Liquidity Ratios: Theory and Solved Problems

Read notes and solved examples on current ratio, liquid ratio and absolute liquid ratio from the chapter accounting ratiosDownload

Ratio Analysis: Meaning, Objectives and Classification

please read the pdf to learn about meaning of ratio analysis, objectives of ratio analysis and classification of ratio analysisDownload

Insurance Company Balance Sheet: Solved Problem

Two solved problems on preparation of balance sheet of insurance company in pdf format. please downloadDownload

Green Computing | Advantages and Disadvantages

It is a novel and innovative trend in the world of computing which has minimum or no impact on the environment.It is an emerging concept towards reducing hazardous material and to save our environment from harmful impacts of the use of computers and other electronic products.

Advantages of green computing:-
1.The major advantage is it reduces energy usage through green computing techniques that controls the carbon dioxide.
2.Green computing uses less energy for electronic products during there produce,use and dispose.

Disadvantages of green computing:-
1.The major disadvantages of green computing could be actually quite costly.
2.some computers that are green maybe considered underpowered.
3.Rapid technology change.

Modern Methods or Techniques of Performance Appraisals

Assessment Centres:

It is a method which was first implemented in German Army in 1930. With the passage of time industrial houses and business started using this method. This is a system of assessment where individual employee is assessed by many experts by using different technique of performance appraisal. The techniques which may be used are role playing, case studies, simulation exercises, transactional analysis etc.
In this method employees from different departments are brought together for an assignment which they are supposed to perform in a group, as if they are working for a higher post or promoted. Each employee is ranked by the observer on the basis of merit .The basic purpose behind assessment is to recognize whether a particular employee can be promoted, or is there any need for training or development. This
method has certain advantages such as it helps the observer in making correct decision in terms of which employee has the capability of getting promoted, but it has certain disadvantages also it is costly and time consuming, discourages the poor performers etc.

360 Degree Performance Appraisals:

This method is also known as ‘multi-rater feedback’, it is the appraisal in a wider perspective where the comment about the employees’ performance comes from all the possible sources that are directly or indirectly related with the employee on his job. In 360 degree performance appraisal an employeecan be appraised by his peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors – anyone who comes into direct or indirect contact with the employee and can provide necessary information or feedback regarding performance of the employee the “on-the-job”. The four major component of 360 degree performance appraisal are:

1. Employees Self Appraisal
2. Appraisal by Superior
3. Appraisal by Subordinate
4. Peer Appraisal.

Employee self appraisal gives an option to the employee to know his own strengths and weaknesses, his achievements, and judge his own performance. Appraisal by superior forms the traditional part of the 360 degree performance appraisal where the employees’ responsibilities and actual performance is judged by the superior. Appraisal by subordinate gives a chance to evaluate the employee on the basis of communication and motivating abilities, superior’s ability to delegate the work, leadership qualities etc. It is also known as internal customers; the correct opinion given by peers can aid to find employees’ who are co-operative, employees who ready to work in a team and understanding towards others.

Cost Accounting Method:

In this method performance of an employee is evaluated on the basis of monetary returns the employee gives to his or her organization. A relationship is recognized between the cost included in keeping the employee in an organization and the benefit the organization gets from him or her. The evaluation is based on the established relationship between the cost and the benefit. The following factors are considered while evaluating an employee’s performance:

1. Interpersonal relationship with others.
2. Quality of product produced or service given to the organization. 3. Wastage, damage, accidents caused by the employee.
3. Average value of production or service by an employee.
4. Overhead cost incurred.

Behaviorally Anchored Rating Scales (BARS):

This method is a combination of traditional rating scales and critical incidents methods. It consists of preset critical areas of job performance or sets of behavioural statements which describes the important job performance qualities as good or bad (for e.g. the qualities like inter personal relationships, flexibility and consistency, job knowledge etc). These statements are developed from critical incidents. These behavioral examples are then again translated into appropriate performance dimensions. Those that are selected into the dimension are retained. The final groups of behavior incidents are then scaled numerically to a level of performance that is perceived to represent. A rater must indicate which behavior on each scale best describes an employee’s performance. The results of the above processes are behavioural descriptions, such as anticipate, plan, executes, solves immediate problems, carries out orders, and handles urgent situation situations. This method has following advantages: a) It reduces rating errors) Behavior is assessed over traits. c) It gives an idea about the behavior to the employee and the rater about which behaviors bring good Performance and which bring bad performance.

Limitations of Performance Appraisal

The main limitations of Performance Appraisal are explained below :

1. Time Consuming : Performance appraisal is a time taking affair. It is a very lengthy process under which different forms are to be filled in and various observations are required to be noted in a careful manner.
2. Lack of Reliability : Reliability implies stability and consistency in the measurement. Lack of consistency over time and among different raters may reduce the reliability of performance appraisal. 3. Incompetence : Raters may fail to evaluate performance accurately due to lack of knowledge and experience. Post appraisal interview is often handled ineffectively.
3. No Uniform Standards : The standards used for appraisal purpose are not uniform within the same organisation. This makes the rating unscientific. Similarly, the rating is done on the basis of an overall impression, which is not proper.
4. Absence of Effective Participation of Employees : In performance appraisal effective participation of concerned employee is essential. In many methods of appraisal he is given a passive role. He is evaluated but his participation or self evaluation is rather absent.
5. Resistance of Employees to Appraisal : Employees oppose the system as they feel that the system is only for showing their defects and for punishing them. The managers resist the system as they are not willing to criticise their subordinates or have no capacity to guide them for self improvement or self development.
6. Paperwork : Some supervisors feel that performance appraisal is paperwork. They make such complaints because many a times, performance appraisal reports are found only in the files rather than rendering any practical use.
7. Fear of Spoiling Relations : Performance appraisals may also affect superior-subordinate relations. As appraisal makes the superior more of a judge rather than a coach, the subordinate may look upon the superior with a feeling of a suspicion and mistrust.
8. Stereotyping : This implies forming a mental picture of a person on the basis of his age, sex, caste or religion. It results in an over-simplified view and blurs the assessment of job performance.
9. Negative Approach : Performance appraisal loses most of its value when the focus of management is on punishment rather than on development of employees. 11. Multiple Objectives : Raters may get confused due to two many objectives or unclear objective of performance appraisal. 12. Resistance : Trade unions may resist performance appraisal on the ground that it involves discrimination among its members. Negative ratings may affect interpersonal relations and industrial relations particularly when employees/unions do not have faith in the system of performance appraisal.
10. Halo Effect: Generally, there is the presence of a ‘halo‘effect which leads to a tendency to rate the same individual first, which once have stood first.
11. Individual Differences: Some people are more distinct while some are very liberal in assigning the factors, points or number to the employees. They are unable to maintain a fair distinction between two individuals. It also nullifies the utility of this system.

Meaning and objectives of career planning

Career Planning : meaning

Career Planning is the systematic process by which one selects career goals and the path to
these goals. From the organization’s viewpoint, it means helping the employees to plan their career in terms of their capacities within the context of organization’s needs. It involves designing an organizational system of career movement and growth opportunities for employees from the employment stage to the retirement stage. Individuals who can fill planned future positions are identified and prepared to take up these positions. Career planning is the process of matching career goals and individual capabilities with opportunities for their fulfilment.

Objectives of Career Planning

Career Planning seeks to achieve the following aims:

1. To attract and retain the right type of persons in the organization.
2. To map out careers of employees suitable to their ability, and their willingness to be trained
   and developed for higher positions.
3. To ensure better use of human resources through more satisfied and productive employees.
4. To have a more stable workforce by reducing labour turnover and absenteeism.
5. To improve employee morale and motivation by matching skills to job requirements and by
   providing opportunities for promotion.
6. To provide guidance and encourage employees to fulfil their potentials.
7. To achieve higher productivity and organizational development.

Meaning & Definition fo COMPENSATION

Employees’ compensation is one of the major determinants of employee satisfaction in an
organization. The compensation policy and the reward system of an organization are viewed by the employee as a indicators of the management’s attitude and concern for them. Hence, it very important
for the management to design and implement its compensation system with utmost care and tact. A good wage and salary administration should be able to attract and retain employees, give them fair deal, keep the organization competitive and motivate employees to perform their best.

Meaning of Compensation

In layman’s language the word ‘compensation’ means something, such as money, given or received as payment for service. The word compensation may be defined as money received in the performance of work, plus the many kinds of benefits and services that organization provides their employee. It refers to wide range of financial and non-financial rewards to employee for their service rendered to the organization. It is paid in the form of wages, salaries , special allowance and employee benefits such as paid vacation, insurance, maternity leaves, free travel facility , retirement benefits etc.

Definition

According to Wendell French,” Compensation is a comprehensive term which includes wages, salaries and all other allowance and benefits.”
Wages are the remuneration paid for skilled, semi-skilled and unskilled operative workforce. Salary is the remuneration of those employees who provides mental labour to the employer such as supervisor, office staff, executive etc wages are paid on daily or hourly basis where as salary is paid on monthly basis.

Objectives of Compensation Planning

The basic purpose or objective of establishing sound compensation is to establish and maintain an equitable rewards system. The other aim is the establishment and maintenance of an equitable compensation structure i.e an optimal balancing of conflicting personnel interest so that the satisfaction of employees and employers is maximised and conflicts minimized, the compensation management is concerned with the financial aspect of employees need, motivation and rewards.

A sound compensation structure tries to achieve these objectives:

• To attract manpower in a competitive market.
• To control wages and salaries and labour costs by determining rate change and
frequency of increment.
• To maintain satisfaction of employees by exhibiting that remuneration is fair
adequate and equitable.
• To induce and improved performance, money is an effective motivator.

a) To Employees:

i. Employees are paid according to requirement of their jobs i.e highly skilled jobs are paid more
compensation than low skilled jobs. This eliminates inequalities.
ii. The chances of favouritism are minimised.
iii. Jobs sequence and lines of promotion are established wherever they are applicable.
iv. Employee’s moral and motivation are increased because of the sound compensation structure.

b) To Employers:

i. They can systematically plan for and control the turnover in the organization.
ii. A sound compensation structure reduces the likelihood of friction and grievance over remunerations.
iii. It enhance an employee morale and motivation because adequate and fairly administrative incentives are basis to his wants and need.
iv. It attracts qualified employees by ensuring and adequate payment for all the jobs.
v. In dealing with a trade union, they can explain the basis of their wages programme because it is based upon a systematic analysis of jobs and wages facts.

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