Appraisal Systems Essay Example | Topics and Well Written Essays - 1500 words

Appraisal Systems - Essay Example Performance appraisal of employees resorted to by organizations has many objectives. Mohrman, Resnick-West and Lawler (1989) identify increase in motivation to perform effectively and to increase the self esteem of the employees as essential objectives of performance appraisal methods. They usually enable the organization to maintain a reliable record of the performance of each employee in order to determine the wage levels, incentives, salary increase, transfers and promotions. The performance appraisal methods also bring out the needs for training of employees at various levels in the organization. By studying his/her performance appraisal report the employee is able to improve upon his performance by rectifying the mistakes he/she might have committed earlier. There are various methods usually employed by progressive organizations to make appraisals of employee performance. These can be divided into three different groups; (i) individual evaluation methods, (ii) multiple person evaluation methods, and (iii) other methods. The individual evaluation methods are based on an assessment of the performance of the individual employees. ... The report is not data-based but merely represents the impressions of the superior about the subordinate. Since the report is mostly subjective the employee may not be sure of his strengths and weaknesses and is also not guided for rectifying his mistakes. Essay evaluation is a non-quantitative technique in which the rater is asked to prepare an essay based on the job knowledge and potential of the employee and the employee's understandings of the policies and programmers of the company. The attitude and perceptions of the employees are also taken into account while preparing the essay. This method has serious limitation of being a subjective one and sometimes the rater may be found to be poor in expressing his views correctly. Under critical incident technique the effective and ineffective behavior on the job of the employee is observed by the manager who prepares a list of incidents representing the poor or outstanding behavior of each employee. The manager periodically records the incidents and at the end of the rating period these incidents are summarized to evaluate the employee performance. This method is more suitable to assess the job of the supervisors rather than that of the employees at low levels. In the check list method a list of objective or descriptive statements about the employee behavior is included and the rater makes his observations on the employee performance by checking the particular trait of the behavior which he assessed the employee to possess and other traits are left blank. A variation of the method is to assign weights to different traits and summarize the assessment of the rater. One serious limitation of this method is that the rating is normally biased by the

C-V-P equation.Contribution margin Essay Example | Topics and Well Written Essays - 1250 words

C-V-P equation.Contribution margin - Essay Example The C-V-P equation or the Cost Volume Profit Analysis is a major step in major decisions. It is the model which defines a relationship between the sales price, cost or production, sales volume and other costs of any product. The major purpose of this model and its application is the predictability of future profits and its change based on changes in either volume or any of the components of costs that it takes into account.It is important for managers to decide if their materials costs and other direct variable costs are too high given the revenue from the product. Keeping aside the fixed costs which have to be borne irrespective of the sales revenue, the remaining costs which are directly proportional to units sold can be minimized to manage cash flows in a better way. They can cut on their variable costs by having a look at the contribution margins of their company and their products.The contribution of sales to before tax profits, or gross profits, over and above the break even is exactly the contribution margin as there are no fixed costs any more. The amount after the deduction of variable costs from the revenues will be added to the profits.CVP graphs help the manager and the reader to have a better figure of the relationship between the profits, sales and volume of sales. CVP graphs also helps in viewing the breakeven points on the graph and provides a better insight into the profit-impact of increased sales or costs.When we have a increase in the fixed costs, the breakeven point changes. ... 13. When other factors are constant, what is the effect on profits of an increase in fixed costs Of a decrease in variable costs When we have a increase in the fixed costs, the breakeven point changes. The breakeven point is the point where the profits are zero or the total contribution margin is equal to the fixed costs. It's a no-profit and no-loss position. When the fixed costs increase in the [(Fixed costs) / (contribution margin)] calculation of break-even point, the number of units to break even increases. If there is a decrease in variable costs, the contribution margin increases, given the same price. Due to this, the break even units decrease as the denominator is increasing. 14. What are the limiting assumptions of C-V-P analysis The CVP model assumes that the prices of the units will remain constant and do not change in the entire process. Variable and fixed components can be easily and accurately calculated for units. The determination of fixed and variable costs, in actual conditions, is very difficult. Inventories are available at all times to make sales and that there is no shortage of supply of products to sell. The sales mix remains constant for multi product companies too. Practice 16-3 Linearity of Variable Costs within the Relevant Range The company has assembled the following data about its variable costs: Level of Activity Total Variable Cost 1,000 units $ 25,000 2,000 units 46,000 3,000 units 69,000 4,000 units 92,000 5,000 units 100,000 The company is currently producing 3,300 units. According to these data, what is the relevant range over which the company can assume that the variable cost per unit is constant In this case, the