Training Blog

In January 2009 Consumer Prices Index (CPI) inflation fell to 3%, in December 2008 the CPI was 3.1%. For the last four months the CPI has fallen from a high of 5.2% in September, to 3%.

As well as the falling energy prices, the reduction in VAT from 17.5% to 15%, announced in the pre-Budget report in November, also had an effect. A zero or negative RPI could result in the extraordinary occurrence of average pay increases also falling towards zero with the current strain on government finances some are calling for a freeze on public sector pay.

The decline in CPI wasn’t expected – the consensus forecast among analysts had been for an annual rate of 2.7%. the decline in energy bills were slightly offset by rises in the price of household equipment, such as furniture, and alcohol, clothing and footwear. the smaller than expected drop was also due in part to a reluctance by retailers to slash prices further after heavy discounting in December. One of the reasons why the Bank of England delayed cutting interest rates last year was concern over inflationary pressures in the economy; the bank has already cut interest rates to 1% in an attempt to stimulate the economy. They believe that CPI inflation will drop to 0.5% this year and will remain below its 2% target for two years.

A 360 degree appraisal also known as a 360-degree feedback, multi-rater feedback, multisource feedback, or multisource assessment, is employee development feedback that comes from all around the employee (subordinates, peers, managers and may also include a self assessment). The results from 360 degree appraisals are often used by the person receiving the feedback to plan their training and development. The results can also be used for making promotional or pay decisions.

There are numerous benefits to this particular method of appraisal:

• A study on 360-degree feedback to leaders conducted by Arizona State University has supported the hypothesis that improvement in a leader’s consideration and employee development behaviours will lead to positive changes in employees’ job satisfaction and engagement, and reduce their intent to leave.
• Individuals get a broader perspective of how they are perceived by others than previously possible.
• Increased awareness by senior management that they too have development needs.
• Encouraging more open feedback — new insights.
• Reinforcing the desired competencies of the business.
• Clarified to employees critical performance aspects.
• Identifying key development areas for the individual, a department and the organization as a whole.
• Identifying strengths that can be used to the best advantage of the business.
• Supporting a climate of continuous improvement.
• Starting to improve the climate/ morale, as measured through the survey.
• Focused agenda for development. Forced line managers to discuss development issues.
• Perception of feedback as more valid and objective, leading to acceptance of results and actions required.
• Gaps are identified in one’s self-perception versus the perception of the manager, peer or direct reports.
• Customizing the questions to one’s organizational competencies.

So in summary there are alot of benefits to this method of appraisal but there is one notable criticism:

A Watson Wyatt’s Human Capital Index tudy found that 360-degree feedback programs were associated with a 10.6% decrease in shareholder value.

If you decide to adopt this method of appraisal there are numerous sites that offer a framework for setting up 360 degree appraisals one particularly good site is www.medicology360.co.uk. I can guarantee should you decide to adopt this method it will provide valuable information that will ultimately enhance performance.

There seems to be a growing number of employees who are working hard, but not at being productive instead they are working at looking busy and thus making them appear indispensable. This is because workers fear they will join the growing number of workers becoming unemployed if their bosses see how little work they have to do. As a result some engage in “busywork” such as reorganizing files while some attempt to trick their bosses into thinking they are working late nights. However this is not a phenomena that is confined to times of economic uncertainty even when the economy is good, some workers will go to great lengths to appear busy, but these people are usually the slackers who are bunking off on company time. When the economy turns for the worse, it’s only natural that every employee wants to look indispensable and some start using the same techniques perfected by the slacker in an attempt to secure their job.

Some workers will go to extreme lengths to convince their boss that their are indispensable:

• An attorney, who wanted the boss to think he was working late into the night, brought an oscillating fan to his office so that it would produce movement and the lights wouldn’t dim when he left his office.
• A sales associate refolds clothes even though they are folded perfectly already.
• A worker in the financial industry scatters papers on his desk.
• An advertising executive is busy but not at the advertising business. While at the office, he is designing toys for the baby he is expecting. His computer is facing toward the window in his office building so no one can see what he has on his computer screen.

In some cases spend their time with busywork because they have no real work to do. A professor argued that busywork probably does more for the individual’s psyche than for the company’s productivity. Some claim that busywork may have an individual value for the person who is doing it because it’s difficult going into work and having nothing to do, particularly if the person is used to having a substantial workload.

Basically if you are not productive the company will cease to exist as it is highly likely that you are not the only one doing busywork instead of work that is productive thus beneficial both to you and the company.

So we’ve all heard about the impact the credit crunch is having on big chains like Woolworths but how is it affecting small businesses?

Small UK firms are struggling to get the loans they need to grow or even survive. A lack of funds means that banks are being more selective over who they lend money to, the Federation of Small Businesses (FSB) says: “Those who could get loans now faced paying interest rates in excess of 10%.”

Matthew Knowles claims that: “one of the reasons Banks often see small businesses as more of a risk. The issue is that the banks are being more choosy over who they lend money to until they ride out the storm.”"The reason that banks tend to see small businesses as more of a risk – and because they aren’t able to tick all the boxes which the banks set out, they struggle to borrow.

The credit crunch has followed woes in the US sub-prime mortgage sector, which specialises in loans to people with poor credit histories or on low incomes. Rising interest rates have led to record levels of loan defaults and home repossessions – and that has sparked fears about which lenders might be exposed to the bad debts.