes of lights in a nearby storage closet. On days when the assembly line breaks down, the boxes are added back at the end of day to meet production goals. This is an example of:

Employee performance evaluation is needed because:

If managers were rewarded for meeting quota, then:

The larger the number tasks and the greater the authority required in a job, then the evaluation of the person in the job will move from to .

If an employee is paid a fixed wage in a production environment where the wage is independent of output, then the employee has an incentive to:

In a very basic principal-agent model, output is contractible if:

In the model management cannot observe:

If the output of an employee is dependent on the marginal productivity of the employee, the effort of the employee, and random elements (changes) in the production environment, which one(s) is (are) actually easily observable to management?

Give examples of how government intervention helps reduce moral hazard and adverse selection problems in internal labor markets.

While production teams are important sources of productivity in business, they can suffer from the _______ problem.

Which of the following is not a problem with subjective performance evaluations?

If performance evaluation of work is used to change wages, raises, bonuses, or dismissals, then the system is designed to:

Setting performance goals based on historical data and past performance creates:

In a very basic principal-agent model, output is contractible if:

If output Q = 8.5e (e=units of effort) and Wage W = $6.70 + .25Q, then 20 units of effort are worth _____ to the firm.

Introduction

Economists View of Behavior

Markets, Organizations, and the Role of Knowledge

Demand

Production and Cost

Market Structure

Pricing With Market Power

Economics of Strategy: Creating and Capturing Value

Economics of Strategy: Game Theory

Incentive Conflicts and Contracts

Organizational Architecture

Decision Rights: The Level of Empowerment

Decision Rights: Bundling Tasks Into Jobs and Subunits

Attracting and Retaining Qualified Employees

Incentive Compensation

Divisional Performance Evaluation

Corporate Governance

Vertical Integration and Outsourcing

Leadership: Motivating Change Within Organizations

Understanding the Business Environment: The Economics of Regulation

Ethics and Organizational Architecture

Organizational Architecture and the Process of Management Innovation

Filters

Exam 16: Individual Performance Evaluation

A few years ago the state legislature of a particular state passed a bill that increased funding for only those public universities that showed an increase in graduation rates. In two years, the bill was retracted. Why was the bill enforced in the first place just to be withdraws so soon?

In the TruLite boxing department, management finds that the production team maintains several boxes of lights in a nearby storage closet. On days when the assembly line breaks down, the boxes are added back at the end of day to meet production goals. This is an example of:

Employee performance evaluation is needed because:

If managers were rewarded for meeting quota, then:

The larger the number tasks and the greater the authority required in a job, then the evaluation of the person in the job will move from ____ to ____.

If an employee is paid a fixed wage in a production environment where the wage is independent of output, then the employee has an incentive to:

In a very basic principal-agent model, output is contractible if:

In the model management cannot observe:

If the output of an employee is dependent on the marginal productivity of the employee, the effort of the employee, and random elements (changes) in the production environment, which one(s) is (are) actually easily observable to management?

Give examples of how government intervention helps reduce moral hazard and adverse selection problems in internal labor markets.

While production teams are important sources of productivity in business, they can suffer from the _______ problem.

Which of the following is not a problem with subjective performance evaluations?

If performance evaluation of work is used to change wages, raises, bonuses, or dismissals, then the system is designed to:

Setting performance goals based on historical data and past performance creates:

In a very basic principal-agent model, output is contractible if:

If output Q = 8.5e (e=units of effort) and Wage W = $6.70 + .25Q, then 20 units of effort are worth _____ to the firm.

Introduction

Economists View of Behavior

Markets, Organizations, and the Role of Knowledge

Demand

Production and Cost

Market Structure

Pricing With Market Power

Economics of Strategy: Creating and Capturing Value

Economics of Strategy: Game Theory

Incentive Conflicts and Contracts

Organizational Architecture

Decision Rights: The Level of Empowerment

Decision Rights: Bundling Tasks Into Jobs and Subunits

Attracting and Retaining Qualified Employees

Incentive Compensation

Divisional Performance Evaluation

Corporate Governance

Vertical Integration and Outsourcing

Leadership: Motivating Change Within Organizations

Understanding the Business Environment: The Economics of Regulation

Ethics and Organizational Architecture

Organizational Architecture and the Process of Management Innovation

Filters

The larger the number tasks and the greater the authority required in a job, then the evaluation of the person in the job will move from to .