There are generally two types of loans, namely the secured and the unsecured type. A secured loan will be one where the borrower would be asked to keep an asset in return for the loan. If the situation arises that the borrower is actually unable to repay the loan amount then the lender can easily sell off the entire collateral and take back the money that was given as a loan.
An unsecured type of a loan is kind that is generally associated with a credit card. Here it entirely depends on the borrower to return back the money. In fact through a secured loan one take in huge amounts of money and the terms of repayment are generally much easier and the time that is allotted for the repayment is much longer than in case of an unsecured loan.
Today people with a little amount of property can actually go in for secured loans as the amount that they can take in is much larger the terms of repayment much relaxed and even the time that is allotted for repayment long.
Moreover, today there are a large number of institutions that offer secured loans even if the person has a bad credit record. In fact these secured loans on a lot of occasions serve as the ways and means through which people generally increase their credit rating. Moreover, when you offer an asset as your collateral, the bank, in spite of the fact that you might have a bad credit record, would be more in favor of secured loans than unsecured ones as there remains a guarantee for your repayment.
In order to be eligible for a secured loan one must at least have a home that you own, along with a car whose price has been fully paid, or might even comprise of your jewelry. Thus if one needs to improve his or her house one can keep these things as collateral and start the work immediately.
However, not everything is very rosy and good about secured loans. Here comes one more difference between unsecured and secured loans. In case of unsecured loans the meting out of the money happens much faster than in case of the secured loans where a lot of time is spent in the money to actually reach the borrower. The money is generally disbursed after a serious inspection of the collateral and this process involves a lot of paper work to be done, which also eats up a lot of his valuable time. Thus it is generally advisable to go in for unsecured loans in case of emergencies and for purposes that can wait, secured loans are the best. Moreover, if at the end the borrower is not able to pay back the loan the collateral is usurped and sold off by the lender to recover the loan amount.
Anyone thinking of secure loans? 5starloans website is always there for you. These people are the best in the loan business and provide loan at a very low interest. Moreover, the repayment time as well as the collateral demanded is within an affordable range.
I recently read a disturbing report in the daily newspaper about an air crash in Indonesia. The article (in the Sydney Morning Herald, 12/4/07) read in part; "Pilot may have been saving fuel in crash. A Garuda policy of preserving fuel may have been why a pilot did not abort a landing in Yogyakarta last month that killed 21 people, the head of the airline's pilots association said. He was concerned about Garuda's policy of paying pilots a 3 per cent bonus if they conserved fuel. The company is making extra payments to pilots if they can conserve fuel. Maybe this is bothering the pilots."
Not only is this a disturbing safety concern, for me this also raises the issue of individual pay for performance. Individual pay for performance is contrary to teamwork and ultimately, organisational effectiveness. If everyone is out to "do their own thing", the consequences must surely lead to lack of consideration of others and ignoring the use of their expertise. Elsewhere in the article, it was mentioned that the report suggested that the pilot continued to land rather than abort despite the urging of his co pilot and the airplane's warning alarm system to abort the landing.
Many organisations today are looking to increase their bottom line by paying their people to improve individual performance. For instance, it is now quite common for a large percentage of a person's salary (particularly senior managers) to be based on their performance, with a smaller component made up of base salary.
Why do organisations continue to throw money at performance issues? My contention is that if organisations were better managed and led, then there would not be the need to offer people incentives to perform.
Contrast this "pay for performance" approach with another article in the same paper headed "Smilers are stayers". The article described a small pharmaceutical company, Blackmores, that had just been given a Best Employer Award. Their secret? They look to the long term development of their people, encourage them to take responsibility, reward them with good salaries, and include them in a company wide profit sharing scheme. As one Blackmores employee, Pamela Stone said "There's a culture of openness and genuine support and honesty which keeps people motivated".
Performance pay is now almost a part of the standard makeup of organisations, particularly in western countries. So, can it be improved to increase employee effectiveness, teamwork and organisational effectiveness?
Fortunately, there is a set of principles. Many successful organisations take the following approach:
1. Base salary - relative to industry standards (the major component of salary)
2. Profit sharing - inclusion in a company wide profit sharing scheme
3. Team performance - inclusion in a team based performance scheme
4. Individual performance - achievement of personal objectives (smallest component of salary)
Does this approach work?
One of the largest and most successful pharmaceutical companies in the world, uses these principles. For example, their base salaries (which make up the largest component of pay, approximately 85%) are amongst the best in the industry. Of the remaining 15% component of salary, 40% relates to company profit, 30% to team performance and 30% to individual performance. But over and above salary, they manage their people really well ? people enjoy working for the company as evidenced by the lowest staff turnover rate in the industry.
Copyright (c) 2007 The National Learning Institute
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