Financial Analysis for Managers II Essay Example | Topics and Well Written Essays - 1000 words

Money related Analysis for Managers II - Essay Example It is a fixed sum paid on yearly premise (Myers and Allen, 2005). This sum may be consistent for a specific timeframe or may have a consistent pattern for quite a while and may vacillate something else. The annuities and the time estimation of cash are connected and influenced by specific elements. These are as per the following; Loan fees are the overall charges of profiting the office of the capital that may have been put resources into an enthusiasm creating instrument or a financial balance. The financing costs of propelling credits and paying on the stores are extraordinary and that the thing that matters is really the fiscal award of using that capital. In any case, the genuine estimation of cash, in any event, when the chief sum is included with the all out premium sum got as an annuity, is typically not the same as what it was at the hour of hindering that cash into the individual hold under inquiry. This may have an alternate effect on the intensified intrigue approach. Since the premium is compound, accordingly it yields a higher sum at each progression and subsequently even the real estimation of the aggregate of that sum may be more than the sum really contributed relying upon the terms, approaches and loan fees. This presents the idea of the current estimation of future installments or potentially income(s) that are relied upon to be gotten (Myers Allen, 2005). This implies the current worth consistently varies from the future worth. The thought is additionally identified with the reality about the future estimation of any of the long haul or potentially even momentary ventures that were made. They will only occasionally be equivalent in genuine terms, in any event, when they appear to be equivalent as an annuity. The most usually applied model of the time estimation of cash is our regular old aggravated premium model. A measure of cash 'C' for 't' years at a pace of enthusiasm of 'I'% (where enthusiasm of 15 percent is communicated likewise as 0.15) aggravated on yearly premise, the current estimation of the receipt of C, t years later, is: Ct = C(1+i)- t = C/(1+i)t The articulation (1 + i)t is a conventional type of computing nearly al sorts of present worth. Where the loan fee is considered to be something which isn't steady figure over the time of the investment(s), various qualities for 'I' may individually be utilized; a speculation over a multi year duration would then have PV (Present Value) of: PV = C(1+i1)- 1.(1+i2)- 1 Present worth is added substance. This implies the current estimation of a heap of incomes is the aggregate of every individual's current worth. On the off chance that there are no dangers associated with the venture for example the undertaking is regarded to be without chance, the normal/anticipated pace of come back from the task must approach or surpass this pace of return or probably it is smarter to rather put the capital interest in these (possibly) chance free resources. On the off chance that there are dangers engaged with any such speculations or an undertaking adventures this can be reflected using a 'chance premium'. The hazard premium that is required can without much of a stretch be found by contrasting the venture and the pace of return required from other comparable undertakings with comparative dangers (Ross and Westerfield, 2007). Along these lines it is workable for practically all speculators to assess any vulnerability or hazard factor

Late Bloomers Free Essays

At the primary trace of work, she is hurried to the clinic with dread and energy. Long stretches of difficult constrictions assume control over her body however the information on before long gathering her unborn youngster keeps her holding tight. After conveyance she holds her infant child in her arms. We will compose a custom article test on Delayed prodigies or on the other hand any comparable point just for you Request Now She doesn't know until years after the fact how subordinate upon her this youngster will turn into. Josh doesn't react well to sounds or faces however the doctor’s test his hearing and discover nothing incorrectly. A couple of years after the fact this mother sees that her child is a â€Å"late bloomer† when he has not yet figured out how to walk or endeavor to talk. His appearance resembles other kids his age however his capacities are restricted. Josh can't highlight items or hold his arms out for affection. He drives from fondness needing to be disregarded to play with his toy vehicles. Josh discovers fun in fluttering his arms and snickering, as a rule at unseemly occasions. School has come yet at the same time Josh doesn't talk. At the point when he starts to talk, he talks in a dull prattling way that is difficult to comprehend. He fears school and obscure countenances. At the point when he shows up home from school, he is dreary in development and exercises. Josh paces the floor in roundabout movements and on occasion hits his head against the floor. Josh does poor in school since he neglects to focus. He has poor eye to eye connection and is frequently observed with his hands over his ears. At this point, his mom has understood that he isn't a â€Å"late bloomer†, something isn't right with her kid. After numerous tests and perceptions, Josh is determined to have chemical imbalance, a sickness that isn't treatable. He will live with this social handicap for a mind-blowing remainder. Josh’s mother is worried that she is to be faulted for his handicap. She counsels her primary care physician about the reason for this malady. It is conceivable that infections and hereditary qualities have a job in Josh’s chemical imbalance however neurological harm is the best bet. Contingent on the seriousness of Josh’s inability he could possibly have the option to think about himself later on. He is absolutely reliant upon his mom for his essential needs throughout everyday life. The above story is an average situation of a kid with mental imbalance. â€Å"Autism is a serious formative issue portrayed by significant language postponement and extraordinary social withdrawal (San Jose Mercury News). Chemical imbalance influences typical advancement of the mind having to do with social connections and verbal aptitudes. Mentally unbalanced individuals ordinarily make some hard memories identifying with the outside world. They are frequently portrayed as being in an ice square. The reason for mental imbalance is as yet dubious at the same time, specialists from everywhere throughout the world are giving time and vitality into finding the reason. Neurological harm can happen in any kid for any number of reasons. This is the reason mental imbalance is so difficult to analyze and treat. This sickness can influence anybody and any race. Neurological harm can be brought about by numerous things part of the regular day to day existence, for example, immunizations. Because of a 273% chemical imbalance increment over the most recent ten years in California, the U.S. Division of Education propelled an examination study. â€Å"It was chosen to target moms who had gotten a live infection antibody after the age of 16, regardless of whether they had a mentally unbalanced child.† (Yazbak, F. Edward, MD, FAAP 1999) The guess was that antibodies which the kid had gotten from it’s mother had some how blended in with the immunization to make medically introverted outcomes. Moms got the antibody to meet necessities for advanced education; business related immunizations, or inability to respond to past immunizations. 200 forty guardians of mentally unbalanced kids and moms who had gotten immunizations were contemplated. Seven examinations are talked about in ‘Autism: Is there an antibody connection?’ â€Å"Six out of seven kids (85%) who came about because of these pregnancies were determined to have mental imbalance, and the seventh, (case 1) whose mother got a measles immunization, shows side effects which propose medically introverted spectrum† (Yazbak, F. Edward, MD, FAAP 1999). Research is as yet being led on immunizations given to pregnant ladies and how the antibodies impact the unborn kid. Different instances of chemical imbalance are being looked into, as neurological innovation is opening up. Hereditary qualities, for instance, are being filtered for defects and pictures are being taken of the cerebrums in progress. â€Å"Phenylketonuria (a mind illness) is a simply hereditary sickness that can cause mental retardation† (Cook, Jr., Edwin H. 1999). In the event that it is discovered right off the bat in youth, dietary treatment can forestall this ailment. It is conceivable chemical imbalance might be dealt with a similar way, but since this hypothesis and numerous others are new, subsidizing and look into just started. Emission is additionally a treatment that can help with mental imbalance. â€Å"It is one of the hormones that controls digestion† (Lloyd, John Wills 1998). Emission is transmitted into the vacant stomach by cells in the stomach related framework to animate the liver and stomach to deliver proteins that assistant to assimilation, and liquids that kill the causticity of the digestive organs. Pituitary adenylate cyclase enactment polypeptide (PACAP) is likewise utilized. PACAP, a peptide that is utilized to cure malady, for example, ulcers, yet has a reaction of stifling layers which cause mentally unbalanced kids to act anomalous has been found. At the point when given to rodents, deferred responses were found in light of uproarious commotions and open spaces. At the point when kids got emission, their eye to eye connection improved and readiness and expressive language were seen (Horvath, Stefanatos, Sokolski, Wachtel, Nabor Tildon, 1998). The Tomatis Method is an entirely different methodology. The point of the Tomatis Method is to create or restore correspondence when it had been lost or disabled utilizing the ear and its different capacities (Sollier, Pierre 1996) Tomatis treats the youngster not the ailment. This treatment isn't a fix; it is just used to improve the lives of mentally unbalanced youngsters. 60% of the youngsters treated show upgrades, for example, more clear discourse, more eye to eye connection, and cooperation with other kids and instructor. Guardians have been accounted for that Tomatis Method accelerates different treatments and makes life simpler. Like all medications, there are acceptable and awful days. Every so often the youngsters return to their own reality and again become hermits. Tomatis has discovered another approach to recover these youngsters. To restored correspondence, Tomatis centers around the vestibule, the internal piece of the ear. â€Å"There isn't one single muscle of the body, including the muscles of the eyes, that isn't leveled out of the vestibular system† (Sollier, Pierre 1996). At the point when the tactile info doesn't run easily the youngster becomes barraged with data. The disarray of the data makes the kid pull back into his own reality to ensure himself. Tomatis brings up that meeting and listening are two unique things. Mentally unbalanced kids can't concentrate on the right data coming into his detects. We all hear foundation clamor, yet decide to concentrate on bits of data that are essential to us. A medically introverted kid doesn't be able to tune in, he may hear vehicles pass by in the city beneath and the various back ground commotions. Medically introverted youngsters ‘space out† or go into their own reality to get away from the disarray of the outside world. By making a simpler route for medically introverted kids to interpret data, the longing to talk is found. To do this, directed research in which youngsters tune in to their mother’s voice. â€Å"He electronically sifted her voice, to coordinate the sounds heard in the womb† (Sollier, Pierre 1996). The youngsters started to bond with individuals around them. It is realized that a mother’s voice sooths youngsters, and since mentally unbalanced kids live in dread its normal that Tomatis utilizes the mother’s voice to sooth those apprehensions. As innovation opens up numerous treatments will be made to improve the life of mentally unbalanced kids, yet the most ideal approach to improve the child’s life is to teach their consideration suppliers. Chemical imbalance is a serious illness evaluated to happen in 1 of every 500 individuals (Centers for Disease and Prevention 1997). Learning the side effects and indications of chemical imbalance is the initial phase in training and improved consideration for medically introverted kids. Indications of mental imbalance might be distinguished when early stages. A few signs include: 1. Curving his/her back to stay away from contact 2. Inability to foresee being gotten A long time back guardians didn't live the weight of with mental imbalance. Most youngsters were taken care of in havens to be left in their own reality, since they were not comprehended. These kids spent their lives not knowing some other world than their own. Today with the innovation we have, we can go into the child’s world and take him back to our own. This should all be possible with training and innovation. Instructions to refer to Late Bloomers, Papers

Marketing Plan

Marketing Plan Marketing Plan Executive Office Concepts Home›Marketing Posts›Marketing Plan Executive Office Concepts Marketing PostsMarketing planThe Executive office Concepts has grown steadily fast and is designing programs that will move it to the next edge of advantage, with the view of securing a large market share. These include revamping in-house cataloguing system, distribution department and a unique mobile customer service aimed at tracking of marketing and sales.Currently the market segment puts it in an overwhelmingly good market scenario full of opportunities for growth. To exclusively beat the market, they envisage concentrating on improving quality by way of using high quality materials coupled with unique artistry. They will also embrace technological advantage and adequately do this through increased market research and tailored customer service with a lasting intention to meet the ever-changing market needs.All market segments ranging from home office, small business enter prises, and corporate clients will subsequently render their loyalty to quality of the products that are customer focused. To sustain this strong loyalty, they will stress on ensuring quality of manufactured products. They will reach out to the market by way of marketing drives that will bring about product awareness.MissionThe Executive Office Concepts boasts of its unique and well-designed furniture that integrates advances in technology. The company designs its products to fit the office model that is admired by its market. The company values customer needs by providing to them quality interior look that gives a best possible office environment that is commensurate with the price.The company will model and nurture a customer friendly working environment that values its employees and customers. Executive Office Concepts envisions putting up a prudent profit that will put itself on the best financial platform to fast-track its policy of giving value back to owners and investors thr ough better dividendsMarketing ObjectivesThe marketing strategy for EOC rides on an assumption that they will move into the market through segmentation so as to address the needs of their target customers. The target of high-end quality catalogs will ensure that the company captures corporate clients through offering them classic quality.EOC’s publicity created on the internet places it on a better edge since it will facilitate the market knowledge about their products. This strategic positioning will make use of the computer technology so as to access both existing and its “would-be” customers.Financial ObjectivesTo constantly increase their sales by more than 200% during its first four- years of operation from $ 2 Million in 2011 to 4 Million in 2014.To maintain financial capacity that will enable it move the business by independently financing its programs.To increase the profit margin by 10%To reduce the marketing variable cost from the current 25% to 15% by end of three y ears.Target MarketThe company devotes its marketing efforts to segmenting its market into low- end and high- end customer niche. The company however endears itself to target the high-end customer class who are willing to appreciate quality by paying highly. The company will put emphasis on the quality of materials, improved customer service and customer focused design as an enabler to consistently beat the target market without much strain.PositioningExecutive Office Concepts prides in alienating itself from the ordinary market players through manufacturing high quality, technology driven furniture design that attracts high price. The main selling point entails reaching out to the customers through building an improved and customer friendly environment that appreciates and respects the clients. To enable this, the company will engage a more professional team and institute employee policy plan that will energize and promote craftsmanship.The ECO’s competitiveness will basically lie in the ability to determine the current and future segmented customer needs. This will be done by way of conducting routine market research that provides a road map to boasting sales while considerably reducing the marketing expenses as a result of assured quality.StrategiesThe company’s approach to competition is its niche that has been won due to incorporating the technological advantage together with the traditional craftsmanship. Since many manufacturers have not utilized this advantage, EOC has fully used it as its edge that advantageously propels its market penetration.EOC’s market entry concept is that which segments its customers and concentrates on the quality-preferential facet of customers, who have the ability and willingness to consume quality irrespective of price. The company, due to extensive market knowledge has created a lasting loyalty to its customers. Therefore, the product quality has strategically placed it on the top of market ground .In ensuring this tr end, focus is on the right mix of high quality wood, customized design and unique artwork that continues to elicit sustainable image of quality.The pricing of its products is not strict in its nature but it’s rather modeled on the basis of customer design needs. In essence, Executive Office Concepts approaches to price determinants are basically customer-based and assured quality of furniture.EOC also has designed a customer service that is mobile in nature where customer feedback is collected and adequately used in the bridging manufacturing and market gaps. This will be made possible through the use of mobile customer service vehicles aimed at reaching out to its potential and existing market.The bottom line strategy incorporates market-led research, a mix of traditional and new technologies, penetrative approach to product distribution and emphasis on quality that differentiates it from the other manufacturers.Marketing MixEOC’s marketing mix is determined by the nature of pr oduct and the mode of marketing chosen. However this is also aided by the ability to use special channels of distribution that are able to avail the products in a timely manner.Product MarketingThe company approaches the market by sensitizing the market of the quality products that embraces technology, designer craftsmanship and expertise. Since packaging is a challenging aspect to many manufacturers, EOC has embarked on a strategy to uniquely package its products so as to meet the pride of its prestigious clientele.PromotionPromotional strategy is modeled to make the segmented market aware of the quality and availability of customized furniture. This will mainly be through high-end catalogs, special channels of distributions targeting those customers who can be willing to link quality with high price. To perfectly utilize its market while leveraging itself, distribution channels will be employed to penetrate the market through strategic partnership aimed at reaching the inner custo mer cycles.ServiceCustomer service as part of the marketing mix of EOC is maintained so as to sustain the loyalty of its customers. Quality service and additional peripheral products is a key to customer retention. This retention level is intended to produce repetitive buying pattern from repeat buyers who develop product loyalty due to trusted quality and excellent customer service.ChannelsTo reach its inner market, Executive Office Concepts intensifies the use of in-house cataloguing system that is customer specific. Moving into partnership with local distribution channels that will quickly avail its products at required time and place will be preferable. They will also intensify market awareness while using quality as the selling point for its products.Since the target market does not choose buying on basis of price but rather quality, marginal distribution costs will be cushioned by the customer experience presented by the feel of fine wood, ergonomics and technologically induce d design. Design of distribution mode is meant to beat the market by increasing the sales volumes which will be critical in leveraging the marginal expenses in marketing.Quality will paint irresistible goodwill that will enhance walk-ins who prefer picking up voluminous products from the manufacturer’s premises.Marketing ResearchThe Executive Office Concepts will vest its future in intensive market research that assesses feedback and subsequent sealing of gaps that the target market experiences. To cheaply approach this, historical customer information will be used to model customer profile based on previous experiences. In doing this, EOC will be best placed to forecast its future market needs and trends. A correlation matrix will be established with a view of providing an insight into the future of potential purchase patterns.ControlsThe Executive Furniture is anticipated to increase in sales with an average incremental rate of 6% on yearly basis to provide adequate operating ca pital for the business. Similarly, the market is thought to expand considerably as a result of the increased market awareness and market research.Possible deviations are likely. Customer dissatisfaction, decreased product demand are possible setbacks. In case of these deviations, the EOC designs possible measures such as interim feedback analysis aided by distribution channels aimed at improving customer service and quality.ImplementationExecutive Office Concepts will commence its strategic partnership plan with reputable distribution agents by mid June, 2011. The market research according to previous data will be instituted by end of December of 2011.this is envisioned to define the customer demand needs for the year 2012.Trade shows will be conducted by beginning of September, 2011 to showcase its design and expertise. Designing of the internal catalogs will be done in the month of August 2011 so as to proactively reach out to defined customer segment.Marketing OrganizationEOC’s organizational structure has Wesley Khan as the core founder and Chief Executive officer (CEO) responsible for overall business operations. All the departments including marketing, finance, sales and human resources report to CEO.The experienced marketing team is led by Mr. Lich Richard. He has over 20years serving experience in sales and is exclusively concerned with all sales and market related aspects of the organization.The design department is critical to the quality of products. It consists of a team of five led by Jim Derrick who has an award winning reputation in design of high-end furniture.EOC’s planning relies on the Strategy and execution. As the head of this department, I am generally concerned about the implementation of the strategies designed by the organization. With a wide range of experience in strategic operations, I have served in the same position for fifteen years now.Planning ContingencyExecutive Office Concepts has differentiated its market penetration st rategy by way of using quality and unique customer service, coupled with executive technology-based furniture. This dramatic move that has seen EOC beat the market is likely to provoke a market reaction from other market players. It means that they are likely to unveil a competitive product that is intended to outdo the EOC’s high-end, technologically modeled furniture.EOC faces a possible sprawl of other competitors in the same line which may limit the market share. Lastly, already existing companies may also be motivated to invade the target market that will be consequently a threat to the image of quality that has been seen as the best in the market. However, these obvious challenges will not pose a great market crisis because of the lasting loyalty that is entrenched especially in its segmented and differentiated target market.

Talkch Thesis Statement - 738 Words

Senior defensive back Duke Dawson made a case for himself last year as one of the best nickel players in all of college football, helping him earn Second Team ALL-SEC honors. The beginning of the 2017 football season has been no different. His ability to play multiple positions on the field and lineup in different situations makes it easy for his coaches and even tougher for opposing offenses. A season ago, even with a star studded secondary with names like Jalen Tabor, Quincy Wilson, and Marcus Maye, Dawson managed to lead the Gators with 7 pass break-ups. With the other three declaring for the NFL Draft and departing from Florida, questions began to circulate whether Dawson would join the others in pursuing their dream of†¦show more content†¦After having some miscues in a young secondary during the first game, the focus then turned to Tennessee in hopes of having a better performance from the unit. And they delivered. The Gators secondary only allowed Quinten Dormady to complete only 54% of his passes and forced him to throw three interceptions, including one to Duke Dawson, who played a magnificent game. The drive which Dawson caught the interception near the goal line may possibly be the best four plays he has had while wearing the Orange and Blue. With Tennessee knocking on the door step with first and goal from the one, they ran a fade route to Marquez Callaway. Dawson played the ball beautifully and had a near interception (with plenty of green grass in front of him), but dropped the football while extending his arms. After two penalties, it was first and goal, this time from the six. Again, they made the mistake of throwing towards Dawson. He played excellent defense, forcing a touch catch from the receiver, and he dropped it. On second and goal, they tried hitting their running back in the flats on the right side of the field. Closing in with great pursuit, Dawson made an excellent open field tackle and forced a loss of one yard. Now, it was third and goal from the six. The Gators still lead by 3 at this point in the third quarter, hoping to keep Tennessee out of the end zone and at worst, allow them to settle for a field goal. However, AGAIN, for the

The Issue Of Immigration And Refugees Essay - 1326 Words

Without a doubt, the topic of immigration and refugees is a pressing matter around the globe. With more than 60 million individuals displaced around the world and 41 million immigrants currently living in the United States, there is an international movement of individuals rather by choice or not. In the United States, the topic of immigration and refugees has been at the forefront of the upcoming presidential election; however, although and this topic is at the lead of most news, Americans are undereducated and misinformed about many of the key terms and concepts about immigrants and refugees. Due to the various misconceptions Americans hold, many citizens not open to welcoming more immigrants or refugees into the country. To explain, according to the Pew Research center, 51% of Americans believe immigrants are beneficial to the country, while 41% believe immigrants are a burden to our country (Krogstad, 2015). In order to clarify the key concepts of immigration and refugees, Dr. Id a Fadzillah, and associate professor of Anthropology at Middle Tennessee State University, defined the crucial terms of immigration and discussed the various limitations of the current international policy of immigration in her lecture â€Å"Immigration, Refugees, and the Global Diaspora: Key Concepts and Themes†. As an immigrant herself, Dr. Fadzillah is able to use her personal and professional knowledge and perspective to address the multitude of issues surrounding immigration. To begin theShow MoreRelatedImmigration Policy And The United States1713 Words   |  7 PagesSusan Siena April 2nd, 2017 Immigration Policy This paper will be discussing immigration policy, what fixes the United States needs to make to the current policy and what aspects should remain the same. 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The next strategyRead MoreEffectiveness Of The United States And Canada s Polices Towards Refugees Essay1543 Words   |  7 Pagesand Canada’s Polices Towards Refugees Has United States or Canada been more effective with implementing and abiding by refugee rules and laws? Before discussing and comparing which of these countries had been more successful, the historical context of refugees needs to be explored. Although refugees have existed throughout the course of history, the definitions of what a refuge is had shifted and evolved over time. The League of Nations in the 1920s defined refugees â€Å"by categories, specificallyRead MoreWho Should Determine Refugee Policy870 Words   |  4 Pagesfundamental definition of refugees include natural disaster, war, class oppression, national oppression, religious, racial discrimination, change of borders and so on. They were forced to leave their homeland because of some or all of the possible reasons. And the United Stated have been working towards the largest refugee camp in the world due to U.S. policy and diplomacy. After the mid 1970s, a prominent American immigration policy issue facing the problem of refugees, especially after the endRead MoreHealthcare Of Current Undocumented Refugees And Immigrants Of The Early Twentieth Century1410 Words   |  6 PagesUndocumented Refugees and Immigrants of the Early Twentieth Century Immigration has remained a long-standing, controversial topic in this country with strong public opinions as well as many political disputes over this issue. Laws have been created over time, which support immigration and refugee resettlement, however, these laws have been met with much resistance throughout history. According to the Department of Homeland Security (2012), the number of illegal immigrants and undocumented refugees in theRead MoreA Brief Note On Social Issues Of Refugees1669 Words   |  7 PagesKatie A. O’Conner SOC 2020 SEC 010 Instructor – Amanda Levitt Final Paper Social Issues of Refugees Since the United States declared independence from Great Britain in 1776, there has been numerous amount of legislation passed to increase the difficulty of gaining citizenship for immigrants. These laws passed were deeply rooted in discriminatory practices for the preservation of an idealized American culture. In today’s society the United States has continue these practices, but claims indiscriminationRead MoreNegative Effects Of The Holocaust1466 Words   |  6 PagesIf a death is preventable and one fails to prevent its occurrence, is he at fault? During and after the Holocaust, citizens of the United States pondered this question in the context of Jewish refugees murdered in Nazi Germany; ultimately, citizens remember this tragic genocide and promise it will not happen again under any circumstances, not only in America, but in other nations as well. Since the Holocaust, leaders and lawmakers in the United States have analyzed the causes that led to this eventRead MoreRef ugee Refugees809 Words   |  4 PagesRefugees coming into the country has been a problem for our country for a long time. The issue of refugees coming to America first surfaced during World War II, when millions of Europeans fled their homes for a better future. Since then, there has been a large amount of dispute over this issue. This became a much bigger problem after the 9/11 terrorist attacks, and with concerns of future acts of terrorism in the country, this topic has become a big controversy. I believe that the United States shouldRead MoreA Brief Examination of the Immigration and Refugee Board of Canada647 Words   |  3 Pagesï » ¿A Brief Examination of the Immigration Refugee Board The Immigration and Refugee Board of Canada is an independent tribunal established by the Parliament of Canada. Our mission, on behalf of Canadians, is to resolve immigration and refugee cases efficiently, fairly and in accordance with the law. ~Mission Statement of the Immigration and Refugee Board of Canada For various reasons, it may become necessary to leave ones home country. Many people are attracted to Canada. Some peopleRead MoreCanada s Immigration System Lacks Heart879 Words   |  4 PagesCanada’s immigration system lacks heart, critics say, is an article filled with professional opinions and debates. These debates and opinions are regarding the humanitarian and compassionate side of immigration and refugee law in Canada. The article’s main purpose is to expose how Canada has changed its compassion for acceptance of refugees in recent years. Canada has always been recognized as an accepting and â€Å"go-to† country in crisis. However, in recent years, there have been changes. Refugee

Performance Appraisal Notes Free Essays

A. Explain the benefits of performance appraisal systems within an organization in which you address the following: A1. Present the optimal results of a well prepared and well-delivered performance appraisal. We will write a custom essay sample on Performance Appraisal Notes or any similar topic only for you Order Now *If the company establishes a well prepared and well delivered performance appraisal, what are the best results the company can expect? (employee prospective and company perspective are good here) Performance appraisals are a tool that most companies use when assessing their employees. A well prepared and well delivered performance appraisal can be beneficial to both the employee and the company. The company benefits in many different ways when they deliver this type of performance appraisal. The performance appraisal process allows the company to reiterate the goals that they have, as well as change the priority of previous goals. Things change all the time and the evaluation would be the perfect place to make this aware to employees. The company also can use these performance evaluations when they are preparing to promote within the company. When the company promotes from within it creates a moral boost to current employees by letting them know that there are chances for growth within the company. The evaluations also give the company a paper trail of documentation for use if legal actions are ever taken. This will show just cause for the decisions made by the company. These decisions could be linked to promotion, termination, salary raises, and even poor performance documentation. It is always in the best interests of the company to keep documentation that will justify all decisions. The company also benefits by learning areas of needed improvement to help raise productivity and moral throughout the company. Employees will see the loyalty the company has towards them when the company invests time and money into their employee’s improvement. Personal goals of the employees is another benefit the company has through performance evaluations. The company can see where the employee wants to be in the future, which may uncover a potential management trainee that was overlooked. Companies can greatly benefit by promoting employees that have personal goals that match company goals. The company is not the only entity that benefits from these performance appraisals. The employee benefits as much as the company does. The performance appraisal process gives each employee a face-to-face meeting with their supervisor or manager. This is a perfect chance for the employee to learn exactly what the company expects from them. This gives a chance to clear up any issues or questions that may have been weighing on the employee. A well prepared and well delivered performance appraisal will raise the moral of the employee as well. The employee will know what specific things he has done well, which will enable them to keep them up. The areas that the supervisor feels needs improvement will be discussed and they can both agree on a way of getting the employee more training. The employee feels more involved in these decisions when the supervisor allows for their input on decisions. This makes the employee feel the company has loyalty and therefore the company wants to help the employee achieve all their performance goals. The employee also benefits by letting the company know their future goals. This will allow for the company to help the employee out in all ways possible. For example, the employee may want to be in a different department in the next year. The company could possibly start cross-training the employee in that department, therefore helping both parties reach their goals. This could benefit both the company and the employee by showing support and possibly raising performance. These regularly scheduled performance appraisals will promote better performance through employees knowledge of what is expected of them. A2. Recommend pre-appraisal activities that ensure they are performance appraisal processes that are beneficial to the employee and the company. *What happens before the appraisal? (suggestion: ongoing activities and in the time proximal to the performance review) It is important to make time for pre-appraisal activities to make sure that the benefits are at max potential. It will hurt the chances of maximizing gains for both the company and the employee if the following activities are not done beforehand. The most important thing when it comes to being ready for the performance appraisal is being well prepared. The manager needs to make sure that he sets aside enough time to perform the pre-appraisal activities. These activities include establishing a time for the appraisal and relating it to the employee, making sure to lay out all new and old goals for the employee, giving the employee an advance copy of the review, collecting the employee’s review of themselves, and collecting all notes taken that may validate your points and emphasize your decisions as well as the last  performance appraisal. It is important to make sure that the employee has enough time to prepare for the appraisal. This allows for quality feedback from them and will also lead to quality questions. In order to make it the most beneficial appraisal possible, then both sides need to be well prepared. Goals and expectations will be completely understood if both parties have an idea of what’s expected of them. The employee can have questions ready for things that they may not understand. There may be instances where they can ask for additional training in areas they know they are weaker in. The act of giving the employee the advance copy of the review will make sure that the employee is not blind-sided and will significantly lower the amount of defensiveness. The employee will have questions ready to ask their managers, which will in turn make for a more rewarding appraisal. The employee’s review of themselves will also let the manager know where the employee sees himself performing. This could in turn get the manager ready for an employee that felt he was above expectations on everything, but in reality the manager seen the total opposite. This will allow for the manager to prepare himself with the necessary responses for the possible situations or questions. It is also important for the manager to have all the documentation that supports his thought or decisions. A copy of the previous appraisal will also allow for the manager to show what strengths and weaknesses the employee may have had in reaching previous goals. The manager will have more backing and a proper paper documentation basis for all decisions. A well prepared appraisal will lead to a happier and a more beneficial meeting between the two parties. A3.  Recommend post-appraisal activities that ensure there are performance appraisal processes that are beneficial to the employee and the company. *What happens after the appraisal? Activities that occur just after the performance review (meeting) up through 364 days after. The appraisal is has now been concluded and it is time to make sure that it remains beneficial. It is important that the employee knows that the manager is going to do everything possible to make sure the employee can be the best he can. It is now time to implement the training programs that were discussed with the employee. This will show the employee that the company is investing the time and money on them. The company and the employee will both benefit if the employee reaches their full potential. Daily, weekly, or monthly follow-up meetings with the employee may also be necessary and beneficial. This will allow for a personal relationship to be formed between manager and employee, which will in turn give a sense of trust towards management. Managers can also continue to take notes on observations about what the employee is improving at, or can document what the employee seems to be struggling with. This will give the manager things to go over when they are having these follow-up meetings. It is also important to let the employee know that he can come to the manager if they have any questions or concerns about their progress from the previous appraisal. This will allow for the manager to give the employee the proper accommodations to fulfill their goals. A4. Illustrate what can go wrong when giving feedback. *If you consider the performance review a communication loop or conversation, what can go wrong during this critical feedback period? Illustration means giving detail and specifics. There are a lot of issues that can go wrong through the process of giving feedback during a performance appraisal. An employee’s moral can drop significantly if the manager spends all his time telling the employee only the things they do wrong. The appraisal process should focus on what the employee is doing right and what areas the company can help them improve in. It is important that the manager emphasizes that both the company and the employee benefit from maximizing the employee’s performance. The employee should have some input on the areas of training they need to improve in. This will allow the employee to have a sense of ownership in the training process. They will be more inept to go along with the accommodations and training programs decided upon. Employees may also become defensive if they feel the manager is throwing a bad performance review on them. An employee may walk into a performance appraisal thinking they have been doing a good job, but the manager throws them a curve that suggests they are not performing to the companies standards. If the employee has no idea what’s coming, then they will be prone to defend themselves in order to not look as bad. There will be a less chance of the employee agreeing with the training suggestions for improvement. Another affect from this scenario would be that the sense of trust between the manager and employee could be lost. In this event, the employee went in to the meeting thinking all was good, but now they feel that they can no longer trust the manager. There is also the possibility of a biased review when it comes to performance appraisals. This could happen if the manager rated the employee a certain way because they were not liked on a personal level. There may be a promotion coming up and the manager wants someone that they are friends with to get that new opening. This could lead to a biased review that could potentially lead to legal issues. There are always the possibility of reviews being biased, which could lead to legal actions being taken. A5. Discuss steps that a manager might take when delivering a performance appraisal for optimal value. *Of all those things can go wrong in A4, how can we avoid those? What steps can a manager take? It is very important for the manager to follow steps that will lead to the delivery of an optimal valued performance appraisal. The things that must be present in order to achieve this are the idea that the evaluation is based off the performance of the employee, maintain an environment during the meeting that promotes moral and includes the employee’s thoughts, keep the evaluation focused on the employee, equip the employee with the appraisal before the meeting, remain unbiased in the employees evaluation, and to keep in mind the possibility of legal issues that could come from a biased evaluation. A performance evaluation is given to do just what it says, evaluate only the performance of the employee. It is extremely important to make sure that the focus on the evaluation is that of the employee’s performance. If this is followed when doing the employee’s appraisal, then it leads to making sure the employee understands that all topics will relate to performance only. It is also important to make sure that the manager promotes an environment to promote moral for the employee. This can be done by specifically telling the employee what he has done well since the last appraisal. It is important to make sure the meeting is not based just off what the employee is not doing right, but instead about areas he is excelling at and areas that he could improve in. Moral can be boosted by taking the employee’s thoughts into consideration for the training and accommodations that they need. The employee will feel valued by the company and manager if they have some sort of contribution. It is possible to have an employee that has underperformed in every area leave the meeting with a moral boost, but this depends on the environment which has been setup by the manager. It also a must to equip the employee with a copy of your appraisal before the meeting. This will allow for the employee to come to the meeting prepared and with a knowing of questions that will maximize his performance growth. The manager can even ask for a list of questions from the employee. This will allow for the manager to be prepared to give the employee the best correct response. The employee will not feel that they have to be defensive when they have some sort of idea what is coming in the review. Managers must maintain that all appraisals are based on the employee’s performance and are free of bias. It is a manager’s duty to make sure that they exclude any biased evaluations for their employees. Managers could get the company into legal troubles by allowing for biased evaluations. It is critical that they keep in mind all legal issues that could arise from their meetings with their employees. The company can be found liable for any discrimination that the manager promotes or demonstrates. It is important to keep the appraisal about performance only. A6. Discuss the benefits to the company of working with employees to further their career goals. *Company perspective—what are the positive consequences of discussing career goals with employees? The company benefits in many ways when it works with employees to further their career goals. A big benefit for the company is the increased performance that comes when it helps employees reach their career goals. Performance is an area that is important to all companies and getting the most out of each employees is key to helping the employee grow. These employees that can reach their potential have the foundation to move up within their company. Some companies have special programs that monitor potential management trainees. This keeps the company on top of these employees and makes sure they keep challenging them. If companies take an interest in furthering their employee’s career goals, then these employees feel a sense of loyalty and are less prone to leave the company for career advancement. This keeps the turnover down for the company, which in return saves money for the company by not having to reinvest time and money in new employees. It will also boost moral by allowing employees to see that promotions are made from within the company. This will allow all employees to see that the company is just as committed and loyal to them, as they are to the company. This will make it easier for the employees to see that there is potential for promotion. The company also invests time and money into employees as they are prepared to advance through the company. The company can learn that an employee is interested in moving up within the company, which the company could then evaluate a plan of training for the employee. The company could also implement career development programs that their employees could enroll. Managers could also recommend employees for these development programs. The perfect time to talk to employees about personal career goals is during the performance appraisal. This will help the manager set goals that will lead the employee towards reaching his career goals. It will become very valuable for the company to learn that their goals are a match to an employee’s. B. Discuss the evaluation of teams within an organization in which you address the following: B1. Summarize research of effectively assessing team performance. There are various models that can be used to assess team performance. The assessment of team performance is becoming more and more standard with the emergence of team environments. The three models that I have decided to research to evaluate team performance are the absolute judgment method, the behavioral appraisal method, and the management by objectives (MBO) method. These are all valuable assessment methods that are used by many different types of organizations. It is important to remember that no single assessment method is 100% perfect, so be sure to take into consideration which works best for the company. The absolute judgment method is an assessment of performance that is based only off the performance standards that are set. It does not compare one employee to the next, therefore there could be multiple employees with the same ratings. In the textbook Managing Human Resources it states, â€Å"the dimensions of performance deemed relevant for the job are listed on the rating form, and the manager is asked to rate the employee on each dimension. †1 This method allows for a manager from a different area to assess the performance of the team, since there are set standards set. We can use the example that each of our sales  teams has a performance standard of making 15 sales per week. If the team has averaged 18 sales per week over the last six months then any manager could see that their performance is above performance standards. The idea that there are preset performance standards that are known makes it easy for the manager to rate the team’s performance. The benefits of this system is that it doesn’t put employees against each other during the evaluation and that there is documentation that supports the assessment of the employee. In the event of legal issues, this method makes it easier for the company to prove why the assessment is rated the way it is. The negative side of this method could be variances in evaluation standards of different managers and also there could be issues judging individual performance when assessing the team. It is important to make sure that assessments reflect not only the team, but also the individuals on each team. The behavioral appraisal method is another method that could be used to assess team performance. This method looks at the behaviors that are performed by the team and its individuals. A manager may focus on things like whether the team is back from lunch on time, whether the team is prepared for meetings, or whether the team shows up for work daily. The focus is laid on behaviors that the company deems important to improve performance. The most commonly known example of this method is the Behaviorally Anchored Rating Scale (BARS). Robert Bacal describes its differences by stating, â€Å"it focuses on behaviors that are determined to be important for completing a job task or doing the job properly, rather than looking at more general employee characteristics. †2 This method is used to appraise whether a person is doing what is expected of their job. For example, a salesperson may be evaluated on whether or not they successfully ring up every piece of merchandise on every transaction. This is a very valuable step for a salesperson’s job description. This step is extremely important to make sure the company is not losing money. The behavior’s that are being evaluated in this type of appraisal are more specific to the job at hand. The benefits of this type of appraisal is that it makes it easier on the company to spot areas that need improvement and to provide possible solutions, it promotes the behaviors that are necessary for the employee to be successful and productive, and it provides documentation that supports the legal aspect of backing up the evaluation. The job description and role  of the employee has to be researched to make sure this type of assessment is appropriate. Management by objectives (MBO) is another strategy that can be used to evaluate performance. MBO is a strategy that relies on setting goals or objectives that the employee is expected to reach. This strategy can be a little time consuming if the job description relies on a steady change of objectives. In order for MBO to be an effective strategy for appraisal, then the manager would have to meet with the employees either daily, weekly, monthly, or possibly quarterly to go over the objectives. It is important for the manager to make sure that all objectives are given to the employees and they are understood. A major benefit for this type of assessment is that the evaluation of specific goals does a fantastic job of cutting out the chance for biased evaluations. It is also a benefit that the objectives can be changed for each job description rather quickly. An issue with this type of assessment is that employees tend to focus mainly on the objectives and goals that are set by managers, which in turn could lead to other areas falling. Paul Kevin Michaelree states, â€Å"the MBO process focuses attention not on the person but on the job.† 3 This shows that the MBO is focused on reaching objectives and does not leave room for a biased evaluation. This assessment focuses more of setting goals for specific jobs and not for specific people. A manager should set objectives or goals for all production workers to be the same. This would mean that each person under the job title production worker would have the same goals or objectives. This would leave solid documentation for future possible legal matters. Behavioral Appraisal Instruments Management by Objectives (MBO) *Research and discuss 2-3 models of team performance. How can the company evaluate team results effectively?  (need sources: in-text citations and references) B2. Recommend a strategy for the company to adopt to assess team performance. *Which one should the company use? Why? I believe the best appraisal method for our organization would be MBO. I believe that our company would benefit the most by aligning the objectives of the company to the objectives of the employee. Our managers have a great deal of knowledge in the company’s goals and objectives. They can look at the jobs that are done in their departments and make sure that the goals and objectives for their employees are steps in the direction of the company’s. The MBO strategy will give the company goal seeking employees. We will see a change of direction in the way things are done by the employees. There are beliefs that we could lose employee performance in other, non-objective areas. The answer to this is to make sure that the company’s ethics policy is followed at all times. The new performance assessment strategy may have the employees thinking heavily about quantity, but the managers must continue to stress the importance of quality as well. This method of assessing the employees will also take away the error and bias that come along with other methods. The assessment of a team will no longer have room for the manager to use bias when evaluating, since all teams doing the same job will have the same objectives. There may be individuals, like team leaders, within the teams that may have added personal objectives. The idea of the managers spending more time with the employees is also a benefit for the company. Each manager will have to spend more time with individual employees as well as the teams. Managers will have to meet with the teams weekly, monthly, or quarterly to ensure the objectives are understood. This makes it easy for the managers to make sure changes in objectives are relayed quickly. It will mean that our employees will not have to wait until their next assessment to find out their new goals. This could make it easier to see which teams are performing and which are not. We can easily make accommodations or setup training for teams that need it. This method of assessing our company will work the best for growing our employees, managers, and the company in whole. B3. Illustrate the benefits to the company of working with employees to further their career goals. *Illustrate differences between team and individual performance assessment. Bloom’s Taxonomy clarifies that â€Å"illustrate† means: solve, calculate, interpret, relate, apply, classify or put into practice. So, even though you won’t really â€Å"paint† for this illustration, you are trying to show that you can apply what you have learned from section A, B1, and B2. Discuss and give examples. Our company would benefit by working with employees to help them further their career goals. Our company does both individual and team performance assessments. It is vital to our company’s growth that we make sure to work with our employees to help them further their career goals. Individual performance assessments allow our managers the chance to talk with their employees about their career goals. Managers will then look at how their employee’s goals complement our company’s goals. Managers will have an idea of whom they feel has long term ties to the company are willing to move up in position. It is cheaper on the company to keep a low turnover ratio and not have to keep training new people. It also will bring up moral, throughout the employee ranks, as they see promotions within the company. Employees will continue to perform and work hard if they see that there are rewards waiting. Career advancement consists of moving up the ranks, whether at the same company or at a new one. It benefits our company to keep our loyal employees. Manager trainees are most often found within the company through these performance appraisals. For example, the manager of the shipping department may have an employee that has shown advancement capabilities in the last two annual appraisals. This year the manager learns that shipping will increase and he will need another lead. The manager could easily pick the employee that has showed promise for the last few years, which could lead to another promotion a few years down the line if he keeps his performance up. Team performance appraisal also benefits the company in a lot of the ways the individual performance assessment does. Team performance is increased when you show that the company has furthering their career goals in mind. It is always a benefit to the company when performance levels are increased. The company also benefits from employees helping train and educate their teammates. This saves the company money from having to setup special training classes for certain people. Teams understand that their performance are not based off individual success, but rather what they do as a whole. There is understanding that if one person in the group fails to pull their weight, then the whole team suffers. Companies also get a good idea of whom the leaders are in each group. This works out to the company’s advantage as they can easily spot individuals who are ready to advance in the company. It is up to the manager to make sure the employees know that the company is here to help them advance their careers as much as possible. Comments on this criterion: The presentation identifies a few differences between evaluating team performance and individual performance, such as the training that is conducted and how success is obtained, but the presentation focuses more on the company’s benefits for furthering goals of each type of performance, rather than on the differences that exist when evaluating team performance and individual performance. Please provide additional detail and discussion on the differences that exist when evaluating team and individual performance, in order to appropriately satisfy the task prompt. There are differences that exist when evaluating team performance and individual performance. Individual performance evaluations usually tie in with the salary raises of the individual. The individual performance evaluations are based on the job description for which position they were hired for. Individual objectives and the duties of the job are the things that the manager will evaluate and then decide what the individual needs improving on. A team performance is based on the goals and objectives set for the team. The manager will evaluate how the team has done as far as accomplishing their goals. Team performance evaluations can look bad if one member is not capable of pulling their weight. It would be up to the other teammates to make sure to help the individual out as far as training and development. The team realizes that if one member fails, then the whole team fails. Individuals of the team are aware that the evaluation process is uniquely different than what an individual performance evaluation brings. Accountability is hard easy to evaluate in individual appraisals, but in team appraisals it is easy to overlook a weak member if the rest of the team picks up the weight. Peer reviews are a way of looking at how the team works together. This form of appraisal is a good way to account for all individuals in the group, but biased appraisal could be an issue. Team performance greatly depends on accountability, communication, and decision making. It is important to make sure that there is good communication between the team and that a leader emerges to take control of making sure team objectives are met. This will make sure that all members are held accountable for their work within the group. Individual performance appraisals typically happen once or twice a year. Team performance appraisals could happen as often as every project change. This leans toward team evaluations happening a lot more often than individual performance appraisals. Rewards and compensation are linked to appraisals, but can differ in the ways they are seen from the individuals. Individual appraisals will reward and compensate the individual on how good they were at doing their job and reaching their goals and objectives. Managers have to manage their time allotted for evaluations differently based on which type of review they are doing and depending on how often they will evaluate. Team performance can also reward and compensate, but sometimes it is deemed unfair. Members can sometimes feel cheated when a weaker team member is rewarded the same way. This can come back to a faulty evaluation if peer reviews are not used. The differences in the two types of appraisals can vary from time, accountability, rewards and compensation, and methods of evaluations. It is very important to make sure all communication about goals and objectives are understood between managers and employees, which will lead to better performance throughout the company. C. Discuss the concept of succession planning with an organization in which you address the following: C1. Present reasons for adopting succession planning. *Why would a company do succession planning? Addresses company needs ahead of time Allows company to select best candidates Focuses on the future Meets company needs by finding competent employees Succession planning is very important when it comes to continuing the company’s success in the future. It seems that a lot of companies are realizing that replacement hiring is not the best option for long term quality employees. Companies are starting to realize the commitment level that employees are willing to give when they have companies that train and promote within. Succession planning looks within the company and finds its future leaders and manager from the ranks. The company will then send the selected employees through various training and developmental programs to get them ready for future succession. This could be a lengthy process and employees should not look at this plan as a two week training period. Succession planning is a drawn out process for the future needs of the company. A replacement hiring method usually brings people in right away for a specific job opening that the company was not preparing or planning for. Succession planning allows for the company to pick candidates that are right for a position that may have someone retiring in the next two years. This will give the employee a two year period to learn and train with the person they are taking over for. It is important for the company to choose the best of their talent pool when they are planning for future trends. Succession planning also allows for the company to give employees a shot at reaching their career goals within the company. It is always a good thing for an employee to know they do not have to leave their company in hopes of advancing. Moral and performance are usually higher when employees know that they are not working in a dead end position. Our company will give all employees the chance to further their careers. C2. Discuss how succession planning can be used by the given company. *How to use it? What are the side benefits? What may happen in the process of implementing the components of a succession planning system? What can go well if these side benefits occur? Succession planning can be used in all sorts of way depending on how each company wants to go at the process. I believe that our company can benefit greatly and build a future that has no boundaries. I believe that our company can use succession planning to our benefit by keeping a deep group of candidates for possible promotion within the company. It is always good to have someone trained and ready to take over in the event we have someone leave the company. The company should have an idea of what members of leadership are coming upon retirement or which ones are approaching the end of their time with the company. We must understand that there are going to be instances where we may lose people that we are not planning on losing. Succession planning will come in handy and have people ready to assume these positions in these instances. It is crucial to have people being trained and obtaining the knowledge that our leadership can pass on. This will entail for our company’s morals and prior knowledge to be passed down to our new leadership recruits. I also feel that it will continue to give our company a good reputation as being a place that challenges our employees and works dramatically to enhance their careers. People look for places like this when they are transitioning their careers. This program will make us the place all career oriented people will want to work. This will allow for us to keep recruiting the top talent for both our organization and our succession planning program. Succession planning also comes with side benefits for the company. Implementing this program here at our company will allow us to keep employees loyal. Loyalty can save the company a lot of money, which will keep costs of training new associates down. Our company invests time and money into training employees and we want to make sure we are not wasting these assets. Employees will have an idea of what things they need to do in order to become potential candidates for succession planning. This will give our employees drive and motivation to keep performing at high levels. The company also benefits by passing knowledge from our older leadership into the younger leaders of tomorrow. It is very important that knowledge is not lost in the transition. Young leaders can learn resourceful information that will keep them from making past mistakes over again. We also benefit by maintaining a good reputation as a solid company that promotes career goals of employees. This reputation will help the company keep pulling in promising talent for both the company and the program. This will help us keep that company moving forward in the direction that past leaders have set us up for. The side benefits will help our company in growth throughout the future as long as we keep the goals and objectives matching future outlooks. We must remember that this program is setup to keep us going forward. There are lots of possibilities that could come from us implementing succession planning. Some of the possibilities are good and some are not so good. Time constraints could be a negative possibility that could come in various instances. A few examples of how time constraints could hurt us would be that all members of the succession planning team keep having things come up or that it just takes too long to prove to the employees that this will work. Employees will want to see this program successfully in action before they buy in to it totally. There is also the possibility of communication issues. Employees that do not receive the information effectively will think they are excluded. It is key to a successful succession plan that all communication lines are effectively thought out and successfully implemented. We must make sure the employees know how this will benefit their careers and what is required of them for this program. This could also be a benefit for the company because it could give a better communication line between leadership, employees, and HR. Communication is always important in the company and we can benefit greatly from it. Goals, ethics, and company morals are all things that must be successfully communicated between the company’s employees. The company will also benefit by finding stronger candidates for the program. The implementation will help the company find the best candidates that could end up leading the company into the future. C3. Illustrate a succession planning process for the company. *What are the steps of a succession plan? Be specific. (â€Å"illustrate†) The succession planning process will not go anywhere if we do not have the backing and support of upper management and the CEO. It is crucial to the plan that these managers are around showing support at various times. Once we have the backing we need we must research the objectives and core concepts that are to be gained through implementing the succession planning program. We must look at ways to get the employees to back the program, we have to develop ways to estimate what we will need as far as future management openings go, and we have to look into current managers that could make a good succession planning team. We must then select a development team that should come from various areas of our company. This will help us diversify the way our program works by bringing in people with different skill sets to help lay the foundation for our succession planning program. This highly diverse team will research the company’s potential for growth in all areas and will estimate potential moves that will be made in the future. This will help our team develop a highly successful design that focuses on the company’s future goals and projections for growth. Possible future moves will be accounted for and our program design will leave room for reviews and possible adjustments. It is extremely important that we focus on a communication plan to help announce it to the company. We will want our employees to realize that this is in place to help them and that we welcome all forms of communication from them. We will stress the importance of communicating possible problems or possible solution they may have thought about. This open communication will help the company by making it easier for the employees to buy into. We want to make sure that no one is left out when we make this official to everyone. A good communication plan will get this information out to all employees through various avenues. We will use e-mail, intranet, bulletin boards, departmental meetings, and any other ways that we feel are potentially used to communicate important company information. We must also make sure that we successfully communicate what requirements are associated with getting picked for the program. This will help in keeping the moral, loyalty, and performance levels at a high. As the program is implemented we must make sure it is reviewed and evaluated, which will help us make changes to the process if we deem there are necessary changes that need to take effect. It is crucial that the designed program has room for changes as the company or business changes. If we spend the time to build the program and leave no room for change, then we will end up scraping it down the road and it will be a short-term plan instead of a long-term investment for the company. CONCLUSION It is important to remember that the company’s growth and prosperity is greatly tied to the three main areas we have discussed. We must continue to improve our performance appraisal systems, which will in turn allow us to notice possible candidates to promote within the company. We must realize that both the company and the employees benefit from these performance appraisals. Some on the benefits the company receives is that we can promote from within, it allows us to reiterate or change goals, paper trail for documentation, it identifies weak areas and allows us to give training, and it boosts moral and performance. The employee benefits by having moral and performance boosted, face-to-face time with managers, better understanding of company expectations and goals, and they feel a sense of loyalty from the company. Pre and post appraisal activities are also important to ensure that these appraisals are as effective as can be. Pre-appraisals activities include establishing meeting times, collecting new and old goals, make sure to give employees an advance copy of their appraisal, and collecting all notes and previous appraisals. Post-activities would include the implementation of discussed training programs, scheduling follow-up meetings with employees, continue to observe and make notes on employees, and reinforce an open door policy to all employees. These are key steps to make sure that these performance appraisals benefit the company as much as possible. An effective appraisal system put in place within our company will benefit all areas and aspects. An importance should be put on making sure the proper steps are taken for optimal performance appraisal. These steps should include things like managers basing evaluation off performance, promote moral and including employee’s thoughts, focusing on the employee, give them access to your evaluation before the meeting, remain unbiased, and to keep possible legal issues in mind while performing the performance appraisal. It is also a benefit to incorporate the employee’s goals into the performance appraisal. Employees will feel that the company is loyal to them by making their objectives match some of their personal career goals. It is important to stress the importance of promoting the employee’s career goals to all managers that do performance appraisals. This will help raise the performance level of our company. Team performance appraisals are also important for the benefit and growth of the company. There are many different techniques that can be used to assess the performance of teams, but I recommend that our company base appraisals off the management by objectives (MBO) model. This will help us assure that employees are focused on goals or objectives, it will help remove added chance of errors or bias in appraisals, and it will give the managers a chance to spend more time with employees. There are benefits for both individual and team performance appraisals. Individual appraisals benefit the company by helping to identify which employee’s career goals match the companies and it helps increase the individual’s performance. Team appraisals benefit the company by raising performance of teams, having employees train other team members that need additional development, and it gives management an idea of which people may be ready for an upward movement within the company. Furthering the career goals of employees will show everyone in the company that we are invested in them. Succession planning is the last area that we discussed, but it is an area that can help the company as it moves into the future. Succession planning will help us generate candidates that will be trained for potential management positions that become available. The company benefits of this plan include the addressing of needs before they occur, allows the company to select and train best candidates, it focuses on the future of the company, and it will keep employees loyal to the company. The right steps for a succession plan are also important to ensure that it will be successful. It would not be a good thing to invest time and money into a program that was not developed for success. The rights steps include getting proper backing from upper management, researching objectives and core concepts of the company, select a team from various areas with various skill sets, research future needs and goals of the company, develop an effective communication plan, implement communication plan to get program out to all employees, and continue to evaluate and review the program to ensure it changes as the company’s goals and objectives change. These are the steps that are important when implementing a successful succession planning program. The CEO and board of directors should implement these area into the company. The performance reviews would be an issue that HR could complete and make sure all managers understand the new performance appraisal policy. There could be training scheduled to help managers get comfortable with the new appraisal process. We also need to make sure the employees are made aware of the benefits that they will gain by this new appraisal process. The upper management really just needs to make sure that the company knows that they support the new process. We need to make sure that managers incorporate the furthering of employee’s career goals into the objectives and work goals that they establish for the employee. This will keep employees loyal to our company, as we show the employee that we are loyal to them. Team performance appraisals also need to be established to be effective. This will be done by adopting the MBO appraisal process for team performance appraisals. Our employees will be more goal oriented and will perform at a high level in order to accomplish these goals. It is important that managers continue to stress the importance of quality to all workers and establish that the code of ethics should be followed all the time. We do not want short cuts taken to raise performance levels. Succession planning is an area that will need more time from upper management. The CEO and the board of directors need to fully believe in and support the succession plan that is put into effect. This plan will not work without the proper backing from upper management. HR will start the process and select the most diverse group to bring the most skill sets as possible. This team will then come up with a design to implement for succession planning. Upper management should stay involved and show the company that it supports all that is going on. Inputs and thoughts can be added or given to the design team. This success of this program will be the success of the company. Upper management has invested many years in making sure the company has grown as commanded, but now this design will lead the company to the same success in the future. How to cite Performance Appraisal Notes, Papers

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Question: Write a reflection about your anticipated Health Care Practice. Answer: Reflection Healthcare sector is providing quality services to the society. Discriminatory practices are creating an impact on the health of the different groups which sums up the society. This essay has discussed various barriers to health care access which are being faced by the Intersex people on the basis of Gender and Sexuality. Attitude, values, and beliefs of the healthcare professional create an impact on the healthcare practice with Intersex people. Various healthcare practices can be used for enhancing the quality of their health. The Australian government has formulated these practices for providing quality healthcare services to different groups which are getting affected due to discrimination. I am working as a healthcare professional and focusing on providing quality healthcare services to the society and meeting the standards set by the government of Australia. I have seen that discriminatory practices are taking place in the healthcare sector against the Intersex people in Australia. There are various reasons responsible for the poor health of Intersex people. These reasons are acting as barriers and affecting the health and well-being of the Intersex people adversely. I have analyzed various barriers which are affecting the health of the Intersex people (Kitts, 2010). Most important barriers which are adversely affecting the health and well-being of Intersex people are lack of sufficient knowledge of the treatment to Intersex people, fear in the mind of Intersex people which resist them for disclosing their real identity in front of others, rejection from the health care professionals for treating the Intersex people, attitude and behaviour of the healthcare practition ers towards Intersex people, lack of proper communication between the Intersex people and healthcare practitioners and discriminatory practices against the Intersex people (Quinn, et. al., 2015). One of the most important barriers is a lack of knowledge of the treatment which needs to be provided to Intersex people. During my tenure in the healthcare sector, I have analyzed that various healthcare professionals do not possess proper knowledge which is required for ensuring the good health to Intersex people in Australia. Another barrier is related to the negative attitude of healthcare professionals towards the Intersex people. Different individuals have a different attitude towards different people or group (Ross, et. al., 2010). Healthcare practitioners may deny treating Intersex people and they may act inattentive to Intersex people. This barrier resists in providing treatment to Intersex people. Intersex people suffer from rejection from the society which develops fear and anxiety in their mind. This fear develops different thoughts in their mind which deploys from getting treatment at the right time and increases health issues in Intersex people. Fear is developed in the mind of Intersex people due to which they hesitate in discussing their health issues with the healthcare practitioners (Quinn, et. al., 2014). Communication needs to be done between the healthcare professionals and Intersex people. Lack of proper communication affects the health as miscommunication can result in providing wrong treatment or partial treatment to the Intersex patients. The government of Australia is constantly working for ensuring the health of the Intersex people. Discriminatory practices are creating adverse impacts on the health and well-being of the Intersex people. Discrimination against the Intersex people develops fear and insecurity which acts as a barrier between the healthcare services and Intersex people (Mller, 2016). I have analyzed that attitude, values, and beliefs of the healthcare practitioners towards the service users play a vital role in ensuring their health and well-being. There is a need to ensure that healthcare practitioners are adopting a positive attitude towards the different groups of the society and follows same values in every case they deal with. Every individual adopts a different attitude towards the different groups of the society. I have adopted a positive attitude towards the Intersex people so as to make sure that proper healthcare services are provided to them. Negative attitude promotes discriminatory practices against the various groups of the society including Intersex people (OHTN, 2014). Every individual follows the values for performing the roles and responsibilities assigned to it in an effective manner. These values shape the attitude of the healthcare practitioners. Values which I have followed include equality, social justice, autonomy, dignity, honesty, discip line, and curiosity. All these values will ensure that positive attitude is adopted by the healthcare practitioners. Adopting these values ensures that the healthcare professionals are attentive to the healthcare needs of the intersex patients. All these values have helped me in adopting a positive attitude towards the Intersex patients. My positive attitude and values have contributed towards the attainment of the goals set. All these aspects have led me towards the right path and ensuring the quality health of the Intersex people (Berman, et. al., 2011). According to the data presented in the report of AIHW, steps need to be taken by the government for providing better services to the intersex people. Initiatives need to be taken for these patients including empowerment, consultation and full inclusion. LGBTI Ageing and Aged Care Strategy will help in promoting the equal access to the healthcare services to different groups (AIHW, 2017). Culturally safe health practices must be adopted for providing quality healthcare services to every group of the society. An individual who is providing health care services must be self-reflective and must focus on following cultural beliefs. Cultural safety education must be provided along with training sessions which provide knowledge and power to the patient belonging to Intersex group and healthcare practitioner. This knowledge and power plays a vital role as this knowledge and power ensure that quality services are being offered to the Patient belonging to Intersex group. A safe environment must be developed for ensuring that the environment is safe for different groups of the society (Kemppainen, et. al., 2012). The culturally safe environment promotes exchange of information in a better manner and ensures that proper treatment is provided to patients of Intersex group. Training must be provided to the patients by ensuring that no discriminatory practices are taking place in t he environment. As a healthcare practitioner, I will ensure that proper treatment is provided to every group in the healthcare setting in which Im working. I will develop understanding of the different rules and regulations formulated by the government of Australia for the health and wellbeing of the Intersex people. A welcoming environment will be created for patients belonging to Intersex group so that they are treated effectively. I will focus on developing open environment so that patient does not feel hesitant in communicating their health issues (Smith, 2010). For being a health service provider advocate for the patients of the Intersex group, I will ensure that values adopted are for every individual and no discriminatory practices are adopted in the healthcare setting. I will collaborate with the government departments for ensuring that proper training sessions are conducted for developing the knowledge of the healthcare professionals. I will take initiatives for developing skills and knowledge of the health issues faced by the patients belonging to Intersex group. I will make healthcare professionals aware of the issues faced by the patient of Intersex group (Brennan, et. al., 2012). The welcome environment will be the priority as this will enhance the trust of the patient from Intersex group towards the healthcare professionals and better communication will help in enhancing the health of the patients (Surreira, 2014). Thus, it can be concluded from the above discussion that the quality of the health of certain groups of the society is getting affected. This essay has discussed the different barriers which have affected the quality of health of Intersex people. These barriers need to be removed for ensuring the health of Intersex people. Healthcare practitioners must adopt a positive attitude towards the Intersex group. Negative attitude of healthcare practitioners results in depleting health of this group. Culturally safe healthcare practices must be adopted by the healthcare professionals. These practices are being formulated by the government of Australia for promoting better health and eliminating discriminatory practices against certain groups References AIHW, 2017, Older Australians who identify as lesbian, gay, bisexual, transgender or intersex, AIHW. https://www.aihw.gov.au/ageing/older-australia-at-a-glance/diversity/lgbti/ Berman, P., Pallas, S., Smith, A. L., Curry, L. Bradleyb, E. H., 2011, Improving the Delivery of Health Services: A Guide to Choosing Strategies, Health, Nutrition and Population (HNP) Discussion Paper. https://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/281627-1095698140167/ImprovingDeliveryofHealthServicesFINAL.pdf Brennan, A. M. W., Barnsteiner, J., Siantz, M. L. Cotter, V. T., Everett, J., 2012, Lesbian, gay, bisexual, transgendered, or intersexed content for nursing curricula, Journal of Professional Nursing, 28 (2), 96-104. https://ucdavis.pure.elsevier.com/en/publications/lesbian-gay-bisexual-transgendered-or-intersexed-content-for-nurs Kemppainen, V., Tossavainen, K. Turunen, H., 2012, Nurses' roles in health promotion practice: an integrative review, Health Promotion International. https://pdfs.semanticscholar.org/3756/5f545109e5ca507840064980d30d0ef5cecc.pdf Kitts, R.L., 2010, Barriers to Optimal Care between Physicians and Lesbian, Gay, Bisexual, Transgender, and Questioning Adolescent Patients, Journal of Homosexuality, Volume 57, Issue 6, pp. 730-747. Doi: 10.1080/00918369.2010.485872. Mller, A., 2016, Health for All? Sexual Orientation, Gender Identity, and the Implementation of the Right to Access to Health Care in South Africa, HHR Journal. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5395001/pdf/hhr-18-195.pdf OHTN, 2014, Facilitators and barriers to health care for lesbian, gay and bisexual (LGB) people, OHTN. https://www.ohtn.on.ca/Pages/Knowledge-Exchange/Rapid-Responses/Documents/RR79.pdf Quinn G.P., Schabath, M.B., Sanchez, J.A., Sutton S.K. Green B.L., 2015, The importance of disclosure: Lesbian, gay, bisexual, transgender/transsexual, queer/questioning, and intersex individuals and the cancer continuum, Cancer, pp. 1160-1163. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4505934/pdf/nihms706607.pdf Quinn, G. P., Schabath, M. B., Sanchez, J. A. Sutton, S. K., 2014, The Importance of Disclosure: Lesbian, Gay, Bisexual, Transgender/Transsexual, Queer/Questioning, and Intersex Individuals and the Cancer Continuum, Research Gate. https://www.researchgate.net/publication/269727040_The_Importance_of_Disclosure_Lesbian_Gay_Bisexual_TransgenderTranssexual_QueerQuestioning_and_Intersex_Individuals_and_the_Cancer_Continuum Ross, Paul D. S. Carr, Sarah, 2010, It shouldn't be down to luck: training for good practice with LGBT people - Social Care TV, Diversity in health and care, Volume 7, p. 211-216. https://diversityhealthcare.imedpub.com/it-shouldnt-be-down-to-luck-training-for-good-practice-with-lgbt-people--social-care-tv.php?aid=1978 Smith, P. S., 2010, Cultural Safety in Nursing Education: Increasing Care For Lgbt Individuals, Washington State University Spokane. https://research.wsulibs.wsu.edu/xmlui/bitstream/handle/2376/3442/P_Smith_011018665.pdf?sequence=1 Surreira, C., 2014, Culturally Competent LGBT Care, Doctor of Nursing Practice (DNP) Capstone Projects, 34. https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1036context=nursing_dnp_capstone

Moody’s Credit Ratings and the Subprime Mortgage Meltdown Essay Example

Moody’s Credit Ratings and the Subprime Mortgage Meltdown Essay In the early-2000s, Moody’s, one of the leading credit rating agencies in the world, evaluated thousands of bonds backed by so-called â€Å"subprime† residential mortgages—home loans made to those with both low incomes and poor credit scores. When housing prices began to fall in 2006, the value of these bonds disintegrated, and Moody’s was compelled to downgrade them significantly. In late 2008, several commercial banks, investment banks, and mortgage lenders that had been profoundly involved in the subprime market failed. In the wake of these implosions, credit stagnated, consumer confidence plummeted, and job losses increased across the globe. Although the financial crisis had many roots, some analysts felt that Moody’s and other credit rating agencies had played a large role by underscoring the inherent risks in mortgage-backed securities. The actions taken by Moody’s and other credit rating agencies broke no financial laws, posing the question, is what is legal necessarily ethical? This case study will draw historical information, including documents released by Moody’s in connection with a Congressional hearing in October 2008, to search for the causes of the financial crisis and Moody’s role in it. It will then ultimately explain how corporations, governments, and society can improve the integrity and efficiency of the credit rating industry to decrease the risk of financial crises in the future. Moody’s had been founded in 1909 by John Moody, who got his start as an errand boy at a Wall Street bank. After oticing the growing popularity of corporate bonds, Moody realized that investors longed for a source of trustworthy information about their issuers’ creditworthiness. By 1918, Moody and his first were rating every bond issued in the United States. By 2008, Moody’s had become the undisputed â€Å"aristocrat of the ratings business†. (Lawrence, p. 455) The company was made up of two business units. The largest was Moo dy’s Investors Service, which provided credit ratings. It earned 93% of the company’s revenue, while Moody’s KMV, which sold software and analytic tools, made up the other 7%. We will write a custom essay sample on Moody’s Credit Ratings and the Subprime Mortgage Meltdown specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Moody’s Credit Ratings and the Subprime Mortgage Meltdown specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Moody’s Credit Ratings and the Subprime Mortgage Meltdown specifically for you FOR ONLY $16.38 $13.9/page Hire Writer In 2007, Moody’s reported revenue of $2. 3 billion and employed 3,600 people in offices in 29 countries around the world. (Lawrence, p. 455) Moody’s main business was rating the safety of bonds—debt issued by companies, governments, and public agencies. Moody’s would rate bonds according to a scale from Aaa, known as â€Å"triple A†, with a very low chance of default, to C, already in default, with roughly 19 steps in between. Moody’s ratings and those of other credit rating agencies allowed buyers to evaluate the risks of various fixed-income investments. (Lawrence. P. 455) Over the year, Moody’s saw its business model shift in a different direction. Moody’s had charged investors for its ratings through the sales of publications and advisory services for decades. A Moody’s vice president was quoted saying in 1957, â€Å"We obviously cannot ask payment from the issuer for rating a bond. To do so would attach a price to the process and we could not escape the charge, which would undoubtedly come, that our ratings were for sale. † (Lawrence, p. 455) In 1975, however, the Securities and Exchange Commission (SEC) altered the rules. The SEC selected three companies—Moody’s, Standard amp; Poor’s, and Fitch—as Nationally Recognized Statistical Rating Organizations, or NRSROs. The government officially sanctioned these three rating agencies and gave them a trusted regulatory role. It was at this time that Moody’s and the other NRSROs began charging bond issuers for their product ratings. (Lawrence, p. 456) The new SEC rules altered the relationship between the bond issuers and the three ratings agencies. Ratings strongly influenced the market value of the bond, creating a large incentive to ship for the best possible ratings. Rating agencies also had a strong motivation to compete for market share by catering to their clients. In 2000, Moody’s became an independent, publicly owned firm after being released by its parent company, Dun amp; Bradstreet. This placed even more pressure on Moody’s managers to increase revenues and improve their shareholder’s returns. (Lawrence, p. 456) From this point on, we begin to see the credit rating agencies drastically underestimate the risks of mortgage-backed securities in a selfish attempt to further their own bottom lines. The birth of structured finance came from new techniques of quantitative analysis used by Wall Street investment banks, and suddenly, Moody’s was not just evaluating corporate, municipal, state and federal government bonds. Structured finance consisted of combining income-producing assets—everything from conventional corporate bonds to credit card debt, home mortgages, franchise payments, and auto loans—into pools and selling shares in the pool to investors. (Lawrence, p. 456) A structured finance product that became popular in the early 2000s was the residential mortgage-backed security (RMBS). An RMBS started with a lender—a bank like Washington Mutual or a mortgage company like Countrywide Financial—that made home loans to individual borrowers. The lender would then bundle several thousand of these loans and sell them to a Wall Street investment bank such as Lehman Brothers or Merril Lynch. The Wall Street firm would then create a special kind of bond, based on a pool of underlying mortgage loans. Buyers of this bond would receive a share of the income flowing from the homeowner’s monthly payments. (Lawrence, p. 56) In an attempt to make RMBS more desirable to investors, the investment banks typically divided them into separated â€Å"tranches†, with varying degrees of risk. If any homeowners defaulted on their loans, the lowest tranches would absorb the losses first, and so on, up to the highest tranches. It was here that credit rating agencies such as Moody’s were asked to rate the creditworthiness of various tranches of the mortgage-b acked securities. Moody’s charged more for rating structured financial products, considering their higher complexity. Credit ratings were extremely important to investors in mortgage-backed securities because these products were so difficult to understand. Investors had nearly no way to judge the safety of these structured financial products, so they trusted the credit agencies’ judgment. (Lawrence, p. 457) Moody’s began to increase their revenue significantly since they began rating structured financial products. Revenue from structured finance grew as a proportion of Moody’s overall revenue throughout 1999 to 2007, peaking at 43% in 2006, contributing to the company’s impressive profitability. Operating margins during this period ranged from 48% to 62%, an extremely high level. Moody’s had the highest profit margin of any company in the Samp;P 500 for five years in a row, beating out companies like Microsoft and Exxon. (Lawrence, p. 458) The enormous financial results rewarded Moody’s shareholders with an impressive return in the early 2000s. Moody’s top executives were also well compensated, with the chairman and CEO Raymond McDaniel earning a total of $7. 4 million in 2007. (Lawrence, p. 59) In the 2000s, the total global volume of financial assets—money available worldwide to purchase stocks and bonds, as well as more complex structured financial products created by Wall Street—grew by leaps and bounds. Global financial assets grew from $94 trillion in 2000 to $196 trillion in 2007. (Lawrence, p. 459) Until the credit crisis, private bonds were one of the fastest-growing asset classes, growing 10% a year between 2000 and 2007, when the ir global value stood at $51 trillion. Several factors contributed to the growth of a large increase in the total global volume of financial assets. Big pension plans, private hedge funds, individuals saving for retirement, and foreign governments all sought safe investments with good returns. Emerging economies, including China, India, United Arab Emirates, and Saudi Arabia, built up substantial reserves selling oil and manufactured goods to the United States and other developed nations. At the same time that the volume of financial assets was increasing, many classes of assets were becoming less attractive to investors. (Lawrence, p. 459) In the early 2000s, the stock market was struggling after the high-tech bubble and collapses of Enron and WorldCom. Low interest rates, driven down by the U. S. Federal Reserve, fell to historic lows reaching 1% in 2004. This caused RMBS’s, which paid well above the federal funds rate, to be increasingly attractive when compared to rates of return on U. S. Treasuries. The growing demand for asset-backed securities put significant pressure on investment banks to create more of them. Investment banks began to put pressure on mortgage originators to produce more loans. This then led to lenders lowering their standards they used to qualify borrowers. Typically, when a person applies for a home loan, they would need to have good credit, money for a down payment, and proof of income and assets. However, in the rush to make loans, lenders began overlooking these requirements, resulting in borrowers with poor credit, low-paying jobs, few assets, and no money to put down. These borrows—and the loans made to them—were known as subprime. (Lawrence, p. 460) The weakened standards by lenders appeared to be mirrored by public policy towards homeownership by both the Clinton and Bush administrations. The government had helped first-time buyers with down payments and closing costs and allowed borrowers to qualify for federally insured mortgages with no money down. They also encouraged Freddie Mac and Fannie Mae, two government-sponsored mortgage lenders, to buy RMBSs that included loans to low-income borrowers. (Lawrence, p. 460) The industry also began to write more nontraditional mortgages. Instead of traditional fixed-rate loans, under which a borrower made a stable payment every month for many years, the industry developed products with lower monthly payments to allow less qualified buyers to get into the market. From 2003 to 2005, the subprime and low-documentation share of mortgage originations tripled from 11% to 33%. These loans were very popular in states where housing prices were going up the fastest, such as Nevada, California, Arizona, and Florida. (Lawrence, p. 461) Some banks and mortgage companies became very aggressive in pushing loans on poorly qualified borrowers. A report from The New York Times examined the practices of Washington Mutual, where employees were under extreme pressure to generate loan volume. The report cited that Washington Mutual pressured their sales agents to generate loans while completely disregarding borrowers’ incomes and assets. The bank had set up a system that enabled real estate agents to collect fees of more than $10,000 for bringing borrowers, making agents more beholden to Washington Mutual then they were to their own clients. Washington Mutual gave mortgage brokers large commissions for selling the riskiest loans, which carried higher fees, increasing profits and the compensation of the bank’s executives. They also pressured appraisers to give inflated property values that made loans appear less risky, causing Wall Street to bundle them more easily for sales to investors. (Lawrence, p. 461) Due to these practices, the quality of mortgage loans disintegrated. In 2005, the Office of the Comptroller of the Currency (OCC), considered new regulations that would have limited risky mortgages and required better explanations to borrowers and warning to buyers of RMBSs. However, mortgage lenders and investment banks lobbied against these rule changes, and federal regulators backed off. Officials in North Carolina, Iowa, Michigan, Georgia, and other states attempted to rein in lenders, but were overruled by federal officials who argued that federal regulation preempted state regulation. The OCC brought merely one enforcement action related to subprime lending between 2000 and 2006. (Lawrence, p 462) In 2006, the market for residential mortgage-backed securities began to unravel. Interest rates began to rise, and housing prices began to drop. As loans began to reset, homeowners found that they were unable to make the new, higher payments—or to refinance or sell their property. Increasing numbers of homeowners realized they owed more than their home was worth. As people began to walk away from their homes, mortgages became worthless—and the value of securities based on them fell. In July 2008, Ben Bernanke, chairman of the Federal Reserve, testified in the Senate that he anticipated as much as $100 bullion in losses in the market for subprime-backed securities. By the following summer, Moody’s had downgraded more than 5,000 mortgage-backed securities, with a value in the hundreds of billions of dollars, including 90% of all asset-backed securities it had rates in 2006 and 2007. United States Senate Permanent Subcommittee on Investigations) As Moody’s began downgrading bonds, many institutional investors—whose holdings of mortgage-backed securities were suddenly worth much less—became irate. As criticism began to pour in, downgrades continued, and Moody’s own stock dropped in value, the company’s executives be gan a reevaluation process of Moody’s own practices. (The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States) On September 10, 2007, McDaniel convened a town hall meeting with his managing directors. He was quoted as saying, â€Å"Looking at the subprime crisis speci? cally . . . We had historically low [interest] rates. We had very easy credit conditions for a number of years. We had of? cial and market-based support for adjustable-rate mortgages. It created what I think is an overdone condition for the U. S. housing [market]. This was a condition that was supported by U. S. public policy in favor of home ownership. And as I once said, once housing prices started to fall, we got into a condition in which people can’t re? nance, can’t sell, can’t afford their current mortgage. While McDaniel was dodging any personal responsibility that Moody’s should have for the mortgage meltdown, some of his fellow employees were more forthright. One was quoted as saying, â€Å"†¦these errors make us look either incompetent at credit analysis, or like we sold our soul to the devil for revenue, or a little bit of both. † The failure of Moody’s to a ccurately rate the inherent risks are due to the conflicts of interest that are in the issuer-pay business model and rating shopping by issuers of structured securities. Moody’s desire to expand their market share made them willing participants in this mortgage-backed securities scandal. It is also far too simple for major banks to pressure lenders or credit agencies to get what they want. The business model prevented analysts from doing their job by putting investors first, and instead put their own company’s bottom line ahead of everything. The credit rating agencies need increased scrutiny and internal controls so that the market can be assured that their ratings are adequate, elimination of the NRSRO designations, and decreasing the conflicts that are created by the issuer-pays model. While Moody’s may not have been practicing any illegal activities, they ultimately failed at delivering their customers accurate information and committed a grave injustice by continuing to intentionally underestimate the risk of mortgage-backed securities for their own profits. The Financial Crisis Inquiry Commission’s investigations have revealed a â€Å"shadow† banking system, where the operations of financial entities are legal solely because the markets and the forces of capitalism have moved faster than the government can pass laws. This allows them to escape conviction and legal action from participating in economically destructive activities. The financial crisis that followed the unethical practices by Moody’s and others led to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Bill Summary amp; Status – 111th Congress (2009–2010) – H. R. 4173) which addresses the vulnerabilities of the financial services industry by strengthening regulatory authority, specifically in the areas that were most abused prior to the financial systems’ collapse. The â€Å"revolving door† between government officials and corporations may always pose problems for regulators, and lobbyists may succeed in influencing regulators to back off. These concerns mean that regulators must be well paid in order to ensure that they will not give in to bribery or any other unethical action and that there must be a wider separation between government officials and people on Wall Street. The 2008 crisis started when thousands of US homeowners stopped paying interest on their mortgages. The crisis spread because thousands of bankers and fund-managers had ignorantly backed those mortgages, and eventually lost a lot of money. The did this partly because of their own lack of familiarity with RMBSs and also because of the failure of Moody’s and other credit ratings agencies to warn them of the risks involved. Up to 2008, a large proportion of mortgage-based debts were rated AAA, when in reality they were junk. Just days before the bubble burst, Moody’s still rated these failing investments as safe. The problem of conflicts of interest within the credit rating industry must be adequately dealt with, but an even larger problem may be that rating creditworthiness is difficult to begin with. Moody’s will never be able to predict the unpredictable, or anything that cannot be included within a statistic. In order for investments to be healthy, Moody’s must rate what it can accurately judge and dismiss the rest as a warning sign to investors that they should beware to place their finances into a bubble that will eventually burst on bring down the entire global economy with it. References Lawrence, A. Weber, J. (2011) Business and Society, Stakeholders, Ethics, Public Policy, 13th Edition. New York: McGraw-Hill/Irwin The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Washington, DC: U. S. Government Printing Office. January 2011. pp. xxv; 221–222, 226. Becker, Bo; Milbourn, Todd (2011). How did increased competition affect credit ratings? . Journal of Financial Economics 101 (3): 493–514. Ratings in structured finance: what went wrong and what can be done to address shortcomings? . CGFS Papers (Committee on the Global Financial System) United States Senate Permanent Subcommittee on Investigations (13 April 2011). Wall Street and the Financial Crisis: Anatomy of a Financial Collapse. Majority and Minority Staff Report. Committee on Homeland Security and Governmental Affairs. pp. 6, 57. Financial Crisis Inquiry Commission, Testimony of Raymond W. McDaniel, 7