Developing and Managing Performance (Organisation Essay

Developing and Managing Performance (Organisation - Essay Example In order to enhance performance, it will be essential to develop a reward system whereby the best performing individuals will be rewarding, thus promoting competency in their undertakings. (Chartered Institute of Personnel and Development, 2012, p.1). The senior management team will also undergo extensive training on various management perspectives, which will ensure that they will guide their juniors appropriately. This will be implanted in line with the current technological developments to ensure that efficiency is enhanced, which would consequently improve the overall performance of the company. 6 Strategies to Implement 6 Reward System 8 Challenges and How to Overcome Them 8 Conclusion and Recommendations 10 Developing and Managing Performance in an Organisation Executive Summary This report contains a detailed and comprehensive analysis of the different challenges faced when implementing and developing performance management and reward strategy. It puts forward the Bath model e laborating on how it can be used for performance management; moreover, a reward strategy has also been put in place with its significance being indicated. Significantly, the report starts by evaluating the challenges that are known to initiate from implementation, since this is known to be the basis of all the other problems, and proposed a number of ways that they can be countered so as to ensure that the strategic plan goes through to the end without any difficulties altogether. Introduction Over the years, there has been a lot of attention given to performance management and development with the demand for thorough information being actually intensified with the economic downfall. Human resources specialists have toiled to make sure that they keenly evaluate performance between relevant and fair measures putting most of their focus and efforts on essential aspects of any business. Essentially, the different efforts have circled around making sure that the processes are similar in nature with the requirements of a changing breed of line manager, and stream line the systems that are paper based and facilitate admittance through media. Nonetheless, most of the human resource strategies that have been implemented in the past are also focused on ensuring that managing the performance delivers in an environment where the evolution of numbers and effect on organisational brand and innovation is based on the ways of the business success. Concurrently, the report focuses on evaluating the challenges an organisation may incur when putting into place a performance and reward strategy using knowledge from the results of past case studies and theories from different specialists on the field, but mostly on human resources. Currently, the nature of work is altering with diverse organisations and corporations operating in more of a specialized network that is also flexible and natural; basically, the frequency of strategic partnering arrangements between organisations incr easing the need for management relationships to be managed beyond the organisation and hence further work is required. On the other hand, reward systems are also a critical part of any organisations design and how well they are compatible with the rest of the systems has an equal effect on to what extent they will be

Fundamentals of Quantitative Research Template Assignment

Fundamentals of Quantitative Research Template - Assignment Example two variables, this study goes ahead to dissect each of variables into its constituents and analyze how these individuals’ constituents relate to the second variable and its constituents. As already mentioned, a cross-sectional sampling technique is adopted for this research. The cross-sectional sampling technique adopted offers room for an all-inclusive study. Undertaking the study across diverse industries, the author brings a wholly representative study with respect to the area covered. Additionally, the sample is large enough to offer a representative sample. Additionally, considering the fact that the study participants are not aware of the study hypothesis, chances of biased occurring is highly diminished (Tzafrir, 2005). Nonetheless, the sample is non-purposive and this could have an impact on its representative of realistic findings of the research. The approach used in collecting the data used in the research suits its context. For starters, it should be mentioned that selecting participants from various organizations as sources of data allowed obtaining of representative data. Additionally, the researchers consider the ethics behind data collection. Although the sample chosen are unaware of the hypothesis of the study, they were well briefed on the research and those willing to, participated on voluntary basis participated in the research. Additionally, collection of primary data offers room for realistic and more current data for analysis. The research took an in-depth measurement of variables. Other than simply measuring the relationship between the two study variables, research further measures various components of the respective study variables. As a matter of fact, this offers room for undertaking an in-depth exploration of the relationship between the variables. It is simply like answering the question as to whether two countries have good relationship and going a step further to explore the area in which the two countries enjoy a good

Effects of Derivatives in National Legislation

Effects of Derivatives in National Legislation In the case before us the United Kingdom has failed to transpose the directive into national law, resulting in a detrimental effect for both Rachel and Jose. The fact that the UK government voted against the Directive when it was adopted in the council of ministers by QMV[1] and believes that existing legislation adequately covers teacher’s rights is of no consequence if the state of the law doesn’t give effect to the directive. Initially it was envisaged that the infraction procedure as set out in Article 226[2] EC treaty would be the primary means of enforcement of community law against member states[3]. Article 226 proved itself to be ineffective; at the time lacking provisions[4] to impose penalties on member states. Article 226 is also incapable of safeguarding the rights of individuals (a compensation order cannot be made against the defaulting state in favour of the aggrieved individual)[5]. Due to the inadequacy of Article 226 in the case of Van Gend en Loos 1962[6] the principle of direct effect was born. Van Gend en Loos had had a customs duty imposed on his goods by the Dutch contrary to Article 25 breaching rules in relation to the free movement of goods. Van Gend brought proceedings against the Dutch government in the national courts claiming reimbursement of the customs duties. The Dutch court sought a preliminary ruling from the ECJ[7] who first of all considered whether treaty provisions coul d confer directly effective rights upon individuals. The ECJ held that â€Å"community law†¦ not only imposes obligations on individuals but is†¦ intended to confer†¦rights which become part of their legal heritage†¦ (arising)†¦ not only where they are expressly granted by the treaty, but also by reason of obligations which the treaty imposes in a clearly defined way upon individuals as well as upon member states†. Article 249 provides that a directive is binding as to the result to be achieved but not as to the method employed by the state[8]. The direct effect of directives was first recognised by Van Duyn v Home Office[9]. Van Duyn was a scientologist refused entry to the UK as the UK government had imposed a ban on foreign scientologists entering the UK. Van Duyn challenged the ban as falling foul of Directive 64/221/EEC which required that any ban be based on the personal conduct of an individual. The ECJ held that â€Å"it would be incompatible with the binding effect attributed to a directive by Article 249 to exclude, in principle, the possibility that the obligation which it imposes may be invoked by those concerned†¦ (particularly where a directive)†¦ has imposed on member states obligations†¦ the useful effect †¦ (of which)†¦ would be weakened if individuals were prevented from relying on it before their national courts. Another justification for direct effe ct of directives is that of estoppel[10]; it would be wrong for a member state to be able to rely on and gain advantage through their failure to implement an obligation under a directive; they are thus estopped from denying the direct effect of directives once the deadline for transposition has passed. The estoppel argument has one very important implication; as direct effect is based on the fault of the member state in failing to implement the directive it follows that parties may invoke and rely on the directive against the state only; (i.e. only vertical not horizontal direct effect). Where a directive is properly implemented individual rights flow from the implementing legislation and not the directive itself. The limit to vertical direct effect can be best illustrated by the case of Marshall[11]; â€Å"a directive may not of itself impose obligations on an individual and that a provision of a directive may not be relied upon against such a person†. An important requirement is that â€Å"it is necessary to examine in every case, whether the nature, general scheme and wording of the provision are capable of having direct effect†[12]; the provisions must be â€Å"unconditional and sufficiently precise†[13][14]. So, Rachel, working for an entity of the state (a state school) may be able to enforce her right to a break with direct effect through the English courts; the â€Å"teacher’s employment rights† directive imposes on member states obligations to ensure that teachers are afforded a 3 hour break. Clearly as the directive has not been transposed Rachel has been deprived of this right and the English judge should rule in favour of her right to a break. The directive also fulfils the Becker test; it is unconditional and sufficiently precise. Jose, ostensibly will not be able to enforce his rights through the English courts, although he is being denied his break he works for a private institution, a problem insofar as direct effect of directives is permitted only vertically (individual v the state[15]) and not horizontally (individual v individual). This two tier legal system, affording increased rights to public sector employees has come under a barrage of criticism from the judiciary and academia alike[16]. Conversely to allow horizontal direct effect would render the distinction between directives and regulations meaningless so as to be effectively one and the same[17]. Although a directive has in certain cases been used as a â€Å"shield† in a dispute between private parties to prevent provisions of conflicting national being invoked against each other[18] Jose may though be able to claim direct effect; if, although he works for a private institution it has a public function; â€Å"a body†¦ which has been made responsible†¦ for providing a public service under the control of the state†¦ is included among the bodies against which the provision of a directive capable of having direct effect may be relied on†[19]. So in the case of Jose it is a question of fact whether he may be able to rely on the directive. The concept of state liability stems from the case of Francovich[20]. The full effectiveness of community rules would be impaired and the protection of the rights granted would be weakened if individuals were unable to obtain redress when their rights are infringed by breach of community law for which a member state can be held responsible[21]; state liability for loss and damaged caused to individuals is therefore inherent in the treaty[22] In Francovich the court held that in cases where there was a failure to implement community law under Article 249 that there was a right to compensation provided (a) the result which had to be attained by the directive involved rights conferred on individuals. The directive undoubtedly confers rights (better working conditions on both Rachel and Jose) (b) the contents of the rights could be identified from the provisions of the directive (this is satisfied as the directive is clear and unambiguous as to the applicable rights) (c) there must exist a casual link between the failure by the member state to fulfill its obligations and the damage suffered by the person affected (clearly if Rachel and Jose are dismissed because they refuse to work without the break provided for in the directive then there is a casual link). On the face of it Rachel (and Jose) would be able to bring an action for damages against the British government. It is for the national courts†¦ to ensure legal pro tection which persons derive from community law[23][24]. In anycase in the case of Jose, if he is not able to enforce his rights directly (and a complaint to the commission is a lengthy process-see below) industrial action by his trade union could be an attractive alternative. Article 226 plays the leading role in the â€Å"centralised enforcement† of EU law (as opposed to direct effect for instance at the national level)[25]. 226 provides that â€Å"if the commission considers that a member state has failed to fulfil an obligation under this treaty, it shall deliver a reasoned opinion on the matter after giving the state concerned the opportunity to submit its observations†¦ if the state concerned does not comply with the opinion within the period laid down by the Commission, the latter may bring the matter before the court of justice†. In addition Article 227 provides that a â€Å"memberstate which considers that another member state has failed to fulfil an obligation under the treaty may bring the matter before the Court of Justice†. The use of Article 227 has been rare though, member states preferring to leave it to the commission to take action under Article 226[26]. The infrequent use of Article 227[27] can best be attribute d to politics, especially with the increased use of QMV making it even more imperative to maintain good relations with fellow member states[28]. Also in the case before us the failure to implement correct break times for teachers lecturers in the UK is probably not of much concern to the Spanish government!! Returning to article 226 the procedure compromises two elements; the administrative stage and the judicial stage. The Commission, upon being notified of the member states infringement by a member state or a individual initiates matters with an informal letter to the member state government outlining the reasons upon which it suspects and infringement. The member state government is then invited to reply and to submit further information. This is then followed by a formal request to the member state to submit its observations (the letter of notice). Ideally the commission and the member state will negotiate an agreement by this stage, especially if it is the case that the member state is genuinely unaware of the infringement or is simply buying time before implementing the directive. In the UK as there is a chronic shortage of teachers the implementation may well have far reaching applications, for this reason the UK may well call commissions bluff and refrain from implementing the directive for a period of time. Only if no agreement is reached in the early stage will the commission deliver its reasoned opinion. Then only if the infringement continues will the commission move from the administrative phase to the judicial phase. It is of note that only a minority of cases will reach the judicial phase, in 2002 approximately ten percent and in 2003 approximately thirteen percent[29]. It is worth noting that the Commission is under no obligation to take action with regards to Article 226. If the member state takes no heed of the reasoned opinion then the Commission may begin the judicial stage but there is no time limit that the commission must adhere to in doing so[30]. Once the ECJ has judged against the member state failure to observe the terms of that judgment will constitute a breach of Article 228(1). The state may be required to remedy, introduce or revoke national law to comply with the courts judgment. If the state continues to be in breach of the judgment then the commission may invoke fresh proceedings under Article 228(2). The three administrative stages of Article 226 will then apply. If the commission decides to progress to the judicial stage then the commission will recommend a lump sum and or penalty payment[31] to be imposed against the defaulting member state (although I issue the caveat that this is only a recommendation to the court and there is no upper limit on the amount that may be fined). The Court of justice has consistently imposed fines on member states in Art 228(2) proceedings. In the case of Commission v Hellenic Republic[32] the ECJ held that although Article 228(2) did not specify the period in which the judgment had to be complied with the importance of immediate and uniform application of community law meant that the process of compliance had to be initiated at once and completed as soon as possible[33]. The process of Article 228(2) is a very long and drawn out one, with many cases taking a decade or more. Given that several years or more may elapse between the initial complaint to the commission and the hearing before the court of justice, the commission, in circumstances where continuing damage is being caused while the case is processed may well apply to the court for interim relief. The court may apply interim relief under Art 243; â€Å"the court of Justice may in any cases before it prescribe any necessary interim measures†. In the present scenario the issue of interim relief is, seemingly academic as they have not yet been sacked, instead I mention it to try and give a broader view of the area. In summation the commissions actions under Art 226 (or in the unlikely case of a state art 227 actions) are long, drawn out processes and will be of little use to Rachel and Jose who will have long moved on before their protests come to fruition. Bibliography: Chalmers, D. Hadjiemmanuil, C. Monti, G. Tomkins, A. (2006) European Union Law. Cambridge: Cambridge University Press. Craig, P. Directives: Direct effect, Indirect effect and the construction of national legislation. E.L. Rev. 1997, 22(6), 519-538 Fairhurst, J. (2005). Law of the European Union. Harlow: Pearson Longman. Harden, I. What future for the Centralised enforcement of community law? (2002) 55 CLP 495 Harlow, C. Rawlings, R. Accountability and law enforcement: The centralised EU infringement procedure. E.L. Rev. 2006, 31(4), 447-475 Meltzer, D. Member state liability in Europe and The United States. 2006 Jan 4 Int’l J. const. L. 39 Pachnou, D. Direct and Indirect effect of directives and state liability: their applicability in relation to procurement remedies. P.P.L.R. 2000, 5, 251-260 Weatherill, S. Breach of Directives and Breach of contract. (2001) 26 European Law review 177-183 Footnotes [1] Qualified Majority Voting [2] Formerly article 169 [3] Chalmers, Hadjiemmanuil, Monti and Tomkins, 2006, p365 [4] Subsequently amended by the TEU Article 228(2) [5] Fairhurst, 2006, p234 [6] Van Gend en Loos v Nederlandse Administratie der Belastingen Case 26/62 IN RELATION TO A TREATY ARTICLE [7] European Court of Justice [8] A directive is addressed to the state and NOT its citizens, As opposed to regulations (addressed to its citizens) which are binding as to both the method of implementation and the result to be achieved. [9] Case 41/74 [10] First employed in Ratti Case 14878 [11] Marshall v Southampton and SW Hampshire Area Health Authority (1986) Case 152/84 at Para 48 [12] Van Duyn v Home Office. Case 41-74 at Para 12 [13] Ursula Becker v Finanzamt Mà ¼nster-Innenstadt. Reference for a preliminary ruling: Finanzgericht Mà ¼nster Germany. Direct effect of directives. Case 8/1981 at Para 25 [14] See also Craig, 1997, 522 [15] See Faccini Dori v Recreb Case 91/92 [16] See for instance Case 316/93 Vaneetveld v Le Foyer and Faccini Dori v Recreb Case 91/92 [17] See Faccini Dori v Recreb Case 91/92 at Para 24 [18] Weatherill, 2001, p177 [19] Foster v British Gas Case 188/89 [20] Joined cases C-6 and 9/90 Francovich and Bonafici v Italy [21] Ibid at Para 33 [22] Ibid at Para 34 [23] R v Secretary of State for Transport ex parte Factortame Ltd Case 218/89 [24] Meltzer, 2006, 59 [25] Harden, 495, 2002 [26] Harlow and Rawlings, 2006, 451 [27] As yet on only two occasions see Case 141/178 France v United Kingdom and Case 388/95 Belgium v Spain [28] Chalmers, Hadjiemmanuil, Monti and Tomkins, 2006, p349 [29] European Commision 21st Annual report on the application of Community law, COM (2004) 839 [30] See the 6 year wait in Commision v Germany Case 422/92 [31] See Case 304/02 [32] Case 387/97 [33] Pachnou, 2000, 256

The OReily Factor :: essays research papers

The O'Reilly Factor   Ã‚  Ã‚  Ã‚  Ã‚  I choose the O’Reilly Factor because it’s about the only book that appealed to me. As well as the one the few narrators I could listen to for 5 hours. Besides the only other television shows I watch are reruns of the Simpson’s and Senfied. So the O’Reilly factor seemed like a logical choice for me.   Ã‚  Ã‚  Ã‚  Ã‚  The book is basically Bill O’Reilly’s viewpoint on just about everything such as politics, raising children, and taken responsibility for your own actions. Personally I really liked the book but that’s just me I would not recommend to anyone who doesn’t like Fox News Channel. The book incorporates a lot of his television show. In a lot of ways it was long a really long episode of the â€Å"Factor†.   Ã‚  Ã‚  Ã‚  Ã‚  In the book Bill talks a lot of about his childhood and how he was raised in working class family in New York. The friendships he has maintained since his childhood as well as what it takes to be a good friend in his mind.   Ã‚  Ã‚  Ã‚  Ã‚  The book starts out with him talking about being a high school teacher and when he was in college at Boston University looking across the river at MIT and Harvard and then given a chance to go back to get his masters at Harvard and then studying his now new counterparts. Growing up in a working class family his was not accustom to the Harvard way of life or thinking. What he means by that is since he did not come from a wealthy family when he graduated college he didn’t have his fathers friends lining up to interview him. Basically he has always had to work to get where he is today. And that holds true today if you are born into any class besides the wealthy upper class you have to work for everything and speak up for yourself if necessary. Which in the book Bill mentions how his mouth has gotten him into some trouble; for insistence when he first became a journalist he had four jobs in five years mainly because he would speak up when something was done tha t wasn’t right. Trying to make right wrongs.   Ã‚  Ã‚  Ã‚  Ã‚  The first part of the book is a lot about the classes that exist in America. Why they exist for example the rich upper class usually the politicians in America don’t seat around at the country club wondering how to get drugs out of the ghetto.

Narcotic Drugs

In this paper I will discuss the details the classification of narcotic drugs in criminal law, forensic evidence needed to obtain a conviction in a drug case. The term narcotic implies a state of lethargy or sluggishness. Pharmacologists classify narcotic drugs as substance that bring relief from pain and produce sleep. Unfortunately narcotic has come to be popularly associated with any drugs that is socially unacceptable, as a consequence of this incorrect usage many drug are improperly call narcotics. Most drug laws in the United States incorrectly designated marijuana as a narcotic; even now many drug controlled laws in the United States including federal law, classify cocaine as a narcotic drug (Saferstein 2011, p193). A large number of drug users are in daily contact with a range of criminal justice organizations. The police enforce laws relating to illegal drugs and unlawful activities that surround drug use. It is important to recognize that relationship between drug and crime are unclear. Drug use leads to crime; second crimes leads to drug use and third drugs and crime are related to social force (Hughes, p, 75, 2006). When a forensic chemist picks up a drug specimen for analysis, he or she can expect to find just about anything, so all contingencies must be prepared for. The analysis must leave no room for error because its results will have a direct bearing on the process of determine the guilt or innocence of a defendant. There is no middle ground in drug identification either the specimen is a specific drug or its not and once a positive conclusion is drawn, the chemist must prepared to support and define the validity of the results in the court of law (Saferstein 2011, p204). When someone is accused of a crime involving drugs, more than likely the drugs were taken from their person or property will go from hand to hand as they are processed, analyzed, stored, and sent to the courtroom as evidence. Every time a change of hands occurs, it must be documented to ensure that the evidence was not tampered with or handled negligently. The process that evidence goes through from the time it is seized to the time it reaches the courtroom is called the â€Å"chain of custody. Implementing chain of custody is necessary it’s the start of the foundation of the evidence in question, by showing the absence of alteration, substitution, or change of condition. Specifically, foundation testimony for tangible evidence requires that exhibits be identified as being in substantially the same condition as they were at the time the evidence was seized, and that the exhibit has remained in that condition through an unbroken chain of custody. For example, suppose that in a prosecution for possession of illegal narcotics, police sergeant A recovers drugs from the defendant; A gives police officer B the drugs; B then gives the drugs to police scientist C, who conducts an analysis of the drugs; C gives the drugs to police detective D, who brings the drugs to court. The testimony of A, B, C, and D constitute a â€Å"chain of custody† for the drugs, and the prosecution would need to offer testimony by each person in the chain to establish both the condition and identification of the evidence, unless the defendant stipulated as to the chain of custody in order to save time. Conclusion: Narcotic drugs will forever be around. It’s a complex problem throughout society. It affects people from the newborn stage to old age. Narcotic drugs, takes an enormous toll on lives and communities, especially in developing countries and its contribution to the overall burden and will to increase in the future.

Accounting Profit vs. Economic Profit. the Necessity of a Management Performance System to Boost Organization’s Performance

Accurate information is a critical input in a decision making process that targets real value creation for shareholders. The objective of this paper is the analysis of two articles of Stern Steward Research, namely â€Å"Accounting is Broken. Here’s How to fix it. A Radical Manifiesto† and â€Å"The capitalism Manifesto. The Transformation of the Corporation – Employee Capitalism –â€Å". Both papers propose a roadmap to fix the conventional accounting shortness through the use of Value Based Management (VBM) as a real and effective management system of value creation and measurement.Economic Value Added (EVA) plays the main role in this management approach, as a very effective performance metric in the alignment of the organization with its ultimate goal of shareholder’s value creation. VIEW OF THE READING In the first paper â€Å"Accounting is Broken. Here’s How to fix it. A Radical Manifiesto†, the accounting related aspects of EV A are discussed, providing a comparison between accounting earnings and economic earnings. Weaknesses of accounting standards are exposed here.The authors suggest a serie of radical reforms for the conventional accounting in order to align conventional with economic accounting in order to provide managers with the information that really matters and avoid mispreactices to deceive shareholders. The paper proposes EVA as a rock solid measure that provides a very clear picture of the organization’s performance. According to the paper accountants should start using economic profit (EVA) to better reflect the economic reality of the organization.Economic earnings underpin the decision making process, clarifying the economic objectives and setting up a target for value creation. The paper highlights the capability of EVA measure to fix some weaknesses of the accounting earnings perspective and proposes some reforms: †¢Cost of equity must be brought into the light of day as a k ey element for the economic profit. Shareholders need and deserve to be compensated for the risk they are taking by investing in a company. †¢Operating decision must be separated from investment and financing decision to avoid manipulation. Intangible assets should be capitalized as investments aimed at the creation of economic profit. †¢Stock options have to be expensed and depreciation and amortization must be better measured. The second paper â€Å"The capitalism Manifesto. The Transformation of the Corporation – Employee Capitalism –â€Å" analyzes the role of EVA measure as a metric of the total organizational productivity and the role it plays or can play in a pay-per-performance incentive plan to align the interest of the owners with the interest of the employees to enhance organization performance.Empowerment and accountability are seen as the basis to boost employee’s performance and the basis to set up incentive programes to stick the gains . The paper presents a deep analysis on the implementation of effective business management and incentive systems down to the shop floor in the European Union. Some examples are presented to explain the potential role of EVA in the implementation of a European policy for incentive plans. According to the paper, executives and frontline employees can or should unify their efforts within the EVA proven management system, to maximize value creation within the organization.The authors propose that decision making process at all levels should be implemented within a management framework where short- and long term incentive plans will be linked to results in form of value creation. Incentive plans should also be linked to cash and equity to guarantee the sustainability of the organization. If the employees can invest in the organization, they will start acting like owners taking right decisions and fostering sustainable growth. MY POINT OF VIEW Both papers assume a shareholder’s va lue perspective: the first and foremost purpose of a Corporation is to maximize shareholder value.This perspective should be brought in balance with the stakeholder’s perspective. Profitability has to be combined with responsibility. According to S. David Young and Stephen F. O’Byrne (2000), the economic pressures that organizations are facing nowadays induce managers, in some cases, to use bad practices in order to deceive shareholders by inflated earnings or not sustainable growth. EVA alone cannot solve this issue. A very clear management system has to be set up with guidelines and accountability for executives. Corporations cannot become economic machines.Responsibility for stakeholders (employees, society, environment, customers) has to play a central role as well. Economic earnings should be the main target, but corporations should be able to provide the needed environment to create the expected value based on ownership, clear economic and financial information, moral recognition, personal growth, empowerment and training. The first paper is a very interesting approach to EVA and to accounting practices. It sheds light on the issue that accounting is not what is used to be and cannot account anymore for what it has to account.Accounting standards lack the ability to control and guide executive behavior. On the other hand, the paper tends to fully disqualify accounting. Conventional accounting has played and will play its role in the society. It is hard to say that accounting is completely responsible for all bad practices and mismanagement cases (Enron, Worldcom, etc). Accounting has its weak points and these weaknesses have been used by irrational managers to inflate value in the shareholder’s eyes. The question is if we are talking about a symptom or about a root cause.We cannot solve the problem working on the symptoms. The root causes have to be found and addressed. In the current competitive environment, managers are struggling with the value creation process. Fierce competition and growing expectations of the shareholders is a killing combination to push managers in the bad path. It is not rare then that some of them make use of bad practices in order to boost value on the short-term, but putting in serious dangerous the future of the organization.In such situation is fair to say that accounting cannot account anymore for what really counts. Accounting standards allow these bad practices. A superior management system is in need. S. David Young and Stephen F. O’Byrne (2000) states that EVA can actually boost productivity and is able to match the interests of shareholders and stakeholders. Decision making process must be decentralized and roll down to the floor. In my experience, executives lack the ability to empower employees.Maybe it is the fear to lose power or that they don’t trust the subordinates. In any case they are missing the possibility to stimulate and motivate employees and the m ost important they are failing to use the advantage of impacting decision making by the ‘time and place’ factors. I think one of the reasons can be that they lack a measure like EVA that can set up the targets for the whole organization, allowing the cascading of the decision making process, improving the performance of the organization through more motivated employees and ownership boosting.EVA can be used at all levels within the organization, stimulating the decision making and risk taking attitude of the employees, since EVA will bring transparency and direction to the objectives to be met to create true value. In this case owners don’t have to worry about the earning sharing and they can start seeing employees as partner with the same objectives and motivations. Nowadays the intellectual capital of a corporation is one of the strongest competitive edges they can create. Employee’s satisfaction must be one of the goals within the organization to make i t sustainable.Employee’s satisfaction cannot be based only on cash or equity. People need a trusty environment where they can interact and reach high productivity levels, based not only on economic incentives, but on total ownership, supported by an increasing role in the decision making process, contributing to the value creation process and ensuring a sustainable growth of the organization. If one takes a closer look at EVA methodology to demonstrate that EVA is not as simple as supporters tell. EVA is a performance measure capable of reliably indicating the intrinsic value of all companies in all times.As a performance metric, EVA remains in control of the corporation and should impact Market Value Added (MVA) on the long term creating true value for the shareholders. With EVA managers have a more effective tool to support their decision making process. The entire metric was developed based on the following three ideas : 1. Cash flows are the best indicators of performance . The accounting distortions must therefore be â€Å"fixed†. Accrual based accounting should be transformed into cash-flow accounting. 2. Some expenses are really investments and should be capitalized on the balance sheet.True investments must therefore be recognized as means to create future cash flow. 3. Equity capital is expensive (or, at the very least, not free). This expense must therefore be accounted for. Investment is an economic decision and opportunity cost should be taken into account. To calculate EVA, two sets of information’s are needed, namely the Net Operating Profit After Taxes (NOPAT) and the Weighted Average Cost of Capital (WACC). NOPAT is first calculated based on the Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA).Some adjustments are needed here to account for the correct operating profit of the corporation. Important here is to understand that operating and financing decisions must be evaluated separately. NOPAT provides a very clear picture of the organization operating performance, excluding potential manipulation through financing decisions. On the other hand, WACC is the average of the costs of the financing sources, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.WACC demands a very clear policy from the organization about its financial structure (debt and equity relationship) to calculate the cost of the capital. This is a fundament to avoid bad practices, manipulations, abuse of leverage technique through cheaper debts and ineffective decision making process. A very strong and reliable financing structure is needed in order to not compromise the future of the organization and to provide a very solid platform for the economic growth, by choosing projects with a really economic impact on the bottom line. Generally speaking, EVA has a big drawback.As we could se e above, EVA is very far from being a simple metric. The point here is that the implementation of value-added measures such as EVA into a company is a costly and time consuming process . Substantial costs and time are justified only if benefits of optimizing the company’s strategy for value creation can be achieved. A transition to value-added measurements requires serious commitment of the board of directors and senior management to use these measures to manage the business. Every individual in the company must buy into the plan to make it successful.Extensive training and communication effort directed to everyone in the company is also required. EVA may be a complex concept and may not be something the average person/employee/manager/investor is going to understand without big efforts. When it comes to the organizational change required to implement something like EVA, you need to get people on board and it could be a very difficult task and therefore a major obstacle for i ts adoption. EVA should not be viewed as the answer to all things either. It doesn’t solve business problems, which is the manager’s responsibility.In conjunction with MVA, it does provide a meaningful target to pursue for both internally and externally oriented decisions. Managers remain the leaders within the corporations and the one who has to drive the value creation process. Generally speaking, shareholders must be provided with clear data on the corporation performance and on the decision making process. They need and deserve a return on their investment, but it should not be forgotten that their investment decisions involve risk and they must be compensated for this.The cost of the capital should be incorporated. Value creation should be calculated as the difference between NOPAT and capital and its cost. Accounting earnings don’t mean value creation. A Corporation can report net profits that don’t actually mean value creation from the shareholderà ¢â‚¬â„¢s viewpoint. To accomplish this, managers need clear and strong performance metrics able to stretch the corporation to achieve clear performance targets properly aligned with the ultimate goal of creating value. EVA is a metric upon which the whole organization can be build.In the current high competitive market, Value Based Management is a competitive advantage. It aligns the organizations with the expectations of the shareholders, facilitating the decision making process, avoiding accounting manipulation, targeting the ultimate goal of value creation, providing a very unambiguous metric such as EVA to guide the organization through the value creation process and ensuring the long term economic growth of the organization based on clear and transparent management practices.CONCLUSIONS Both papers offer a very clear perspective of the advantages of using EVA. Value Based Management provides Senior Management Teams with a clear benefit since it is able to close the gap between accounting earnings and economic earnings, driving the value within the organization. With EVA, the corporations possesses a metric that drives value and supports the incentive plans to motivate employees and make them to act like owners.Effective implementation could be an issue due to the complexity of the concept, but EVA is nowadays the most effective management approach connecting shareholders and stakeholders to accomplish the ultimate economic goal of the corporation, the value creation. EVA creates a very transparent environment providing more qualitative data to the shareholders about the organization’s performance and the use of the resources. It also provides a more qualitative decision making process in order to satisfy shareholder’s expectations.