Impact Of Performance Management On Organizational Success Commerce Essay

Impact Of Performance Management On Organizational Success Commerce Essay The concept of Performance Management is an important HRM process that provides the basis for improving and developing performance and is the part of the reward system in its most general sense. Performance management is a systematic process for improving organizational performance by developing the performance of individuals and teams. It is a means of getting better results by understanding and managing performance within an agreed framework of planned goals, standards and competency requirements. Performance management is: A process for establishing a shared understanding about what is to be achieved and how it is to be achieved, and an approach to managing people that increases the probability of achieving success. (Weiss and Hartle, 1997) Performance management can be defined as a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors. (Armstrong and Baron, 1998) Performance management is all about improvement-synchronizing improvement to create value for and from customers with the result of economic value creation to stockholders and owners. The scope of performance management is obviously very broad because performance management must be viewed at an enterprise wide level. Organizations work more effectively when the goals and objectives of the organization, those of the smaller work units and the job responsibilities of each employee are all linked. When people in the organization understand how their work contributes to the success of the company, morale and productivity usually improve. The aim of all the parts of the company is the key to making these links clear to everyone. (Robert Bacal, 1999) Performance management has three distinct components defined by Banks and May, 1999 that are following: The first component consists of the definition of performance which includes organizational objectives and strategies, the second component is the actual measurement process itself and the third component is the communication between supervisor and subordinate about the extent to which individual behaviour fits with organizational expectations. Many of the components of performance management have been recommended for years as valuable to performance assessment. The importance of performance management is that the process combines most of these suggestions and adds the overlay of the strategic importance of various performance areas. (Frank Conte, 2009) RESEARCH QUESTIONS AND OBJECTIVES The objectives of a research project summarise what is to be achieved by the study. Objectives should be closely related to the statement of the problem. Properly formulated, specific objectives will facilitate the development of the research methodology and will help to orient the collection, analysis and utilisation of data. For example, realizing the two keywords performance management and organization success, it is important for this research study to have a particular organization that will focus in determining impact of performance management on McDonalds success. The research objectives are the goals to be achieved through the research. The Research should always be based on pre-decided questions. These questions help to focus on the research objectives. The first step in any research is defining the problems to be studied and the questions to be asked. (Campbell et al, 1982) A good research question defines the focus of your research project. It helps readers to know the specific subject matter you will be addressing. It can set boundaries to help you figure out where to go next and defines which data you need to collect and which methods you will use to access and analyse your documents (Hung Popp, 2009). Research question needs to be answerable by the kind of study researcher could actually conduct. The researcher doesnt want to pose a question that no feasible study could answer, either because the data that might answer them could not be obtained. (Maxwell, 2005) In the research the following questions will be answered: What is Performance Management? How is it achieved within McDonalds? What is meant by organizational success? How is success affected by the impact of performance management? What are the positive and negative impacts of performance management on an Organization? LITERATURE REVIEW Literature reviews or searches are essential steps in any research project. They often focus on articles in academic journals although textbooks may also be consulted. Performance management is a term, which is widely used in organizations and in particular by human resource professionals. A generic definition is that it is about applying processes, techniques and systems which maintain and improve individuals performance whilst simultaneously aiming to improve the performance of the organization. ( Hale Whitlam, 2000) From the HR field Armstrong and Baron highlight the importance of performance management being strategic, integrated (vertical, functional, HR integration and integration of individual needs), concerned with performance improvement and development. The principle of setting goals for individuals which are linked to organizational goals has a long history, evolving from merit rating to management-by-objectives (MBO- first coined by Peter Drucker in 1955), through Lockes Goal setting Theory of 1968 (Greenberg Baron, 2000) and finally to performance management, which became a recognised process in the 1980s (Armstrong Baron, 2002). Philpott and Sheppard (1992): The fundamental goal of performance management is to establish a culture in which individuals and groups take responsibility for the continuous improvement of business processes and for their own skills and contributions. As stated by Hartle (1995), Performance management should be integrated into the way the performance of the business is managed and it should link with the other key processes such as business strategy, employee development and total quality management. Performance staff members are at all times faced with the test of building agreement as to which workloads are supposed to be treated the best, and categorizing which workloads should be acceptable to experience a constrained setting. Once agreement is attained, the essential tools and measurements have got to be in place to decide if the prioritized workloads are meeting definite goals. Literature reviews of various academic journals and text books written by different authors are very helpful in conducting the research and supporting the research findings with the opinion and point of views of different authors. Performance management of employees is an important element of HR processes in the successful organizations (Burnes 2004). Performance management is a concept which emphasize on the continuous improvement on employees performance which has a good impact on the productivity of the organization in the long run. Effective performance management of employees is very helpful in order to achieve the strategic business objectives (Caldwell 2002). HR managers of successful organizations consider the implementation of performance management process essential for the business growth and development. It also helps the employees to improve and develop their own skills (Chen 2003). Most of the employees working in the organizations want to grow in their field; the supervisors during the performance management process can guide their subordinates which is helpful for them to overcome their professional weaknesses and improve their skill essential for their professional growth (Cherry 1993). The process suggests a complete career growth plan for the individuals by enhancing their performance in a professional business environment. However, it is important that performance management process should be implemented in a way that it should also improves the overall performance of the business by using different business processes like total quality management. PERFORMANCE MANAGEMENT A BRIEF OVERVIEW Performance Management is a method for creating a collective understanding regarding what is to be accomplished and how it is to be accomplished. It is an approach to supervising people that raise the likelihood of reaching success. The performance management process helps the managers and supervisors to provide feedback to the employees regarding their current performance at job and expected level of performance (Covey 1991). It provides clear direction to the employees about management expectations regarding their performance. The compensation and rewarding system is also established based on the performance of the employees over the period of time. It also assists the organizational leadership to identify the training needs of the organization and resolve the performance related issues. It provides opportunity to the managers to set the performance expectations and keep proper tracking of the employees performance (Doorewaard and Benschop 2003). The supervisors and managers can me asure the performance outcomes by comparing it with the performance expectation and performance appraisal can be done on the basis of this exercise. However, it is important that management should adopt the performance management practices that are consistent with the business operation requirements and objectives of the organization (Drumm 1999). An effective performance management process starts with defining the performance objectives which includes tasks and results which needs to be accomplished. It is important for the management to communicate the objectives to the employees in order to get the desired results (Francis 2003). Planning is also an important part of the performance management process. Planning includes making clear to the employee how they assist the organization to accomplish its objectives. Work together with the employees to clarify the performance standards and make sure that there is accountability at every stage. Employees should be made to comprehend the accountabilities and expectations regarding their job. Clarify the behaviours which are required from them and why. Explain them that they are accountable for taking an active role in running and judging their performance all through the year. Effective communication methods could be adopted for this purpose because if the objectives and tasks have not been communicated to the employees, they will not be able to perform according to the expectations. Once the tasks has been communicated and employees have started putting efforts in order to achieve those tasks then continuous performance reviews are very essential to advise employees about their ongoing performance and management expectations. Feedback is considered to be the most critical step in performance management process (Gibb 2001). Give frequent informal coaching. It involves acknowledging the good work that the employee is doing and helping out the employee to perform up to the mark. Discover ways through which the employee can grow and improve, and work together to generate development plans. Rapidly communicate novel opportunities and adjustments that affect the employees job. Name clear actions that the employee can implement so that suggestions offered are co ncrete. Formulate informal observation notes (perhaps on a calendar) whenever the employee performs a good job, make and implement development plan. These observations will assist supervisor while reviewing the performance of employee and filling the performance appraisal form. The supervisor can also note down praise or complaints from consumers concerning an employees work (Hale 2000). The manager and supervisor can use all saved notes regarding the employees performance and evaluate their performance on accountabilities and behaviours. The supervisor can invite the employee for feedback with reference to how they performed throughout the year. They may perhaps remind the supervisor of particular occasions of good performance or troubles outside their control that harm their capability to do their job well. After completion of the performance appraisal forms talk to employee about ratings and remarks. The most important step in this process is to recognize and reward the employees for their good performance because it will not only motivate employees to go extra mile to meet the goals but also increases the loyalty of the employees. In the modern business worlds loyalty of internal customers has been an important concern for the HR managers because if employees dont feel ownership of the work they will never put their 100% efforts for the success of the business (Huang 2001). Therefore, it is important for the organizational leadership to recognize the employees for their efforts and compensations should be made on the basis of employees performance and efforts because if employees are compensated and rewarded on performance basis then it will create an atmosphere of healthy competition within the organization essential for individual and organizational growth (Hunt 2003). Training and development of people is also an important step in performance management process which helps to improve the skills of the employees according to the job requirements (Hyland and Verreault 2003). The value of employees and their progress all the way through training and education are key features in shaping long-term profitability of a business. If you appoint good quality employees, it is likely to spend in the development of their skills as they can enhance the productivity. Training is mostly thought to be for new employees only which is a wrong perception because continuing training for existing employees facilitates them to adjust according to the varying job and business requirements because external environment is changing on continuous basis and it is essential to develop and train the employees according to the latest system and processes in order to increase the efficiency of the business and maintain the market share (Johnson and Scholes 2002). An important step in performance management process is to link the individual objectives with the business objectives and directing the efforts of the employees towards the achievement of those objectives. Here comes the role of the immediate supervisor of an employee who can direct the employees efforts towards accomplishment of specific objective and make the employee feel that his efforts are important for the growth and success of the business (Kane and Grant 1999). At the end of the process it is important to ensure that individual efforts should be directed towards meeting the organizational goals. It needs to be determined the contributions of each team towards tasks achievement. This is also helpful in defining the future human resource policies and strategies. These approaches may help to improve organizational performance depending on if they are put into practice at length and stay alert on managerial outcomes. Some of the following, e.g., organizational learning and knowledge management, might be interpreted more as movements than organization performance strategies because there are wide interpretations of the concepts, not all of which include focusing on achieving top-level organizational results (Liao 2005). Nevertheless, if these two notions are instilled from corner to corner of the organization and focus on organizational outcomes, they can add strongly to managerial performance. On the other hand, the Balanced Scorecard, which is purposely intended to be inclusive and focused on organizational results, will not develop performance if not applied from a strong design. THEORIES OF PERFORMANCE MANAGEMENT The fundamental structure of performance management is drawn from basic principles of well-established motivational and learning theories. These theories are underpinning of performance management in this research proposal. Goal theory was developed by Latham and Locke (1979) who highlights four mechanisms that connect goals to performance outcomes: They direct attention to priorities; They stimulate effort; They challenge people to bring their knowledge and skills to bear to increase their chances of success; The more challenging the goal, the more people will draw on their repertoire of skill. This theory underpins the emphasis in performance management on setting and agreeing objectives against which performance can be measured and managed. Control theory focuses attention on feedback as a means of shaping behaviour. As people receive feedback on their behaviour they appreciate the discrepancy between what they are doing and what they are expected to do and take corrective action to overcome the discrepancy. Feedback is recognized as a crucial part of performance management processes. Social cognitive theory was developed by Bandura (1986). It is based on his central concept of self-efficiency. This suggests that what people believe they can or cannot do powerfully impacts on their performance. Developing and strengthening positive self-belief in employees is therefore an important performance management objective. Clayton P. Alderfer (1972) devised ERG theory of human needs that explained three primary categories: Existence: This is akin to physiology and security needs in Maslows hierarchy of needs. It is concerned with fulfilment of basic requirements like food, shelter and clothing. Relatedness: It is related to needs like interpersonal relationships, acceptance as a member in a group/society and family relationships. Growth: This need involves people finding the opportunities to be what they are most fully and to become what they can. Expectancy theory developed by Porter and Lawler (1968) and it states that motivation will be high when people know what they have to do to get a reward, expect that they will be able to get the reward and expect that the reward will be worthwhile. So this theory leads to the performance management. Equity theory demonstrates the importance of perception in motivational behaviour of employees. The central theme of this theory is that satisfaction as a consequence of job performance is contingent upon the perception of equity. Stacy Adams (1965), who was given credit for development of this model, had brought recognition to the issue of equity in performance management. As we know literature review is the major part of the research project. So, it is necessary to know what has already been covered and the theories that have been developed to provide leads and reference points or as the basis for a grounded theory. METHODOLOGY Methodology usually refers to the general approaches to research, while method refers to techniques for gathering evidence (Gancian 1992). Therefore Methodology is a theory and analysis of how research does or should proceed (Harding 1987). Methodology is that how to apply the methods in the research. In my research, the methodology will be based on both, qualitative and quantitative data collection techniques. The qualitative research aims to generate insights into situations and behaviour so that the meaning of what is happening can be understood and it is often a useful tool to discover research questions. Quantitative research is empirical-based on the collection of factual data that is measured and quantified and in other words it is the link between cause and effect. The proposed methodology will include both primary and secondary data collection techniques. Data collection techniques will include comprehensive database research, highlighted data, surveys, supplemental intervie ws. By using the case study in research, the concept will be better understand. The analysis of this research is qualitative which is used to highlight the different patterns and make it easier to understand. In this research, the case study will be on McDonalds. The structure of research is based on literature review. (Saunders et al 2008). INTERVIEWS: Interviews are an important research method. Interviews are basically qualitative but they can become more quantitative by the use of content analysis. The advantages of interviews are that they obtain information directly from the people involved in the area that is being researched and can provide insights into attitudes and perspectives. It gives opportunity to give information of research to interviewee so he/she can give relevant information (Zikmund, 2003). The interviewer is an integral part of the investigation. (Smith, 1983) SURVEYS: Surveys obtain information from a defined population of people. They provide more powerful data than other methods by using a combination of questionnaires and interviews and possibly focus groups. (Zikmund, 2006) states that the main purpose of survey in research is to collect primary data, which is assembled specifically for the research. CASE STUDY: A case study is a description or history of an event or sequence of events in a real life setting. Case study protocol sets out the objectives of the research, how the case study will support the achievement of those objectives, including the evidence required and how the work of producing the case study will be conducted. This methodology covers sources of evidence such as interviews, observations, documents and records. The use of multiple source of evidence, each with its strengths and weaknesses, is a key characteristics of case study research.(Gillham, 2000) DATA ANALYSIS: The data collected through interviews, surveys and case studies will be continuously analysed. Doing data collection and data analysis, according to Merriam (1998) is the right way to do it in qualitative research. It is helpful, as it enables the researcher to focus and shape the study as it proceeds, through consistent reflection on the data and attention to what the data are saying (Glesne, 1999).

HBS Marriott Case

Marriott Corporation has three divisions – lodging, contract services and restaurants – with dissimilar operations. The company uses three separate hurdle rates for the three divisions to value the proposed projects. It is believed that this strategy is more appropriate that using a single firm-wide discount rate because the operations of the three divisions differ drastically. However, the company has to ensure that the company uses an appropriate discount rate for each division. Therefore, we calculate the appropriate cost of capital for Marriott as well as for each of the three divisions. A detailed analysis is presented about the appropriate calculation inputs for each of the three divisions and various assumptions, made while performing the calculations, are justified. 1) Are the four components of Marriott's financial strategy consistent with its growth objective? The first component of the strategy is to manage rather than own the hotel properties. This objective mitigates the investment needed to launch new hotels, as the general partner is not required to make significant investments. Although it may be argued that such a strategy could decrease the profit margins, the growth prospects are certainly easily achievable because of less limitation on the resources required. The second objective is an important characteristic of modern corporate finance. It believed that focusing on maximizing shareholder value should be the underlying aim of every corporation, leading to stable growth and healthy profits. With regard to the third objective, Miller and Modigliani claimed that the use of debt, in the presence of corporate taxes, could increase the value of a company through the value added by debt tax shield. In modern finance, it is commonly believed that debt can increase the value of a corporation. However, a company should be careful about high debt levels because of the distress costs associated with high debt. As stated by Marriott, a corporation should aim to optimize its debt at the most beneficial level. The repurchase of undervalued shares might not always be consistent with the growth objective. The repurchase program could make sense if the shares are believed to be highly undervalued and the company does not have more attractive investment opportunities to utilize its cash. However, the strategy could also hinder growth if the company is foregoing highly profitable investment opportunities in order to take advantage of slight under pricing in its shares. 2) How does Marriott use its estimate of its cost of capital? Does this make sense? Marriot evaluates its investment opportunities using the discounted cash flow approach, which requires an estimate of the cost of capital. Technically, the cost of capital for each investment should be commensurate with the amount of risk inherent within the investment. Thereby, if a company has ten different prospective investments, it could have ten different cost of capital estimates for the investments. However, it is impractical for companies to estimate a separate cost of capital for each investment opportunity. Usually, a company operates in a uniform line of business and has investment opportunities with similar risks. Therefore, it is normal for companies to use a single firm-wide cost of capital. However, companies with multiple divisions often use separate cost of capitals for the divisions because each division has separate operations and risks. Marriott Corporation has three separate divisions and employs three separate hurdle rates – one for each division. This treatment is consistent with theory as long as the hurdle rates adequately compensates for the risk inherent in each division’s investment and risk does not vary significantly across investments within a division. ) What is the weighted average cost of capital for Marriott Corporation as a whole? What risk-free rate and risk premium do you use to calculate the cost of equity? How do you measure Marriott's cost of debt? There is no agreed-upon measure of riskfree rate that investors could use. In fact, the available riskfree interest rate could be argued to change with changes in business cycles and economic policies. In t he US, the rate offered by US Treasury securities is often deemed riskfree because of the negligible default risk. However, there is a disagreement regarding the maturity of the treasury security that should be used as a proxy for riskfree rate. Since Marriott is seeking to optimize its debt at a long-term stable level, it is believed that the maturity of the company’s debt will be long. Therefore, the 10-year Treasury bond seems to be an appropriate measure of riskfree rate. The cost of debt is calculated by adding the specified risk premium to the selected riskfree rate. The cost of equity can be calculated using the Capital Asset Pricing Model (CAPM). The market risk premium is an important constituent of the CAPM. The market risk premium estimates the premium for the excess risk taken by market participants. Investors can earn a certain degree of return – the riskfree rate – without taking any risk. Therefore, the riskfree rate should be subtracted from the market return to calculate the market risk premium – the extra return that investors earn by taking risk. We already have an estimate of the riskfree rate that can be used for Marriott. Therefore, the market risk premium can be calculated by estimating the appropriate market return. The proxy for market return is usually a national stock index such as the S&P500 for US companies. In contrast to the Treasury bond market, where the yields provide an estimate of the future returns on the security, there is no consensus estimate on the future expected return on the stock market. Therefore, historical averages of stock returns are typically used to estimate the future expected return on the market. We use biggest available period – 1926 to 1987 – to estimate the average historical market risk premium. The information about riskfree rate and the market risk premium can be combined with equity beta of Marriott (provided in the case study) to calculate to cost of equity of the company. Once we have the respective costs of debt and equity, the weighted average cost of capital (WACC) is simply their average – weighted using the target proportion of debt provided in the case study. The calculations in the attached spreadsheet show that the WACC for Marriott is 10. 39%. 4) What type of investments would you value using Marriott's cost of capital? The cost of capital estimates the riskiness of an average investment within the company. If an investment under consideration by Marriott has more risk than the average investment risk, the cost of capital would understate the risk and overstate the value of investment. On the other hand, if an investment has less risk than the average investment risk, the cost of capital would overstate the risk and understate the value of investment. Therefore, the cost of capital is only appropriate for valuing investments, which closely resemble the typical investments carried out by Marriot Corporation. If an investment has a different amount of risk than the typical investment in Marriott, the company should strive to calculate the cost of capital that is consistent with the investment in question. One way of estimating the appropriate cost of capital would be to look at the comparable companies where that particular investment would be a typical investment. For example, an investment in sports equipment could be evaluated by looking at the cost of capital used by a sports club that uses similar equipment. ) If Marriott used a single hurdle rate for evaluating projects in each of its divisions, what would happen to the company over time? Marriott has three separate divisions with dissimilar operations. The firm-wide cost of capital is probably a weighted average of the three individual costs of capital commensurate with each of the three divisions. While the firm-wide cost of capital might be a good measure of the risk of an average investment undertaken by the company, it is proba bly not a good measure of the investment risk inherent in each division’s average project. If the company continues to use a single discount rate for each of its three divisions, the project cash flows of the division with more than average risk would be overstated, while the project cash flows of division with less than average risk would be understated. Therefore, division with more than average risk would start accepting projects that would have been otherwise rejected if a more appropriate higher discount rate were used. On the other hand, the division with less than average risk would start rejecting projects that would have been accepted if a more appropriate lower discount rate were used. In short, the more risky division would accept negative NPV projects, while the less risky division would reject positive NPV projects. 6) What are the costs of capital for the lodging and restaurant divisions of Marriott? The division wise calculations of the cost of capital are shown in the attached spreadsheet. The weighted average costs of capital for the lodging and restaurant divisions are 9. 76% and 13. 32% respectively. It is important to note that the discount rates differ because certain inputs in the calculations are dissimilar. The most significant differences are in riskfree rates, asset betas, and debt proportions. a) What risk-free rate and market risk premium do you use in calculating the cost of equity capital for each division? How do you choose these numbers? There is no full consensus of which proxy for riskfree rate should be used. Nevertheless, it is generally believed that the maturity of the riskfree rate proxy should match the purpose for which the rate is utilized. It is mentioned that the lodging division has more long-term assets, while assets of restaurant division are short-term in nature. Therefore, one-year riskfree rate has been employed in the restaurant division, whereas a higher ten-year rate has been utilized in the lodging division. On the other hand, the market risk premium for both divisions is the same as the market risk premium previously used for the whole company. Although the asset betas for the divisions have been calculated using the past five years data, it is believed that a larger pool of data should be used to estimate the market risk premium because the recent volatility in the markets might distort results. ) Did you use arithmetic or geometric averages to measure rates of returns? The arithmetic mean adds the annual historical risk premiums and averages the results, while the geometric mean is equal to the compounded annual risk premium. In professional practice, both these methods of calculating average historical risk premiums are regularly employed. However, there is a major statistical difference between the two approaches. Geometric mean is a compounded average of risk premiums and is, therefore, a good predictor of the risk premium over multiple future time-periods. On the other hand, arithmetic mean is the best predictor of risk premium for the forthcoming time-period. In other words, arithmetic mean would be better at predicting the risk premium for the next year, while geometric mean would be superior at predicting the average risk premium over the next few years combined. In this case, we are calculating the risk premium for the purposes of using it in the CAPM model. The CAPM is a single period model, which estimates the cost of equity over a specified time interval. Therefore, the arithmetic mean might be a better method in this context. ) How do you measure the cost of debt for each division? Should the cost of debt differ across divisions? The rationale for using different riskfree rates for the division has already been explained in the preceding section. The case study also provides different levels of risk premiums that should be added to the riskfree rate to calculate the total cost of debt. It could be argued that the company only p ays a single cost of debt, and there is no need to calculate separate cost of debt for each division. However, each division has separate financial leverage, different sales, and a unique ability to cover its debt obligations. Therefore, each division’s debt should also be rated separately for more accurate capital budgeting. d) How do you measure the beta of each division? The betas for the divisions have been calculated using the pure play approach. Under this approach, the equity betas for companies, comparable to each division, are unlevered in accordance with the respective leverage. The resulting asset betas are then averaged to obtain an estimate of the asset beta for each division. Subsequently, the respective asset beta for each division is relevered, using the target debt ratio for the division, to obtain the equity beta. ) What is the cost of capital for Marriott's contract services division? How can you estimate its cost of equity when there are no publicly traded comparables? The beta for contract services division cannot be obtained directly because there are publicly traded comparable companies, which could have been used to employ the pure play approach. However, we do have informati on about the asset beta of the overall company as well as the asset betas for the remaining two divisions. Theoretically, the overall asset beta for Marriott should be a weighted average of the individual asset betas for the three divisions. The weights can be calculated using the information about identifiable assets in each division. Thereby, the only unknown in the equation is contract services division’s asset beta, which can be obtained through basic arithmetic. Subsequently, the asset beta can be levered using the target debt proportion to obtain the equity beta, which can be used is the CAPM equation to calculate the cost of equity for contract services division. The WACC for the division is simply the weighted average of its cost of equity and cost of debt. The calculations in the attached spreadsheet estimate the cost of capital to be 8. 4%. 8) Marriott also considered using the hurdle rates to determine incentive compensation. How do we link this with the Economic Value Added (EVA) approach? The objective of any company’s management should be to maximize the shareholder wealth. Shareholder wealth increases when a company consistently produces positive economic value. In this context, economic valu e added is measured as the excess operating profits over the dollar cost of capital. In mathematical terms, economic value added equals net operating profits after tax minus the product of cost of capital and capital employed (dollar amount of WACC). The concept of economic value added is closely linked to the concept of net present value (NPV) calculated using the hurdle rates. Specifically, a positive NPV project will generate positive EVA, while a negative NPV project will generate negative EVA. Therefore, if a company only accept positive NPV projects, calculated using the appropriate hurdle rates, it will generate positive EVA on the profits generated from these projects. Therefore, a manager’s compensation could be linked to the amount of positive net present value that the manager generates through new investments.

Ritual acts in Judaism, Islam and Christianity - Free Essay Example

Sample details Pages: 2 Words: 618 Downloads: 8 Date added: 2019/07/18 Category Religion Essay Level High school Tags: Christianity Essay Islam Essay Judaism Essay Did you like this example? Many religions have similar characteristics in which we can compare. These similar characteristics are termed family resemblances, which means that these religions have unique qualities that are similar to one another. Ritual is a trait that can show similarities amongst various religions. Don’t waste time! Our writers will create an original "Ritual acts in Judaism, Islam and Christianity" essay for you Create order Rituals are acts that help ties an individual and community to what they call their sacred. These acts can be described as either orthopraxy, orthodoxy, or the rite of passage. Orthopraxy emphasizes correct practices and orthodoxy is emphasizes correct beliefs within religion. The rite of passage is when one or an entity transitions from one stage to another. All of these acts help define what makes up a religion. Rituals play a great role when it comes to the three religions: Judaism, Islam, and Christianity. Judaism is a religion that has various rituals that help ties their community with their sacred. Judaism is an Abrahamic religion in which the Torah is its text that withholds their foundation. One ritual that they have is being kosher, which are dietary laws. One of the dietary laws is that they must not eat pork because pigs have hooves and represent uncleanliness. It is also a Jewish law to not mix meat and dairy. This is because meat represents a physical body that leads up to death and milk is seen as a life-giving entity because it comes from mothers. This law is to separate what leads to death from what can lead to life. Another ritual is the Jewish celebration, Bar Mitzvah. This celebration is the becoming or rite of passage into adulthood for a boy. The boy becomes a full member of Judaism and is able to interpret the Torah. These are two ritual acts that are important to the Jewish culture and the Islam religion also has ritual acts that share the same importance. Islam is a Muslim religion that represents their faith with ties to their sacred, Muhammad. Muhammad is the Prophet of Allah and is who they worship. Islam rituals is also known as the Five Pillars of Islam. One pillar represents the statement of faith, which is that there is no other God, but Muhammad and he is the prophet. The second pillar is prayer or Salat, praying five times a day. The third pillar is almsgiving, and this is when they must pay 2.5% of their personal wealth to help benefit the poor. The fourth pillar is the fast of Ramadan, where they must not eat nor drink during daylight hours. The last pillar is the Hajj or pilgrimage to Mecca. These are all acts that the Muslim religion must commit too for their practices and beliefs. These practices and beliefs share significant value to that of the Christian rituals. Christianity is a religion that is based on the teachings of Jesus, and its practices and beliefs. The main ritual act in Christianity is the belief in the Holy Trinity. The Holy Trinity is defined as there being one God, but he portrays three persons. These three persons are God the Father, Jesus Christ, and the Holy Spirit. They also have the belief that Jesus died and resurrected. It is important that they believe in this because they also have the belief that he will come again for Judgement Day, salvation. These are major ritual beliefs in Christianity and share the same value of the rituals expressed in both Islamic and Jewish religions. Rituals help set the foundation in Judaism, Islam, and Christianity. The beliefs and practices within all of these religions show distinct family resemblances because they all help tie each community to their sacred. This helps to show that ritual acts in Judaism, Islam and Christianity has a significance to each religion.

An Effective Civil Justice System General Law - Free Essay Example

Sample details Pages: 13 Words: 3882 Downloads: 4 Date added: 2017/06/26 Category Law Essay Type Argumentative essay Tags: Justice Essay Did you like this example? An insight into the civil process before the present change was first made by Charles Dickinson in his novel bleak house The civil justice process is in many respect quite different from the criminal justice system .the criminal justice system pits the state and its agencies the citizen while civil justice system essentially involves different individuals, companies etc But civil justice process is a complex social process. It is important to note that an effective civil justice process is one which is effective as justice delayed is justice denied. In 1995 a survey by national consumer council found that 3 out of every 4 people in serious legal dispute were dissatisfied with the civil justice system According to the civil justice review 1998 the civil justice system was costly, unfair, and ineffective .It caused anxieties, tress and economic fears amongst people and as a result people usually hesitated from being involved in the process of litigation. Don’t waste time! Our writers will create an original "An Effective Civil Justice System General Law" essay for you Create order In the past, there have been many review carried out But the biggest attempt to reform the process has been carried out as a result of measures introduced in the report made by lord Woolf  [2]  . The present system of civil justice is based on the reform recommended by Lord Woolf In 1994 conservation government appointed lord Woolf to head a review into the civil system .In his report access to justice 1996 lord Woolf identified fundamental problem with the system and suggested ways to over come them The final format of report contained 303 recommendation and it was published in July 1996 The changes proposed by lord Woolf were widely supported by the government, trade unions, opposition etc the government approved most of the reforms Lord Woolf began form the proposition that the system was in a state of crisis a crisis for the government ,the judiciary and the opposition .consequently in 1997 the civil procedure act was passed to in torduce necessary changes .in 1998 t he civil procedure rules were passed these rules produced one simplified set of rules for the high courts and county courts The rules were drafted in plain English ,introduced judicial case management ,and were in line with the recommendations of lord Woolf The basic objective of the civil justice system proposed by lord Woolf are that the system should aim to be just ,accessible efficient ,timely, effective however the report access to justice found that virtually none of these points was being achieved in the civil courts and criticised the system for being unequal .expensive ,slow uncertain and complicated  [3]  .lord Woolf claimed that the civil justice system had become excessively slow complex and expensive there was undue complexity of law and courts procedure ,uncertainty about how much time ,money would be required and unfairness the main aim of the proposal are were stated as cutting delay reducing expenses and simplifying the process of litigation Mainly there a re three main aspects to the reforms Judicial case management Pre actions protocols ADR (Alternative dispute resolution) Firstly Woolf recommended that as opposed to the past ,case management by judges should be encouraged case management is probably that most significant reform .This new system allocates case to one of the three tracks ,depending upon their financial value and complexity which are small claims ,fast track ,multi track. Small claims deal with claims less than 5000 pounds and deals with cases regarding consumer disputes, personal injury etc. The process is quick, cheap and simple .No legal aid is provided for small claims .however the fee of courts is very nominal. A person ay resent himself without a lawyer. But its disadvantage will probably be facing a large company with trained experienced lawyers. Fast track deals with cases having claim between 5000 pounds to 15000 ponds .these cases are heard in county courts. A strict but reasonable time tables is se to bring the case to the trail. No oral evidence is heard. Instead voidance will e read form prepared statement. Each side is only permitted to use one expert witness. Lord Woolf also proposed the idea f fixed rate for lawyers. but this deal has received much criticism and little support form legal profession. Multi tracks deals with cases having claimed more than 15000 pounds these cases are heard in high courts. Unlike fast track, flexibility in the date of trail is given .more over judges ill be given the training to manage cases now judges is under an obligation to manage case actively. This includes encouraging cooperation between the parties; identify issues at an early age etc. Previously lawyers were at liberty to take inordinate time to solve things, related to the case. Accordingly in an attempt to resolve cases things more quickly, a set of guideline has been established namely pre actions protocols .They are enforced before going to the courts and encourage people to settle, before the case goes to trail. In this respect to protocols have been drawn up to apply in the largest areas of litigation i.e. clinical negligence and personal injury  [4]  . The object of the protocols is to encourage greater contact between the parties at the earliest opportunity, to prevent cases going to the courts. Before lord Woolf proposal the cost of taking action in the civil courts has been great .The old rule that costs follow has been created a great for the parties to settle their claims before the trail. The main focus of the changes is to avoid going to courts wherever possible, instead ADR should be well encouraged. ADR is a process alternative to court action where the parties choose an independent third-party and agree on a certain time table. It is a process of settlement and parties may not agree at the onset to be bound by the conclusion. The term alternative dispute resolution is define in the Glossary to the CPR as a collective d escription of methods of resolving disputes or else than through the usual trial process. In exercise nevertheless references to ADR are usually unspoken as being references to some form of mediation by a third party  [5]  . In recent years there has been, country and overseas, a growth in alternative dispute resolution (ADR) and an growing acknowledgment of its involvement to the fair, suitable and effective resolution of civil disputes litigation is not the only means of achieving this aim, and may not in all cases be the best  [6]  .Conciliation, mediation and arbitration are method of resolving disputes.  Commonly, arbitration is distinguished by the fact that the arbitration decides the dispute, while conciliation and mediation only aim to help the parties to reach a settlement of the disputes. Arbitration is the first of alternative dispute procedure it come into play anywhere the parties have trouble with all other and they want to resolve the dispute outside the court. The benefits of the arbitrations incorporate its solitude, agility, speed and the know-how of many arbitrators. It is generally but not always cheaper than courts.   In arbitrations dispute are dogged with compulsory effect by a person or persons acting in a judicial manner in secret rather than by a court of law that would have authority but for the agreement of the parties to barred. It is not unusual for arbitration to be classed as a form of ADR, but this is potentially deceptive. In many important compliments arbitration has more in common with court-based litigation than other forms of ADR. T he arbitrator does this by making an award and giving the reasons for doing so. Neither parties may then start a court action in relation to the same dispute. The courts will not get in the way with the decision if not the arbitrator acted rudely or unless fresh evidence is introduce and the power for this statement was given where the parties were involved in adjudication under UNICTRAL rules in London. The arbitration took place in private and the award was in print only to the parties. The judgment was not noticeable private and the publishing company Lawtell inward a copy of the judgment, which in good faith it summarised on its website and by email to its 15,000 subscribers  [7]  . The full text of the ruling could be in print. Although the hearing might have been in private, the ruling should be given in public where that could be done without disclose important secret information; there has to be a poise  [8]  . An arbitrator has discretion not to award costs, b ut usually awards reasonable costs to the winning party. The only right to appeal against an arbitrators decision, is through the High Court on a count of serious irregularity, such as a violation of natural justice, the excess of jurisdiction, or a visible error of law. Arbitration can be conducted in private and confidentially. Going to court is a sure way to wash dirty linen in public. Arbitration lets parties choose their own judges each party usually nominating one arbitrator who between them choose a third. Because the majority rules, decisions cant be skewed by a rogue appointee. Parties can choose a neutral venue for the hearing and a neutral language if necessary. Although arbitration takes place under strict rules the process and basis for decision are not as rigidly defined as in court. For example, rules of evidence are not as strict, and parties can usually have a say in how they want the hearing to be conducted. Arbitration can save time and to businesses ti me means money because the arbitrators can tailor the procedure to the dispute and rights of appeal are more limited. And if both sides agree, they can forego appeals completely. The 1996 Act provide that the adjudication procedure is carried out in a legal manner in line with Natural Justice arbitrators are required to give reasons for decision and awards. Arbitration is voluntary but the courts do uphold a supervisory role. IT can be seen in the case where D built a dam in Lesotho Africa for C. The party took a dispute about extra labour costs to an arbitration court in London. The court made reward in sterling and Euros quite than the local Lesothan currency. Under the 1996 Act, a party may apply to the court challenging an award if the court has exceeded its powers. nevertheless, International Chamber of Commerce  [9]  (ICC) Rule provide that all party forego any right of appeal to the courts except for a serious irregularity under the 1996 Act. Where his Lordships refused to disturb the court award. They uphold the principle of great significance of negligible interference in arbitration proceedings  [10]  . The Act was examine textually. A high threshold was required for the courts to intervene in arbitrations.   Ã‚  [11]  Lord Steyn adopt a purposive approach preservation that the 1996 Act was intended to promote one-stop arbitration. A major purpose of the 1996 Act was to decrease radically the extent of interference of courts in the arbitral process. 12The Act has though given English arbitration law an entirely new face and a new foundations. The English court establishment have been replace by the statute as the principal basis of law. The power of foreign and international method and concept is obvious in the book and structure of the Act, and has been openly recognized  [13]  . Finally, the Act embody a new balancing of the associations between parties, advocates, and courts which is not only intended to achi eve a policy proclaim within Parliament and outside but may also have distorted their juristic nature .Arbitration is also available in the county court under the small claims procedure. The supplies of the Arbitration Act 1996 extend to small claims arbitration in the county court and consumer arbitration agreement  [14]  .for example in sec 5 the act requires that in order to make an agreement there must be a written evidence. Secondly the power and the possibility of arbitration in case of contract can be easily seen in the case of Scott v Avery  [15]  where according to arbitration rule an award form the arbitrator is limited  [16]  . ADR in case of employment act 2002 which was made to encourage comprises and settle the effect of pre actions protocols  [17]  . The advisory conciliation and arbitration service was made to protect the employment on order to help or resolve trade dispute in short improve industrial relations . It is simpler to use ACAS  [18]  arbitration service where the decisions is unfair .such cases could arise out of breaches of the parties agreed to bound but the features of is that if the parties some how agreed on certain term the arbitrator is still binded under sec 58, and arbitrator act 1996. According to section 1 of arbitration which is about the freedom to arbitrate lays out the principle that the principle are free to agree and settle there disputes without any interference and the court should not interfere. In detail the court will more often than not not only refuse to interfere but in fact put into effect the arbitration. The acas provides free independent and impartial arbitration to employers and employees who vary which means there are certain rules and the most importantly there are many versions of it such as icc, lcia or American arbitration association. It is helpful in adversarial court system like ours in(uk)  [19]  .The case of dunnett where dunnett kept horses in a field that adjoin ed an inter-city railway line. A gate leading from her field was replaced but could be left open. The workmen said that to fit a lock would be illegal. Three horses escaped and were killed.  The judge found that it had not been reasonable for C to rely on the workmens advice. At the hearing at which permission to appeal was granted, the court stated that the parties should attempt alternative dispute resolution (ADR). The defendant refused outright to consider ADR and offered inadequate compensation and the matter proceeded to the hearing of the substantive appeal it was stated that the court should further the overriding objective of the CPR by encouraging the parties to use ADR (active case management). Furthermore it was stated that the parties were required to help the court in furthering the overriding objective.   To flatly turn down ADR could place the party doing so at risk of adverse consequences in costs won, but no costs order made. Dennett was applied in Leicester Circuits Ltd v Coates Brothers plc [2003] (there is a prospect that mediation will succeed, and an unexplained withdrawal has cost implications) Arbitrators might use there ow n rules even in international disputes which are enforced by Geneva conventions (1927) and the new York convention (1958) . An arbitration clause is commonly used in contact which is used to settle disputes through arbitration process. Generally arbitration is a process through which allows the parties to settle the disputes outside the court but still it is considered as an important part of Making a contact .In united states the federal government has made a written guide line for arbitration clauses to reduce the burden of the courts and authority for the statement was given in the case prima paint crop v flood Conklin mfg co where the supreme court held that a contract can be challenged at any stage if not the arbitration clauses itself has been challenged .Moreover, arbitration clauses is often combined with geographic forum selection clauses, which are also fully enforceable. The result is that a applicant might find himself or herself obliged to arbitrate in a extraordinar y private meeting thousands of miles from home, and the arbitrators may make a decision of the case on the basis of the law of a state or a nation which the applicant has never visited. arbitration clauses has never been challenged but In  Graham v. Scissor-Tail  [20]  the  Supreme Court of California  establish that an arbitration clause in a  contract of adhesion  which essentially puts disputes prior to a body that would tend to be biased towards the defendant is excessively oppressive therefore annulled as  unconscionable. For this reason a lot of arbitration clauses assign widely recognized neutral organization such as the  American Arbitration Association.Other terms may void an arbitration clause In the case of   Armendariz v. Foundation Health Psychcare Services Inc  [21]  where the court held that a one-sided arbitration clause in a contract of adhesion for employment (deemed a necessity) may also be void as unconscionable because of the relative positions of the parties involved. In that case, the court establish that there is a procedural unconscionability where a worker was supposed to arbitration but the employer was not in other words, the agreement lacks mutuality of compulsion. even though in Federal Court, the  United States Court of Appeals for the Eighth Circuit  has lined the exact opposite on mutuality of obligation  [22]  , and substantive unconscionability where the contract limited the damages the employee could recover through arbitration. Some legal orders exclude or restrict the option of arbitration for number of reason, e.g. consumers. For instance German law excludes disputes over the rental of living space from any form of arbitration  [23]  , as arbitration agreements with consumers are only measured valid if they are either signed,  [24]  Ãƒâ€šÃ‚  or if the signed document does not bear any other content than the arbitration agreemen t  [25]  .  The limit does not apply to notarized agreements because it is supposed that the notary public might be well informed and the consumer should have known about the content and its implications..Secondly In keeping with the casualness of the arbitration process the law is usually intense to support the validity of arbitration clauses still when they lack the normal formal language associated with legal contracts. Clauses which have been uphold and therefore includes arbitration in London and English law to apply  [26]  secondly suitable arbitration clause  [27]  thirdly arbitration, by ICC Rules in London  [28]  . More importantly the courts have also upheld clauses which specify resolution of disputes which include provision that a arbitrators must not judge according to the strict law which is generally rule ought to be considered the principles of practical business  [29]  and internationally accepted principles of law governing contractual re lationship.  [30]  Where as in USA the California courts contain the authority to employ a arbitrator to hear and determine any and all discovery motions and dispute relevant to discovery, and to report and to make recommendation  [31]  . A court can appoint a arbitrator on demand of either party  [32]  .A arbitrator may be certain by agreement of the parties file with the clerk enter in the minutes  [33]  . Anywhere the discovery matter is complex and necessary. The court has the power to utilize an arbitrator to hear and decide discovery disputes either without the parties to consent. Appointment of a discovery an arbitrator is authorized nevertheless only where its necessary moreover it is to determine such motions or disputes  [34]  . subsequently the specific needs must be met before a state and the court may order a location. likewise a district court might appoint masters to grip pre-trial matter that cannot be handle effectively in addition appropri ate by an available district judge  [35]  . A master may be appointed to manage discovery activity (e.g., to review discovery documents for privilege A coverlet order direction discovery motions to a arbitrator and improper in routine matters  [36]  .and-exceptional circumstances is needed. But such orders are proper and in unusual cases such as cases in which the inquest essential to decide the dispute will consume inordinate time because of a majority of the following factors exist such as a need for many factors that resolved around and the need to have many motions heard consecutively secondly a pending motion is only one of many where as the need to reconsider numerous and huge documents which is especially in connection with issues based on declaration of a privilege  [37]  . Arbitration has following advantages over court litigation that its less expensive however there are some exception due to allots of parties .secondly exclusionary rules of evidence cant be apply as long as relevant and non cumulative. Thirdly there is no recording of public proceeding in other words kept confidential which is required for arbitration agreement. Fourthly there is less exposure to punitive damages and run amay form juries . More importantly it limit discovery because it control what the parties agreed upon and what they want .furthermore the arbitration process is less adversarial than litigation which helps to maintain business relationships between the parties. When discussing the role of arbitration in relation to courts it is important to discuss the disadvantages of arbitration because in arbitration there is no right of appeal even if the arbitrator make a mistake even if it is related to fact or law .Moreover there are some limitation that it is difficult to define .secondly the arbitration process may not be fast and it may be more expensive and ther is no jury on the foam of claimant point of view which is serious draw back. Thirdly an arbi tration awards cannot be the essential for any malevolent prosecution. More importantly in certain circumstance the arbitration agreement cannot be forced to arbitrate  [38]  . The increase in the use of obligatory arbitration in genuine estate agreements has-been a uprising as compare to photocopy machines, voice mail, facsimile transmission, email, word processing, computers, search engines, text retrievable systems, scanning and automatic redlining. Obligatory arbitration will continue to expand because Public policy that favours arbitration of disputes and the legislative shift of the cost of court house civil trials to the Litigants alike to the shifting of the cost of cleanup of contaminated. Although there are many criticism against arbitration but it should be kept in view that majority of reforms are based around the facts of trying to overcome delay which were mainly caused due to faults in the system. Hence changing it wont reduce the problem, they were due t o deeply in built features of English legal system. By neglecting this fact, the proposed reform might take make matters worse. Michel zander argued that Woolf not commissioned any research on what caused delay .but simply assumed it the way the lawyers operate under adversarial system. The lawyers also complained that the cost at the start of case are heavier than before. if the case is settled early these cost still have to paided . Another flow with arbitration is that some county courts are in efficient and provides delay and poor service . Moverover the instigation of the county and high court is also not too advantageous because hearing both small and large claims in one court would likely result in small claims not getting sufficient consideration. The most significant is probably that there are no precedent .no guideline are provided for future decisions may prove difficult to enforce as the courts do not make them Professor zander also criticised case management as it is only appropriate in a minority courts. he jails that court cannot set suitable timetables as they do not possess enough knowledge of the working of a solicitors office and judges do not have the time or skills to take on such a job . zander also referred to us research that highlighted inconsistency in judicial decisions ,when judges are given more discretion and case management responsibilities . More importantly enforcing arbitration in other countries the court decisions can easily be obtain in one country but still its not so easy to enforce  [39]  . The use of arbitration has proved to be very successful but the binding nature of arbitration is inflexible and for that reason other types of ADR may be more suitable .    Â