JET2 Task 4. Findings on Competition Bikes, Inc. Essay

Costing Method The traditional costing method is a distribution of manufacturing overhead costs to the actual products manufactured. By using this method the factory’s indirect costs are assigned, on a scale of volume, to the items manufactured (Averkamp, 2013). This may include items such as the direct hours of labor or the number of bikes produced. This volume metric, however, is not the driving factor for manufacturing overhead expenses in fact this method is designed more for departmental focus. It can also be very inaccurate as there is little to no relations between the actual costs and the activity these costs are being signed to. This method often causes inaccuracies. It is in the company’s best interest to switch, as many companies are doing, to an activity-based costing system. Activity-based costing system will be used to identify the costs of Competition Bikes, Inc.’s activities and services based on actual consumption. This system consists of four steps in order to build its cost point. First, Competition Bikes, Inc. must recognize activities guesstimate their overall costs. Second, the cost driver must be estimated for each activity and done so on the basis of the overall quantity of the driver’s allotment. Third, Competition Bikes, Inc. must calculate how much of the costs should be distributed to each activity. Fourth, costs must be distributed to the cost object. Although this method is time consuming and costly the activity-based costing method will generally earn this money back plus some as it has a much more precise prognosis of the correct costs that are related with each activity. This system often generates more overheads into direct costs then compared to the traditional costing method. It is believed by switching from a traditional costing system to an activity-based costing system, Competition Bikes, Inc. will gain greater knowledge and be able to define the driving forces and costs of the products being manufactured. According to the overhead analysis, while using the traditional costing method the Titanium models costs $713 per unit and the CarbonLite models costs $1,359 per unit. Under the activity-based costing method Titanium models cost $656 per unit to produce and CarbonLite models cost $1,460 per unit. This shows us the difference in the two costing methods. Traditional costing method over-valued the costs of Titanium bikes and under-valued the costs of CarbonLite bikes, which is apparent when looking at the activity-based costing method. Again due to the way activity-based costing method breaks down the activities and allocates each one, this method is much more accurate than that of the traditional. Competition Bikes, Inc. can now analyze these costs and look for ways to improve operational results now that the costs have been broken down and allocated to different activities. Using the activity based costing method the CarbonLite models is at a much higher rate than that of the traditional costing method yet the Titanium models have the opposite affect as the total product costs are lower using the activity based costing system than that of traditional costing methods. Prices vary greatly between the two bike models, which were not seen before under the traditional costing method. The company should be able to now evaluate these costs and find ways in which they can lower them to get them more in line with one another. As stated above the activity-based costing method also allows Competition Bikes, Inc. to simply identify variations in product costs and pinpoint the variation directly to the source. This helps the company keep control of  the company’s costs and expenses. This assists in keeping profits relatively steadily. The current operations can also be improved by implementing a just-in-time inventory management system. This is where the company only buys the materials that it needs to produce the units that are actually sold. This cuts down on dollars that are tied-up in inventory held in raw materials inventory. This is a considerable amount for Competition Bikes, Inc. and will be lowered enormously as fewer materials are placed in raw materials. This will be billed in the same month in which they are produced creating fewer dollars to be tied up in inventory. This will then be converted to cash to be used as working capital. Breakeven Point According to Investopedia the breakeven point is the point at which gains equal losses. For Competition Bikes, Inc. achieving the breakeven point is a leap in the right direction. This will allow them to be one step closer to being a profitable business. Here we will analyze the sales units and the sales dollars of the Titanium and CarbonLite bike models in order to configure the breakeven point. In order to construct the breakeven point we must use the weight average contribution margin. This is calculated by dividing the combined contribution margin (sales price per unit subtracted by the variable cost per unit) by the total sales mix-in units. The contribution margin per unit is equal to $221 for the Titanium models and $111 for the CarbonLite models. Now we multiply these numbers by the total sales mix-in units to reach the contribution margin. The total contribution margin ($127,200) is divided by the total sales mix-in units (700) in order to receive a weight average contribution margin of $181.71. At breakeven the total contribution margin subtracted by the fixed costs will equal 0. The sales units multiplied by the weight average contribution margin equals the fixed cost. From the data given the estimated fixed costs  is $400,000. The fixed costs divided by the weight average contribution margin of $181.71 can help Competition Bikes, Inc. determine the breakeven point of 2,201 sales units. Now Competition Bikes, Inc. can calculate sales units and sales dollars with these numbers calculated. By parting the sales at the breakeven point by the product mix-in does this. Competition Bikes, Inc. must sale 1,415 Titanium and 786 CarbonLite models in order to hit their breakeven point and gain profitability. The sales dollars at the breakeven point are computed by multiplying the breakeven sales units by the sales price per unit. This equals $1,273,584 for Titanium and $1,175,314 for CarbonLite models giving us a overall amount of $2,448,899. Breakeven Analysis Change We will now discuss how the changes in direct materials and fixed costs to the production facility based on an evaluation of cost-volume-profit will affect the breakeven analysis. If the costs of direct materials increased by 10%, Competition Bikes, Inc. will notice a change in the breakeven point as the variable costs would then increase from $679 per unit to $709 per unit for the Titanium models and $1,384 per unit to $1,451 per unit for the CarbonLite models. Because the variable cost per unit has changed so will the contribution margin per unit. This will have a large decrease on both the Titanium and the CarbonLite models as Titanium bikes would have a contribution margin of $191 per unit and CarbonLite bikes would also have a contribution margin to $44 per unit. We then multiply these changes by the sales mix in values. The contribution margin for the Titanium bikes is $85,950 and $11,000 for the CarbonLite bikes. This gives Competition Bikes, Inc. a total contribution margin of $96,950. The weight average contribution margin is now calculated by dividing the contribution margin of $96,815 by 700 the total number of sales mix-in units. This totals to $138.5. Before the 10% increase this number was much higher at $181.71. If Competition Bikes, Inc. added $50,000 in the fixed costs towards the production facility, changes would occur in the sales units at the breakeven point. The calculation would be $450,000 compared to $400,000 divided by the new weight average contribution margin of $138.5. This totals to 3,249 units. Titanium models would total 2,089 in sales units at the breakeven point and CarbonLite would total 1,160 sales units at the breakeven point. The total breakeven point in sales dollars now increases to $3,614,620. This is an extra $1,165,721. Competition Bikes, Inc. would need to stay on top of these additional costs and in order to do so they must increase their sales each quarter. Based on direct materials increase of 10% and the additional $50,000 in fixed costs, Competition Bikes, Inc. will need to manufacture 1,048 additional units in order to breakeven. References Averkamp, Harold. (2013). Accounting Coach. What is the Traditional Method used in Cost Accounting? Retrieved from http://blog.accountingcoach.com/taditional-method-cost-accounting/ Investopedia. (2013). Breakeven Point-BEP. Retrieved from http://www.investopedia.com/terms/b/breakevenpoint.asp Johnson, Rose. (2012). EHow Money. The Cost-Volume-Profit Analysis. Retrieved from http://www.ehow.com/info_10040118_costvolumeprofit-cvp-analysis.html Wikipedia. (2013). The Free Encyclopedia. Activity-based Costing. Retrieved from http://en.wikipedia.org/wiki/Activity-based_costing

Fire Tornado Project

Fire Tornado Project A fire tornado forms when fire is caught up in a vortex. Fire tornadoes or fire devils occur naturally in some wildfires, but you can make a small scale fire tornado yourself. Heres how: Fire Tornado Materials In order to produce a fire tornado, youll need a source of fire and the ability to create an air vortex or whirlwind. The fire tornado is made by placing a container of fire onto a spinning surface. A cylinder of mesh or screening forces the air into a column to force air into a vortex. lazy susan or table or chair that can rotate freelycontainer of fire (e.g., fireproof bowl containing pieces of sponge sprinkled with lighter fluid or alcohol)cylinder of wire mesh or screen with diameter to fit outside the fire bowl. Make the mesh cylinder by rolling a sheet of metal window screening or chicken wire into a tube. Be sure the tube is wide enough to fit around the container youll be using for fire. Staple the ends of the tube to secure it into a cylindrical shape. Create the Fire Tornado Practice this set-up without igniting the fire to be sure your container wont go spinning off. Its a good idea to secure the bowl and screen tube to the lazy susan with tape or glue so that it wont go flying off when you spin the fire. Its also a good idea to have a fire extinguisher handy, just in case. Set the fireproof bowl in the center of the lazy susan. Secure the bottom so the bowl will remain stable when spun.Place the sponge with lighter fluid into the bowl.Set the metal mesh cylinder around the bowl. See if you can spin the lazy susan without incident. You may need to secure the cylinder.Once you are confident of your set-up, ignite the fire in the bowl and slowly start spinning the lazy susan. See a video of this project or make a green fire tornado. Disclaimer: Please be advised that the content provided by our website is for EDUCATIONAL PURPOSES ONLY. Fireworks and the chemicals contained within them are dangerous and should always be handled with care and used with common sense. By using this website you acknowledge that ThoughtCo., its parent About, Inc. (a/k/a Dotdash), and IAC/InterActive Corp. shall have no liability for any damages, injuries, or other legal matters caused by your use of fireworks or the knowledge or application of the information on this website. The providers of this content specifically do not condone using fireworks for disruptive, unsafe, illegal, or destructive purposes. You are responsible for following all applicable laws before using or applying the information provided on this website.

50 Words for Writing

50 Words for Writing 50 Words for â€Å"Writing† 50 Words for â€Å"Writing† By Mark Nichol As an unabashed proponent of reasonable elegant variation the moderate use of synonyms to avoid tiring repetition of a specific word throughout a passage I offer this assortment of terms for a piece of writing: 1. Article: This word, with the diminutive -le as a clue, refers to a small part of a publication (thus, the extension of the word to mean â€Å"thing† or â€Å"item†) more specifically, a piece of nonfiction that appears in a periodical or on a Web site. (It also refers to a section of an official piece of writing.) 2. Brief: Breve, the Latin predecessor of this synonym for short, acquired the connotation of â€Å"summary† or â€Å"letter† when it was used in the Roman Catholic Church to refer to a missive less extensive than a bull. (That word comes from the Latin word bulla, â€Å"knob,† referring to the seal that ensured discretion.) Brief now refers to a legal summary hence briefcase. 3. Causerie: This noun form of the French verb causer, â€Å"to chat,† directly borrowed into English, means â€Å"a brief, informal essay.† 4. Chronicle: This term, derived from the Greek term ta khronika (â€Å"the annals†), refers to a an account of a succession of historical events. 5. Column: This word originally referred to a vertical block of type on a page, echoing the original meaning of â€Å"pillar.† Early journalistic publications, which made no pretensions to objectivity, laid out various pieces of writing in distinct columns, hence the modern connotation of an article advocating a point of view. 6. Commentary: The Latin term from which this word derives, commentarius, refers to personal writing, but the modern sense is of an opinion piece. 7. Composition: This descendant of the Latin word compositionem (â€Å"putting together†) refers to the assemblage of sentences that constitutes a written effort, either in general or in the specific reference to a scholastic exercise. 8. Critique: A critique, as the name implies, is a work of criticism; the connotation is of a formal, erudite dissection of another written work (or any creative endeavor). 9. Diatribe: Interestingly, this word’s Latin precursor, diatriba, has the neutral connotation of â€Å"learned discussion.† A couple hundred years ago, it acquired the sense, now exclusive, of harsh criticism or complaint. 10. Discourse: The meaning of discursus, the Latin term from which discourse stems is â€Å"the act of running around,† suggesting the process of progressing through a written argument. 11. Discussion: Despite the resemblance of this word to discourse, there is no relation; the Latin origin is discussus, meaning â€Å"to break apart,† which led to the noun discussionem and its sense of â€Å"examination.† 12. Dissertation: The term from which this word’s Latin ancestor, dissertationem, is ultimately derived means â€Å"to take words apart†; the primary sense now is of scholarly writing that examines or debates an assertion. 13-14. Document: The Latin term documentum (â€Å"example, lesson, proof†) now has a generic sense of any piece of writing. Documentation, however, implies information provided to support or authenticate other writing, and is used especially in computing and in academic research. 15. Editorial: This word derives from the direct borrowing of the Latin term editor (â€Å"one who presents†). As the entry for column explains, all editorial content was originally subjective, but in modern journalism, the term refers to a statement of opinion by a periodical’s management or by a guest commentator. The latter variety is often relegated to an op-ed page. (The latter term is an abbreviation for â€Å"opposite the editorial page† that being the sheet on which the publication’s own arguments are printed.) 16. Essay: The meaning of this word is â€Å"attempt† (it’s related to assay, which refers to a test of a metal’s purity), with an original connotation, long since muted by the quotidian ubiquity of the scholastic assignment by that name, of a written opinion presented for the audience’s approval. 17. Examination: The sense of â€Å"test† for this word (or for exam, the truncated form that has largely supplanted it) follows the original meaning of â€Å"test or judging in a legal context† (hence the judicial term cross-examination). 18. Exposition: This word derived from the Latin term expositionem (â€Å"something shown or set forth†) can mean â€Å"narration† or, more often, â€Å"explanation; the latter sense is employed in literary criticism to refer to the author’s technique in revealing background details. 19. Feature: This term, taken from Latin by way of French, means â€Å"a formation.† In writing, it refers to an article specifically, usually a profile of a person, place, or thing, perhaps with a more conversational style, as opposed to a more straightforward news or informational piece or an opinion. 20. Guide: This word from the same term in French, originally meaning â€Å"one who shows the way,† refers to publications that inform readers about how to do something or where to visit. It may be extended to guidebook. 21. Memorandum: Taking directly from the Latin word for â€Å"(thing) to be remembered,† this word, and its abbreviation, memo, refer to an official note. 22. Minutes: This word, which stems from the Latin phrase minuta scriptura (literally, â€Å"small writing†), refers to a record of a meeting or a similar event. 23. Monograph: This word, which literally means â€Å"writing about one (thing),† refers to academic writing on a topic. 24. Narrative: The Latin term narrationem means â€Å"recounting,† and this word is a synonym for â€Å"story,† though it also specifically refers to storytelling style. 25. Polemic: This Anglicization of the French word polemique (â€Å"controversial†) means â€Å"a harsh response to or refutation of an opinion.† 26-28. Paper: This meaning an example of synecdoche, in which the name for a material stands in for something made of that material (as in wheels as slang for car) describes a scholarly written presentation. A variation is white paper, a piece of writing prepared for or by a government entity or a business to inform or persuade. By contrast, a green paper is a preliminary version of a white paper. 29. Proces-verbal: This French term meaning â€Å"verbal trial† is an unnecessary synonym for report unless, perhaps, one wishes to mock the formality or pretension of a report. 30-33. Prolegomenon: This mouthful of a synonym for preface, taken directly from Greek, means â€Å"to say beforehand,† though it may be used in a more general sense than preface, which usually refers to a specific component of a book. (A book preface, by the way, is distinguished from the proximately placed foreword by the fact that it is the author’s statement of purpose, intended audience, scope, and content. A foreword, by contrast, is a recommendation from another person. There may also be an introduction, which orients the reader to the topic.) 34. Propaganda: This word, stemming from the Modern Latin word for â€Å"propagating,† was used by the Roman Catholic Church in the sense of disseminating the Gospel. Since then, it has acquired a derogatory connotation, referring to true, slanted, or fabricated information designed to promote one’s, or criticize another’s, position or ideology. 35. Proposition: Like many words on this list, proposition comes down almost intact from Latin in this case, from propositionem, meaning â€Å"a statement.† In rhetoric, it is specifically the initial statement of an argument, or a point offered for consideration. It is also employed to refer to a type of referendum. 36. Rant: Alone among all the words on this list, rant is from a Germanic language, rather than Latin or Greek: Randten means to talk foolishly, and a rant is an emotional and perhaps irrational criticism in speech or in writing. 37. Report: This translation of the Latin word reportare, meaning â€Å"to carry back,† in noun form refers to a written or spoken account. More specifically, it acquired the sense of an investigative summary and, by extension, a scholastic exercise. 38. Review: This word, from the Latin verb revidere (â€Å"to see again†) by way of French (as the noun reveue) is used as a less formal synonym for critique (a written evaluation of a creative product). 39. Screed: This word (from the Old English term screde, â€Å"fragment,† and related to shred) needs context assistance, because it can mean â€Å"informal writing,† â€Å"a long speech,† or â€Å"a rant.† The last sense is the most frequent, but make sure, whatever usage you intend, that your readers will understand your intent. 40-41. Script: This derivation of the Latin word scriptum, â€Å"a piece of writing,† is versatile. It can refer to a piece of writing in general, to a set of instructions, or to a copy of a play, a screenplay, or a similar work, as well as to a brief computer program. It also has an informal connotation of an orchestrated version of reality that all associated parties are expected to adhere to. Manuscript literally means â€Å"a piece of writing produced by hand,† though now it has the more general meaning of a draft of writing at any stage of preparation, as opposed to a published version. 42. Study: Based on the Latin term studere, â€Å"to be diligent,† the verb gave rise to the noun meaning â€Å"evaluation† or â€Å"experiment† and then to a sense of a written account of the procedure. A case study is an account of a particular person, event, or situation. 43. Testament: Testamentum, in Latin, means â€Å"will,† as in the legal document, as does the English derivation, but it can also mean â€Å"a supporting statement.† 44. Testimonial: This word, derived from the Latin term testimonium, which originally referred to biblical scripture, came to mean â€Å"an attestation of the virtues of a person or thing.† 45. Theme: This word comes from Greek, meaning â€Å"something set down,† and is akin to thesis (see below), though it often refers merely to a student composition. 46. Thesis: Thesis stems from the same Greek root as theme (tithenai, â€Å"to set†); the former word, like the latter, means â€Å"something set down.† The formal meaning is of a piece of writing produced as a requirement for a college degree, but it also has a general sense of â€Å"a statement to be proved† and as such can refer to an introductory argument in a larger work. 47. Tract: A truncation of the Latin term tractatus, â€Å"a treatment,† tract has an often pejorative sense of a piece of propaganda (see above) or something reminiscent of such, often in pamphlet form. 48. Treatise: This word stems from a French derivation of the Latin term tractatus (see above) and refers to an argument that discusses and analyzes a topic. 49. Treatment: Treatment, which has the same root as treatise, is usually employed to refer to an outline or early adaptation of a screenplay. 50. Write-up: This informal term for a piece of writing can carry a connotation of a work with an unduly positive bias, so take care that the context communicates this intent or the lack thereof. Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Vocabulary category, check our popular posts, or choose a related post below:36 Adjectives Describing Light34 Writing Tips That Will Make You a Better WriterOne "L" or Two?

Employment of Minors between the Ages of 12 and 18 Essay - 1

Employment of Minors between the Ages of 12 and 18 - Essay Example (c) It is necessary for the individual to submit the following elements before they are able to be granted a certificate: (1) A certified copy of a birth certificate or birth registration card; and (2) A statement from the potential employer indicating that if he were given a certificate from the school superintendent, he could employ the minor immediately and describing the type of job offered. It shall be understood that the potential employer, by furnishing such statement, does not promise to employ the minor for any specific amount of time. (d) A copy of the certificate will be made a part of the minors school file, for all minors between the ages of 16 and 18. The certificate must show that the minor is at least 16 years of age in order to qualify the minor to work between the hours of 9:00 P.M. and 6:00 A.M. and to be employed in any of the occupations covered by Code Section 39-2-2. In addition to the certificate, the superintendent of schools, or an authorized member of his staff, shall issue an identification card to each minor in this category. The identification card will demonstrate that the minor is eligible for employment. The minor will then not have to attain future employment certificates unless his certificate is revoked by the Commissioner of Labor. (e)(1) The certificate mentioned above must be accompanied by a letter from the minors school administrator indicating that the minor is enrolled in school full-time and has a good attendance record. The employer of the minor must maintain a copy the certificate and the letter in the minors employment file. The letter must be updated in January of each academic year during which the minor is working. This process will continue until the minor turns 18, receives a high school diploma, a general educational development (GED) diploma, a special education diploma, or a certificate of high school completion, or has terminated his or her secondary education and is enrolled in a postsecondary school. Any employer failing to comply with these rules is guilty of a misdemeanor and if convicted will  be subject to a fine not to exceed $1,000.00, up to twelve months imprisonment, or both, for each violation.

Labour law and labour market regulation Essay Example | Topics and Well Written Essays - 2750 words

Labour law and labour market regulation - Essay Example In the case of Wiltshire County Council v NATFHE and Guy, the court was faced with the question of determining whether a part-time contract was for a fixed period or not. It involved Ms Guy who was employed at s a teacher and attended some teaching lessons but later the course was removed due to reasons such as under subscription amongst others leaving her without employment. When her contract was not renewed she complained of being dismissed unfairly claiming that she was protected by the Employment Protection Act 1978 which in its strict interpretation envisaged that hers was a fixed term contract The appeal court held that her contract was for a fixed term and the contract subsisted even if she had been technically dismissed. Stating that a fixed contract is one in which there was a defined beginning and end. Therefore, basing on the Wiltshire case, Joe can claim unfair dismissal on grounds of discrimination after which the case will be taken to a tribunal for determination This therefore means that there are certain provisions that must be met that include giving the employee the mandatory notice period required in order to terminate the contract and the steps to be followed in the termination process. 2 The employer can only terminate the contract for reasons amongst them non-performance of duties, job elimination and misrepresentation amongst other reasons and must be written in a statement to the employee.3 The employer is therefore required to pay their employees there severance pay or any other form of financial consideration that may be entitled to the employee. The termination of the employment of Joe must not be based on discriminatory reasons and therefore in any sort of remedy sought; the courts of law will determine the reasons for the termination of the employment. If Joe had an individual contract with his employer or was covered by a collective bargaining agreement, his remedies and compensation will be covered under the stipulations of t hat agreement that subsisted before the termination of the contract. In a jurisdiction such as that of the United Kingdom, the courts or the tribunals can hear the cases brought for wrongful termination of the contract of employment. If proven that the contract of employment between Joe and that of his employer was wrongfully terminated, the court has remedies that it can give Joe.4 One remedy available to Joe is that he can be reinstated back to the position or job he held previously before termination of the employment. The courts may also order for monetary compensation to Joe for the wrongful dismissal that will be calculated commensurate with what he previously earned.5 Question 1 (b) Dismissing an employee who has had a long-term history of illness or sickness is one of the major difficult decisions employers have to make when considering terminating the employment of a sick employee in the United Kingdom.6 An employer is entitled to dismiss but fairly an employee who is absen t from duty due to sickness that may be long-term in nature but there is a caveat that they must demonstrate that they have acted in a fair, sensitive manner.7 This means that

Mystery Story Essay Example | Topics and Well Written Essays - 2000 words

Mystery Story - Essay Example "Hello". "No. I tried to call him all afternoon, but he didn't answer the phone and didn't return my calls." Carol's mind began to race. Something was wrong and the misdeeds started this afternoon with Jim's absence. It wasn't like him to not call back or get in touch. "What time was he murdered Where How" There were a million questions racing through Carol's mind. "He was shot in his office within the past hour. We've got a suspect in custody. We'd like you to come down to the station and talk to us." Keller's tone was far too matter of fact. There was a murder that was being treated as a trespassing. "Well send a car for you. Your husband is at the city morgue. We need you to help us with the investigation". The words seemed to flow so easily from the officer's lips, but stuck inside and fouled Carol's ears. Mr. Keller's office was a dimly lit hole in a drive by mini-mall. Carol noticed the barren space and lack of any usual business activity. The desks lacked all the usual accouterments that make an office run such as paper, pens, and staplers. There was only a small laptop computer that sat folded and dusty from lack of use. There was no copier and no printer in sight. "We are not sure. It seems your husband was working late when this suspect entered the office. It was probably an attempted robbery, but he set off an alarm when he entered. The metro police were only a block away and caught him exiting the building." Keller looked at Carol and asked with an air of awkwardness, "Did your husband have any enemies Any reason someone would want to kill him Did you know anything about his business dealings" "Why no," Carol stammered. "You said it was a robbery. I don't know any other reason someone would want him dead. He ran a real estate business, and he took care of all that. I didn't know any of his clients or investors." "Well," Keller continued, "There didn't seem to be anything taken. Your husband still had over $200 on him and a wallet full of credit cards. Doesn't seem like a

The Effectiveness Of Performance Related Pay Commerce Essay

The Effectiveness Of Performance Related Pay Commerce Essay Impressive levels of staff performance are difficult to for many organizations to attain. Maintaining desirable levels of personnel performance is central to the objectives of most organizations. This is imperative as employee performance often translates to aggregate organizational performance. In a situation where employees are less motivated or less engaged to their job functions, there is a risk that such low employee morale will be reflected in an organizations overall performance. There are two main types of motivational mechanism that can be employed to induce staff to desired levels of performance namely; intrinsic motivation and extrinsic motivation. Perkins White (2008:8) defined extrinsic motivation as motivation that is derived from the use of tangible or transactional reward. Financial reward and incentive pay are examples of extrinsic motivation. Perkins White (2008:8) defined intrinsic motivation as the motivation of staff that is derived from the nature of the work itself. Armstrong (2010) added that intrinsic motivation is intangible in nature. Examples of intrinsic motivation are career development, career progression, training and development e.t.c. Armstrong (2002) argued that while intrinsic motivational mechanisms tends to have a sustained and positive impact on personnel morale, extrinsic motivational mechanisms tend to have minimal impact on personnel morale. For some organizations, they focus of their process of motivating staff is mainly extrinsic, while for some others, the focus is on use of mainly intrinsic motivational variables. In spite of this, Armstrong (2010) contended that both types of motivation can together be used to design mechanisms and processes for motivating important personnel. The use of performance-related pay (PRP) as a tool for motivating staff within organizations is what this research will be about. Before proceeding, it is essential to point out that PRP is an extrinsic motivational variable. Many firms, specifically firms that deal with financial services, use performance-driven pay to reward personnel for enviable performance. Before going into in-depth explanation of what PRP is, it is essential to gain an understanding of what employee reward is. In the words of White Drucker (2009), employee reward involves the tools used to compensate employees for their contributions to the achievement of organizationa l objectives. Employee takes into consideration how important it is to use the right reward schemes to compensate personnel, especially where there is above average performance. While employee reward mechanisms can be both tangible and intangible in nature, tangible reward schemes will act as the main emphasis of this research, most notably pay. The challenge of using pay to motivate staff is the difficulty of determining the right application of pay structures in a way that it enhances sustained and desired levels of staff performance. This difficulty has led to increased innovation in the use of pay to motivate staff. One of such innovations is the development of performance-related pay. Thorpe Homan (2003) suggested that PRP deals with the correlation of personnel performance with financial rewards. Again, IDS (1998) defined PRP as the different types of incentive mechanisms, in exclusion of direct payments based on outcomes achieved. Some of these incentive arrangements are pro fit sharing, employee share ownership arrangements, bonus arrangements e.t.c. PRP is widely used in the financial services industry in the United Kingdom. Bonus schemes are usually used to reward for employees for additional business or revenue generated. The recent liquidity crisis in the UKs financial services industry, in the wake of the subprime economic disaster, has stimulated a widespread debate on the effectiveness of (PRP) as an effective tool for influencing personnel behaviour. Most of these debates arose because of the role of bankers in fuelling the liquidity crisis which culminated into the recent global economic recession. Based on these observations, this emphasis of this study will be on assessing the usefulness of PRP as a mechanism for motivating employees, especially from the ethical perspective. 3. Preliminary Review of Literature PRP acts as an added way that can be used by firms to reward their employees in tangible terms. Again, performance-related pay also refers to individualized mechanisms or processes in which pay rises are relative to the outcomes of performance appraisal (Heery Noon, 2001). This is why CIPD (2009) referred to performance-related pay as appraisal-related pay or merit pay. A great deal of debate has arisen in recent times about the usefulness of performance-related pay as a tool for motivating staff to sustained and desired levels of performance. Most of the recent debates have been fuelled by the role of rogue bankers in the recent global economic crisis. While money or pay provides an avenue through which an employees value is assessed, there is a failure by most organizations to recognise that people tend to differ when it comes to being motivated by pay. Human beings are complex creatures and as such will respond to motivation through the use of pay in differing ways (Corby et al., 2009). Another problem derived from the application of PRP is the failure of most organizations to distinguish between awarding financial rewards based on behavioural criteria or based on the achievement of results. There is a broad difference between these two criteria. In most cases, the application of PRP by most organizations is more focused on the achievement of results and less focused on behavioural criteria. While result-oriented performance-related pay can be effective in terms of the achievement of an organizations objectives, there are pitfalls in the use of this particular approach. The role of bankers in the recent economic crisis acts as a useful example of how result-oriented performance-related pay can be damaging to overall organizational performance especially in terms of the intrinsic worth of a firm. The use of bonus schemes led to excessive risk-taking by most bankers, especially bankers in the investment trading arm of most banks. Such excessive risk taking wa s largely driven by the desire to earn bonus payments; as a result, proper risk management mechanisms were often ignored as most banks became excessively leveraged. The decision by RBS to acquire Dutch bank, ABN Amro, was done in ignorance of appropriate corporate governance mechanisms; a decision that would not have been taken in retrospect as it led to accumulation of huge losses by RBS in the wake of subprime bust in America (Owen, 2009). Most of the criticisms against PRP is derived from its failure to recognise the significance of the need to control behaviour. This is because the application of result-oriented performance-related pay process tends to encourage employees to engage in discretionary efforts and behaviours that are mainly based on their desire to earn additional pay incentives as opposed to engaging in behaviours that bring about added value for shareholders. Kessler (2005) noted that another problem with the proper implementation of performance-related pay mechanisms is the difficulty of measuring inputs as they are generally more qualitative in nature. On this specific note, performance-related pay is more likely to be based on individual targets than team or group targets. Another issue with the implementation of PRP is that since in most cases, it is reliant on individual targets, there is a potential for it to become discriminatory in nature. The banks in the United Kingdom again act as useful exa mples; bonus schemes tend to be given to bankers in the investment banking and trading arm of most banks while back office staffs seldom have access to such bonus schemes. What makes this appalling is the fact that most of the ill decisions taken by the bailed out banks was done by bankers in the trading arm of most these banks (FSA, 2009). Armstrong (2007) noted that discriminatory application of performance-related pay systems only leads to decreased intrinsic motivation and decreased co-operation between employees. This undermines every sense of an equality-based organizational culture. Again, Perkins White (2008:165) were quick to point out that discriminatory bonus schemes only leads to low aggregate employee morale. Such a scenario only serves to undermine overall intrinsic interests within the organization. These observations help to highlight the undemocratic nature performance-related pay schemes especially as it tends to leave little room for the protection of entrenched collective employee interests. In spite of the multiple criticisms against performance-related pay (PRP), it is only fair to acknowledge that there are also perceived benefits that can be derived from using PRP schemes. For one, Lawler (2005) argued that relating individual pay tom performance possesses a potent motivational effect since it creates room for differentiating between the behaviour of employees and how they are rewarded. 3.1 Need for this research Firstly, I decided to conduct this research because of one of the subjects of my international human resource management module. That topic, in particular, was about how culture determines the way people react to financial rewards and non-financial rewards. Again, this research will help to examine the rationale for use of PRP schemes as a way of influencing personnel behaviour. 4. Research Questions 1.) Can performance-related pay be used to create a dichotomy between the need to protect collective employee interests and the need to inspire above-average of performance among personnel? 2.) What are the most effective ways that organizations can employ to reduce the pitfalls of performance-related pay? 3.) Why did use of performance-related pay schemes fail to control the excessive ris taking attitudes of personnel in the investment banking arm of the Royal Bank of Scotland (RBS)? 5. Research Objectives 1.) To establish the best way of implementing performance-related pay in such a manner that entrenched collective employee interests will always remain protected. 2.) To establish the value of performance-related pay as a tool for enhancing performance of key personnel. 3.) To establish veritable options to the application of performance-related pay systems as a tool for motivating personnel to sustained and desired levels of personnel performance. 4.) To ascertain reasons for broad criticisms against use of performance-related pay to reward employees, especially personnel in financial services institutions in the United Kingdom. 6. Research Perspectives The research philosophy that I will use in this research is interpretivism. Collis Hussey (2003) posited that, interpretivism suggests a broader philosophical paradigm and avoids misunderstanding with the phenomenological research paradigm. In some aspects, there appears to be a like for like similarity between interpretivism and phenomenology. Any research that employs interpretivism is often times than not inductive. The subject of pay-driven performance is a subject that entails qualitative information as both direct and indirect observations both by the researcher and other researchers will form the basis for most of the information collected by the researcher. The study of the effects of financial rewards on personnel performance, to a lesser degree, involves quantitative information except when measuring output-driven target for target-oriented jobs. Such measures can apply to certain jobs in the financial services sector, like investment banking jobs. The potential lack of ac cess to such quantitative or target-driven information has informed the decision to use more qualitative-oriented information. Previously conducted empirical research on this researchs subject matter will be used to create the theoretical framework for this study. 7. Research Design Collis Hussey (2003) noted that the research design serves the main purpose of giving focus and direction when conducting a research. The research design forms the skeletal framework of the different methodologies applied during the conduct of a particular research. The research design that will be used in this research is the case study research design. Saunders et al., (2003) noted that the usefulness of the case study research design is that it enables the researcher to narrow the focus and scope of a research such that unnecessarily work is prevented. In this research, the case study for examining the effectiveness of performance-related pay is the Royal Bank of Scotland (RBS). This bank will form a useful case for investigating the key variables of this study especially when taking note of the fact that the actions of some of its employees were culpable in some of the excessively risky decisions that almost contributed to its demise in the wake of the subprime market disaster ( Owen, 2009). As a result, findings from the cross-examination of RBSs PRP arrangements can be used to determine the best ways of implementing PRP schemes in other similar organizations. 8. Data Collection Methods In order to achieve the necessary requirements for this particular research, data or information will be obtained from both primary and secondary sources. Under-listed is a concise description of some of the tools that will be used to gather both forms of data. 8.1 Primary Data Collis Hussey (2005) defined primary data as raw data or information. The usefulness of primary data stems from the fact that it provides the researcher with original perspectives when investigating a particular problem. Primary data will be used to a considerable degree in this research. There are different ways for gathering primary data. In the context of this particular research, the researcher will gather primary data through three anonymous open-ended interviews with personnel of the Royal Bank of Scotland (RBS). The researcher expects that the interviews will take approximately forty minutes for each of the proposed interviewees. One of the proposed interviewees is a friend of mine and has promised me access to the other two interviewees. This friend of mine is a customer service representative in one of RBSs offices in London. Feedback from these three open-ended interviews will help the researcher to meet most of the objectives of this research and also conclude this resear ch. 8.2 Secondary Data Secondary data, on the other hand, will be obtained from academic textbooks and academic journals. Collis Hussey (2005) noted that secondary data is information assembled by other researchers and are available in public domains. Some of the peer reviewed academic journals that will be used in this research are the human resource management journal, CIPD articles and the reward management journal. These journals will be accessed from academic databases like the CIPD website, Ebscohost, and Emerald. Journal entries sourced from these databases will help to create the theoretical framework of this research. The value of the secondary data to be utilized in this research is derived from the assumption that it will also be used by the researcher as a support mechanism during analysis of the primary data gathered by the researcher for this researcher. 8.3 Analysis of Data Gathered by the Researcher Most of the data that will be analysed in this research will consist of the primary data gathered by the researcher. As mentioned earlier, the primary data for this researcher consisted of feedback from the three open-ended interviewees that will be carried out. The researcher will make use of content analysis during analysis and interpretation of feedback from the three interviewees. The content analysis will involve using the secondary data gathered as a support mechanism for analyzing feedback from the three interviewees. The use of secondary data during analysis of the primary helped to reduce subjectivity, which is one of the main limitations of the qualitative research approach. 9. Limitations of this Research One of the main limitations of this particular research is the fact that the researcher will only use one research approach as opposed to use of a mixed-methods research approach; in this case, only the qualitative research approach will be used. The qualitative research approach is not without its limitations. One of the main limitations of this particular research approach is that analysis of data gathered tends to be subjective since it is largely based on the researchers perspectives and viewpoint (Collis Hussey, 2005). To reduce subjective analysis and interpretations, the secondary data gathered will be used during analysis of feedback from the interviews that will be carried out by the researcher. Another constraint of this research is the fact that the sample size of just two interviewees may be regarded as too small to generate considerable primary data. To address this particular constraint, the researcher will ensure that considerable secondary data will be gathered so as to ensure that a concise analysis is conducted. Another constraint of this research is the use of just one case study; in this case, the Royal Bank of Scotland. The use of just one case study may make it challenging to generalize findings or results from this research. This is where the secondary data gathered by the researcher will be crucial; the secondary data will offer further perspectives on the underlying subject matter of this research, especially where the primary data appears deficient. 10. Ethical Considerations The process of conducting this research will be based on the stipulated requirements of Coventry University. In this regards, the Coventry University Ethics Manual will be studied by the researcher before inception of the research. All external information that will be utilized in this study will be properly referenced using Coventry Universitys recommended referencing style; in this case, the Harvard referencing style will be used by the researcher. The use of this particular referencing style appears to be in accordance with the plagiarism regulations of Coventry University.