Performance Appraisals and Motivation Theories - Free Essay Example

Sample details Pages: 14 Words: 4201 Downloads: 10 Date added: 2017/06/26 Category Management Essay Type Research paper Did you like this example? This chapter served as the groundwork for the development of this study. An overview of the extensive historical research on related topics is provided. The literature review is divided into two categories where the first dwells on literatures pertaining on the subject of Performance Appraisals and the second category focuses on motivation theories and their relevance in the Performance Appraisal System. 2.2 Performance Appraisal System 2.2.1 Meaning of Performance: Different authors have differing ideas about what performance actually is. Lebas (1995) defines performance as undertaking a particular action to successfully complete set goals, taking into consideration the given time frame and constraints of the performer and the situation. On the other hand, performance can be demarcated by comparing actual results attained to results that were expected (Dess and Robinson, 1984). According to Brumbrach (1988, cited in Armstrong, 2000): Performance means both behaviours and results. Behaviours emanate from the performer and transform performance from abstraction to action. Not just the instruments for results, behaviours are also outcomes in their own right the product of mental and physical effort applied to tasks and can be judged apart from results.  [1] The above definition considers performance to be involving both the actions taken during the process in attempting to achieve goals and outputs obtained as a result of the effort put. Don’t waste time! Our writers will create an original "Performance Appraisals and Motivation Theories" essay for you Create order 2.2.2 Performance Management System (PMS) Following the definition of performance given by Brumbrach, Armstrong (2000) highlights the importance and need for superiors to manage employees performance. To determine if performance has been succeeded, techniques have to be developed to appraise the accomplishments. Performance Management (PM) is one of the ways to manage workers performance today in many organisations. Noe et al (2006) define performance management as a practice used by managers to make sure that employees actions and outputs delivered are consistent with the organisations goals. The concept of PM was first coined by Beer and Ruh in 1976. However, it is barely in the mid 1980s that it had been known as a distinctive approach. PM since then has contributed a lot in the advancement of Human Resource Management. The concept is widely being used in organisations with a view to obtain better results and improved performances from the workforce. Goals and standards are being planned well beforehand in orde r to get satisfied outcomes. 2.2.3 Performance Appraisal System (PAS) Performance Appraisal System is a component of PM. Also known as performance review, it formally documents the achievements of an individual with regards to set targets. Managing employees performance can be said to be as important as any other work that all managers execute during the year. Grote (2002) describes performance appraisal as a formal management tool that helps evaluate the performance quality of an employee. Schneier and Beatty as cited in Patterson (1987) define it as a process which apart from evaluating also identifies and develops human performance. According to Karol (1996) performance appraisal includes a communication occasion planned between a manager and an employee for the main purpose of assessing that employees previous performance and establishing ways for further improvement. 2.2.4 History of PAS The history of performance appraisal is fairly concise. Appraisal really began with the Second World War where it was used to assess outcomes. Performance appraisal was seen in the industry in early 1800. Randell (1994) identified its use in Robert Owens use of silent monitors in the cotton mills of Scotland. The Silent monitors were in terms of blocks of wood with different colours painted on each visible side and it was hung above each employees work station. At the end of the day, the block was turned so that a particular colour, representing a grade of the employees performance, could be seen by everyone. (Weise and Buckley, 1998) Subjective evidence indicates that this practice had a facilitating influence on subsequent behavior. Spriegel(1962) and Weise and Buckley(1998) affirm that by the early 1950s, 61 per cent of organisations regularly used performance appraisals, compared with only 15 per cent immediately after World War II. DeVries et al. (1981) pointed out th e primary tool to be the trait-rating system, which focused on past actions, using a standard, numerical scoring system to appraise people on the basis of a previously established set of dimensions. The main tool, used under here was trait rating system. The concept of Management by Objective (MBO) was first proposed by Peter Drucker in 1954. Mcgreror then used it in the appraisal process in the year 1957. He suggested that, employees should be appraised on the basis of short-term goals, rather than traits, which are jointly set by the employee and the manager. Weise and Buckley (1998) affirm that this method was very advantageous as it lead to a transformation of a managers role from being a judge to a helper. It also showed that employees productivity ultimately leads to performance. However, when employees performance was measured on the basis of units, then MBO was ineffective. This lead to new development in the appraisal process and the employees were evaluated on the ba sis of behaviour based rating. Smith and Kendall (1963) designed the first tool to focus on behaviors and it was the Behaviorally Anchored Rating Scales (BARS). 2.1.5 Modern Appraisal Todays performance appraisal process has evolved into a more planned and formal process. It is used as a means which helps identify and compare employees performances. The appraisals data are frequently being used to review several Human Resources decision. It can determine any need for career developments and trainings. For issues such as raise in salaries, rewards and promotions, employers are more and more making use of the appraisals results. Appraisals have now developed into a regular and intervallic system in organizations, normally carried out at least once a year. When talking about the modern approach to appraisal, the term feedback cannot be ignored. The one-to-one discussion between supervisors and subordinates gives rise to feedback and is referred to as the feedback process. This process can improve communication all through the organization but also it can reinforce employees relationships with their superiors. This is so as the workers have the feeling that they do matter to the organization and that their needs are being taken into consideration. The performance appraisal system has most likely become a future-oriented approach as it aims to improve future performances by considering present problems. 2.1.6 Purposes of PAS The most known purpose of performance appraisal is to improve performance of individuals. Cummings and Shwab (1974) held that performance appraisal has basically two important purposes, from an organizational point of view and these are: 1. The maintenance of organizational control 2. The measurement of the efficiency with which the organizations human resources are being utilized. Still, there are also a variety of other declared purposes for appraisal as per Bratton and Gold (2003) and Bowles and Coates (1993) and some are; improving motivation and morale of the employees, clarifying the expectations and reducing the uncertainty about performance, determining rewards, identifying training and development needs, improving communication, selecting people for promotion, discipline, planning corrective actions and setting targets. Furthermore, Bowles and Coates (1993) conducted a postal survey of 250 West Midland companies in June 1992, where organizations were asked ques tions pertaining to the use of Performance management in the organization. These questions included the apparent purpose of PA in the management of work, its strengths and weaknesses. Through their survey they found out that PA was beneficial in the following ways: PA was favorable in developing the communication between employer and employee It was useful in defining performance expectations It helped identified training needs. Performance appraisal can thus be used as an effective tool to improve employees job performance by identifying strengths and weaknesses, meeting of targeted goals and providing training if needed. 2.1.7 Techniques of PAS There are several commonly used techniques of performance appraisal as reviewed by Oberg (1972). They are as follows: Essay Appraisal, Paired Comparison, Graphic Review Scale, Weighted Checklist, Person to Person Rating, Forced Ranking, Critical Incidents. The above techniques were the traditional ones but the methods most widely used today are: Management by Objectives Employees are requested to put up their own performance objectives. They are then judged through these objectives by verifying whether they were satisfied or not. However, in many cases organizations themselves set their standards and goals even after consulting employees. 360 Degree Feedback 360 Degree Feedback is a process in which employees receive private and anonymous feedback from the people who work around them. Kettley (1997) says that when an individual receives feedback from different sources of the organization, including peers, subordinate staff, customers and themselves, the proce ss is called 360 degree feedback or appraisal. The employee is then assessed using those received feedback. 2.1.8 Feedback Feedback about the effectiveness of an individuals behavior has long been recognized as essential for learning and for motivation in performance-oriented organizations. Ilgen et al. (1979) stated that feedback is considered as an important tool in performance appraisal process. Feedback can be a useful tool for development, especially if it is specific and behaviorally oriented, as well as both problem-oriented and solution-oriented according to Murphy and Cleveland (1995). One of the basic purposes of formal appraisal process is the provision of clear and performance based feedback to employees. Carroll and Scheiner( 1982) affirmed that some organisations use feedback as a development tool, while in some organizations it is used for merit evaluation and compensation adjustment. McEvoy and Buller(1987), Wohlers and Gallagher( 1990) contributed that feedback is very essential for the employees because it forms a baseline for the employees which help them to get a review of their pas t performance and chance to improve their skills for the future. Ashford (1986) says that when feedback is considered as a valuable resource, then only the individuals feel motivated to seek it, which helps in reducing uncertainty and provides information relevant to self-evaluations. There is also evidence that performance feedback (if given appropriately) can lead to substantial improvements in future performance (Guzzo et al., 1985; Kopelman, 1986; Landy et al., 1982) Fedor et al. (1989); Ilgen et al. (1979) identified that it is commonly accepted that negative feedback is perceived as less accurate and thus less accepted by recipients than positive feedback. Furthermore, Fedor et al. (1989) found that negative performance appraisal feedback was less accepted and perceived as less accurate than positive performance appraisal feedback. 2.1.9 Views Organisations Employees have on P.A.S Evans (1986) asserts that many employees believe that their promotion or salary increments depend mostly on their performance. Employees therefore are in a dilemma and consider this situation as survival of the fittest. They know for a fact that, their performance will only be taken into consideration at the end of the day. So, in order to grow in the company they need to be proactive towards their work. The feedback the employee receives from his superior, may simply describe the level of performance achieved. Hence, it becomes important for the managers to conduct the appraisal technique correctly. Employees can only accept criticism if it is useful and important to them. Managers should therefore know how to give information regarding progress made in performance and how to present criticism as well. Meyer et.al (1965) carried out a study in General Electric Company where certain points relating to performance feedback was highlighted. In this study, 92 employees were appr aised by their managers on two occasions over two weeks. The study was carried out using questionnaires, interviews and observation. The first appraisal highlighted performance and salary while the second one underlined performance and improvement. It was observed that lots of criticisms were pointed out by the managers, which lead to defensive behaviour of the employees. The conclusion of the study was that criticism leads a negative impact on the motivation and performance of the employees. Also feedback sessions designed to improve performance should not at the same time consider salary and promotion issues. Ilgen et. al (1979) add that employees who believe that the appraisal system is under any kind of bias, are most likely to be dissatisfied by their work and can also leave their jobs. On the other hand Murphy and Cleveland highlighted one possible reason for the widespread dissatisfaction with performance appraisal in organization as the systems used by these help neith er them nor their employees in meeting the desired goals. Landy et al. (1978) and Tang and Sarsfield-Baldwin (1996) found evidence that the assignment of raters influences perceptions of fairness and accuracy in performance appraisals and hence about the whole process itself. Nevertheless, according to Jacobs, Kafry Zedeck (1980) employees perceive PA to give them a proper understanding of their duties and responsibilities towards the organization. Likewise, organization sees it as a tool to assess employees on a common ground and one which helps in salary and promotions decisions, training and development programs. In many circumstances appraisal plans are interpreted by managers as a system that helps an organization to change regular priorities and usual ways of working and in so doing to alter its strategic direction. Hence, in circumstances where change cannot be attained by managerial proclamation, appraisal takes on the character of an engine of change. When manager s look at appraisal from this angle they hope that it will bring about a change in strategic direction and organizational behaviour. Researchers have suggested that reaction to performance appraisal is critical to the acceptance and use of a performance appraisal system (Bernardin Beatty, 1984; Cardy Dobbins, 1994; Murphy Cleveland, 1995). Reactions may even contribute to the validity of a system (Ostroff, 1993). Cardy and Dobbins (1994) suggest that with dissatisfaction and feelings of unfairness in process and inequity in evaluations, any performance appraisal system will be doomed to failure (p. 54). Murphy and Cleveland (1995) stated that reaction criteria are almost always relevant, and an unfavorable reaction may doom the carefully constructed appraisal system. 2.1.10 Benefits of PAS Possibly the most important benefit of appraisal is that, in the rush and pressure of todays working life, it allows the supervisor and subordinate to have time out for a one-on-one discussion of indispensable work problems that might not otherwise be addressed. Likewise, the existence itself of an appraisal system indicates to employees that the organization is genuinely concerned with their individual performances and advancement. This only can have a positive impact on the employees sense of worth, commitment and belonging. Appraisal offers the rare chance to focus on employment activities and objectives, to spot and correct existing problems and to enhance favorable future performance. Thus the performance of the whole organization is improved. Performance appraisal usually provides employees with acknowledgment for their work efforts, if any and as a result it brings them satisfaction. Actually, there are facts supporting that human beings will even prefer negative re cognition in rather than no recognition at all. During performance appraisals, feedbacks are obtained. These provide vital information on whether training and development needs should be considered. The presence or lack of working skills, for example, can become very obvious. The supervisor and subordinate can thus agree upon any demand for training. As far as the organization is concerned, the overall appraisal results can provide a regular and efficient training needs audit for the organization as a whole. The information obtained from appraisals can also give indication on an organizations recruitment and selection practices. This can be done by screening the performance of recently hired workers. The general quality of the workforce can also be monitored by assessing any improvement or decline performances. Changes if needed in the recruitment strategies can then be considered. 2.1.11 Criticisms related to P.A.S There are several problems in the actual performance appraisal primarily due to rater bias. Some supervisors are too lenient and thus have a tendency to rate all employees positively rather than really measuring their performance. Another problem is the central tendency where supervisors position the majority of the employees in the center of the performance scale, even though they deserve a better or worse grade. The halo effect is another error usually made during appraisals. This arises when a supervisors general feeling about an employee influences the overall judgment. Performance appraisal systems are at times criticized for weaknesses in the system design itself. Sometimes they assess the wrong behaviours or consequences, or focus on employees personality instead of on their work performances. Very often standards for appraising employees are not related to the work itself. As a consequence employees may not likely be interested in such a system where performance stand ards are unsuccessful in highlighting important aspects of the jobs. Some organizations founds that PAS is a constant cause of tension, since evaluative and developmental concerns come often into disagreement. It is said that the appraisal can serve only one of them at a time. Also they find it dehumanize and demoralize to pass on judgments which then become source of apprehension and stress to employees. Many researchers such as Derven (1990) expressed doubts about the effectiveness and dependability of the appraisal process. Some found the process to be imperfect in nature. Moreover, Gabris Mitchell (1989) found a disturbing bias in the appraisal process called the Matthew Effect. It is said to take place in cases where employees keep on receiving the same evaluation each year. This denotes that there is the belief that if an employee has work well, he or she will continue on that pace. The Matthew Effect advocates that even if employees struggle to do well, their past a ppraisal reports will discriminate their future progress. Accuracy is important in appraisals. However for raters to appraise employees accurately, they should give unbiased results. Unfortunately accurate ratings are quite impossible as researchers affirm that personal liking, look, former impressions, gender and race will certainly manipulate appraisals, that is, there will always be some kind of biasness. 2.1.12 Conclusion about PAS There are various schools of beliefs as to the validity and reliability of performance appraisals. While Derven (1990) doubts about its dependability, Lawrie (1990) finds it to be the most important aspect of organizations. A recent survey concluded that more than fifty per cent of the workforce wishes that their supervisors list the performance objectives much more specifically and clearly. The same survey revealed that 42 per cent of the employees were rather disappointed their organisations performance appraisal system. Many supervisors make the wrong use of appraisal. They use it as a punitive tool rather than helping their subordinates to improve their performance and overcome work problems. According to Shelley Riebel, as in the Detroit News (April 11, 1998) often managers are unsuccessful to explain what they really expect from their employees and fail to well describe the criteria used for assessing their performance. The data obtained during the appraisal proce ss should be wisely used and considered. Still, for performance appraisal to be successful, it is important to carry it out on a regular and consistent basis. This will allow supervisors to follow and review employees work. Raters often make the mistake of emphasizing too much on mistakes committed by the employees. Rather, if ever some problem is spotted by the supervisor, the issue should be discussed with the employee concerned and both should try work on a solution. 2.2 Motivation Performance Appraisal System 2.2.1 Introduction to Motivation Motivation can be defined as the driving force that moves us to pursue a certain goal, or trigger a particular action. It can be considered as the desire within a person causing him or her to act. People generally act for a motive and that is to achieve a specific objective. Two main types of motivation have been noted, namely intrinsic and extrinsic. Intrinsic motivation comes from the inner self while extrinsic motivation arises when external factors require one to perform something. According to Passer and Smith (2004) the concept motivation refers to a course of action that influences the determination, direction and dynamism of goal-directed behaviour. Similarly, Kreitner and Kinicki (2007) assert that motivation represents psychological practices that stimulate voluntary actions. In the work context, as confirmed by Coetsee (2003), motivation entails the readiness of individuals and groups to put much effort so as to achieve organizational goals. From the above, it can be construed that there exists no single and general definition for motivation. Yet, Boje and Rosile (2004) regard motivation as an authoritarian ideology, a way to manipulate performance and where visions of self-actualisation need gratification. This view might be too negative to consider, but the rise in capitalism has been driven by high concentration motivation programmes which sometimes turn employees into production machines. 2.2.2 Motivation and P.A.S in Organisation Today Motivation can be the key to a successful organization. It is often claimed that the best businesses have the best motivated workers. Well motivated employees are said to be more productive and perform quality work. It remains however one of the most challenged tasks for managers to motivate their staffs as everyone is unique. A supervisor should strive to tie in the companys goals together with the employees individual goals through performance management. Moreover, the whole performance appraisal process and its result can affect an employees motivation. As highlighted by Cummings and Shwabs (1974), employees performance is the outcome of the employees motivation to perform. In an organisational context, the performance is appraised by assessing the employees aptitudes and potentials to achieve the set goals. 2.2.3 Theories of Motivation related to P.A.S 2.2.3.1 Edwin Lockes Goal Setting Theory A main element for efficiently coaching employees is by using goal setting. Edwin Locke (1968) introduced the Goal Setting Theory whereby employees get motivated to work for the organisation when they are given specific and pronounced goals to achieve. This theory emphasizes that hard goals produce a higher level of performance than easy goals. Secondly, particular hard goals produce higher level of output and lastly, behavioural intentions lead to choice behaviour. Many, who study the relationship between performance and motivation in organizations, will agree that goal-setting and explanation creates confidence in the workers. By clearly explaining the meaning of the goals, employees will have a clear view on what the organization wants to achieve. Coetsee (2003) affirms that the most performing workers are goal-directed. Set goals allow employees to accomplish organisational vision, aims and strategic objectives. The assumption made here is that when people recognise and unde rstand what is expected from them and how they are to be met, they will be motivated to achieve them within the time-limit. With regard to coaching, goal-setting theory has been used more than any other as a framework to motivate employees to improve their performance. As cited by Cary L. Cooper, Edwin A. Locke (2000), the early work of Maier (1958) and Meyer et al. (1965) emphasized goal setting in the appraisal process. In a study, Latham et al. (1978) found that consistent with the theorys predictions, employee participation in setting the goals resulted in higher performance than assigning them, not because of greater goal commitment, but rather due to high goals being set. According to Dossett et al. (1979), a similar result was observed with Weyerhaeusers word processing employees. Goals and objectives set by the employers and employees should be discussed regularly. Erez (1977) asserted that for difficult goals to result in high performance, sufficient feedback is ve ry important. 2.2.3.2 Behaviour Maintenance Model (BMM) Cummings and Swabs presented the Behaviour Maintenance Model (BMM) to illustrate how people are motivated to perform efficiently in an organisation. This model emphasises on the significance of outcomes in the motivational process. Fig.1: Behavior Maintenance Model This framework shows that goal aspirations results in goal attainment and motivation. When goal attainment is achieved by the employee, it leads to job satisfaction which in turn leads the employee to become motivated. 2.2.3.3 Victor Vrooms Expectancy theory Expectancy theory is an idea that was introduced by Victor Vroom. The theory as explained by Kreitner Kinicki (2007) is based on the assumption that people are motivated to act in ways that will be followed by valued and desired outcomes. The theory says that an employee might be motivated when there is a belief that a better performance will result in a good performance appraisal which will help in the realization of personal goals. The theory focuses on motivation as the combination of valence, instrumentality and expectancy. Valence is the value of the alleged result. Instrumentality is the point of view of an individual whether he or she will really obtain what they want. It shows that successful act will eventually lead to the desired result. Expectancy refers to the different level of expectations as well as confidence regarding ones capability. Employees believe that these create a motivational force and this force can be represented by the formula: Motivation = Valence x E xpectancy The theory focuses on three things: ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Efforts and performance relationship ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Performance and reward relationship ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Rewards and personal goal relationship 2.2.4 Conclusion: Performance Appraisal as Motivator? From the above reviews, it can be seen that no such research has been done to show if performance appraisal really acts as a motivator to employees. Bratton and Gold (2003) and Bowles and Coates (1993) claimed motivation to be one of the purposes of appraisals. It remains unconditional to know whether performance appraisal has a role to play in employees motivation. The research will therefore try to answer the following research questions: Does the Performance Appraisal System affect employees motivation? Does the system affect more a specific category of employees? How do employees perceive the PAS at the MRA? How do employees perceive feedback? Does the level of importance given to the system directly affect the employees motivation? Does the trust put on the appraiser influences the employees motivation?

Autism Spectrum Disorder ( Asd ) - 1285 Words

Introductions: Autism Spectrum Disorder (ASD) is defined as a lifelong developmental condition that affects, among other things, the way an individual relates to his or environment and their interaction with other people. The word ‘spectrum’ is the description of a range of difficulties that people with autism may experience and the degree to which they may be affected. Not everyone with autism have an accompanying learning disability and require continued specialist support because some people with autism may be able to live relatively normal lives. There are main areas of difficulty that are associated with autism people such as difficulty in social communication, social interaction and restricted or repetitive behaviours and interests†¦show more content†¦They assessed their DNA from blood samples. The researchers used a highly urbane technique that can detect duplications or deletions of one or more sections of DNA. Research suggests that mutated genes, which are found wit hin the Central Nervous System, which is similar to other neurological disorders such as Rhett’s syndrome or Huntington disease, may be the cause of Autism, as it is the part of the brain that effects information processes. (Autismresourcecenter.info, 2015). The environmental risk factors include much more than exposure to chemicals and it’s important to understand that. The term â€Å"environmental† scientists refer to influences other than changes in a gene’s DNA. None of these influences appears to cause or prevent autism. Autism Speaks, (2015). The age of the mother and father can trigger the onset of Autistic symptoms. Children born from a mother who’s older than 35 years and father who is over 50 years old are more likely to be born with some form of brain dysfunction or associated problems. (Autismresourcecenter.info, 2015) It is comprehended that psychological factors has informed increasingly well-designed and productive approaches to the education and treatment of children with autism, so that theory and practice can build on each other in a synergistic way. Psychological aspects of autism is distributed into sections covering the major areas

Importance of agriculture to economy of mianwali free essay sample

Mianwali is the district situated in the north of Punjab. It is located at the border of province KPK AND PUNJAB. This district was formed in the year 1906 . it has three tehsil’s Mianwali Easa khel Piplan The majority of peoples of mianwali belong to the field of agriculture . Mianwali consists of wonder full irrigation system. It consists of canals, river, and tube well, INDUS RIVER is one important source which provides water to many areas in mianwali. this river covers the areas of esakhel,mianwali,kundian,chashma,doaaba, etc.  due to this river most of the irrigation system in mianwali is easily approachable to all farmers. There are two major canals in mianwali too Thal canal Upper-Jhelum canal These two canal canals cover the major portion of mianwali. Apart from these canals there are many tube wells which fill the agricultural needs of mianwali people. From a long time the economy of mianwali was revolving around the crops which were more cultural in nature . These crops consist of wheat mungi and some vegetables. These crops were produced in mianwali for a long time but due to some problems these crops cannot give economical benefits to mianwali neither they can full fill the food needs of mianwali. But now in last ? years the type of crops being produced in mianwali is changed now mianwali people are producing crops like cotton, tobacco, etc. These crops are providing large profits to the people of mianwali and it is also providing people with employment . these crops are also giving industrialization in mianwali. In this article we will discuss about the effect of agriculture to mianwali. In Pakistan agricultural sector is of prime importance. It is the major source of income for the country during last 65 years. According to the latest survey it is contributing 1. 20. 9 % to the GDP. 2. Its growth rate is as low as 1. 5%. 3. It gives employment to 45% labor force So this scenario shows that agriculture is of prime importance to the economy of PAKISTAN. As mianwali is located in Punjab province so it also possesses a very fertile land. Due to this reason agriculture is also very important to the people of mianwali and its economy. Everyone knows that mianwali is traditionally producing those goods which are used as food, like wheat but in this article we will study about a few crops which are new in mianwali and which are making mianwali economically strong. EXPANSION OF COTTON INDUSTRY. The production of cotton in mianwali is increasing in last couple of years. MIANWALI was not known for the production of crops like cotton in the history but now mianwali is producing cotton at a high rate. Cotton is helping the economy of mianwali in many ways we will study those ways but firstly we will show the stats which show Amount of cotton in 2011 /acre Amount of cotton in 2012/acre 91000 96500 This increase in the production of cotton is providing mianwali with many benefits these benefits are explained shortly. Direct benefits. Employment Industrialization Increase in per capita Income Increase In the Production Tobacco Increase in the production of other crops Now these direct benefits are discussed in brief: Direct benefits Like every crop cotton has a direct benefit because cotton is a premium crop and it has a high market value so it gives farmer a very large amount of profit. This large amount of profit gives two benefits to the farmer .  1st is large revenue and 2nd is increase in per capita income. Also if a farmer gets large amount of benefit it proves incentive to work hard which helps to increase in income of the farmer directly and city and country indirectly. Employment: This increase in production of cotton is leading to many advantages to our district. The biggest of all these advantages is providing employment . f irstly when the people work on wages in the fields they get jobs. 2nd reason is that with the increase in production many GINNING FACTORIES have started working in the premises of mianwali. There are 33 ginning factories working in mianwali. Due to these factories many people in mianwali have started to get jobs in these factories. Almost 100 people are working in these factories. So at least 3000 people have got their jobs. This leads to increase in per capita income and ultimately to the stability of economy of mianwali. Industrialization: Industrialization is the thing which gives development to a country and a city every developed city in the world is developed due to its industry. Manchester is one of the most developed countries in the world it is just developed due its industry. In Pakistan Faisalabad Gujarat Gujranwala is one on of the developed cities just because of their industry. Cotton industry is providing mianwali with a chance to be industrially strong now in mianwali 33 ginning factories are working this is not a very big no but for a city like mianwali it is very healthy thing to have a start in the field of industry and this start is just because of crop of cotton . Increase in per capita income: Cotton factory is also increase leading to per capita income because if a farmer earns a direct revenue ,or a person gets a job in a factory or a person installs a industry it leads to the increase in earnings of mianwali and also it is leading to the increase in per capita income and development of economy of mianwali. INCREASE IN PRODUCTION OF TOBACCO: In the last few years the production of tobacco has increased in mianwali especially in last two years its production has increased at a very rapid rate, which can be seen from the following data. Amount in 2011 per acreage Amount in 2012 per acreage 1000 1500 According to this data the amount of production of tobacco has increased almost half of the amount since last year. This increase in the production of tobacco is giving mianwali many economic benefits. Firstly if the production of any crop increases it can increase the revenue, secondly it increases the rate of employment but the major benefit which mianwali has got from the production of tobacco is the INDUSTRIALIZATION because the increase in the rate of production has got the attention of PAKISTAN TOBBACCO COMPANY (PTC). due to the increase in the rate of production of tobacco PTC has started a plant in the mianwali. In the past few years the production of other crops is increasing in mianwali at a constant rate . for example the production of wheat is increasing at a rapid rate, wheat is an important ingredient of human food . it is a premium crop and increase in its production has lead to the increase in the rate of revenue earning for the people of mianwali. The increase in the production of all other crops is increasing the living standards of the people of mianwali . this increase in the production rate is increasing the per capita income. It is providing people of mianwali jobs and also giving mianwali a chance to be industrially strong. But there are some indirect benefits which people of mianwali are getting from agriculture now we will study about those benefits. BENEFITS OF AGRICULTURE FOR ECONOMY OF MIANWALI (INDIRECT): There are many benefits of agriculture in a country. Many people know about these advantages but there are some other advantages about which not enough people know but these advantages are as important as other advantages and they are also helping the economy in a descent way. FOCUS OF NATIONAL MULTINATIONAL AGRO COMPANIES: This increase in the rate of agricultural products has lead to the focus of many national and multinational companies in mianwali. This focus is giving people of mianwali a chance to get employment. Their are around 20 agro companies working in the mianwali presently . around 50 men are working in each company as a salesmen, accountant, managers, . So almost around 1000 people have got the jobs in these companies . so in a small city like mianwali it is proving to be very beneficial . this is increasing the per capita income and helping our economy in a great way. The volume of grain market has increased in mianwali at a rapid rate in mianwali(complete info about grain market is provided on a separate page). due to this increase in grain market it is easier for the farmers to get their grain into other areas and earn important revenue. (All the data was provided by ALI AKBAR GROUP) PROBLEMS FOR FARMERS IN MIANWALI As we have already discussed that mianwali is a remote area it is not much developed so our district is facing many problems in its agricultural process. The irrigation system of mianwali need to be improved and the farmers need to have some support from government. There are many problems faced by the farmers of mianwali a few of them are as follows: SHORTAGE OF WATER: Water is the necessity for agriculture easy access to water and better irrigation system makes it easier for farmers to produce good crops. Unfortunately many areas of mianwali are facing problems of water farmers don’t have easier access to water. Low level farmers cannot use tube wells .  most of the agriculture system of mianwali depends upon rain water so if there are no sufficient amount of rains farmers of mianwali suffer losses. Transportation of agricultural commodities: In many areas of mianwali like kacha there are serious transportation problems . farmers are not able to take their commodities to the other cities easily . as the farmers are not able to take their commodities to the other cities so, there is less amount of production because the farm ers know that they cannot sale their products in other cities so they produce in less amount. Cold stores Another serious which people of mianwali are facing is the problem of cold stores. Because there is no cold store in mianwali due to this reason the production of citrus is affected in mianwali because farmers know that if they produce in large amount then their fruits can be ruined due to the absence of cold store. So due to this reason production of goods is affected at a high rate. Inputs should be cost effective The inputs like fertilizers, seeds pesticides are really important for the production of crops. If the inputs are cost effective then it directly influences the rate of production. In mianwali these inputs are not easily available and also not very much cost effective. So to improve the economy of mianwali inputs should be cost effective. So to improve the economy of mianwali we need to find some solution of these problems because without solving these problems we cannot improve the economy of mianwali. STEPS TAKEN BY INDIAN GOVERNMENT FOR THEIR FARMERS AS COMPARED TO GOVERNMENT OF PAKISTAN PAKISTAN AND INDIA are two neighboring countries .  these two countries resemble with one another in many ways. The weather, economic conditions type of soil and many other traditions are same between these two countries but due to certain reasons India is much more economically strong than Pakistan. These reasons are as follows. Here is a short comparison between the steps taken by Indian government and Pakistan government is as follows: PAKISTAN Inputs are not cost effective Tube wells a re not easy for small farmers to install. Ways of transportation are not good. The middlemen’s in Pakistan reduce the benefit of farmers Transportation system is better in india. There is no middle man in india that is why farmers gets more profits. At the end we will like to end our article by suggesting that government of Pakistan should also take steps to improve the life style of our farmers as Indian government did. And there should be new methods in agriculture to improve the production and the farmers should be given skills so that they can enhance their production.

LONG TERM CAPITAL MANAGEMENT L.P. A CASE STUDY Essays -

LONG TERM CAPITAL MANAGEMENT L.P. ? A CASE STUDY Rarely if ever has a single firm had as tremendous an impact on international economics as Long Term Capital Management L. P. (LTCM). This report describes the company itself and its investment strategies, with particular attention paid to its international influence and importance. LTCM's activities in the financial world ultimately caused a near-collapse in the entire international financial system. In fact, had the Federal Reserve Bank of New York (FRBNY) not intervened to coordinate a major buyout of LTCM after it sunk into insolvency, the entire financial system could have been seriously jeopardized. Company Profile Set up as a particularly large hedge fund, and comprised of Ph.D. economists and established Wall Street bond traders, LTCM is a very interesting case, as well as an extremely volatile and important fund. Key Members and Their Backgrounds Founded in part by Nobel laureates Robert Merton and Myron Scholes, LTCM based its investment strategies on the mathematical models developed by Scholes, Merton, and Fischer Black. The model itself, commonly known as the "Black-Scholes Options Pricing Model", is famous for two major insights into economic thought. First, the model determines how to eliminate risk as a variable in the option-pricing equation. This was accomplished as a result of the second major insight, which was the idea of using continuous time for option pricing as opposed to second-by-second timing, a most crucial element that Robert Merton borrowed from a Japanese rocket scientist named Ito. Discovering how risk can be eliminated from large-scale investing is obviously an enormous break-through that puts greed in peoples' eyes and gets major investment players fighting for the chance to invest where the model will first be used in practice. Integrating the notion of continuous time into the pricing model elimina ted the problem of an appropriate option price being out-of-date by the time it was calculated. As champions of these powerful tools, Merton and Scholes decided to play the very financial markets that had already been transformed by their insights. The Black-Scholes model is: Value of a call option = P0N(d1) - X [N(d2)] eKRFt Where Po = the current price of a stock X = the exercise (strike) price on the option t = time remaining until expiration of the option KRF = continually compounded risk-free interest rate e = the natural antilog of 1.00 or 2.71828 N(d) = the probability that a standardized, normally distributed random variable will have a value less than or equal to d, essentially the hedge ratios.1 The Black-Scholes pricing model can adjust the value of options to reflect continuously changing stock prices. Black, Scholes and Merton appeared to have made the break-through that could finally bring perfect efficiency to the world's markets. John Meriwether, a wealthy and famous Wall Street bond trader from Soloman Brothers Inc., also played an integral role in the history of the firm. Meriwether left Soloman after having his name too closely associated with a bond-auction fraud scandal orchestrated by one of his colleagues. Meriwether, an old friend of Scholes, brought his expertise in bond markets and bond futures to the firm as its top executive. Also a co-founder, Meriwether brought with him from Soloman several of his former colleagues, who had also left Soloman after the bond fraud scandal in 1992. Hedge Funds and the Uniqueness of LTCM A hedge fund is organized much like a mutual fund (both are private, pooled investment accounts), but with some significant differences. Legally, a hedge fund is distinguishable by the fact that it limits the number of investors to 500 per fund. Also, to qualify to invest in American hedge funds requires a minimum capital amount of US$5 million for individuals, and US$25 million for institutional investors. In the case of LTCM, only those individuals and institutions that the fund's partners sought out were able to invest in the firm. Other things that distinguish hedge from mutual funds are: Hedge fund managers have almost complete autonomy in determining what assets to hold, and are not at all limited in what types of assets they can hold. Hedge funds are allowed to engage in short selling. Hedge funds may use leverage to increase levels of funding and of risk and return. Hedge funds can limit the amount cash injected into and withdrawn