What are the main purposes of Budgetary Controls and Standard Costing?

The main purpose of budgetary control is

1. Planning,

2. Coordination,

3. Responsibility and Performance evaluation.

A sound and efficient organization is essential for effective budgetary control.

Standard costing is a technique that uses standard for cost and revenue for the purpose of control through variance analysis. The purposes of standard costing are mainly :

(a) Measuring Performance

(b) Controlling and Reducing Costs,

(c) Valuing Inventory and

(d) Fixing Selling Price.

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What are budgets & its benefits ?

What is Operating Budget ?

What is capital budgeting? Name its criteria. & how to evaluate a project?

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On what basis a Job description is written? List the things it should cover.

Job analysis forms the base to produce a job description A job description is a written statement of what the worker actually does, how he or she does it, and what the job’s working conditions are. HR department uses this information to write a job specification; this lists the knowledge, abilities, and skills required to perform the job satisfactorily.

There is no standard format for writing a job description. However, most descriptions contain sections that cover:

 1. Job identifications

2. Job summary

3. Responsibilities and duties

4. Authority of incumbent

5. Standards of performance

6. Working conditions

7. Job specifications

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Barriers before Iintrapreneurs

How to define employees goals and work Standards?

Why is Appraisal done?

Every manager needs some way to appraise employees’ performance. If employees’ performance is good, you’ll want to reinforce it, and if it’s bad, you’ll want to take corrective action.

Performance appraisal means evaluating an employee’s current and/or past performance relative to his or her performance standards. It estimates the replacement value and quality of an employee.

 Performance appraisal always involves :

(1) Setting work standards,

(2) Assessing the employee’s actual performance relative to those standards, and

(3) Providing feedback to the employee with the aim of motivating him or her to eliminate performance deficiencies or to continue to perform above par.

 An appraiser makes a report after evaluation which becomes a document for the HRD for future references and salary hike or promotion etc.

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Does money only motivates?

What is Capital Budgeting? How to evaluate a project?

Capital budgeting can be explained to be a firm’s decision to invest its current funds most effectively in long term activities in anticipation of an expected flow of future benefits over a series of years.

The investment decisions could be in the form of additions, dispositions, replacements and modifications of activities or asset base that would ensure good returns on the utilization of the firm’s assets. Therefore, the manager has to give consideration to the following factors when capital budgeting decisions are involved viz.

(a)    The existence of huge expenditures or large cash exposure.

(b)    The involvement of long gestation period between initial expenditures and returns and

(c)    The expectation of higher returns because of factors (a) and (b) above.

Going by the factors above, the manager must not fail to make appropriate investment or selection of good projects because, the volume of fixed assets far exceed current assets and the owners of the company (shareholders) are long term investors, whose high expected returns can only be met with the higher returns from long term assets.

These assertions, call for the need to examine the different methods of selecting investments in long term assets. Following are the main tools used to evaluate the project:

 1. Non Discounted Cash flow Techniques :          

a.  Payback period (PBP):     

b.  Accounting Rate of Return (ARR)

            2. Discounted Cash flow Techniques

c.  Net Present Value (NPV):    

     d. Internal Rate of Return (IRR)

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 What are budgets and its-benefits?

What is an Operating Budget ?

Profit addition through CFO.

How to define Employee’s Goals and work standards? What is the main issue in Goal Definition?

Employees should know ahead of time the basis upon which you’re going to appraise them. The second basic approach is to appraise them relative to specific standards that you expect them to achieve. 

Employers usually write job descriptions not for specific jobs, but for groups of jobs, and the descriptions rarely include specific goals.

Setting motivational goals is an art. The most straightforward way to do this is to set measurable goals or standards for each duty.

· Set SMART goals. These are Specific, Measurable, Attainable, Relevant, and Timely.

·         Assign specific goals. Employees who have specific goal usually perform better than those who do not.

·         Assign measurable goals. Always try to express dates or deadlines along with goals.

· Assign challenging but doable goals. Make them challenging, but not so difficult that they appear impossible or unrealistic.

·         Encourage participation. Goals set through participation usually produce higher performance. 

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Salary Survey-2012.

Salary Survey 2012

Salary is something which has no satisfaction limit. Whatever be the number employees are always dis-satisfied.

The structure of Salary components is an area where today's HRM people have to work most to retain their employees and attract the new talent.  Here, we are making an effort to capture those elements which gives satisfaction to the employees.

You can help us developing a right salary model by clicking the following Link and filling up the survey.

Click for the Survey 2012 Form

Very soon on this blog we will put the outcome of this Survey.

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Todays dynamic work place.

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Define Management Control System and explain its characterstics

 Definition   ::  Management Control System is defined a ‘set of policies and procedures designed to keep  operations going according to plan”

CHARACTERISTIC FEATURES OF MANAGEMENT CONTROL SYSTEM :

(a)    It focuses on ‘programmers’ and “responsibility centers’. Responsibility centre is an unit or sub unit or sub unit of an organization usually headed by a manager, who becomes responsible and accountable for the activities or that unit or sub unit.

(b)    For the purpose of control, managers use two types of data, viz. planned data and actual data. Planned data relate to estimate, budget, and standard and forecast details of future events or activities.

(c)  The control process is a set of actions such as programming, budgeting, monitoring, evaluating, analyzing and reporting. It is a continuous or an on going process. “Just as the navigator in an aircraft or sea voyage continually takes reading to ascertain whether or not he is relative to a planned course.

(d)  It is a ‘total system’ covering all aspects of a company’s operations. This is important because management function assures that all parts are balanced with one another. Unless management obtains information about each of them, coordination between all the activities is not possible.

(e)    The system is normally coordinated and integrated so that the same set of information can be used by other units for some other purpose. Management Control system is a set of interlocking sub systems generating a single system. While designing reporting format, this aspect is carefully considered by the systems manager.

(f)    The system is usually designed with financial figures and not with physical units of input and output. Because, monetary unit is the only common denominator which can be used to express heterogeneous input and resources, such as, kgs., pcs., litre, machine hour, labour hour, etc.

(g)    The system tends to be rhythmic, not ad hoc, one time or occasional. It follows a regular time table like daily, weekly, fortnightly, monthly, quarterly, half yearly and annual, year after year. All reports are prepared and forwarded to the persons mentioned in the circulation list at regular intervals.

(h)   Line and staff managers are equally involved in the control process. Line managers are, therefore, the focal points in management control.

(i)    G.W. Dalton and P.R. Lawrence added two other features in Management Control System:

(a)    Reciprocity. Every living being tries to control its environment as a mean of fulfilling its needs.

(b)  Expansibility. Control in an organization is a variable rather than a constant element, because it can expand or contract. The influence of an individual in the organization changes from time to time.

Finally, the purpose of a Management Control System is to encourage managers to take actions that are in the best interests of the company. Although systematic, the Management Control System is by no means mechanical. The process involves interactions among individuals.

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Handling Multinational Market on Web