Based on the information provided, the statement that best supports the argument to replace Oshman's traditional appraisal methods with performance management is: Oshman has experienced problems associated with central tendency and bias, and the firm wants to ensure that appraisals are legally sound. Here's why: * Central tendency and bias directly undermine the accuracy and fairness of performance appraisals. As we discussed earlier, central tendency doesn't differentiate between employees, and bias introduces subjectivity. * Legally sound appraisals are crucial for organizations to avoid potential lawsuits related to discrimination or unfair treatment. If the current appraisal system is flawed due to central tendency and bias, it's less likely to be defensible legally. The other options are less directly supportive of a replacement with performance management: * Oshman uses management by objectives as a primary appraisal method and requires supervisors to develop SMART goals: While MBO and SMART goals are components of some performance management systems, this statement doesn't inherently suggest a need for a complete overhaul. * Oshman's competitors in the small appliance industry monitor the performance of their employees through electronic performance monitoring systems: This highlights what competitors are doing but doesn't necessarily indicate a problem with Oshman's current system or a direct need for performance management. * Oshman executives want to align the firm's strategic plan with individual employee goals and development needs: This is a key goal of performance management, but the statement itself doesn't point to a flaw in the current appraisal system that necessitates a change. Therefore, the issues of central tendency, bias, and the need for legally sound appraisals provide the strongest rationale for replacing the traditional methods with a more robust performance management approach.