The Future of Investing Beyond the Savings Account - Free Essay Example

Sample details Pages: 12 Words: 3692 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? There are so many ways to invest- through your bank, the stock market, even online- that it would be foolish to limit yourself to just having a savings account. To diversify your portfolio and put more money in your pocket, use any or all of these investment trends. *Invest in companies with a strong Asian presence, and a global reach. Don’t waste time! Our writers will create an original "The Future of Investing Beyond the Savings Account" essay for you Create order Economic activity centers are already shifting, both globally and regionally. The GDP of Asia, not counting Japan, makes up 13% of the worlds GDP, and it will pull even with that of Western Europe within the next two decades, resulting in greater demand for consumer items as the population earns more. *Put some of your money in companies that can provide goods and service cost-effectively, such as those who use technology and outsourcing. The public sector is growing rapidly, making increased production absolutely vital. Populations in the developed world are aging, and with that will come the need for greater creativity and efficiency. An aging population will overrun nations abilities to finance health care and retirement pensions through normal means (taxes), so the public sector will need to step up and cover the shortfall. *Invest in luxury and consumer goods companies with a presence in Asia as well as in other developing countries. More than a billion more consumers will enter the market as economic growth in that part of the world allows them to make more than $5,000 per year- the point where the average person starts buying extra items. *Invest in software companies. Technology is already transforming the way we live and work with one another- location is no longer a preventive factor. As there are new developments, people around the world will find ways to use them. Work will become not only global, but instant. *Another good investment idea is the outsourcing of professionals to places like China and India, which are shifting to knowledge-intensive industry. Since the labor market is becoming so global, the 33 million educated professionals in these countries is an untapped source of cost-effective labor. *Invest in companies that are both socially responsible and profitable. Businesses are facing ever-greater scrutiny, and the demand on the environment is only growing higher. Business philosophies such as free trade, profit repatriati on and property rights arent lived by in many areas. Every environmental incident is instantly broadcast on television and the Internet, turning local crises into global stories and fostering greater resentment of big business. *Pollution control, water filtration, and energy companies. Demand on natural resources is growing as economies worldwide are expanding. In the next two decades, oil demand will grow by 50%, and will soon outpace supply. The main constraint on growth in many areas will be a lack of water, and there will need to be fundamental changes in our behavior to keep our atmosphere and our water from being further depleted. There are many more investment ideas out there, and most can be found with a simple online search. Let your portfolio grow, by putting a little money into one or more of these rapidly growing investment opportunities. The future of investing is much more than just savings accounts, and theres no better time than now to get started. Over the Counter Investing Dabbling in the stock market is a great deal of fun, but it also takes a certain amount of skill. However, over the counter investing is another thing entirely. An over the counter stock is generally offered by a company thats a lot smaller than most traded on the NYSE or NASDAQ. These companies are traded thinly, meaning that you might not have access to unlimited buying and selling. Because of limited access, large price fluctuations are perfectly normal. If you cannot handle the psychological effect of an up-and-down market, you should consider investing somewhere else. However, if you can roll with the punches, so to speak, you can use the tips provided in this article to help in your evaluation of over the counter stock. The most important factor is your chosen companys potential for growth. Your companys earnings should increase by at least ten percent per year for the next five or six years, or you should take your business elsewhere. Now, look at the companys investments, cash flow, and inventory. These items should be, at a minimum, twice the size of any liabilities that are coming due- because the company is smaller, it needs a larger economic cushion. Next, you should take a look at the amount of working capital per share of stock. For an over the counter company that number should be greater than the stocks market value- for example, a $14 stock should be backed by at least $16-$18 in working capital. The company should have at least ten investors as reported by SPs stock guide. This can be a high benchmark for an over the counter stock, but it is still vital. You should also take a look at the companys balance sheet- there should be no operating expenses deferred whatsoever. You would be remiss if you didnt find out more about the shareholders. Look for companies that have 500,000 to 1 million publicly owned shares. The ideal company will have no more than one-tenth of its stock owned by a single institut ion or individual. Also, look at recent stock splits and dividends. What happened afterward- did the stock price increase or did it decline? If it increased, thats a sign that the company is solvent and its investors are confident. A declining price makes the suggestion that company investors are cutting and running. Finding a reliable and profitable over the counter investment can be very difficult, but it can also be very rewarding. All you need to do is to find a handful of these little-known companies, and you could be making a lot of money in a short amount of time. Spot Market Investing Spot market investing involves an instant or nearly instant exchange of the trades components. This type of investing is usually seen on the foreign exchange market, the commodities market, and less often among other markets. This article will go into further detail as we try to explain spot market investing. Where the commodities market is concerned, spot market investing means that instead of post-dated contracts changing hands (the commodity is supplied at a date in the future for the price specified), the item is delivered very shortly after trade completion, or even immediately. Spot market trading has changed the way normal market fluctuations affect commodity pricing. Commodities trading is usually not affected as severely by supply and demand, because the purchase agreement is made well in advance. However, as its name implies, spot market investing is completed immediately, and therefore the market is more volatile. The price of commodities trad ed in this manner can change throughout the day, and can be greatly influenced by shortages or surpluses. Spot market trading is more attractive to investors seeking a high risk/high return investment. The most well-known spot market worldwide is the foreign exchange market. In this type of spot market investing, transactions are dealt with immediately, through the instant transfer of funds from one international currency account to another. This market is very attractive, for a few reasons. For the average investor, the forex market is the most liquid- it can be gotten into or out of in mere seconds, at the investors option. The market is very volatile, and returns can be made and lost very quickly. Spot market investors on the forex market buy on margin, meaning that their broker puts up additional money so that they can make a higher purchase. The foreign exchange market is very risky, but for the lucky and the courageous, its a risk worth taking. A factor that affects pric es on the spot market is whether or not the commodity is perishable. A commodity that isnt perishable, such as silver or gold, will sell at prices that reflect future movements. A commodity that is perishable, such as fruit or grain, will be more subject to the laws of supply and demand. For instance, a crop of tomatoes bought in July will reflect a surplus, and will be cheaper than those bought in January, when demand is higher. The investor cant buy January tomatoes at July prices, making this an ideal example of a spot market item There are other, lesser known spot market out there. Spot marketings main principle is the efficiency and speed with which trades are done, and the proportional speed with which profits are made. Spot market investing can of course be very profitable, but as with any other investment, it should be subject to careful research before funds are spent. Private Equity Investing Private equity investing is just what its name implies- its an investment in a privately held company as opposed to an investment in stock that is publicly traded. The term private equity investing can refer to any of several strategies or types of investing in privately-held companies, or to the act of taking a public company private. There is a whole industry built around private equity investing, which is very profitable, but able to escape the extreme scrutiny that comes with the trading of public securities. Private equity investing is normally done to get a company off the stock exchange in order to begin implementing new management methods. Then, after time has passed, the investors can hold an IPO (initial public offering) and go public again- often making more in profits than they originally invested. Most who get involved in private equity investing are investment bankers or wealthy individuals that can afford to have money tied up as they a wait a profit. One of the most well-known forms of private equity investing is called a leveraged buyout. In a leveraged buyout, the private equity firm assumes debt in order to make the money needed to buy out a publicly traded company, or to purchase most of its stock (which will be taken off the market). The debt that the private equity firm incurs is repaid, with interest, by the earnings from the newly private company. In other cases, multiple private equity firms will put their resources together to pay for the deal, so the debt load is split evenly. The majority of private equity investments dont involve buying the majority of the target companys stock. For example, venture capital is a type of private equity investing where the investor puts up money to pay for a companys start-up. Venture capital is usually used to start new biotechnology and other tech firms. Initially investing in one of these companies is extremely costly, and venture capital is used when no cheape r financing is available. Even if a company isnt new, it may still need money to finance growth or major changes. Private equity investing in these situations is called growth capital, and it can come from many sources. Growth capital is best for companies that have proven themselves profitable, but lacks the working capital to grow the way its owners planned. Most of what happens in private equity investing is indeed private. Securities law and government rules typically dont apply to private equity investing, so the normal operations of firms are hidden from the public eye intentionally. Private equity investing provides advantages that publicly owned companies cannot realize, such as low accountability and giant profit margins. Stock Market Investing Investing in the stock market is a great way to earn returns, if the investor knows how the market works, and how to predict movements within it. If you are thinking about trading stocks as a way to maximize your earnings, there are a few things you need to keep in mind, and well go over them here. *Stock market investing is inherently risky. Therefore, its important for you to know exactly what you can afford to risk. While the returns on a low-risk stock arent as good as those on a more volatile stock, you also stand a lower chance of losing your money. If youre a beginning investor, sticking with low-risk trades allows you to learn the market while making a bit of money. *You need to know how to read the market and you also need to know how to interpret signs of how a stock may perform. If you learn how to read these indicators and understand what they mean, you will have an easier time knowing which stocks to buy and which to stay away from. Youl l also know when to hold your stocks and when to sell them. Stock market investing is all about knowing what to do- and when to do it. *Carrying a diverse portfolio is a great way to keep from losing too much money. For instance, you can buy stocks from retail stores, service companies, and stocks from utilities. By not sticking with stock from just one industry, you can continue to make money even if one of your chosen sectors takes a turn for the worse. Diversifying buys you the time it takes to make a decision on whether to buy or sell. *You should work with a reliable broker, even if you are confident in your stock market investing abilities. Using a broker gets you access to information more quickly, and that could help you avoid an ill-timed stock deal or find an opportunity that you were unaware of. Working with a stockbroker can help you increase your stock knowledge- and knowledge goes a long way in making a good investor a great one. As a final word of caution, no vice stock investors should not buy on margin. Buying on margin means that your stockbroker puts up money along with yours, allowing you to make a much larger initial investment. While great profits can be realized, its just as easy to lose it all. Margin buying is best left to the veterans- newer traders should keep their investments on a strictly cash basis. Stock market trading has its ups and downs, but all in all, its an exciting way to make money. Financial Derivatives Investing A derivative is defined as a financial instrument that springs from another asset, and its main function is to assume the risk of a market position. Instead of trading the asset itself, the investor enters an agreement with another party for the exchange of money at some point in the future. An example of a financial derivative investment is in futures, which are just agreements to sell or trade the asset or its cash flow at a later date. There are a few methods of financial derivatives investing, but the most common are forwards, futures, swaps and options. An option is a contract where one party agrees to pay another a sum of money for the right to buy or sell them something for a predetermined amount of time. The right of trade with another party doesnt come with an obligation to do so. To safeguard against stock price declines, the first party pays a fee to be able to sell to someone else who will buy the stock at todays prices. This is kno wn as a put option. As the stock market evolved, swaps began to be used. When a swap takes place, one investor is exchanging cash flows with another. For example- a company repays a variable-rate loan, while another is repaying a fixed-rate loan. Each decides that they would be better off with the other kind of loan, and rather than paying to refinance, the two companies swap loans. By doing this, the two companies in effect took the loans they werent happy with and converted them. Financial derivative investing can be based on almost any type of asset- bonds, commodities, exchange and interest rates, indices and stocks. The wide range of underlying assets has led to numerous derivatives that can be traded. As the growth of the derivatives market goes on, they are being used more frequently to protect an investors assets from price drops. Derivatives first gained attention in 1995 when Nick Leeson brought down the Barings Bank of England. Neeson traded derivatives, but the trades did not pan out, and due to the trades leverage, the bank lost so much money that it went bankrupt. Warren Buffett, arguably one of this centurys greatest financial minds, has said that he is against using derivatives and that they will most likely fail for almost everyone. In spite of all the criticism, financial derivatives investing has long been a part of doing business, and will continue to be so for years to come. Real Estate Investing If you pick up any two instructionals on real estate investing, you will probably get similar but still slightly different versions of the steps investors should take for success. However, there is no list of steps to take, or a set standard for what makes a successful real estate investor. There are some characteristics that apply to almost all good real estate investors, and well discuss them here. *Someone whos reaching for the top in business or investing should obviously take the time to understand how their chosen field works. For a real estate investor, that can mean joining a local association or group, or reading books and magazines. As is the case with so many other things in life, with real estate investing, knowledge is power. *Successful real estate investors never let their emotions get the best of them. If you are flipping houses, you shouldnt let your heart decide whether or not to buy a specific property, or one in a particular neighb orhood or at a certain price. Have a certain financial goal in mind, and stick to it without letting your emotions get in the way. *Surround yourself with people who think like you- this is another reason why its such a good idea to join an investment group. Talk to people whove been successful in your chosen market, and follow their advice. Research the market youre in, look at your chosen neighborhoods, and above all, ask questions of those who are successful. All the great investment strategy in the world wont be effective if its wrong for the market. *Develop a strategy early on. Are you going to fix and flip a property, or are you going to buy one and rent it long-term? You can always change your strategy, but the basic actions you take should remain the same. Most successful real estate investors will say that their success came by doing the same thing repeatedly and by developing good habits early on in their real estate career. Consistency is the biggest obstacle you w ill face- get past it and your chances of success are much greater. *Dont try to take the easy way or buy into the latest real estate investing shortcut, but dont take the harder road just to gain experience, either. Just stick with your principles- and just like with your other relationships, treat the other person the way you would like to be treated. Remember, if a deal sounds too good to be true, it probably is, and you should walk away. Dont sacrifice your character or your principles for a deal! Just like with any other career field, real estate investing success comes to those who work hard and do not give up. The list above is by no means complete, but most successful investors exhibit all the characteristics detailed here. By doing your research, letting your head rule your decisions, finding people who think like you do, developing a strategy, and staying true to your principles, you will have a greater chance at success. Commodity Market Investing With a long history and a bright future, commodity market investing will continue to be a popular way to make money. For those already involved, it can be exciting, but for those who are thinking about getting started, theres no better time than now to learn about investing. To make your investment experience easier, here are some tips on the commodities markets around the world. Commodities markets in the US have their origin in early 1800s Chicago, where futures were traded. Chicago was a natural choice because of its nearness to the farmland of the Midwest, and its location at the Great Lakes base. As we all know, shortages and surpluses can cause extreme price swings. To control those, it was necessary to create an exchange that would bring buyers and sellers together. The CBOT was formed in 1848, and the first futures contract was created on March 13 of 1851. Fast forward to today, and commodities market investing isnt actually done at the mark et, but usually through a broker who does the legwork for you. There are futures exchanges around the world, but the best known are in Kansas City, New York and Minneapolis, as well as Chicago. Regardless of where the investing takes place, the essential idea is the same. Investors submit their market order and a sale or purchase is made on their behalf by a broker. The Internet has taken away some of the mystique of commodities markets, but the trading floor is still a neat place to be. Most markets are separated into pits, where brokers stand facing center. Each pit trades a specific commodity, such as soybeans, corn futures and T-bonds. The COMEX exchange in New York is home to pits for gold, cotton, orange juice, coffee, and heating oil. Like trading in the stock market, commodities market traders must be members of the exchange theyre trading in. By paying membership dues, the members support their exchange. The commodities market provides the place to trade, and it also pro vides price reporting and dissemination support. While the market doesnt set prices or buy and sell, it does have ways of ensuring that exchange members follow trading and governmental rules. From its very humble beginnings in the 1800s in Chicago, to the high-tech marvels they are today, commodities markets have become great places for traders to invest in both options and futures. Commodity market investing, along with online trading of futures, are taking investors far into the future. Bond Market Investing

Women s Roles During The American Armed Forces - 1409 Words

Combat roles are grueling and nerve breaking, with a lot of commitment and endurance required. Masculinity is the most suited trait for anyone to fit adequately and perform effectively. Mostly, men fit well in these roles due to their masculinity. However, women too, can perform as equally as effective as men. The effectiveness and suitability of inclusion of women in major combat roles in the American Armed forces has faced heated debates, between people who believe that the combat roles are most suited for men, and those that term these people as sexists and argue that women aren’t as qualified and capable of fighting in war. In essence, women can be as effective as their male colleagues in these combat roles. Combat roles in the military and armed forces entail soldiers fighting at the battleground, under the most adverse conditions, with heavy artillery and other supplies. Combat roles involve endurance and physical strength, which most women might lack, whereas the opportunity to represent the county at war needs to be open to all who are willing to sign up as a show of fairness in creation of opportunity. Feminist proponents want more women included in combat positions and serving at the war front, whereas opponents of the move, in public discourses, view this as unnecessary since women are weaker. Personally, I think women should sign up and be allowed to fight just like their male counterparts. The United States Armed Forces comprises of the Army, the Marine Corps,Show MoreRelatedGender Roles Of Women s Roles971 Words   |  4 PagesTransforming Gender. Women’s Roles in Society. Why are men always in power? Or is that we just assume that they have power? In recent years, the roles of women have changed greatly in American society.   For example, women have earned more power in education, the workplace and especially the military (Cordes). Yet, when it comes to women being fully integrated in the military, many males still question female competency. This situation needs to be addressed because women are physically, emotionallyRead MoreEqual Opportunity in United States Armed Forces: Minorities and Women785 Words   |  4 PagesThe American Military is widely viewed as a pioneer in bestowing equal opportunity for all of its uniformed members. I am going to study the Equal Opportunity in United States Armed Forces with a particular emphasis on Minorities and Women in the Military. The United States Armed Forces has the most diverse labor force in the World. There are five branches of the United States Armed Forces: Army, Air Force, Navy, Marines, and Coast Guard. The demographic profile of the all volunteer UnitedRead MoreAfrican Americans Played a Key Role in Vietnam War Essay1602 Words   |  7 PagesAfrican Americans played a key role in Vietnam War and, in the process, changed the complexion of the U.S. Armed Forces I. African Americans involves in the army a. Irregular percentage of African Americans drafted in the military b. The role of blacks in the Army c. The Vietnam War as a genocide II. Discrimination Issues a. Armed Forces dominated by whites b. Personal racism c. Racist practices against blacks d. African Americans in combat III. Black Women in the Armed ForcesRead MoreWomen s Armed Services Integration Act1159 Words   |  5 PagesWomen now make up 14 percent of the active-duty military in the United States, which is up from 1.6 percent, 25 years prior. (Christian Science Monitor, 1). In 1948, President Truman signed the Women s Armed Services Integration Act which created the role of women in the military. This law meant that each branch of the service was allowed to have one female Colonel (Byfield, 12). As of 2015, there are many women who serve as Generals and Admirals. All of these roles are non-combative. 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The first enlisted women served in World War I as telephone and radioRead More World War Two and Its Impact on the Role of American Women in Society1494 Words   |  6 PagesWorld War Two and Its Impact on the Role of American Women in Society World War II is an event that has marked history like no other. Originating from a European struggle, war broke out in 1939 and continued for six years. From the years 1939 through 1945 more than half the earths surface was battling in war. American society was greatly affected. People of every age, race and class were deeply affected. Womens place in society took a leap forward like it never had before. As an effectRead MoreThe War Of The United States1554 Words   |  7 PagesSince the dawn of human existence many have understood the importance of service to one s society. It existed during the early stages of civilization when hunter-gatherers came of age to hunt with the older men of their clan. 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Hum week vocabulary quiz Free Essays

Dogma A system of doctrines offered by some religions. It is proclaimed and accepted as true specific answers to the religion it is being offered for. 9. We will write a custom essay sample on Hum week vocabulary quiz or any similar topic only for you Order Now Monotheistic Is not a believer in unseen reality but can be spiritual without labeling themselves a certain religion. 10. Transcendent The belief that a greater power exists outside the material universe. 11. Incarnations The living embodying the divine or spirit. 12. Soul The spiritual part of the body that exist separately form the physical body. 13. Atheism The belief that there Is no god because no proof exist. 14. Agnosticism The belief that humans cannot be able to know the existence of a higher power. 15. Rituals The repeated actions by people or groups. Some religion rituals are dancing, singing, reciting prayers and sharing food to symbolize spirituality. 16. Symbols A borrowed image that represents some form of a spiritual experience. 17. Myths Symbolic stories that used for explanations for with in the universe. 18. Orthodox Abiding to a particular form of religion by practicing established traditions. 19. Rotationally of charisma The Institutionalizing of religion that can damage the Inspiration of religion. 20. Absolutists Believe In traditional forms of religions as being true and unchangeable. 21 . Charisma 22. Fundamentalism Emphasizes on what form one perceives as historical in religion. 23. Phenomenology Analyzing religion practices to better understand their purpose. 24. Liberal Take a flexible and unpredicted approach to interpreting religion traditions. 25. Mysticism To believe the truth despite human belief because it was perceived directly by experience. 26. Sacred The realm of extraordinary which lies the source of the universe and its value. How to cite Hum week vocabulary quiz, Papers

Performance and Reward Management Samples †MyAssignmenthelp.com

Question: Discuss about the Performance and Reward Management. Answer: As stated by Shields et al., (2015), performance management is one of the crucial factors for gaining competitive advantage in the modern business environment.Performance management is the process of continuously measuring, identifying and developing performance in firms. This is done by aligning the personal gaols and objectives of the employees with that of the organization. Mone and London, (2018) stated, performance rating can be effectively used by the organization to increase the productivity of the employees. On the contrary, Pulakos et al., (2015) opined that there are other effective ways of evaluating the performance of the employees and help them in improving their quality of the performance. This literature will critically evaluate the importance of performance rating in elevating the performance of employees and whether companies can improve the employee performance without using performance ratings. As put forward by Judge and Zapata, (2015), performance rating is a part ofperformance management which is continuous process and aim at improving the overall growth of the organization. Performance rating is essential as it enables the managers to identify the strength and weaknesses of each of the employees. Moreover, the rating system will also reflect upon the growth of the employees in a particular time span. Therefore, the contribution of the employees towards the organization, their development in their respective career, promotional opportunities and pay increases and training needs are discussed within the organization. The rating system is the accurate reflection of employee performances which can be effectively used for their professional growth. On the other hand, Barrick et al., (2015) states, employee performance can be effectively evaluated without using the performance rating systems. The employees can be evaluated based on their accomplishments and the goals that they can achieve within a certain period of time. The employees can also be evaluated based on their future actions instead of their past performances. The performance rating system can also be avoided by discussing about their accomplishments and their future goals. As stated by Li, Bagger and Cropanzano, (2017), performance rating system contributes negatively more often than positively. Moreover, there are occasions where the rating systems are biased and inaccurate. It has been seen quite often that the performance measurement system is not an accurate measure of the organization and leads to an environment that is stressful. According to Borman, (2017), traditional approach of performancemanagement are still used many organization and all companies rate their employee performance. This enables them to identify the contribution of the employees to the organization. Maslows hierarchy of needs states that employee motivations to work are driven by their needs and wants. Moreover, there are certain needs that have higher priority than the others. Performance rating system is used to provide the employees with better monetary rewards and compensation packages so the employees driven by monetary urge will be able to perform in a better way. On the other hand, DeNisi and Murphy, (2017) states, recent research suggested that most of the employees are driven by growth than rewards, benefits and incentives. As stated by Bernardin, Orban and Carlyle, (2017), performance rating system should be developed according to the requirement of the organization. This will facilitate in development of an effective working environment and work culture. The work culture should always be congenial and conductive and this would facilitate the employees in sharing information and knowledge among each other so that the organizational goals can be achieved. However, in most occasions the inappropriate use of performance rating system makes the employees more oriented towards their personal goals. Performance rating system cannot be considered as the most effective system for promoting employee performance. Performance ratings system has been used by all companies in one way or the other and most of the cases the companies are unable to develop an effective performance rating system. The majority of the global organizations are more oriented towards employee growth than performance rating. The basic problems in performance rating system are lack of differentiation, recency effect, horn effect and personal bias. The managers are either reluctant to judge the employees or lack self confidence to justify the rating they have provided to the employees. Schuh et al., (2018) states, in most scenarios it has been seen that employees are given average ratings or similar ratings. This leads to either lower ratings for everyone or higher rating for everyone which means that this is amanagement failure. This will definitely have an adverse effect on the employees and their performance. Recency effect is another major issue where the managers become more diligent than before (Rock Jones, 2015). Therefore, continuous evaluations of the employees are not done which will highly affect the employees performance. Horn effect is very much frequent where the employees are judged on areas where they are highly competent or incompetent. This evaluation is not exactly true to the organizat ion. Personal biases are a common bias where the employees are rated based on their personal feelings and impressions about them. These drawbacks majorly hamper the employee performances and most of the employees will be highly demotivated due to these practices. According to Smith et al., (2016), managers should be able to inspire the employees in order to improve their performance. Employee engagement is more important in this context and can be used effectively to increase the efficiency of the employees. This is the reason that most of the companies are not using the simple rating system for improving the employee performance. There are other complex systems of continuous evaluation of the process such as performance curve and forced ranking which has been effective for motivating the employees. The employee performance ratings are hurting the productivity of the organization as they do not assist in improving the performance of the employees. This is because of the fact that the employees provided with top ratings become complacent while the ones provided with lower ratings are disappointed and angry. The rating system is the area where the employees are focused on and they do not even listen to the valuable feedback that is being provid ed to them. The employees are more focused on the numbers on the assessment sheet that they have received (Latham, 2016). The rating system is practically meaningless as there are managers that are too strict about the ratings and others are too lenient. There are instances when employees have tried their level best to contribute to the organization and they have made an effort to improve the performance. Moreover, their improvements have been well received by the management but at the end of the day they received the same ratings as their last year. This will result in development of all negative emotions within the employees which will highly affect their performance of the employees. Therefore, these instances shows that the performance rating systems have not been used the way they should in an organizational setting. As stated by Rosen et al., (2017), the purpose of the reviewing the performance of the employees is to develop their hidden talents and motivate them to perform in a better way. The ineffectiveness in the employee rating system increases the attrition rate of the organization which increases the organizational cost. The most relevant example is Microsoft where the removal of the rating system increased the collaboration within the employees and they have been able to increase the performance of the employees significantly. The removal of the rating system exhibited collaboration, agile and customer orientation which is essential for companies to gain competitive advantage in the market (Latham, 2016). The employees in the modern generation are looking for growth in their respective careers and talent management is more effective in which the manage rs had a frequent conversation with their employees so that employee engagement can be increased. These have increased the growth rate of the employees significantly and the employees are developing at faster rate. The tradition process showed that employees and managers spent a lot of time in discussing about their past performances. These have been a complete waste of time as the organizations should be more focused on the future development of the employees (Rock Jones, 2015). Therefore, instead of assessing the ability and talents of the employees it is essential for the organizations to provide suitable job roles according to their talents which will benefit the organization. The importance of employee management and growth is high so majority of the companies are getting rid of the performance rating system in order to increase their organizational efficiency. Therefore, the argumentative literature has been able to throw a light on the advantages and disadvantages of using performance rating system. Performance rating system is not the most effective way of increasing the performance of the employees which is the very reason that most of the global organization shave changed their human resource policies. Thus, it can be concluded that performance rating system is not effective in respect to the changing modern environment and has more adverse affects that positive effects on the employees. References Barrick, M. R., Thurgood, G. R., Smith, T. A., Courtright, S. H. (2015). Collective organizational engagement: Linking motivational antecedents, strategic implementation, and firm performance.Academy of Management journal,58(1), 111-135. Bernardin, H. J., Orban, J. A., Carlyle, J. J. (2017, November). Performance Rating as a Function of Trust in Appraisal and Rater Individual Differences. InAcademy of Management Proceedings. Academy of Management Briarcliff Manor, NY 10510. Borman, W. C. (2017). 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