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Investors in People Why Bother? Essay Sample

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Investors in People Why Bother? Essay Sample

As part of my work with Investors in People (IIP) I have been asked to prepare a paper on the motivations for organisations pursuing IIP status. I intend to cover the background to the standards, developments during their history and an examination of the benefits of becoming an acknowledged Investor in People. At the same time I will draw upon the concerns of those who say ‘IIP, Why Bother?’ and consider what next for the laurel-leafed standard.

The IIP process arose out of repeated reports which demonstrated that, compared to our competitors, Britain’s workforce held fewer qualifications. Although an estimated 18 billion per annum was spent on training, according to the Training Agency of the Department of Employment, this was far less than our competitors and worryingly the gap was widening.

In 1988 a Government White Paper, ‘Employment for the 1990s’, launched the National Training Task Force (NTTF) which was given the responsibility to ‘promote to employers the necessity of their investing in the skills of the working population.’ As Sir Brian Wolfson Chairman of the Task Force put it, ‘Investment in equipment depreciates whilst investment in people appreciates’ and it was against this background that the standards were born. At the same time the Confederation of British Industry (CBI) established a task force to look at similar issues and the report ‘Towards a Skills Revolution’ came up with the concept of an ‘Investor in Training’ which contained 10 guiding principles.

The eventual standard was based upon the inputs of a range of different employers and represented best practice amongst British industry. The name was finalised as Investors In People and employers fears were allayed that the process of meeting the standard would be unduly bureaucratic and would add value to organisations. Ironically, these concerns have never failed to completely vanish.

Although IIP commenced life as a pilot operation in 1991 it did not achieve a formal status until Investors In People UK was established in July 1993. The role of Investors In People UK was to:

* Become the ‘protector’ of the new national standard

* Market and promote IIP nationally and

* Provide a national assessment and quality assurance service

But what of the standard itself? In her book, ‘Introducing Investors In People’, Mary McLuskey summed up the standard as a simple yet powerful business development tool that, when used as a framework for human resource practices, will impact upon the success of business. Significantly the standard does not dictate what organisations should do to achieve success, rather the standard itself provides the framework for how organisations may become successful from the use of their people. To facilitate measurement the original standard was broken down into 4 overriding principles, Commitment, Planning, Action and Evaluation together with 23 indicators.

Something must be happening well as by the year 2000 over 45,000 organisations were working with the standard and over 38% of employees in the UK were working in organisations where the standard is being used. Yet 2001 saw the IIP standard changed; did this mean that it had been wrong for nearly 10 years? No, as Ruth Spellman Chief Executive of IIP puts it, ‘This all goes to show that Investors In People is both flexible and adaptable.’ Indeed the standard was amended in 2001 to focus more on the outcomes rather than the processes, what results were achieved rather than how, using fewer indicators, clearer language and becoming less bureaucratic. This final change was significant as it was based upon the ongoing feedback from organisations which have been concerned from outset that achieving IIP was sometimes an exercise in bureaucracy. Also, of great importance, the standard was updated to reflect the need for diversity in the workforce and specific indicators were added to include the effect of equal opportunities in organisations.

Is there any evidence to suggest that organisation benefit by gaining the IIP standard? In an NOP survey in 2001 just under 70% of SMEs surveyed, that’s small and medium sized enterprises of less than 250 staff, believed that gaining recognition as an Investor In People had increased productivity. 45% of employees surveyed believed that Investors In People had directly impacted positively on their personal productivity.

The OHP shows figures taken from research carried out for the Royal Society of Arts in December 1994 which compared 300 recognised Investors In People with the national average, on 3 key financial measures: return on capital employed, pre-tax profits and sales per employee. Whilst one cannot claim that these significant improvements in the figures arose solely from IIP recognition it is interesting to note these 300 organisations beat the national averages by such a significant margin.

Governments have come and gone since IIP was launched and changes in government have seen different initiatives in so many areas yet IIP according to Secretary of State for Education and Skills, Estelle Morris, has gone from strength to strength. It has secured the solid support of successive governments and the other interested parties from employer bodies through to the Trade Unions.

But what of those concerns about IIP? Norrie Gilliland in ‘Developing Your Business Through Investors In People’ scotches some myths about the standard; I have included the myths on the OHP slide.

* IIP is bureaucratic: Definitely not, unless an organisation makes it so. A business plan is the only written document necessary and the standard has recently been amended to make it less bureaucratic

* IIP is a training initiative: Not so, although training and development is involved, the standard is about much more and affects the whole business through communication and the motivation of employees

* People will always be away from their desks on training courses: No. The only training that should be carried out is that which directly affects the needs of the business. Development of people is not solely about them being trained.

* All we get is a flag and a logo: Whilst the flag and logo are clearly visible signs of an organisation’s commitment to the development of people, the standard is about improving business performance as seen from the above statistics.

The last word should be left to the current Investors In People Chief Executive, Ruth Spellman. Speaking on the 10th anniversary of the launch of Investors In People she reflected on the success of the standard when she commented that, ‘After 5 Secretaries of State; three General Elections; two major changes to the standard itself, we now have 1 in 4 of the working population in organisations who already have Investors In People, that’s more than 25,000 organisations. We also enjoy a customer retention rate of 91%, 88% of UK employers recognise the brand and 56 of the FTSE 100 are working with the standard.’

Excellent results, happy birthday Investors In People! There are issues facing the standard as it moves into the 21st Century. For example, can the IIP standard work more closely with other quality standards and models and will we see joint reviews with the consequent savings for employers and employees alike? How should employers contribute to the development of the standard in the future, ad hoc as now or a formal process? Finally, how do we make the most out of the export of the Investors In People standard to other countries? IIP is all about best practice and there remains a great deal to be learned and shared between Investors In People UK and the 20 overseas strategic partners it presently works with.

Dave Wiggins

Comparison of Investors In People companies with the national average


National Average

IIP Recognised Companies Average

Percentage Difference

Return on Capital Employed

9.38 per cent

18.93 per cent

+ 101.80

Pre-Tax Return Profit Margin

3.03 per cent

4.67 per cent

+ 54.00

Sales Per Employee



+ 44.71

Source: ‘RSA Inquiry – Tomorrow’s Company’. Published 1994. Reported in Management Today, August 1995 and Director Magazine, December 1994.

Scotching some myths about Investors In People

* Investors In People is bureaucratic

* Investors In People is a training initiative

* People will always be away from their desks on training courses

* All we get is a flag and a logo

Investors In People

Future Strategy in AEGON UK Services


Page 1: Introduction

Page 2: Findings

Page 9: Summary



In a recent speech to the Trades Union Congress adult-skills minister John Healey voiced his unequivocal support for Investors In People. “This government will never underestimate the value of Investors In People. It remains central to our workplace development strategy. It will be a critical element of the Learning and Skills Council’s workforce development strategy. It is a major UK success story that we intend to build upon.” (People Management, ‘Raising the Standard’, Vol 8, No 8). Clearly Investors In People (IIP) has government support and with over 25,000 organisations now accredited according to Ruth Spellman, Chief Executive of Investors In People UK, speaking at the 10th anniversary of IIP’s launch so does industry.

AEGON UK Services, then known as Guardian Financial Services (GFS), first worked with the IIP Standard in 1999 when the Business Plan for that year gave a firm commitment to achieve success by the end of the year. (Guardian Financial Services Business Plan 1999) Having attained the Standard in the autumn of 1999 the Managing Director David Barker reaffirmed the commitment ‘to achieve Investors In People re-accreditation for Guardian Financial Services.’ (Guardian Financial Services Business Plan 2001) Success duly followed and the organisation proudly flys the IIP flag, the IIP logo adorns all literature and it embraces the IIP Standard. But does it?

This report will examine the practices adopted in the organisation’s management of IIP, reflect on the strengths and weaknesses of those practices and put forward a proposal for working with the Standard in the future.


When the then Guardian Financial Services (GFS) committed itself to the IIP process in late 1998 to some extent this involved a ‘leap of faith’ on behalf of the Managing Director, David Barker. The organisation’s Training and Development Manager, Mal Hall, had sold him on the principle, as McLuskey (1996:21) puts it of ‘… a simple yet powerful business development tool that, when used as a framework for your human resource practices, will impact upon the success of your business.’ Accordingly, the organisation’s 1999 Business Plan included attainment of the IIP Standard. Just as the 10,000th Investor In People was celebrated (IIP Company report 2000-2001) GFS set out on the road to accreditation still uncertain of what the IIP Standard was all about.

In accordance with the culture of the organisation a formal Project was created and a Project Team appointed to oversee and co-ordinate the company’s efforts and over the next 12 months over 1,000 ‘man-hours’ were spent directly on the work by team members. Support for the Project was provided by the local Training and Enterprise Council (LAWTEC) which was responsible for the delivery network of IIP. TECs were further supported in terms of the Standard by a number of assessment and recognition units and advisory registration units. My own role within the IIP framework was as a member of the Project Team. Given that there was a significant amount of time committed to the Project what results were achieved?

The primary objective of attaining the IIP Standard was achieved but there were a number of other benefits and weaknesses with the approach that had been followed. The assessment process includes detailed written feedback against the IIP indicators and from the feedback GFS was in fact well advanced prior to assessment without the need for significant interventions. Having confirmed the strength of what we already had in place, the process towards IIP status ensured that with regular communications staff became aware of the IIP Standard and what it entailed. According to Taylor and Thackwray (1996:30) ‘improved communication = better informed people = increased commitment.’ Nevertheless, a theme echoed by both Taylor and Thackwray (1996) and Gilliland (1999) is the concern for some organisations of IIP as being too bureaucratic. On reflection, a key learning point for the Company was to not create unnecessary paperwork for the sake of it; the Project Team created a library of reference material for the assessor to consider only to be advised by the same assessor sometime later that, ‘I thought it best to read through the material as you clearly had spent so much time preparing it!’ As Gilliland (1999:142) puts it so succinctly, ‘The IIP process will only become bureaucratic if you let it.’

In 1999 a report by the Centre for Research in Emplyment and Technology in Europe found the Standard to be bridging the skills gap between the UK and its competitors.

There were still doubts and these included the need to focus more on the quality of training, customer satisfaction measures, results rather than targets and a reduction in IIP bureaucracy. (People Management, Vol 5, No 20). Responding to these comments, in April 2000 a revised version of the IIP Standard was launched to include changes to the delivery network with the introduction of Learning and Skills Councils (LSC), the Small Business Service and Education and Learning Wales. This revised edition was converted into Plain English and was intended to be both less bureaucratic and much more pragmatic for organisations to work with, answering in full the criticisms of the 1999 report. In the introduction to the IIP Company Report 2000 – 2001 Chairman Tim Melville-Ross points out that ‘… organisations increasingly recognise the Standard as a very flexible, user-friendly tool that can be easily adapted to meet their particular needs.’ At the same time, Guardian Financial Services, now AEGON UK Services following its purchase by AEGON UK, sought reaffirmation of its position against the Standard as part of the 2001 Business Plan. It was to be my responsibility for the reaccreditation process.

As Ruth Spellman, writing in the foreword to Taylor and Thackwray (1999), makes clear, ‘However, it is important to remember that Investors In People accreditation is the start of the process, not the finish. Working with the Standard is about continuous improvement: continuing to maintain the Standard and reap the … benefits that the Standard delivers.’ Working with this less bureaucratic regime and with the support of our local LSC we scaled down our Project Team commitment from 12 to 6 months prior to reaccreditation. In consultation with the IIP assessor it was agreed that most evidence would be gathered verbally, the IIP Practitioner Handbook 2001 – 2002 (p3.27) confirms that ‘There is no requirement whatsoever for the client to prepare a portfolio of evidence or a ‘storyboard’. Although some clients may prefer these methods, the assessor should always let the client make an informed choice.’ Other than brief written details at outset therefore, verbal evidence alone was to be collected; the Handbook goes on to point out that, ‘…verbal evidence is the cornerstone of the evidence gathering activity. …it confirms or otherwise, that the client organisation has a ‘people culture’ as much as the client organisation is ‘doing the right things’. (p3.26) In essence, success would depend upon the perceptions of the staff interviewed by the assessor.

This IIP Review in autumn 2001 proved positive and the organisation took a more relaxed approach to the impending assessment. Communication at all levels was improved and much more focused than had been the case in 1999 and there was a genuine understanding of what IIP stood for in relation to AEGON UK Services. The feedback provided by the IIP assessor has added worthwhile business information to the organisation, including the review of the newly-added indicator of Equal Opportunities, Management Development and instances of staff attending training courses without a specific identified business need, a process known in the industry as ‘sheepdipping’.

We are now almost 3 years old as an Investor In People, how should we carry the Standard forward? Can we sit back, do nothing and rest on our laurels or should we pay heed to independent research from NOP World, ‘People and Productivity’ which highlighted success in the finance sector as being dependant upon the skills and training of its staff. In fact 95% of employers from the sector said that having the right skills was an important factor in a productive employee with 41% stating this as the most important quality. Employers said that implementing a learning strategy, investing in staff development and establishing a good training programme are crucial to increasing the productivity of an organisation. Almost a quarter found that the single biggest negative effect on employee productivity in the finance sector was the lack of training. Commenting on the findings of the survey, David Jackman of the Financial Services Authority (FSA) added his weight by adding that, ‘I believe this research supports the FSA’s emphasis on competence as a basis of sound compliance culture. Good practice in training and development is fundamental to ensuring a fair deal for consumers as well as a sound bottom line.’

If further support were required for the organisation’s continued commitment towards the IIP Standard it came from Secretary of State for Education and Skills Estelle Morris when addressing a conference of UK business leaders to mark the 10th anniversary of Investors In People. The Secretary of State commented that, ‘Investors In People lies at the heart of the government’s plans to increase the skills and productivity of our workforce. The UK still lags behind many international competitors in these areas – a gap we are keen to address.’.

According to the Practitioner Handbook 2001 – 2002 (p5.1) the post-recognition Review ‘… enables the client organisation to demonstrate whether, on an ongoing basis, it continues to meet the Standard and to add value to its recognition. Organisations can therefore use the Standard as appropriate but the true spirit of ongoing Review is summed up by the Handbook as ‘… contributing to improvements within client organisations, to encourage their continuous development.’ A sense of caution however is added by Taylor and Thackwray (1999:71) who dampen this enthusiasm slightly by suggesting that, ‘… Investors In People is not a panacea for everything that organisations face. Improvement is a relative commodity.’

However, it is the view from industry that convinces me that our continued commitment to the IIP framework is worthwhile. Michael Parkinson,Chairman of Airedale Springs, is positive about the effects of post-recognition Reviews. ‘As long as there are sound business reasons, the company will continue to go forward for reassessment. So far the feedback at the end of the assessment from the assessor – a person with an external perspective and with no vested interest – has been extremely beneficial.’ (Taylor and Thackwray, 1999:117) His thoughts are endorsed by the Finnish-owned labelling company Raflatac Ltd which, according to taylor and Thackwray (1999:141) find it helpful ‘… that an independent and impartial person takes a look at its training and development processes. It found the subsequent feedback either reinforced existing plans or gave it further ideas for future development and continuous improvement.’ In line with the comments of Raflatac Ltd we have also been able to take on board feedback from previous assessments that have added value, ranging from Management development to the ‘sheepdipping’ of some training which added no real business value for learners. The case for IIP is proven, I now wish to turn to managing the future success of the Standard.

I propose that AEGON UK Services no longer commits itself to a formal Project Team to oversee the IIP Review rather that the framework is owned by the various business managers together with my support as IIP co-ordinator. IIP was not launched to become a systems-driven vehicle, indeed the most recent changes to the Standard in April 2000 included greater focus on results not how they were achieved. As Gilliland (1999:140) offers, ‘There is nothing new about Investors In People.’ However, there are a number of areas in which AEGON UK Services can benefit from the work being undertaken by IIP and from previous assessment feedback.

In July 2001 Investors In People UK launched the Recruitment and Selection Model. Based upon the IIP structure of principles and indicators the Model describes good practice in the way in which organisations recruit and select their staff. Given the desire of AEGON UK to expand the Lytham St Annes site of AEGON UK Services and the subsequent need for upwards of 250 staff within the next 12 – 18 months, adoption of the Model as a recruitment standard would appear a viable business proposition. The Model was developed in response to to specific requests from employers at the time of the IIP review in 1999 – 2000. Whilst the principles of the Model add value to the business goals in the short term, Russian (2001:8) offers words of caution, ‘It is clear from feedback that if the Model is to be widely deployed and recommended for use by employers there needs to be a more formal link to the core standard itself. At the moment there is no assessment process in place for organisations to receive independent feedback on their status against the model.’

A significant part of the 2002 Business Plan for AEGON UK Services involves the creation of a structured Management Development programme, something highlighted as a shortfall when IIP status was first achieved in 1999. Within the Planning principle, Indicator No 8 states that ‘Managers are effective in supporting the development of people. The organisation makes sure that managers have the knowledge and skills they need to develop their people. Furthermore, managers at all levels understand what they need to do to support the development of people.’ Historically, we have provided a range of learning opportunities for managers at all levels to pursue on a voluntary basis; the IIP Standard suggests that this approach is no longer enough. Within the strategic plan for AEGON UK Services lies the driver to future growth of providing the business with upwards of 50 new first-line supervisors and the development of both junior and senior managers in line with the rest of the AEGON UK Group.

Russian (2001:6) suggests that ‘… there is a clear desire to provide more focus on issues relating to management and leadership. However, both employers and practitioners believe that organisations would value further assistance in improving the quality and effectiveness of their managers and leaders.’ Although the IIP Standard sets out to be a best practice tool and offers guidance on issues such as Management Development, companies may yet have to report annually on their management and leadership training. The proposals come from the government advisory body the Council for Excellence in Management and Leadership whose Chairman, Sir Anthony Cleaver, believes that the UK must develop a national framework to assess the capabilities of its workforce. He added that the shortage of managers with leadership skills and the shortage of professional staff with managerial abilities contrasted with an increase in the demand for these skills. (People Management, Vol 8, No 7, p11)

Russian (2001:6) sees an ongoing debate between focusing on the management and leadership issues which are directly related to the IIP Standard such as communication and managing diversity and those broadly related to the whole management and leadership functions. In addition, IIP intends to discuss with the Council for Excellence in Management and Leadership its ‘Good Practice Guide for Developing Managers and Leaders’ with view to ‘… adapting this approach to meet the needs of organisations of all types and sizes.’ AEGON UK Services on the other hand is presently working with other members of the AEGON UK Group to identify the appropriate competencies that are required of its managers and leaders. Progress against this IIP Indicator will not only satisfy the needs of the Standard but will clearly go some way to also satisfying the needs of the business.

Indicator No 6 of the IIP Standard within the Planning principle states that ‘the development of people is in line with the organisation’s aims and objectives.’ At an individual level this may be evidenced by an employee ‘clearly understanding what their development activities should achieve, both for them and the organisation.’ During the IIP assessment in late 2001, I had asked the assessor to ask staff who were interviewed for their thoughts and opinions on the company’s existing appraisal mechanism, the Performance Management System (PMS). Feedback from the assessor showed that in general staff were happy with PMS although a number of concerns were expressed that the 360 degree approach was proving somewhat unwieldly and bureaucratic to operate. As we are investigating a Management Development programme with a revised series of competencies for managers at all levels, AEGON UK Services has commissioned a Project to overhaul the existing PMS. In line with the present IIP Standard, the Project Team has been tasked by the Managing Director David Barker with replacing the present system by the least bureaucracy possible that meets the IIP Standard and adds value to the business.

The most recent IIP assessment feedback report that AEGON UK Services received commended the organisation as a ‘family-friendly company for employees to work for’. As the strategy of the company is to increase the present site by upwards of 250 staff in 2003 this feedback could offer a potential competitive advantage in the recruitment of staff. Barry (1999:25) adds weight when suggesting that, ‘Ambition in the workplace is now taking a back seat to the priorities of home, the family, personal development and most other spheres of life which have been weathered by working in today’s economy.’ Russian (2001:8) acknowledges Barry’s comments, ‘…there is recognition that the issue of work-life balance is of growing importance …’, in his Report entitled ‘Investors In People – What Next?’ However, he goes on to add that ‘… we do not believe that it would be appropriate to include a work-life balance within the core Investors In People Standard … there is further merit in considering how it might form part of the further stretch for recognised organisations.’ The ownership for this recently introduced Department of Trade and Industry standard has been transferred to Investors In People UK since Russian produced his Report in the summer of 2001. I will monitor developments as successful management of the new work-life balance standard by AEGON UK Services may offer a great return in terms of recruitment and staff development by cementing our position as a famil-friendly company.


It is now over 10 years since IIP was launched and despite its fair share of criticism it has continued to thrive partly no doubt because it has continued to evolve and adapt to changing circumstances. Amongst the range of topics being considered by IIP are: the provision of an advanced Award, benchmarking, National Awards, Membership Club and Lifelong Investors In People status to name a few. I have already discussed the Recruitment and Selection Model which together with the co-operative work being undertaken alongside the Council for Excellence in Management and Leadership are providing AEGON UK Services with material which to add value to our business. Whilst the debate about a formal IIP Standard for Work-Life Balance still goes on, it is clear from the previous assessment feedback that we adopt famil-friendly policies. By the time that we commit ourselves to our next IIP Review in mid 2003 we will already benefit by the changes that IIP are planning to implement.

IIP never intended for the Standard to be a bureaucratic process, indeed the changes that have been made to it reflect the desire for Investors In People UK to be a flexible, development tool for business. IIP’s twin objectives as set out in the 2000 – 2001 Company Report (p15) are as follows: ‘… to continue to help all organisations in the UK – and increasingly the world – to adopt the best possible people management practices … and to empower the individuals in those organisations to achieve their full potential.’ As Gilliland (1999:148) sums IIP up, ‘Investors In People is about training and development.’ AEGON UK Services can be rightly proud of its achievements in providing not only focused on-job and in-house training that adds value to the business but also a broad range of development opportunities for its employees. Through our learning partnership with the Trade Union UNIFI and the local college we are able to offer our staff access to the European Computer Driving Licence and the Learndirect programme, broadening employees’ skills whilst simultaneously satisfying business; surely the essence of Investors In People?

Such is my personal commitment to the IIP Standard that I put myself forward as a potential Investors In People Panel Member in early 2002. I was delighted to be accepted into the role and am now able to provide external input to the recognition process and ensure that the Standard is maintained and interpreted consistently. One final key part of my role, and the driver for all organisations to work with the Standard, is to ensure through the assessment process that the client organisation always receives added value from the feedback report.

Finally, Gilliland (1999:140) tells a story which sums up my proposed approach to the IIP framework. Some years ago when working as a consultant with a small company, the Managing Director approached him and asked if he knew about a thing called Investors In People. When asked for his feelings about it, he replied that it was probably just one of those management fads. He was surprised when told that his company ‘… had been working with Investors In People for nearly nine months.’ That is the real essence of the IIP framework; AEGON UK Services has already successfully used the Standard as a development tool prior to our first formal assessment and thereafter adding value to the business. Maintenance of our position in a more relaxed and less mechanical manner will continue to support our business goals into the future.


Barry T (1999), Vision and Values: Practical Guidance for Training and Development Professionals, Handbook of Training and Development, edited Landale A, 3rd Edtn, Hampshire: Gower

Bramley P (2001), Evaluating Training, London: CIPD

Gilliland N (1999), Developing your Business through Investors In People, Handbook of Training and Development, edited Landale A, 3rd Edtn, Hampshire: Gower

Hackett P (1998), Introduction to Training, London: CIPD

Harrison R.(2000) Employee Development (2nd ed), London: CIPD

Investors In People Company Report 2000 – 2001, London: Investors In People UK

Investors In People Practitioner Handbook 2001 – 2002, London: Investors In People UK

Mayo A (2001), Creating a Training and Development Strategy, London: CIPD

McLuskey M( 1996), Introducing Investors In People, London: Kogan Page

People Management, ‘Call for Annual Training Reports’, Vol 8, No 7, p 11

People Management, ‘Raising the Standard’, Vol 8, No 8, p 23

Rana E (1999), People Management, ‘IIP’s credibility questioned despite satisfaction poll’, Vol 5, No 20, P15

Rana E (2000), People Management, ‘IIP revamp aims to cut back on bureaucracy’, Vol 6, No 8, P14

Reid M A & Barrington H (1999) Training Interventions, 6th Edtn, London: CIPD

Russian P (2001), Investors In People, What Next?, Report on Consultation with Employers and Practitioners, Investors In People UK

Taylor P & Thackwray B (1996), Investors In People Explained, 2nd Edtn, London: Kogan Page

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