Explore the main goals of generative AI: automated content creation and enhanced creativity in fields like art, literature, and music.
What is the Main Goal of Generative AI in Content Creation?
Generative AI aims to create new content by learning from existing data. This can include generating text, images, music, or other forms of media. The main goals of generative AI include:
Content Creation:
Automating the creation of high-quality content across various domains, from art and literature to scientific reports and marketing materials. By leveraging large datasets, generative AI can produce detailed and contextually relevant content that can rival human creativity.
Creativity Enhancement:
Assisting humans in the creative process by providing novel ideas, designs, or solutions that might not be immediately apparent. Generative AI can spark inspiration by offering unique perspectives and compositions that humans might not consider, thus pushing the boundaries of innovation in fields like music, art, and writing.
Personalization:
Generating personalized content tailored to individual preferences or needs, enhancing user experience in applications like advertising, customer service, and education. For instance, generative AI can analyze user behavior and preferences to create customized recommendations for products, content, or learning paths, making interactions more engaging and relevant.
Efficiency Improvement:
Reducing the time and effort required for content creation, enabling quicker turnaround times and freeing up human creators to focus on more complex tasks. By taking over repetitive and time-consuming aspects of content production, generative AI allows professionals to dedicate more time to strategic planning and creative exploration.
Innovation:
Driving innovation in various fields by exploring new combinations and variations of existing data to uncover unique and potentially groundbreaking insights or solutions. In scientific research, for example, generative AI can generate hypotheses and models that accelerate discovery and innovation. In the entertainment industry, it can create entirely new genres or styles, enriching the cultural landscape.
Summary
Generative AI is not just about mimicking human creativity but augmenting and expanding it. As these systems continue to evolve, they have the potential to significantly transform how we create, personalize, and consume content, making it more efficient and innovative while opening up new possibilities for human collaboration and creativity.
A Performance Improvement Plan, or PIP for short, is an HR document used by employers to help employees improve their performance when they are struggling to meet the expectations and standards of their job. This plan sets out specific goals or milestones that an employee must meet within a certain timeframe to improve their skills, habits, and overall work performance with management. In some cases, a PIP is also used as a precursor to letting go of an employee if their improvement plan is deemed unsuccessful.
Explain the Performance Improvement Plan (PIP) features, goals, benefits, and downsides with create plans
A Performance Improvement Plan (PIP) is a structured process used by organizations to help employees improve their performance when they are not meeting the required standards or expectations. It is typically implemented when an employee’s performance falls below the desired level or when there are concerns about their behavior or productivity.
The main purpose of a PIP is to provide clear expectations and goals for the employee, identify areas where improvement need, and establish a timeline for achieving the desired improvements. The plan is often developed collaboratively between the employee and their supervisor or manager.
Performance Improvement Plan (PIP) features, goals, benefits, and downsides
The features of a Performance Improvement Plan (PIP)
A typical PIP includes the following features:
Objective assessment:
The employee’s current performance assess objectively, highlighting specific areas where improvement needs. This may involve reviewing performance metrics, feedback from colleagues or customers, and any relevant documentation.
Clear expectations:
The plan outlines the desired performance standards and expectations that the employee expects to meet. These expectations should be specific, measurable, achievable, relevant, and time-bound (SMART goals).
Actionable steps:
The PIP includes a detailed action plan that outlines the specific steps the employee needs to take to improve their performance. This may involve additional training, mentoring, skill development, or other interventions.
Timeline:
A PIP establishes a timeline for achieving the desired improvements. It typically includes specific milestones or checkpoints along the way to assess the employee’s progress.
Support and resources:
The plan may outline the resources and support that will be provided to the employee to assist them in meeting the goals of the PIP. This could include training programs, coaching, or any other necessary assistance.
Monitoring and feedback:
Regular monitoring and feedback are essential components of a PIP. The supervisor or manager will provide ongoing feedback to the employee, assessing their progress, addressing any challenges, and making necessary adjustments to the plan if needed.
Consequences:
In some cases, a PIP may also outline the potential consequences if the employee fails to meet the goals and requirements outlined in the plan. This could range from further disciplinary action to termination of employment, depending on the organization’s policies.
The ultimate goal of a PIP is to help the employee improve their performance and bring it up to the desired level. It provides a structured framework for communication, support, and accountability, allowing the employee to address their performance issues and succeed in their role.
The goal of a Performance Improvement Plan (PIP)
What is the goal of a Performance Improvement Plan (PIP)? It is to help an employee improve their performance and bring it up to the desired level. The primary objective is to provide a structured framework for addressing performance deficiencies and supporting the employee in achieving the necessary improvements. Specifically, the goals of a PIP are as follows:
Clear expectations:
The PIP establishes clear and specific performance expectations for the employee. It outlines the desired level of performance, the areas needing improvement, and the standards or metrics that need to be met. This clarity ensures that both the employee and the organization have a shared understanding of what constitutes successful performance.
Identification of improvement areas:
The PIP helps identify specific areas where the employee’s performance is falling short or not meeting expectations. It may involve analyzing performance metrics, gathering feedback from colleagues or customers, and reviewing relevant documentation. By pinpointing the areas that require improvement, the PIP provides a roadmap for addressing those deficiencies.
Actionable steps for improvement:
The PIP outlines actionable steps and measures that the employee can take to improve their performance. These steps may include additional training, skill development, mentoring, or other interventions aimed at enhancing the employee’s abilities and addressing their performance gaps. The plan provides a clear path for the employee to follow to achieve the desired improvements.
Support and resources:
A PIP often includes provisions for support and resources that will assist the employee in meeting the performance goals. This support can take various forms, such as training programs, coaching, access to resources or tools, or guidance from supervisors or colleagues. By providing the necessary support, the PIP increases the employee’s chances of successful improvement.
Monitoring and feedback:
Regular monitoring and feedback are critical components of a PIP. The plan includes checkpoints or milestones to assess the employee’s progress and provide ongoing feedback. This monitoring helps track the employee’s improvement, identifies any challenges or obstacles, and allows for adjustments to be made if necessary.
Performance accountability:
The PIP establishes a level of accountability for the employee to meet the performance expectations outlined in the plan. It encourages the employee to take ownership of their performance and actively work towards improvement. The plan sets clear timelines and milestones, creating a sense of urgency and focus on achieving the desired outcomes.
Continued growth and development:
While the immediate goal of a PIP is to improve performance, it also presents an opportunity for the employee’s growth and development. By addressing performance deficiencies and acquiring new skills or knowledge, the employee can enhance their overall capabilities and increase their potential for future success within the organization.
Overall, the goal of a PIP is to support the employee in reaching the expected level of performance while providing a structured framework for communication, feedback, and improvement. It aims to foster a positive work environment, boost employee engagement, and contribute to the overall success of the organization.
Benefits of a Performance Improvement Plan (PIP)
A Performance Improvement Plan (PIP) has several benefits for both the employee and the employer. Implementing a Performance Improvement Plan (PIP) can offer several benefits for both the employee and the organization. Here are some key benefits:
Clear expectations:
A PIP provides clear and specific performance expectations to the employee. It helps them understand what areas need improvement and what standards they need to meet. This clarity eliminates any ambiguity and ensures everyone is on the same page regarding performance goals.
Focus on improvement:
The primary purpose of a PIP is to help the employee improve their performance. By identifying areas of weakness and creating a tailored action plan, the PIP enables the employee to address their shortcomings and acquire the necessary skills or knowledge to succeed.
Increased accountability:
A PIP establishes a framework for tracking and monitoring progress. The employee holds accountable for meeting the goals and milestones outlined in the plan. This accountability fosters a sense of responsibility and motivates the employee to make the necessary changes to meet expectations.
Support and resources:
A PIP often provides access to additional resources, training, or support that can aid in the employee’s improvement journey. This support can come in the form of mentorship, coaching, workshops, or specialized training programs. The availability of these resources can enhance the employee’s skills and knowledge, enabling them to perform better.
Performance feedback:
Regular feedback is an integral part of a PIP. The employee receives ongoing feedback from their supervisor or manager, allowing them to understand their progress and make any necessary adjustments. This feedback loop facilitates communication and ensures that the employee stays on track towards meeting the performance expectations.
Potential for growth and development:
While a PIP is often initiated to address performance deficiencies, it also presents an opportunity for the employee to grow and develop professionally. Through targeted improvement efforts, the employee can acquire new skills, overcome weaknesses, and enhance their overall performance. This can contribute to their long-term career development within the organization.
Legal documentation:
In cases where an employee’s performance does not improve despite a PIP, having a documented history of the employee’s performance issues and the organization’s efforts to support improvement can be valuable from a legal standpoint. It provides evidence that the organization took appropriate steps to address performance concerns before taking further action.
Overall, a well-structured PIP promotes transparency, accountability, and growth. It allows organizations to address performance issues constructively while giving employees a clear path for improvement. When implemented effectively, a PIP can lead to enhanced employee performance, increased job satisfaction, and improved organizational productivity.
Downsides of a Performance Improvement Plan (PIP)
While Performance Improvement Plans (PIPs) can be effective in helping employees improve their performance, there can be some downsides. Here are some of the drawbacks that organizations and employees may encounter when implementing a PIP:
Negative impact on morale:
Being placed on a PIP can be emotionally challenging for employees. It can create a sense of being singled out or stigmatized, leading to decreased morale and motivation. The employee may feel demoralized, which could further impact their performance and overall job satisfaction.
Increased stress and pressure:
Employees under a PIP may experience increased stress and pressure to meet performance expectations within a specified timeframe. This pressure can be counterproductive, as it may hinder their ability to focus, think creatively, and perform optimally.
Strained working relationships:
The implementation of a PIP can strain the working relationship between the employee and their supervisor or manager. Trust and communication may affect, particularly if there is a perceived lack of support or fairness in the process. This strained relationship can negatively impact collaboration and teamwork.
Limited effectiveness:
PIPs do not guarantee improvement in every case. Despite the best efforts and intentions, some employees may struggle to meet the expectations outlined in the plan. In such instances, the PIP may prolong an unsatisfactory situation, consuming additional time and resources without achieving the desired results.
Potential for legal complications:
If a PIP is not handled appropriately or if there are inconsistencies or biases in its implementation, there may be legal implications for the organization. Employees may perceive the PIP as a precursor to termination, leading to potential legal claims or grievances related to unfair treatment or discrimination.
Distraction from other responsibilities:
While an employee focus on meeting the requirements of a PIP, their attention may divert from their regular job duties. This could lead to neglect of other responsibilities, resulting in decreased overall productivity and potentially impacting the performance of other team members.
Limited development opportunities:
In some cases, a PIP may not provide sufficient opportunities for skill development or improvement. If the plan is solely focused on correcting deficiencies without considering the employee’s long-term growth, it may hinder their professional development within the organization.
Organizations need to approach PIPs with fairness, transparency, and a genuine commitment to supporting employees’ improvement. Regular communication, constructive feedback, and a focus on collaboration can help mitigate some of the potential downsides associated with implementing a PIP.
How to Create a Performance Improvement Plan (PIP)
Creating an effective Performance Improvement Plan (PIP) involves several key steps. Here’s a general guideline to help you create a PIP:
Identify performance issues:
Identify specific areas where the employee’s performance is falling short or not meeting expectations. This can be done through performance evaluations, feedback from colleagues or customers, or any relevant performance metrics.
Set clear performance goals:
Define clear, specific, and measurable performance goals that the employee needs to achieve. Ensure that the goals are realistic and aligned with the organization’s expectations and the employee’s role. Use the SMART framework (Specific, Measurable, Achievable, Relevant, Time-bound) to make the goals more effective.
Determine action steps:
Identify the specific actions and steps the employee needs to take to improve their performance and meet the established goals. Break down the actions into manageable and measurable tasks. Consider any necessary training, coaching, or support the employee may require to succeed.
Establish a timeline:
Set a timeline for the PIP, including milestones or checkpoints to assess the employee’s progress. The timeline should provide a reasonable period for improvement while also maintaining a sense of urgency. It is important to have a balance between giving the employee enough time to improve and avoiding unnecessary delays.
Define support and resources:
Determine what resources, support, or training will be made available to the employee to help them achieve their performance goals. This could include training programs, mentoring, access to relevant tools or resources, or additional guidance from supervisors or colleagues. Ensure that the necessary support is provided throughout the PIP process.
Communicate the PIP to the employee:
Schedule a meeting with the employee to discuss the PIP. Present the performance issues, the goals, and the action steps clearly and concisely. Emphasize that the PIP is intended to support their growth and improvement. Encourage open communication and provide an opportunity for the employee to ask questions or provide input.
Document the PIP:
Create a written document outlining the details of the PIP, including the identified performance issues, the goals, the action steps, the timeline, and any support or resources provided. Both the employee and the supervisor should sign and date the document to acknowledge their understanding and commitment.
Monitor progress and provide feedback:
Regularly monitor the employee’s progress and provide ongoing feedback. Schedule periodic check-ins to discuss their performance, address any challenges or concerns, and offer guidance or adjustments to the plan if needed. Maintain open and honest communication throughout the process.
Document progress and outcomes:
Keep records of the employee’s progress, including any improvements or areas where they may still be falling short. Document any feedback provided, training attended, or additional support offered. These records will be useful for evaluating the employee’s overall improvement and for future reference if needed.
Evaluate the outcome:
At the end of the PIP timeline, evaluate the employee’s overall performance and progress. Determine whether the employee has met the established goals and whether further action or support is necessary. Recognize and acknowledge any improvements made by the employee and provide guidance for their continued development.
Performance improvement Meaning, Goals, and examples: How to be Know. It refers to the process of enhancing the productivity, efficiency, and effectiveness of an individual, group, or organization in achieving its goals. It involves identifying areas requiring change, implementing strategies to optimize performance, and tracking progress toward desired outcomes. In simpler terms, it is all about making things better, faster, and more efficient.
Define as well as Performance improvement Meaning, Goals, and Examples
What is the meaning of performance improvement? It refers to the process of enhancing or optimizing the efficiency, effectiveness, productivity, or quality of a system, process, or individual performance. It involves identifying areas where performance falls short of desired standards, analyzing the factors contributing to underperformance, and implementing strategies and interventions to bring about positive changes.
The specific meaning of performance improvement can vary depending on the context. In the business world, performance improvement often refers to enhancing organizational performance by improving key metrics such as revenue, profitability, customer satisfaction, or employee productivity. Also, It can involve various approaches, including process optimization, technology upgrades, employee training and development, strategic planning, and performance measurement and evaluation.
In sports and athletics, they typically refer to enhancing an athlete’s physical abilities, technical skills, and competitive results. It may involve training methods, nutrition and conditioning programs, sports psychology, and biomechanical analysis to help athletes reach their full potential and achieve better performance outcomes.
It generally refers to the systematic efforts undertaken to enhance performance, whether it’s in organizational settings, personal endeavors, or sports, to achieve better results, increased efficiency, or higher levels of success.
Performance Improvement Meaning, Goals, and Examples
What are the goals of performance improvement?
The goals of performance improvement are to enhance or optimize the efficiency, effectiveness, productivity, or quality of a system, process, or individual performance. Also, This involves identifying areas where performance falls short of desired standards, analyzing the factors contributing to underperformance, and implementing strategies and interventions to bring about positive changes. The specific goals of performance improvement can vary depending on the context, such as enhancing organizational performance in the business world or improving athletic performance in sports and athletics. Ultimately, the goals of performance improvement are to achieve better results, increased efficiency, or higher levels of success in whatever context it is being undertaken.
The goals of performance improvement encompass enhancing various aspects of performance to achieve desired outcomes. Here are some common goals associated with performance improvement:
Enhancing Efficiency:
It aims to increase efficiency by streamlining processes, reducing waste, eliminating bottlenecks, and improving productivity. Also, The goal is to achieve more with the same or fewer resources, thereby maximizing operational effectiveness.
Increasing Effectiveness:
The goal of performance improvement is to enhance the effectiveness of systems, processes, or individuals in achieving desired outcomes. This may involve refining strategies, aligning activities with goals, improving decision-making processes, or enhancing the quality of outputs.
Improving Customer Satisfaction:
They seek to enhance customer satisfaction by delivering products, services, or experiences that meet or exceed customer expectations. Also, The focus is on identifying areas where customer satisfaction may be lacking and implementing measures to address those areas effectively.
Enhancing Employee Engagement:
It aims to create an environment that promotes employee engagement, motivation, and job satisfaction. By identifying and addressing factors that impact employee morale and performance, organizations can foster a positive work culture and improve employee retention and productivity.
Increasing Quality:
They endeavor to enhance the quality of products, services, or outputs. This includes identifying and addressing areas of subpar quality, implementing quality control measures, improving processes, and also fostering a culture of continuous improvement.
Achieving Cost Reduction:
They seek to identify and implement cost-saving measures without compromising quality or customer satisfaction. Also, This may involve optimizing processes, reducing waste, negotiating better supplier contracts, or improving resource allocation.
Strengthening Innovation and Creativity:
It aims to foster an environment that encourages innovation, creativity, and the generation of new ideas. By providing employees with growth opportunities, creating platforms for idea sharing, and also supporting experimentation, organizations can drive innovation and improve performance.
Developing Skills and Competencies:
They involve identifying skill gaps and providing training and development opportunities to enhance individual and team capabilities. The goal is to equip employees with the necessary knowledge and skills to excel in their roles and contribute to overall performance.
Enhancing Organizational Agility:
It aims to increase organizational agility, adaptability, and responsiveness to changing market conditions or customer needs. Also, This involves identifying areas where flexibility and responsiveness may be lacking and implementing strategies to improve agility.
Achieving Strategic Objectives:
The ultimate goal of performance improvement is to align individual, team, and organizational performance with strategic objectives. By improving performance in various areas, organizations can ensure that they are on track to achieve their long-term goals and objectives.
It’s important to note that the specific goals of performance improvement can vary depending on the organization, industry, and context. Also, Organizations may prioritize certain goals over others based on their unique needs and challenges.
Examples of performance improvement
There are numerous examples of performance improvement, depending on the context. Here are a few examples:
In a business setting, implementing new technology solutions or process improvements can optimize performance, increase efficiency, and reduce costs.
In sports and athletics, athletes may improve performance through changes in training techniques, improved nutrition, or modifying their training plans.
Healthcare providers can improve the quality and efficiency of patient care through process improvements, utilization of new technologies, or targeted training programs.
Also, In education, students may improve their academic performance through personalized learning plans, additional tutoring, or study skills development.
In manufacturing, implementing lean production techniques, optimizing supply chain management, and reducing waste can improve productivity, quality, and profitability.
These are just a few examples of the broad range of ways performance improvement can be achieved across different industries and settings.
Here are some examples of performance improvement initiatives that organizations may undertake:
Process Optimization:
Analyzing and improving existing business processes to enhance efficiency, reduce waste, and increase productivity. This may involve streamlining workflows, eliminating unnecessary steps, automating manual processes, or implementing lean methodologies.
Training and Development Programs:
Providing employees with relevant training and development opportunities to improve their skills, knowledge, and capabilities. Also, This can include technical training, leadership development programs, or specialized workshops to enhance performance in specific areas.
Performance Coaching and Feedback:
Implementing regular coaching and feedback sessions to provide guidance, support, and constructive feedback to employees. Also, This helps identify areas for improvement, enhance performance, and address any challenges or obstacles.
Performance Recognition and Rewards:
Establishing recognition programs or performance-based rewards to acknowledge and incentivize high-performing individuals or teams. This can include bonuses, promotions, public recognition, or non-monetary rewards to reinforce desired behaviors and outcomes.
Employee Engagement Initiatives:
Implementing initiatives to improve employee engagement, satisfaction, and motivation. This can include fostering a positive work environment, promoting work-life balance, providing opportunities for career growth, and encouraging open communication and collaboration.
Technology Upgrades:
Investing in new technologies or systems to improve efficiency, accuracy, and overall performance. This can include upgrading software, implementing new tools, or adopting automation solutions to streamline processes and reduce manual errors.
Performance Metrics and Measurement:
Establishing key performance indicators (KPIs) and performance metrics to track progress, measure performance, and identify areas for improvement. Also, This helps provide data-driven insights and facilitates informed decision-making.
Continuous Improvement Initiatives:
Implementing a culture of continuous improvement where employees are encouraged to identify inefficiencies, propose solutions, and contribute to process enhancements. This can involve establishing suggestion systems, conducting regular process reviews, or facilitating cross-functional collaboration.
Customer Feedback and Satisfaction Programs:
Collect customer feedback, conduct satisfaction surveys, and analyze customer data to identify areas for improvement in products or services. Also, This helps align performance with customer expectations and enhances overall customer satisfaction.
Performance Improvement Plans (PIPs):
Developing performance improvement plans for employees who are not meeting performance expectations. These plans outline specific improvement goals, provide support and resources, and establish a timeline for monitoring progress.
These are just a few examples of performance improvement initiatives that organizations may undertake. The specific strategies and interventions chosen will depend on the organization’s needs, objectives, and industry.
Summary
Performance improvement is a term that encompasses a wide range of strategies, approaches, and interventions that aim to optimize efficiency, effectiveness, productivity, and quality in various settings. Whether it’s a business looking to enhance organizational performance, an athlete seeking to improve their competitive results, or an individual striving to achieve personal goals, performance improvement plays a crucial role in achieving better outcomes.
The goals of performance improvement can vary depending on the context, but they often involve enhancing various aspects of performance to achieve desired outcomes. Common goals include improving efficiency, effectiveness, customer satisfaction, employee engagement, quality, innovation and creativity, skills and competencies, organizational agility, and strategic objectives.
There are numerous examples of performance improvement, depending on the context. For businesses, this may involve process optimization, training and development programs, performance coaching and feedback, performance recognition and rewards, employee engagement initiatives, technology upgrades, performance metrics and measurement, continuous improvement initiatives, customer feedback, and satisfaction programs, and performance improvement plans.
Overall, performance improvement is all about making things better, faster, and more efficient. It’s a continuous process of identifying areas of underperformance, implementing strategies to optimize performance, and tracking progress toward desired outcomes. With a systematic approach to performance improvement and a focus on achieving specific goals, individuals and organizations can achieve better results, increased efficiency, and higher levels of success.
Performance Management Meaning, Elements, Goals, Stages, Practices, and Examples: How to be Know. Performance management is a process that involves aligning an employee’s skills and performance with the goals and objectives of an organization. The primary objective of performance management is to enhance the overall effectiveness of an organization by improving the skills and abilities of its employees. It typically involves setting performance standards, providing feedback, evaluating performance, and identifying areas for development and improvement. When implemented effectively, performance management can help improve employee morale, increase productivity, and foster a more positive company culture. Also, It is an ongoing process that assists organizations in achieving their objectives.
Define as well as Performance Management Meaning, Elements, Goals, Stages, Practices, and Examples
What is the meaning of performance management? Performance management refers to a comprehensive process or system designed to continuously monitor, measure, evaluate, and enhance the performance of individuals, teams, or organizations. Also, It involves setting clear performance expectations, providing ongoing feedback, assessing performance against predetermined goals or standards, and implementing strategies to improve performance.
Performance management encompasses various activities and processes, including goal setting, performance appraisals, feedback and coaching, performance measurement, training and development, recognition and rewards, and performance improvement plans. The primary purpose of performance management is to align individual and team performance with organizational goals and objectives, ultimately driving overall organizational success.
Performance Management Meaning, Elements, Goals, Stages, Practices, and Examples
Elements of performance management
The key elements of performance management typically include:
Setting Clear Expectations:
Defining performance expectations, objectives, and goals that are specific, measurable, attainable, relevant, and time-bound (SMART). Also, This ensures clarity and alignment with organizational priorities.
Monitoring and Measurement:
Continuously tracking and measuring performance through various methods, such as regular check-ins, performance metrics, key performance indicators (KPIs), or performance dashboards. Also, This allows for ongoing assessment and identification of areas for improvement.
Feedback and Coaching:
Providing timely and constructive feedback to individuals or teams to acknowledge strengths, address performance gaps, and offer guidance for improvement. Regular coaching and support are crucial for enhancing performance.
Performance Evaluation:
Conduct formal assessments or appraisals to evaluate performance against established goals, competencies, or performance standards. These evaluations provide a comprehensive overview of an individual’s performance and inform decisions related to development, rewards, or promotions.
Development and Training:
Identifying skill gaps and providing opportunities for learning, development, and training to enhance performance. Also, This can involve offering workshops, workload capacity, courses, mentoring programs, or job rotations to build competencies and capabilities.
Recognition and Rewards:
Recognizing and rewarding exceptional performance to motivate individuals and teams. This can include financial incentives, public recognition, career advancement opportunities, or non-monetary rewards to reinforce desired behaviors and outcomes.
Performance Improvement:
Implementing performance improvement plans (PIPs) or interventions for individuals or teams who are not meeting performance expectations. These plans outline specific improvement targets, provide support, and establish a timeframe for progress monitoring.
Alignment with Organizational Goals:
Ensuring that individual and team performance aligns with the broader strategic objectives of the organization. It aims to create a clear link between individual contributions and the overall success of the organization.
By implementing a robust performance management system, organizations can foster a culture of continuous improvement, enhance employee engagement and productivity, optimize organizational performance, and drive individual and collective success in Project Management.
What are the goals of Performance management?
Performance management involves processes that align employee performance with organizational goals. The goal of performance management is to improve the effectiveness of an organization by developing the skills and abilities of its employees. The processes used in performance management include setting performance standards, providing feedback, evaluating performance, and addressing areas of improvement. When these processes are implemented effectively, they can help to improve the overall performance of an organization, resulting in increased productivity, higher employee morale, and a more positive company culture.
The goals of performance management can vary depending on the organization and its specific objectives. However, some common goals include:
Clarifying Expectations:
Performance management aims to establish clear performance expectations and goals for employees. Also, This includes defining job roles, responsibilities, and performance standards to ensure that employees understand what is expected of them.
Monitoring Performance:
Performance management involves regularly monitoring and assessing employee performance. This allows organizations to track progress, identify areas for improvement, and recognize high-performing individuals.
Providing Feedback:
Performance management facilitates ongoing feedback and communication between managers and employees. It provides a platform for discussing performance strengths and weaknesses, providing guidance, and offering constructive feedback to enhance performance.
Identifying Development Needs:
Performance management helps identify individual development needs and areas where employees require additional support or training. Also, It enables organizations to create tailored development plans to enhance skills, knowledge, and capabilities.
Recognizing and Rewarding Performance:
Performance management systems often incorporate mechanisms to recognize and reward exceptional performance. This can include monetary incentives, promotions, recognition programs, or non-monetary rewards such as increased responsibilities or opportunities for career advancement.
Facilitating Career Development:
Performance management supports employees’ career development by identifying their aspirations, strengths, and areas for growth. Also, It helps create development plans and succession strategies to ensure individuals are prepared for future roles and responsibilities.
Supporting Decision-Making:
Performance management provides data and insights that can inform various organizational decisions. Performance metrics and evaluations help in identifying high-potential employees, making promotion decisions, allocating resources effectively, and identifying areas of improvement at the organizational level.
Improving Organizational Performance:
Ultimately, performance management aims to contribute to overall organizational success and effectiveness. By aligning individual and team performance with organizational goals, performance management helps improve productivity, efficiency, and the achievement of desired outcomes.
It’s important to note that the goals of performance management should be aligned with the organization’s mission, values, and strategic objectives to ensure a cohesive and integrated approach to managing performance across the organization.
What are the stages of performance management?
Performance management typically contains several stages or processes. The specific stages can vary depending on the organization, but commonly include the following:
Goal setting: This is the process of establishing clear and measurable performance expectations for individual employees or teams in alignment with organizational goals.
Performance feedback: Providing regular constructive feedback on performance, including identifying strengths and areas requiring improvement, and discussing career development opportunities.
Performance evaluation: Formal and systematic assessments of individual or team performance that may include metrics such as KPIs (key performance indicators), feedback from colleagues or customers, and more.
Performance improvement: Implementing strategies to develop employees’ skills and address performance deficiencies in individuals or teams, such as coaching, mentoring, training, or reassignment.
Performance monitoring: Regular tracking and analyzing of employee or team performance, including reviewing progress toward goals, identifying areas of underperformance, and adjusting goals and strategies as necessary.
These stages are often cyclical, with performance management and improvement being an ongoing process, rather than a one-time event.
Best practices of the Performance management process
Performance management is an ongoing process that helps organizations achieve their goals and objectives by improving individual and team performance. Here are some best practices for a successful performance management process:
Set clear expectations: Performance goals and expectations should be communicated to employees at the beginning of the performance cycle. Clear expectations will help in creating a shared understanding of what is expected of employees and help in reducing ambiguity.
Regular Feedback: Regular feedback helps employees understand what they are doing well and the areas where they need to improve. Constructive feedback can also lead to better job satisfaction, motivation, and employee engagement.
Training and development: Organizations should invest in their employees by providing them with the necessary training and development opportunities to help them improve their skills and career advancement goals.
Fair and objective evaluation: Employees should feel that the evaluation process is fair, objective, and transparent. To achieve this, the evaluator should be impartial, and unbiased, and should evaluate employees based on clear, pre-established performance criteria.
Continuous improvement: Performance management should be seen as an ongoing process, not just a once-a-year meeting. A continuous improvement approach will help employees stay motivated, engaged, and aware of their progress throughout the year.
By following these best practices of performance management, organizations can create a culture of continuous improvement, maximize employee potential and enhance business performance.
Examples of performance management
Here are some examples of performance management practices commonly used in organizations:
Goal Setting:
Establishing specific, measurable, attainable, relevant, and time-bound (SMART) goals for individuals or teams. These goals provide clarity and direction, and they serve as a benchmark for evaluating performance.
Performance Appraisals:
Conduct formal evaluations of employee performance, typically on an annual or periodic basis. Performance appraisals involve assessing performance against predetermined goals or performance standards and providing feedback on strengths, areas for improvement, and development opportunities.
Continuous Feedback:
Encouraging ongoing feedback and communication between managers and employees. Also, This can be achieved through regular check-ins, coaching sessions, or informal conversations to discuss progress, and challenges, and provide guidance.
Performance Metrics and KPIs:
Establishing key performance indicators (KPIs) or metrics to measure and track performance. These metrics can include productivity measures, customer satisfaction ratings, sales targets, error rates, or other relevant indicators to assess individual or team performance.
Performance Improvement Plans (PIPs):
Implementing performance improvement plans for employees who are not meeting performance expectations. PIPs outline specific areas for improvement, set clear targets, and establish a timeframe for improvement, while also providing necessary support and resources.
Training and Development:
Identifying skill gaps and providing training and development opportunities to enhance employee performance. This can include workshops, seminars, online courses, mentoring programs, or job rotations to build competencies and improve performance.
Performance Recognition and Rewards:
Implementing recognition programs or performance-based rewards to acknowledge and reinforce exceptional performance. This can include bonuses, salary increases, promotions, public recognition, or other incentives to motivate and reward high-performing individuals.
Performance Calibration:
Conduct calibration sessions where managers or evaluation committees review and discuss performance ratings to ensure fairness and consistency in performance assessments across teams or departments.
Succession Planning:
Identifying high-potential employees and creating development plans to prepare them for future leadership or key roles within the organization. Succession planning ensures a pipeline of talented individuals ready to take on critical positions.
Performance Analytics and Data Analysis:
Using data analysis techniques to derive insights from performance data and identify trends, patterns, or areas for improvement. Also, Data-driven decision-making helps organizations assess performance at various levels and make informed strategic choices.
These are just a few examples of performance management practices that organizations may employ. The specific practices used can vary depending on the organization’s size, industry, culture, and objectives.
Summary
Performance management is a crucial process that helps organizations to align their employees’ performance with the strategic goals and objectives of the organization. It involves various stages, elements, and practices that aim to improve individual and team performance. By implementing a comprehensive performance management process, organizations can create a culture of continuous improvement, enhance employee engagement and productivity, optimize organizational performance, and drive individual and collective success.
The key elements of performance management include setting clear expectations, monitoring and measurement, feedback and coaching, performance evaluation, development and training, recognition and rewards, performance improvement, and alignment with organizational goals. By defining performance expectations and goals, continuously tracking and measuring performance, providing feedback, assessing performance, identifying development needs, recognizing and rewarding performance, implementing performance improvement plans, and aligning individual and team performance with organizational goals, organizations can enhance their overall effectiveness.
Moreover, the goals of performance management include clarifying expectations, monitoring performance, providing feedback, identifying development needs, recognizing and rewarding performance, facilitating career development, supporting decision-making, and improving organizational performance. These goals contribute to the development of a supportive company culture, resulting in increased productivity, higher employee morale, and overall organizational success.
To achieve a successful performance management process, organizations should follow some best practices such as setting clear expectations, providing regular feedback, integrating technology, ensuring fairness, and implementing ongoing training and development.
In conclusion, performance management is a critical process in enhancing organizational effectiveness, promoting employee engagement, and driving individual and collective success. By implementing best practices, organizations can achieve their strategic goals by aligning individual and team performance with organizational objectives.
Disciplinary laws and actions are actions taken by an employer to address and correct an employee’s misconduct or performance issues. These actions may include a verbal or written warning, a performance improvement plan, a suspension, a demotion, or even termination of employment.
Employee Disciplinary Laws And Action: What You Need To Know
The HR department of your organization is responsible for initiating disciplinary action proceedings against your employees. This can be for a variety of reasons, such as poor behavior or poor performance. Understanding why organizations take corrective or punitive actions can help you understand how important they are in maintaining internal discipline and avoiding larger issues that can disrupt business operations and damage your organization’s reputation.
In this article, we’ll answer the question, What are disciplinary laws and actions? and why your workforce needs to take them. We’ll also look at what are proper disciplinary actions, what are their goals, and when you should take them.
Meaning of Disciplinary Laws and Action
It may be helpful to know the answer to the question “What are Disciplinary actions?”.
Disciplinary actions are corrective measures that an organization may take against an employee through its human resources department. These actions take when an employee’s work performance is poor. When an employee has engaged in unacceptable workplace behavior, or when an employee has violated workplace policies.
Most organizations have a disciplinary policy in place, and they communicate these guidelines to their employees in a way that is clear and understandable. They take reasonable and consistent action that is proportional to the violation, and they may follow a particular order of progression.
The initial action may be to issue a verbal or written warning to the employee to stop or rectify the issue.
The HR department may then suspend the employee with/without pay, demote the employee, create a performance plan for the underperforming employee, and monitor the employer who has received a warning for aggressive or inappropriate behavior.
If no improvement or correction is made, the employee may fire. Most organizations maintain a record of their disciplinary actions as evidence in the event of a lawsuit.
Definition of Disciplinary Laws and Action
According to Society for Human Resource Management (SHRM);
It is a management tool used to ensure compliance with company policies and procedures. It is the process of enforcing the rules and measures of behavior expected of employees and dealing with the consequences of non-compliance.
According to Gary Dessler, author of HRM;
They refer to the process of reworking or enforcing certain behavior or actions by employees that deem improper or harmful to others in the workplace. It involves a range of corrective actions, including verbal and written warnings, suspension, demotion, or termination of employment.
Types of Disciplinary Laws and Action
Disciplinary action primarily see as a corrective measure to prevent future misconduct or poor performance
Warning
This is the least intense form of disciplinary law and action. It usually gives for a minor offense. It is very lenient and can give orally or written. Verbal warnings give when a minor offense commit. If a verbal warning does not result in the desired result, the organization will resort to a written warning for more severe action. These warnings have no impact on the employee’s status or wages within the organization.
Written Notice
When a warning doesn’t work and the employee continues to engage in the same misconduct, a written notice is issued, which implies a certain level of punishment.
Suspension
This type of disciplinary action is temporary. An employee suspends from performing their duties for a specified period, which may range from a few days to several months depending on the type of misconduct.
Demotion
This type of action only uses when an employee fails to meet his current job requirements and standards. If he is unable to provide good performance on the job, he demotes one rank below his current rank within the organization.
Fines
This type of punishment is where the amount of the fine deducts from an employee’s remuneration. If an employee repeatedly breaks any rule, a penalty imposes on the employee.
Pay Cuts
If an employee causes any loss or damage to the organization’s property or takes leave without permission. They will not pay their full compensation and the amount of the loss or damage will deduct from their pay.
Holding Increments
This is a major punishment. An employee is close to receiving their increment but because of disciplinary action, their annual increment is held for some time.
Termination of Services
This is the severe punishment that disqualifies an employee from their job. This is the final stage of disciplinary action where there is no other way for an employer to punish an employee.
Stages in Disciplinary Laws and Action
Preliminary Investigation
The first step in the process is to conduct a preliminary investigation into the allegations of misconduct. This involves gathering information from various sources, such as witnesses to the alleged incidents, and preparing an investigation report.
Issue of charge sheet
If misconduct alleges, the management will then issue a written charge sheet. This charge sheet is the formal statement of accusation and is legally binding on the employee accused.
Meet with accused
Once the charge sheet has been issued, a meeting with the accused should schedule. The accused should allow explaining the reasons for the misconduct. There may be something else going on that does not being disclosed in the investigation.
Notice of Inquiry
If the employee responds to the charge sheet in the affirmative, the employer will immediately punish him without further investigation. If he denies the charges, the employer will proceed with a full-blown inquiry.
Full-blown inquiries
When an employee denies the charges, a full-blown investigation is conducted in which all the details examine by the investigator. Various witnesses interview and the timeline was monitored.
Findings of the Inquiry
The investigator should, after a thorough investigation, determine whether the allegations made against the employee are correct or not.
The final decision of punishment
If the investigator finds that the employee has been charged with a crime, the employer or legal authority may punish him or her. The punishment may vary depending on the seriousness of the misconduct. The punishment may be a temporary one, such as suspension or a monetary fine. Or if the misconduct warrants a severe punishment, the employee’s service may terminate.
The punishment should be notified to the employee in the form of a letter. The letter should include the charge sheet, details of the investigation, findings of the investigation, decisions are taken, and the effective date of the punishment. However, if the employee believes that the investigation was inadequate or that the action taken was unreasonable, he may file an appeal to have his case reconsidered.
Characteristics of Effective Disciplinary Laws and Action
Corrective rather than punishing
Rather than punishing employees, the primary goal of a discipline system is to correct behavior and keep employees performing at their best. Employees will feel more at home in the organization and will motivate to comply with the organization’s rules and regulations.
A progressive disciplinary approach
The goal of a progressive disciplinary approach is to provide employees with the opportunity to correct their behavior. This approach begins with a moderate corrective action taken at the beginning and escalates in severity as the employee’s behavior continues to be inappropriate. Employees give enough time to fix their behavior and they don’t take it lightly.
Follow: The Red Hot Stove Rule
The “Red hot stove rule” states that any delay in taking disciplinary action defeats the purpose of taking disciplinary action. Disciplinary action must have the same characteristics and effects as touching a hot stove
The hot stove rule draws a connection between touching a hot stove and breaking the rules of discipline. If someone touches a hot stove, the following are the consequences that can result from disciplinary action.
Disciplinary action must take immediately: Delayed disciplinary action ruins the whole purpose of taking it. It leaves the accused wondering why they are being disciplined. It also lowers the morale of other employees. Who is always following the organization’s rules and regulations?
It serves as a warning: Because the person can feel the heat if they come close to the hot stove, it serves as a warning to them that if they come closer and touch the hot stove, they may burn themselves.
It provides uniform discipline: The hot stove burns everyone who comes near it. So it provides uniform results without any exceptions.
It burns people without bias: Disciplinary actions are impersonal, just like a hot stove burns anyone who comes near it without any bias.
Supervisory training
When and how disciplinary action needs to use, supervisors and managers must train. It requires a certain level of judgment and communication skills when dealing with disruptive employees.
In addition, disciplinary decisions made by trained supervisors will see as fair by employees and managers, as they will follow fair and well-informed practices when taking disciplinary action
Disciplinary action should be equitable
All employees should punish equally for the same offense. There should be no bias or favoritism when deciding on disciplinary action against an offender. If there are different punishments for the same offense, it would be partiality.
Disciplinary action must be immediate
Effective discipline must be immediate. The longer it takes for an employee to discipline for a misconduct offense, the more likely they are to take it lightly and move on.
Follow-up
Employees must make aware of what constitutes good conduct and the consequences of their misconduct.
Once disciplinary action has been taken, follow-up should conduct to see if there is any change in the employee’s behavior and if there is any improvement.
What are the goals of Disciplinary laws and action policies?
The main goals of disciplinary laws and action policies are to:
Set and maintain uniform, fair, and appropriate standards of work-related behaviors and performance.
Educate employees about these established standards and how they relate to the organization’s mission, values, and vision.
Recommend disciplinary measures and remedial actions that can take by the organization. If employees fail to comply with the established standards of behavior and performance.
Monitor employees with a record and determine if they are taking warnings seriously and are changing their behavior or performance to meet the standards.
What are the conditions for taking disciplinary laws and actions?
The organization may take disciplinary actions against its employees in the following circumstances:
An organization has clearly stated its expectations for workplace behavior and performance in the employee handbook
An organization has provided training workshops on appropriate workplace conduct
The organization posted posters about its workplace policies on its premises
An organization has created a workplace culture and environment that encourages appropriate behavior and work performance
An organization ensures that all employees have access to, and are aware of, workplace rules and regulations
The organization’s competent authority documents cases of misconduct or poor work performance, and refers these records for disciplinary action to the department head or the human resources department
Employee Disciplinary Laws and Action: How to be Know; Photo by Andrea Piacquadio.
Introduction;Corporate Wellness Programs are one of the most popular techniques for reaching this goal. The modern place of business is constantly evolving, and employers are increasingly searching for methods to enhance the health and well-being of their employees.
Here are the articles to explain, Corporate Wellness Programs Definition, Objectives, Advantages, Challenges, and their Impact.
This essay will explore the effect of corporate well-being programs on employee engagement, productiveness, and usual fitness. It will also discuss the challenges associated with imposing such applications within the place of work. By inspecting the evidence, this essay will provide insight into how company wellness packages may use to create a more fit and more productive painting environment.
Definition of Corporate Wellness Programs
Corporate wellness programs stand tasks designed to sell healthy lifestyles among employees within the administrative center. These packages normally consist of activities inclusive of fitness checks, vitamin education, bodily interest lessons, stress management workshops, and intellectual health support. The goal of corporate well-being packages is to create a more fit and more effective painting environment for employees.
The Objective of Corporate Wellness Programs
Corporate wellness packages stand designed to sell healthy lifestyles and enhance the general fitness of employees. These programs stand designed to lessen healthcare costs, boom productiveness, and create tremendous painting surroundings. They usually encompass activities that include fitness screenings, fitness classes, vitamin counseling, smoking cessation applications, pressure control workshops, and other sports that encourage employees to make more healthy way of life choices.
Corporate well-being programs also attention to creating a culture of well-being within the place of job by way of providing resources and aid for personnel to make more healthy picks. The goal is to create surroundings where personnel sense supported and empowered to take manipulation their health and well-being.
The Advantages of Corporate Wellness Programs
Corporate wellness packages have become increasingly famous within the place of the job and for a precise motive. These applications stand designed to enhance employee fitness, grow productivity, and reduce healthcare expenses. Research has proven that company health programs can have a high-quality impact on worker health and properly-being. As well as on the bottom line of groups.
Improved Employee Health
One of the principal benefits of company well-being applications progresses in employee health. These packages typically attention to selling healthful existence. This includes encouraging employees to exercise frequently, devour a balanced weight-reduction plan, and get sufficient sleep. They may additionally offer to get admission to health screenings and academic substances about vitamins and ailment prevention. By presenting personnel with assets to help them keep their health. Corporate well-being packages can help lessen the risk of chronic ailments consisting as coronary heart sickness and diabetes.
Increased Productivity
Another benefit of corporate well-being applications accelerates productivity. Studies have proven that personnel who are healthier and more physically lively tend to be extra productive at work. This is due to the fact wholesome personnel are higher able to concentrate, have more strength, and take fewer unwell days. Additionally, when employees sense supported using their organization concerning their fitness and proper being. They’re much more likely to be engaged and influenced in their work.
Reduced Healthcare Costs
Finally, company wellness packages can assist lessen healthcare costs for employers and personnel. By selling healthful life, these packages can help reduce the prevalence of persistent illnesses. Which may lead to lower healthcare costs for both employers and employees. Additionally, by offering to get the right of entry to preventive care offerings consisting of fitness screenings. Corporate health programs can assist become aware of ability fitness issues before they become more critical and pricey to treat.
Corporate wellness applications provide several advantages for each employer and personnel. These applications can help improve employee fitness, grow productivity, and reduce healthcare prices. As such, they may be an essential device for companies seeking to create a more healthy administrative center environment.
The Challenges of Corporate Wellness Programs
Cost of Implementation
The value of implementing a company well-being application can be considerable. This includes the fee of hiring a workforce to manage the program, shopping equipment, and providing incentives for participation. In addition, companies may additionally want to put money into the era to track employee development and measure effects. This can be a large monetary burden for some businesses.
Difficulty in Measuring Success
Measuring the fulfillment of a corporate well-being program may be hard. This is because it is not always smooth to decide the effect of this system on employee fitness and properly-being. For example, it may be tough to determine whether an increase in the physical pastime is due to the program or other elements.
Difficulty in Motivating Employees
It also can be hard to encourage employees to take part in corporate wellness packages. This is due to the fact many employees might not see the value in taking components or may also lack the incentive to make lifestyle changes. Organizations should find methods to engage and encourage their employees if they’re to attain the blessings of company health software.
Strategies for Maximizing the Impact of Corporate Wellness Programs
In recent years, corporate well-being programs have emerged as an increasing number of famous as employers attempt to create healthier and extra effective painting environments. While these packages can be useful, they should be implemented effectively to maximize their effect. This article will talk about three key techniques for maximizing the impact of corporate well-being applications. Organizing clear goals and goals, using era to song progress, and developing incentives for participation.
“Wellness is a procedure of turning into aware about and making alternatives closer to an extra successful life”.
Establishing Clear Goals and Objectives
The first step in maximizing the impact of a company’s well-being application is to set up clean dreams and goals. According to Dr. John W. Travis, founding father of the Wellness Inventory, “Wellness is a process of becoming privy to and making picks in the direction of a more a hit life”. Therefore, it’s miles essential to define what success looks like for this system to make sure that it meets its desired effects. For instance, if the purpose of the program is to lessen employee absenteeism due to illness. The metrics that include the common range of ill days taken in line with workers have to be tracked through the years. Establishing clean dreams and objectives will assist make sure that this system has the preferred effect on employee health and productivity.
Utilizing Technology to Track Progress
Another key strategy for maximizing the effect of a company’s health software is utilizing technology for song development. By leveraging the era which includes cell apps or online portals, employers can without difficulty display how employees are engaging with this system and measure its effectiveness. For example, employers can music how many personnel are collaborating in activities along with health screenings or fitness instructions, as well as how frequently they are attracted to this system. These records can then be used to discover areas in which enhancements can be made or additional sources allotted to increase engagement and maximize the impact of this system.
Creating Incentives for Participation
Finally, developing incentives for participation is a powerful way to maximize the effect of a company’s wellness application. By offering rewards such as gift cards or discounts on medical health insurance premiums for employees who take part in sports or acquire certain goals, employers can inspire extra people to engage with this system. Additionally, employers can use incentives to inspire employees to reach better degrees of performance by using offering rewards for accomplishing sure milestones or finishing specific obligations. By developing incentives for participation, employers can make sure that their corporate well-being programs are having a tremendous impact on worker health and productivity.
Conclusion
In conclusion, Corporate Wellness Programs can be useful for employers seeking to create more healthy and greater effective painting environments. However, these packages have to be carried out successfully to maximize their impact. This article discussed 3 key techniques for maximizing the impact of company health applications: establishing clean desires and targets, using generation to song progress, and developing incentives for participation. By following those strategies, employers can ensure that their corporate well-being applications are having a fantastic effect on worker fitness and productivity.
Corporate Wellness Programs Goals and Objectives; Image by Ingo Kramarek from Pixabay.
What is the NCF (National Curriculum Framework)? Meaning and its 8 Goals; NCF provides the students as well as the society a set of plans of what students have to learn and expect to achieve at the end of their secondary schooling. The main aims of the framework are to (1) fulfill the needs of the students, and (2) fulfill the needs of the country; As a student, a teacher, or a parent, we are all concerned with the success and the development in the education sector. As our population growth persists there will always be constant changes in the curriculum imposed on the students as well as teachers.
Here is the article to explain, NCF (National Curriculum Framework) Meaning and its 8 Goals!
National Curriculum Framework (NCF) meaning; The NCF best describes as elements that are vital in every student’s learning period and principles which the Ministry of Education imposes on teachers. The NCF also drafts the rules and regulations in the way of assessing the students at school and also at the National Level that is the SC and HSC level.
A Curriculum Framework also referred to as a sort of plan (set up by the Ministry of Education), again impose on teachers to be taught to achieve a good learning outcome. And at the end of the learning time, the student must be able to prove an evaluation of his/her knowledge acquired during the stay at school.
8 Goals of the NCF (National Curriculum Framework);
A goal is an intention in the long term. The NCF consists of eight goals. All the goals mean to have the same outcomes; that is, to make the students achieve their best.
To promote an all-round development of the individual – physical, intellectual, social, and emotional – leading to a balanced, active, healthy, and productive lifestyle.
Secondary students are physically and cognitively developing at each level. To support this, our syllabus varies according to the level of development of the student. For instance, at the lower secondary, students are taught more or less the basics in the subject. Visual arts consist of many hands-on activities. For example, at form 3 level, students were taught how to bend the wire to make forms. They enrich their knowledge with the new tools and materials given to them.
They gave the liberty of expressing themselves. This results in different outcomes. We see that everyone is different from their friends. They are of different social and emotional statuses. Taking the form 3 level, we can say that students are very much appreciated when they allow telling what they feel. They can communicate ideas visually. We see the capacities of our students. Their inner talents are being exploited and they show more productivity.
To foster understanding and appreciation of the biological, physical, and technological world to enable the learner to arrive at informed decisions about the environment and the changing needs of individuals and societies.
Visual arts is a very demanding subject, when we refer to the materials and tools that use, students tend to buy expensive materials and believe that they will do the best artwork. However, we can also use recycled objects to create beautiful sculptures or even old newspapers to make good drawings. At any time, teachers should consider the social and financial position of students. It develops the sense of saving in the student and it protects the environment.
On the other hand, we have new technology devices which are available nowadays to help people and make tasks easy for them to understand better. Why not make use of them? For example, research on the internet from the computer room at school. This enables the students to come across and work with both primary and secondary sources. Therefore, students exposure to the development of their skills and competencies in a variety of ways. At form 3 level, the student can manage a computer easily.
To develop the learner’s knowledge and skills to empower him to participate meaningfully in an information-driven economy.
At form 3 level, students are very much interested in hands-on activities. However, research works are also important in the development of the student. The student will be keen to learn more and more when he gave small tasks to do before starting an activity. This will provide a better understanding. For instance, the history of arts and famous artists’ techniques inspires a lot of new coming painters. This will enrich his knowledge of the arts.
It is to note that when a student well prepares, he is automatically willing to participate and share his knowledge in class. Moreover, every topic of visual arts starts with research work on previous paintings and techniques used. The student exposes to a different and vast platform of art forms from a cultural and historical perspective. Through research and with the help of the internet, students can see all the beauties of Pablo Picasso, Vincent Van Goth, etc which creates inspiration in them.
To develop creative thinking skills and learning skills required for the future.
Secondary students know to be the best product at this stage of life. They have to get the maximum information to cope with the upcoming problems. Analysis of artworks helps the student to think creatively. When he comes across the work of other artists or his classmates. A sense of comparison and criticism is being developed to learn about the weakness and strengths of oneself. This is ongoing learning that takes place in the life of an individual that will help him throughout his life. The basic learning takes place at school and continues during life experiences.
It is said that when the sense of observation is developing, an individual will always take into account what he has learned at school in solving future problems. The sense of thinking from a child to an adult will differ at each stage of life but it starts at an early age. Ex. Solving a problem;
Knowledge with understanding.
Interpretation and response about the situation, and.
Analysis and finding solutions for the problem.
To promote equity and social justice by providing opportunities for every learner according to his/her needs, interests, and potentials.
Equality of opportunity in education is very important. Our schools are open to the Republic of Mauritius that is for everyone. There is no discrimination between rich and poor. No difference in culture or religions, equality for all ethnic groups. A student-centered curriculum influences the student in choosing his subject of discussion. This makes them feel comfortable about the subject and they show interest in it.
Under the progressivist ideology, students focus on their personality development. They expose to problem-solving, which helps them in exploiting their capacity. The teacher must promote;
Good manners.
Good behaviors, and.
Respect in students.
Students will develop respect for each other when they will engage in group works. In visual arts, anything can express through painting or drawing, or sculpting. When students expose to themes such as culture, religion, they show respect towards each other’s religion.
To foster national unity by promoting the individual understanding of and respect for our multicultural heritage.
Due to a change in our society, extended families have been replaced by nuclear ones. Students are taught how to behave as good citizens in our multi-plural society. Parents do not get time, so these concerns include as topics in the NCF. The objectives of learning are to influence the;
Needs of the society and national goals, and.
The cultural aspirations of the society.
Students also develop respect for each other’s values, attitudes, and beliefs. With this, a bond creates between students with different socioeconomic classes. At the lower secondary level, students are more likely to have peer groups. In class, they merge, and through group works and research they mean to mingle with others. For example, in class, there is no difference between Muslims and Christians; they all wear the same uniform, share the same class.
To promote in the learner an appreciation of his/her place in an interdependent global context.
Students should valorize their country in every way. Special debates organize by MCA so that students participate and enrich their knowledge. Thus, they come across various facts and realities of the country. To promote appreciation for our country, subjects like Values and Citizenship education has been introduced. The emphasis is put on our independent country.
We often refer to the past and our ancestors to keep memories alive, in this way, students develop respect for the elders and protect our national heritage at the same time. Many competitions organize with themes related to our nation or its history. With the help of the teacher, the students involve in such activities and increase their knowledge of their country. This promotes the development of the student in the mean of communication and listening skills at the same time.
To promote a culture of lifelong learning for greater access to an ever-changing job market.
Education given to our students will determine the nature of the future society. Long ago, our society depended mostly on the agricultural sector, but nowadays industrialization and modern technologies have paved their way. The government offers a free course of IC3 to form 4 students to provide equality between students. The basic needs are provided to all students. Therefore, even if the student is not being able to complete his studies, he has the main qualifications for a job.
Thus, he secures to a certain limit. At form 3 level, every student has a notion of ICT, science, visual arts, etc. The opportunity gives them to choose their career according to their needs, interests, and potentials. A career guidance day organized by the Ministry of Education to help the students.
Reference; The National Curriculum Framework (NCF) and its Goals. Retrieved from https://www.ukessays.com/essays/education/what-is-the-national-curriculum-framework-education-essay.php?vref=1
NCF National Curriculum Framework Meaning and its 8 Goals; Image by StockSnap from Pixabay.
Self-Efficacy Meaning, Definition, and Source; Self-efficacy, also referred to as personal efficacy, is the extent or strength of one’s belief in one’s own ability to complete tasks and reach goals. Psychologists have studied self-efficacy from several perspectives, noting various paths in the development of self-efficacy; the dynamics of self-efficacy, and lack thereof, in many different settings; interactions between self-efficacy and self-concept; and habits of attribution that contribute to, or detract from, self-efficacy.
What is Self-Efficacy? also explain their topic Meaning, Definition, and Source.
Self-efficacy affects every area of human endeavor. By determining the beliefs, a person holds regarding his or her power to affect situations, strongly influences both the power a person actually has to face challenges competently and the choices a person is most likely to make. These effects are particularly apparent, and compelling, concerning behaviors affecting health.
Meaning and Definition of Self-Efficacy?
Perceived self-efficacy define as people’s beliefs about their capabilities to produce designated levels of performance that exercise influence over events that affect their lives. Self-efficacy beliefs determine how people feel, think, motivate themselves, and behave. Such beliefs produce these diverse effects through four major processes. They include cognitive, motivational, affective, and selection processes.
A strong sense of efficacy enhances human accomplishment and personal well-being in many ways. People with high assurance in their capabilities approach difficult tasks as challenges to master rather than as threats to avoid. Such an efficacious outlook fosters intrinsic interest and deep engrossment in activities. They set themselves challenging goals and maintain a strong commitment to them. They heighten and sustain their efforts in the face of failure. Also, They quickly recover their sense of efficacy after failures or setbacks.
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They attribute failure to insufficient effort or deficient knowledge and skills which are acquirable. They approach threatening situations with assurance that they can exercise control over them. Such an efficacious outlook produces personal accomplishments, reduces stress, and lowers vulnerability to depression.
In contrast, people who doubt their capabilities shy away from difficult tasks which they view as personal threats. Also, They have low aspirations and weak commitment to the goals they choose to pursue. When faced with difficult tasks, they dwell on their personal deficiencies, on the obstacles they will encounter, and all kinds of adverse outcomes rather than concentrate on how to perform successfully. They slacken their efforts and give up quickly in the face of difficulties. They are slow to recover their sense of efficacy following failure or setbacks. Because they view insufficient performance as deficient aptitude it does not require much failure for them to lose faith in their capabilities. They fall easy victim to stress and depression.
Source of Self-Efficacy
People’s beliefs about their efficacy can develop by four main sources of influence. The most effective way of creating a strong sense of efficacy is through mastery experiences. Successes build a robust belief in one’s personal efficacy. Failures undermine it, especially if failures occur before a sense of efficacy firmly establish.
If people experience only easy successes, they come to expect quick results and easily discourage by failure. A resilient sense of efficacy requires experience in overcoming obstacles through perseverant effort. Some setbacks and difficulties in human pursuits serve a useful purpose in teaching that success usually requires sustained effort. After people become convinced they have what it takes to succeed, they persevere in the face of adversity and quickly rebound from setbacks. By sticking it out through tough times, they emerge stronger from adversity.
Second way
The second way of creating and strengthening self-beliefs of efficacy is through the vicarious experiences provided by social models. Seeing people similar to oneself succeed by sustained effort raises observers’ beliefs that they too possess the capabilities to master comparable activities required to succeed. By the same token, observing others’ fail despite high effort lowers observers’ judgments of their own efficacy and undermines their efforts. The impact of modeling on perceived self-efficacy strongly influences by perceived similarity to the models. The greater the assumed similarity the more persuasive are the models’ successes and failures. If people, see the models as very different from themselves their perceived self-efficacy is not much influenced by the models’ behavior and the results it produces.
Modeling influences do more than provide a social standard against which to judge one’s own capabilities. People seek proficient models who possess the competencies to which they aspire. Through their behavior and expressed ways of thinking, competent models transmit knowledge and teach observers effective skills and strategies for managing environmental demands. Acquisition of better means raises perceived self-efficacy.
Third way
Social persuasion is a third way of strengthening people’s beliefs that they have what it takes to succeed. People who persuade verbally that they possess the capabilities to master gives activities are likely to mobilize greater effort and sustain it than if they harbor self-doubts and dwell on personal deficiencies when problems arise. To the extent that persuasive boosts in perceived self-efficacy lead people to try hard enough to succeed, they promote the development of skills and a sense of personal efficacy.
It is more difficult to instill high beliefs of personal efficacy by social persuasion alone than to undermine it. Unrealistic boosts in efficacy quickly dis-confirm by disappointing results of one’s efforts. But people who have been persuaded that they lack capabilities tend to avoid challenging activities that cultivate potentialities and give up quickly in the face of difficulties. By constricting activities and undermining motivation, disbelief in one’s capabilities creates its own behavioral validation.
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Successful efficacy builders do more than convey positive appraisals. In addition to raising people’s beliefs in their capabilities, they structure situations for them in ways that bring success and avoid placing people in situations prematurely where they are likely to fail often. They measure success in terms of self-improvement rather than by triumphs over others.
People also rely partly on their somatic and emotional states in judging their capabilities. They interpret their stress reactions and tension as signs of vulnerability to poor performance. In activities involving strength and stamina, people judge their fatigue, aches, and pains as signs of physical debility. Mood also affects people’s judgments of their personal efficacy. A positive mood enhances perceived self-efficacy, a despondent mood diminishes it. The fourth way of modifying self-beliefs of efficacy is to reduce people’s stress reactions and alter their negative emotional proclivities and is-interpretations of their physical states.
It is not the sheer intensity of emotional and physical reactions that is important but rather how they perceive and interpret. People who have a high sense of efficacy are likely to view their state of affective arousal as an energizing facilitator of performance, whereas those who are beset by self-doubts regard their arousal as a debilitator. Physiological indicators of efficacy play an especially influential role in health functioning and athletic and other physical activities.
What is the Self-Efficacy? Meaning, Definition, and Source; Image from Pixabay.
What knows about strengthening self-efficacy? A range of strategies that can use by teachers to enhance self-efficacy has been identified. Strategies that teachers can use to influence self-efficacy include (a) goals and feedback, (b) rewards, (c) self-instruction for verbalization of strategies, (d) participant modeling, and (e) various combinations of these strategies.
How to Increase Your Strengthening Self-Efficacy? Here is the article to explain.
Keep in mind that self-efficacy, skill development, and strategy use go hand in hand; whether it be math problem solving, soccer skills, or expository writing. Students learn strategies that enable them to develop skills resulting in increased self-efficacy strengthening.
Goals, Feedback, Rewards, and Verbalization
Because task accomplishment is the most powerful source of self-efficacy information; an important approach is to use strategies that can strengthen task accomplishment. The strategies of goal setting, feedback, rewards, and self-talk or verbalization were used in various combinations to help students categorized as LD or remedial to strengthen self-efficacy.
Schunk and Cox (1986) investigated the combination of strategy verbalization; and, effort feedback on the performance and self-efficacy of students with LD. While solving subtraction problems, students verbalized or said the task steps aloud to themselves; they were then given feedback that their successes were due to their effort. The combination of verbalization and effort feedback led to problem-solving successes, higher self-efficacy, and subtraction skills. The authors believed that the two strategies verbalization and effort feedback serve different purposes. Verbalization was useful for training students to systematically use the task strategy.
Continues
Giving students feedback that effort is responsible for success communicated that they are developing skills and that they can continue to perform well with hard work. The importance of feedback for enhancing self-efficacy may sometimes overlook by a teacher. Pajares and Johnson (1994) conducted a study in a language arts course for preservice teachers. The students received feedback from their teacher on attempting and completing writing tasks; but, they did not receive feedback on their specific writing skills.
The end-of-course assessment revealed that, although the students improved on writing skills; their self-efficacy judgments about their skills did not increase. The authors concluded that when teachers note a growth or decline in skills (in this case, writing); they must give the students feedback about their specific skill development. As emphasized earlier, students will make future judgments not just on their actual skills; but, also on their perception of their competence in using the skill. These perceptions of self-efficacy are more likely to increase with specific teacher feedback.
Participant Modeling
Vicarious experience is the second most powerful source of self-efficacy. The most frequent form of vicarious experience for students is seeing a model (another student or teacher) perform a skill they are attempting to learn. Who is a more effective model, a peer or teacher, or a mastery or coping model?
Peer or Teacher Model?
Schunk and Hanson (1985) had students, ages 8 to 10, observe either a peer or teacher model solving fractions on a videotape. Children who had observed a peer model had higher self-efficacy and achievement scores on the math assessment than did students who had observed the teacher model. The authors concluded that the increase may have been because the children saw themselves as more similar to the peer model. The use of peer models is especially recommended for enhancement of self-efficacy among low-achieving students who are more doubtful about attaining the level of competence demonstrated by the teacher.
Mastery or Coping Model?
Which model do you think will be more effective in strengthening self-efficacy; an expert who demonstrates a high level of expertise or one who is competent, but demonstrates the strategies they used to acquire the skill? Previous research found that observer’s beliefs about competence influence by their perceived similarity incompetence to the model. Models can reflect either mastery or coping behaviors. A mastery model demonstrates a task at a high level of expertise with a high level of confidence. In contrast, a coping model demonstrates the task along with the difficulties students experienced and the strategies (e.g., effort) they used to overcome the difficulties. The effectiveness of coping versus mastery peer models was compared by Schunk et al.
Types of models
The two types of models demonstrated strategies as follows:
Peer coping model; Made errors at first and verbalized negative statements that reflected self-efficacy (e.g., “I’m not sure I can do this”). The teacher then gave a prompt (e.g., “What do you do when denominators are the same?”). Next, the coping model made statements about how they overcame failure (e.g., “I need to pay attention to what I’m doing”) and eventually performed at a mastery level.
Peer mastery models; Performed all problems correctly while working at the average rate. Verbalized high self-efficacy and ability (e.g., “I’m good at this.” “That was easy”).
The findings indicated that the subjects judged themselves as more similar to the peer coping model. Students who observed the peer coping model demonstrated higher self-efficacy for learning, greater post-test self-efficacy, and skill development compared with those who observed a peer mastery model.
Modeling is a resource that is readily available in the classroom. This is a case of positive social comparisons with others (Schunk, 2001). The important implication for teachers is to use caution in choosing peer models. An alert, the sensitive teacher can identify peer coping models in their classrooms and use them to strengthen the self-efficacy of many students.
The goals of financial management can be classified in many ways. Official goals, operative goals, and operational goals are one classification. Official goals are the general aims of the organization. Maximization of return on investment and market value per share may be termed as official goals of financial management. Operative goals indicate what the organization is really attempting to do. They focus and help in choice-making. Also Learned, Meaning, Definition, Features, and Scope of Financial Management!
Learn, Explain What are the Goals of Financial Management?
The expected return on investment, cost of capital, debt-equity norms, etc dong with time horizon are specified or their acceptable ranges/limits are static keeping in view the official goals. The operational goals of financial management are more directed quantitative and verifiable. The scale, mix, and timing of specific forms of finance details.
The official, operative, and operational goals structure with a pyramidal shape, the official goals at the top (concerned with the top executives), operative goals at the middle (concerned with middle management), and operational goals at the base. The financial management goals can also be classified functionally. Return-related goals, solvency-related goals, liquidity-related goals, valuation-related goals, risk-related goals, cost-related goals, and so on.
Return-related goals refer to the aims on minimum, average and, maximum returns. What should be the minimum return from a project to accept the same, what should be the average return the firm should settle for and what is the maximum return possible (for risk increases with return)? Similarly, goals as to solvency, liquidity, market value, etc., can be thought of you have to state to what extent the stated goal factor is important and be actively pursued/and the extent of the goal factor required; the minimum, average, and the maximum levels be specified.
Profit Maximization:
Profit maximization is a stated goal of financial management. It is the excess of revenue over expenses. Profit maximization is, therefore, maximizing revenue given the expenses, or minimizing expenses given the revenue, or a simultaneous maximization of revenue and minimization of expenses. Revenue maximization is possible through pricing and scale strategies.
By increasing the selling price one may achieve revenue maximization, assuming demand does not fall by a commensurate scale. By increasing the quantity sold by exploiting the price-elasticity of the demand factor, revenue can maximize. Expenses minimization depends on the variability of costs with volume, cost consciousness, and market conditions for inputs. So, a mix of factors calls for profit maximization.
Financial Management Objectives;
This objective of financial management is a favored one for the following reasons:
Profit is a measure of business success. The higher the profit greater is the degree of success.
Profit is a measure of performance. Performance efficiency indicates by the quantum of profit.
Profit-making is essential for the growth and survival of any undertaking. Only profit-making businesses can think of tomorrow and beyond. It can only think of renewal and replacement of its equipment and can go for modernization and diversification. Profit is an engine doing away with the odds threatening the survival of the business.
Profit-making is the basic purpose of business. It accepts by society. A losing concern is a social burden. The sick business undertakings cause a heavy burden to all concerned, we know. So, the profit criterion brings to light operational inefficiency. You cannot conceal your inefficiency if profit makes the criterion of efficiency.
Profit-making is not a sin. The profit motive is a socially desirable goal, as long as your means are good.
However, profit maximization is not very much favored. Certain limitations point out. First, the concept of profit is vague.
Concepts of Profit;
There are several concepts of profit like gross profit, profit before tax, profit after tax, net profit, divisible profit, and so on. So the reference to the profit has to be clear. Second, profit maximization in the long run or the short run is to state clearly.
Long-run or short-run profit orientations differ in nature, emphasis, and strategies. Third, profit maximization does not consider the scale factors. The size of the business and level of profit has to be related. Otherwise, no sensible interpretation of performance or efficiency is possible. Fourth, profit has to be related to the time factor. Inflation eats up money value. A rupee today is worthier than tomorrow and the day after. The time value of money does not consider in profit maximization.
Profitability Maximization:
Profit as an absolute figure conveys less and conceals more. It must be related to either sales, capacity utilization, production, or capital invested. Profit when expressed about the above size or scale factors it acquires greater meaning. When so expressed, the relative profit knows as profitability. Profit per rupee sales, profit per unit production, profit per rupee investment, etc., are more specific. Hence, the superiority of this goal to the profit-maximization goal.
Further profit per rupee investment or return on investment, (ROI) is a comprehensive measure. ROI = Return or Profit / Average Capital invested.
Profit divided by sales measures the profit per rupee of sales and sales divided by investment measures the number of times the capital turns over. The former is an index of profit-earning capacity and the latter is an index of activeness of the business. Maximization of profitability (ROI) is possible through either the former or the latter or both.
The favorable scores of this objective are the same as those of the profit maximization objective. The unfavorable scores of this objective again are the same as those of the profit maximization objective except one aspect. Profit maximization goal does not relate profit to any base. But profitability maximization relates profit to sales and/or investment. Hence it is a relative measure. So it is better than profit maximization goal on this score. But as other limitations continue, this objective to gets only a ‘qualified’ report as to its desirability.
EPS Maximization:
Maximization Earnings Per Share (EPS) involves maximizing earnings after tax gave the number of outstanding equity shares. This goal is similar to profitability maximization in respect of merits and demands. It is very specific both as to the type of profit and the base to which it compares. One disadvantage is that EPS maximization may lead to value depletion too because the effect of dividend policy on value totally discards.
Liquidity Maximization:
Liquidity refers to the ability of a business to honor its short-term liabilities as and when these become due. This ability depends on the ratio of current assets to current liabilities, the maturity patterns of currents assets and ‘the current liabilities, the composition of current assets, the quality of non-cash current assets; the relations with the short-term creditors; the relations with bankers and the like.
A higher current ratio, a perfect match between the maturity of current assets and current liabilities, a well-balanced composition of current assets, healthy and ‘moving‘ current assets, i.e., those that can convert into liquid assets with much ease and no loss, understanding creditors and ready to help bankers would help to maintain a high-liquidity level for a business. All these are not easy to obtain and these involve costs and risks.
How far is it a good goal? It is a good goal, though not a wholesome one. Every business has to generate sufficient liquidity to meet its day-to-day obligations. Last, the business would suffer. A liquidity-rich business can exploit some rare opportunities like buying inventory in large quantity when the price is lower, lend to the call money borrowers when the interest rate is high, retire short-term creditors taking advantage of cash discounts, and so on. So many benefits accrue. But, high liquidity might result in idle cash resources and this should avoid. Yes, excess liquidity and profitability move in the opposite directions, they are conflicting goals and have to balance.
Solvency Maximization:
Solvency is long run liquidity. Liquidity is short-run solvency. The business has to pursue the goal of solvency maximization. Solvency is the capacity of the business to meet all its long-term liabilities. The earning capacity of the business, the ratio of profit before interest and tax to interest, the ratio of cash flow to debt amortization, the equity-debt ratio and the proprietary ratio influence the solvency of a business. Higher the above ratios greater is the solvency and vice-versa.
Is this a significant goal? Yes, Solvency is a guarantee for continued operation, which in turn is necessary for survival, growth, and expansion. Borrowed capital is a significant source of finance. Its cost is less; it gives tax leverage; So, equity earnings increase, so market valuation increases. So, wealth maximization enables through the borrowed capital. But to use borrowed capital, solvency management is essential. You have to decide the extent to which you can use debt capital and ensure that the cost of debt capital is minimum.
Higher dependence and higher cost (higher than the ROI) would spell doom to the business. If the cost is less, (cost is the post-tax interest rate), and your earnings are stable, a higher debt may not be difficult for service. Solvency maximization is increasing your ability to service increasing debt and does not mean using less debt capital. Increasing the debt serviceability would require generating more and stable cash flows through the operations of the business. Ultimately, the nature of investments and business ventures influence solvency.
Minimization of Risk:
So far, maximization financial goals were dealt with. Now, if we turn the coin, the minimization goals come to light. Minimization of risk is one of the goals. Risk refers to fluctuation, instability, or variations in what we cherish to obtain. Variations in sales, profit, capacity utilization, liquidity, solvency, market value, and the like refer to risk. Business risk and financial risk are prominent among different risks. Business risk refers to variation in profitability while financial risk refers to variation in debt-servicing capacity.
The business risk, alternatively, refers to variations in expected returns. Greater the variations, the greater the business risk. Risk minimization also does not mean taking any risk at all. It means minimizing risk given the return and given the risk of maximizing return. Risk reduction is possible by going in for a mix of risk-free and risky investments. A portfolio of investments with risky and risk-free investments could help reducing business risk. So, diversification of investments, as against concentration, helps in reducing business risk.
Financial risks;
Financial risk arises when you depend more on a high-geared capital structure and your cash flows and profits before interest and tax (PBIT) vary. To minimize financial risk, the quantum of debt capital limit to the serviceable level, which depends on the minimum level of PBIT and the cash flow. Of course, debt payment scheduling and rescheduling may help in financial risk reduction and the creditor must be agreeing to such schedules/reschedules. Here; too, a portfolio of debt capital can be thought of to reduce risk.
Minimization of Cost of Capital:
Minimization of cost of capital is a laudable goal of financial management. Capital is a scarce resource, a price has to pay to obtain the same. The minimum return expected by equity investors, the interest payable to debt capital providers, the discount for prompt payment of dues, etc., are the costs of different forms of capital. The different sources of capital – equity, preference share capital, long-term debt, short-term debt, and retained earnings, have different costs. In theory, equity is the costliest source. Preference share capital and retained earnings cost less than equity. The debt capital costs less, besides there is the tax advantage.
So, to minimize the cost you have to use more debt and less of other forms of capital. Using more debt to reduce cost is however is beset with some problems, viz., you take heavy financial risk, create the charge on assets, and so on. Some even argue, that more debt means more risk of insolvency and bankruptcy cost arises. So, debt capital has, besides the actual cost, another dimension of cost – the hidden cost. So, minimizing the cost of capital means minimizing the total of actual and hidden costs.
This is a good goal. Minimization of capital cost increases the value of the firm. If the overall cost of capital is less, the firm can take up even marginal projects and make good returns and serve society as well. But, it should avoid the temptation to fritter away scarce capital. Capital should direct into productive and profitable avenues only.
Minimization of Dilution of Control:
Control on the business affairs is, generally, the prerogative of the equity shareholders. As the Board holds substantial equity it wants to preserve its hold on the affairs of the business. The non-controlling shareholders too, in their financial pursuit, want no dilution of their enjoyment of fruits of equity ownership. A dilation takes place when you increase the capital base. By seeking debt capital control dilation minimize. Also, by a rights issue of equity dilation of control can minimize.
It is evident, minimization of dilution of control is essentially a financing -mix decision and the latter’s relevance and significance had been already dealt with. But you cannot minimize dilution beyond a point, for providers of debt capital, directly or indirectly, affect business decisions. The convertibility clause is a shot in the arm for those creditors. Yes, controlling power has to be distributed.
Wealth Maximization:
Wealth maximization means maximization of the net worth of the business, i.e. the market valuation of a business. In other words, increasing the market valuation of equity share is what is pursued here. This objective is considered to be superior and wholesome. The pros and cons of this goal are analyzed below.
Taking the positive side of this goal, we may mention that this objective takes into account the time value of money. The basic valuation model followed discounts the future earnings, i.e. the cash flows, at the firm’s cost of capital or the expected return. The discounted cash inflow and outflow are matched and the investment or project is taken up only when the former exceeds the latter.
The term cash flow used here is capable of only one interpretation, unlike the term profit. Cash inflow refers to profit after interest and tax but before depreciation. Otherwise put, profit after tax and interest as increased by depreciation. Cash outflow is the investment. The salvage value of an investment, at its present value, can be reduced from investment or added to inflow. So, the cash flow concept used in wealth maximization is a very clear concept.
Other things;
This goal considers the risk factor in the financial decision, while the earlier two goals of financial management are silent as though risk factor is absent. The not only risk is there and it is increasing the level of return generally. So, by ignoring risk, you cannot maximize profit forever wealth maximization objective give credence to the whole scheme of financial evaluation by incorporating risk factor in the evaluation. This incorporation is done through enhanced discounting rate if need be.
The cash flows for normal-risk projects are discounted at the firm’s cost of capital, whereas risky projects are discounted at a higher than the cost of the capital rate so that the discounted cash inflows are deflated, and the chance of taking up the project is reduced. Cash flows – inflows and outflows are matched. So, one is related to the other: i.e. there is the relativity criterion too. So, wealth maximization goal comes clear off all the limitations all the goals mentioned above. Hence, wealth maximization goal is considered a superior goal. This is accepted by all participants in the business system.
Maximization of Economic Value Added:
A modern concept of financial management goal is emerging now, called as maximization of economic value added (EVA). EVA = NGPAT – INTE, where, EVA is economic value added, NGPAT is net generating profit after tax but before interest and dividend and INTE is the cost of combined capital. INTE = Interest paid on debt capital plus fair remuneration on equity. EVA is simply put the excess of profit overall expenses, including expenses towards fair remuneration paid/payable on equity fund.
