Selecting Your Employer, A Guide to an Informed Pursuit of the Best Career for You (Improving Human Performance Series)

Selecting Your Employer

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Selecting Your Employer A Guide to an Informed Pursuit of the Best Career for You

Gordon Bing

Boston

Oxford

Auckland

Johannesburg

Melbourne

New Delhi

Copyright © 2002 by Butterworth–Heinemann A member of the Reed Elsevier group All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Recognizing the importance of preserving what has been written, Butterworth– Heinemann prints its books on acid-free paper whenever possible. Library of Congress Cataloging-in-Publication Data Bing, Gordon. Selecting your employer : a guide to the informed pursuit of a career for you / Gordon Bing. p. cm. — (Improving human performance series) Includes index. ISBN 0-87719-370-3 (pbk. : alk. paper) 1. Job hunting. 2. Vocational guidance. I. Title. II. Series. HF5382.7 .B54 2002 650.14—dc21

2001049933

British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. The publisher offers special discounts on bulk orders of this book. For information, please contact: Manager of Special Sales Butterworth–Heinemann 225 Wildwood Avenue Woburn, MA 01801-2041 Tel: 781-904-2500 Fax: 781-904-2620 For information on all Butterworth–Heinemann publications available, contact our World Wide Web home page at: http://www.bh.com 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America

Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix CHAPTER 1 Employment Realities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The Face of Instability, 1. A New Age of Business, 2. Loyalty’s Decline, 4. Alternatives and Changing Jobs, 6. Evaluation Techniques, 10. Taking Inventory: Key Questions to Ask, 13.

CHAPTER 2 The Employer: General Information . . . . . . . . . . . . . . . . . . . . . 15 Who Is the Employer?, 16. Reputation, 18. History, 20. Mission Statements, Philosophy, and Strategy, 21. Organization and Structure, 22. Products and Services, 24. Status of Technology, 25. Physical Appearances, 27. Major Assets and Potential Problems, 29. Locating Employer Information, 31. Taking Inventory: Key Questions to Ask, 36.

CHAPTER 3 The Employer: Financial Condition . . . . . . . . . . . . . . . . . . . . . 37 Seeking Information, 38. Profits and Losses, 40. Balance Sheet, 44. Cash Flow, 47. Business Plans, Private Placement Memorandums, and Budgets, 48. Financial Analysis, 50. Taking Inventory: Key Questions to Ask, 52.

CHAPTER 4 Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Most Everything Is for Sale, 53. Change of Ownership, 55. Present Ownership and Control, 55. The Owner’s Objective, 57. Exit Strategy, 57. Indications of Probable Ownership Changes, 59. Perquisites of Owners, 61. Taking Inventory: Key Questions to Ask, 63.

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CONTENTS

CHAPTER 5 Industry and Company Position . . . . . . . . . . . . . . . . . . . . . . . . 65 Industry and Employment, 66. Industry Effect During Employment Process, 67. Trends and Market Share, 69. Taking Inventory: Key Questions to Ask, 74.

CHAPTER 6 Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 It Starts at the Top, 75. Management Organization, 77. Your Boss, 81. Nepotism, 83. Training Programs, 84. Limited Experience Management, 84. Taking Inventory: Key Questions to Ask, 88.

CHAPTER 7 The Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Job Titles, 91. Job Duties and Objectives, 93. Location and Working Conditions, 97. Hours of Work, 98. Travel, 100. Job Duration, 101. Entertainment and Social Demands, 101. Subordinates, 102. Taking Inventory: Key Questions to Ask, 105.

CHAPTER 8 Why Is This Job Open? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Change of Duties, 108. New Jobs, 109. Jobs Open Because of Transfer or Promotion, 112. Jobs Open Because of Discharge, 114. Jobs Open Because of Voluntary Termination, 118. Problem of the Embittered Bypassed Employee, 120. Taking Inventory: Key Questions to Ask, 122.

CHAPTER 9 Cultural Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Discovering the Culture, 125. Normal Cultural Environment, 125. Extreme Factors, 126. Taking Inventory: Key Questions to Ask, 134.

CHAPTER 10 The Employment Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 Interviewing: An Acquired Skill, 137. Employment Procedures, 137. Who You May Meet, 140. Your Point of Contact, 143. Evaluating Interviews, 144. Taking Inventory: Key Questions to Ask, 147.

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CHAPTER 11 Personal Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Nothing Is for Certain, 150. Career Planning, 151. Focus on the Present, 153. How Long to Remain On a Job?, 156. Taking Inventory: Key Questions to Ask, 159.

CHAPTER 12 Relocation: Considering Community Factors. . . . . . . . . . . . . . 161 Sources of Information, 163. Economic Factors, 164. Quality of Life Issues, 169. Local Status of Employer, 173. Taking Inventory: Key Questions to Ask, 174.

CHAPTER 13 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Compensation Philosophy, 176. Salary Structure, 178. What Will He or She Cost?—The Employer’s Rationale, 181. Elements of Compensation, 183. Taking Inventory: Key Questions to Ask, 190.

Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

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Introduction Selecting and evaluating jobs and employers is a task for which few are well prepared. While you can never expect to enjoy complete certainty surrounding your career decisions, it is possible to greatly improve the odds for favorable results. Improving the odds involves evaluating a potential job, employer, and community in a systematic and comprehensive manner. The evaluation process is essentially a search for desirable characteristics, not simply an effort to avoid career missteps and to identify problems. There are both great jobs and employers as well as terrible ones, but most are somewhere between the two extremes. Rarely, if ever, are employers and jobs perfect, so the evaluation requires judgment to weigh both positive and negative factors in order to make sound decisions on both a shortand long-term basis. All employment decisions are made in the context of comparing one’s present condition or predicament with the alternatives. If you are currently employed, you should first evaluate your present employer and job as extensively as you would research new ones. No matter how unhappy you are in your present situation, you undoubtedly could stumble into an even worse job. If, on the other hand, you are satisfied with your current job, any job change should present itself as an improvement. Furthermore, systematic evaluation is particularly helpful when you are in the fortunate situation of choosing between several job offers. If you are unemployed, on the other hand, the question then becomes, “How long can you financially and emotionally hold out until the right job is offered to you?” You may find it necessary to take a less desirable job to tide you over until a better one is found.

A R ECIPROCAL R ELATIONSHIP In order to properly evaluate a new employer and job, both the employee and employer must recognize that it is to everyone’s advantage ix

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for information to be shared freely and openly. Both the employer and the applicant are responsible for determining if the job is suitable for the candidate. Evaluation of an employer need not be based solely on promotional material provided by the employer, or on intuition or how charming and persuasive the interviewers were (who may be gone tomorrow). In most cases, applicants make employment decisions based upon word-of-mouth information and on how well they like those they met during the interview process. This is also true from the employer’s perspective—that they place emphasis on how well they like the applicant in addition to the applicant’s ability to perform the job. Neither one, taken alone, gives a full accurate picture of a proper match between employer and employee. Rather, information should be gathered from as many sources as possible, by asking key questions that enhance the evaluation and the eventual decision. Unlike employers—who feel free to ask any questions they wish, conduct intrusive psychometric tests, and perform highly personal investigations—potential employees often feel at a disadvantage. Interviewers may be offended by probing questions and certainly would never tolerate being subjected to the same tests and investigations they use to screen applicants. Therefore, applicants must gather the information they need, but in so doing their quest requires resourcefulness and discretion. One of the main purposes of this book is to assist an applicant in the search for critical information useful in decision making. During the period of mutual courtship and interviewing for a position, the candidate should have his own program to tactfully acquire all the necessary information. To do so, the candidate must know what the important questions are, what information to request, and the significance of observations. Unfortunately, changing jobs occurs in an environment of uncertainty. It is often a time of personal stress because of financial pressure, family conflicts, the importance of making the best decision and awareness that a bad decision could have disastrous consequences. The decision is made more difficult because most applicants have limited experience in changing jobs and evaluating employers. Frequent job changes or lengthy job searches that provide experience are usually not looked upon favorably by employers.

W HY T HIS B OOK ? This book will provide the tools to evaluate a present or new job, employer, and community. Selecting the best available employer and

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job for which you are qualified should be the objective of your career moves. Every job held is a step in your career ladder and you want well-planned steps to advance your career, not missteps. Selecting Your Employer is written with the conviction that an informed individual will make better decisions and recognition of the fact that a job may be perfect for one person and totally wrong for another. Developing a plan of action, including identification of critical factors, will improve the probability of making the right decisions and help prevent foolish ones. To go through the time-consuming and often expensive process of changing jobs, only to discover after starting that acceptance was a mistake, is a personal tragedy. To enjoy a new job consistent with the preemployment evaluation that indicated it was the right job is a success story. The primary purpose of this book is to assist in selecting the best possible job and employer. Extensive knowledge of the job and employer prior to starting will prove to be of great value once on the job. To know the job environment and what is expected will surely benefit performance and help make favorable those important first impressions. Advance knowledge will speed your assimilation into a new job and avoid costly mistakes. The book is primarily for those seeking positions in private businesses or nonprofit institutions and for anyone offering career advice to these people. Its greatest value will be to evaluate positions commonly described as executive, administrative, and professional, from entry-level up to but not including chief executive officer, although it certainly can enlighten anyone. The chapters of the book are organized by subject enabling a reader to both read the book in its entirety for an overview and have it as a continuing reference as subjects requiring special attention emerge during the employment process. At the end of each chapter is a series of question for you to use in planning your evaluation program and as a quick reference to identify subjects for which you need more data. Few if any engaged in an evaluation will have the time or opportunity to ask all the questions posed in this book but the more answered, the better will be the odds for wise decisions. With the information gained and a little luck and as the ancient Greeks said, “may the Gods be with you” your career should progress.

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CHAPTER 1

Employment Realities Assume your present and next employer will not be your last. The increasing instability of the employment environment is such that it is unrealistic for anyone to assume that his present employer, or his next for that matter, will be his last. Regardless of periodic fluctuations in the economy, it is also reasonable to assume that somewhere there is another employer with an equal or better job for you than the one you now hold. Our economic system has created great wealth for some—as well as unprecedented numbers of jobs and employment opportunities—but the statistical totals tend to mask the constant turmoil within organizations and the job market. The precise causes behind this turmoil may be obvious, unknown, complex, or controversial, but the events affecting individual lives are more easily identified. In other words, the uncertainty of job tenure and the existence of other opportunities places the responsibility upon each individual to pursue his or her own self-interest. A critical aspect of looking after oneself is the ability to accurately evaluate your present employer as well as future ones.

T HE FACE

OF

I NSTABILITY

Most causes of job instability are not new and have existed since the dawn of the industrial age. Mergers and acquisitions, technological change, downsizing, reorganizations, financial success and failures, government regulations and policies, economic cycles, and even retirements and deaths contribute to the instability. Fanciful nostalgic views that in the “good old days” employees were secure or treated better are not supported by the facts. What is new—and is supported by statistical evidence—is that turnover rates are increasing and the average job tenure is declining. Furthermore, current trends and practices are expected to continue and accelerate. What 1

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we do know is that in a free market economy, for-profit and nonprofit organizations grow and contract as their financial condition improves or declines, with many factors influencing job stability. No matter what the cause of turnover, the only one of importance is the one that directly affects you! So, how is job stability or instability created? Every organization has a management team consisting of individuals with diverse abilities who are responsible for the success of the enterprise. The combination of their talents or lack thereof, coupled with factors beyond their control (sometimes described as “luck”), determines the fate of the employees. The ability to manage and adapt to continually changing conditions is undoubtedly a primary factor in creating stability, instability, or growth. It is not the organizations but the people who make the decisions within those organizations that eventually affect the employees. It is important to keep in mind that these decisionmakers possess all the usual strengths and weaknesses of people in power and are largely motivated by self-interest. What does all of this mean? Constant change and the unexpected are the only conditions certain to continue in the employment environment. Ask anyone late in his or her career if their careers turned out as envisioned when they were young. It is doubtful if any career paths could be foretold; upon reflection, most people will marvel at the role of unexpected or chance events. Surely, it will be the same today for those who are just starting out in their careers. Recognizing that instability, change, and chance events are bound to occur—coupled with a realization that nothing lasts forever—enables an individual to be realistic, to guard against adversity, and to take advantage of opportunities. An awareness of uncertainty helps people avoid the security trap, in which one believes that because he is comfortably employed, all will continue indefinitely. When things are going well for you, there is a tendency to believe that bad things only happen to others, that you are an exception. Most career events are ones over which an individual has little control, but many of these can be anticipated and their effects can be mitigated or even exploited.

A N EW A GE

OF

B USINESS

The attitudes and thinking of business owners and management have undergone marked changes in the last half-century. Our semifree market economic system that evolved unfettered by only one dogmatic economic theory continues to create more wealth and

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opportunities than any other economic system in the world. The economy is an evolving mixture of relatively free markets, government regulations and controversial theories argued by and among economists. Even past and the current Chairmen of The Federal Reserve Bank admit they do not fully understand the economy. However, it is clear the motivating forces of self-interest and greed are recognized as necessary components for driving the system. Building upon past success of the free market, we now have the age of ubiquitous entrepreneurs, elevating business creation and technological change to unprecedented levels. Less than fifty years ago, as individuals completed their education, they thought in terms of finding a job and staying with the employer for the duration of their careers. Employers assumed they would be in business indefinitely and selected applicants they believed would remain permanently. There was an unwritten understanding that employees would contribute their best efforts, remain with and be loyal to the employer in exchange for training, promotions, compensation increases, and job security. Employees did not expect to continue indefinitely in the job for which they were hired but rather planned to have a long career with the employer. Few do so today. Today, frequent employer changes are common and anticipated. Back then, rarely did college graduates think in terms of starting their own business. There were no courses on how to write business plans and become an entrepreneur. Now such courses are offered in every undergraduate and graduate business school curriculum. Business schools extol the virtues of entrepreneurs and start-ups companies that out-maneuver lumbering corporations and produce a few billionaires in the process. Graduates seek employment to accumulate money and polish their skills in preparation for starting their own businesses. The advent and proliferation of venture capital funds have made possible the dreams of aspiring entrepreneurs. The majority of those who start a business fail, and many who do fail try again. There is little stigma today in failure. So, we see how the cycle continues. An employer is affected when the budding entrepreneur quits to start a business. Furthermore, the employees of a failed enterprise are forced to seek other employment. If the business is a success, more employees are hired, each creating a vacancy upon departure from their current employer. Perhaps, even greater instability is caused by technological innovations both in the form of new inventions and new business techniques that obsolete competitors and people altogether.

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L OYALTY ’ S D ECLINE This endless process of change, job creation, redundant employees, and instability contributes to the general decline in employeeemployer loyalty over the long term. Loyalty in this context is an employee’s dedication to the best interests of an employer, coupled with a determination to remain with the employer and not seek or accept a job with another employer. Employer loyalty requires treatment that employees perceive to be fair, satisfying jobs and creating a sense of security with a policy of retaining employees during adversity. Loyalty cannot be expected to survive for any length of time unless it is reciprocal. Loyalty certainly exists to varying degrees from organization to organization. It is important for both parties, employees and employers to be aware that conditions can change, and that self-interest can eventually transcend loyalty. Intense loyalty may be nurtured and can exist for the short term, but it is unrealistic to expect it to continue indefinitely or to be fairly rewarded. Good things may happen but never count on enduring gratitude. The diminished loyalty of employees to their employers and vice versa is reflected in the employee turnover rates discussed earlier. Few employees in the early stages of their careers expect or even wish to remain with an employer until retirement, let alone in the same position. Many employers select new employees whom they believe can quickly become productive and be either promoted or terminated. Employers are driven by the need for profits and every employee is an expense, regardless of his or her position within the organization. Labor costs are a major variable expense requiring the vigilance of management. It is the responsibility of managers, from the first-level supervisor to the president, to control and reduce expenses, to increase profits, and to financially strengthen the institution. The philosophy of the need to protect and perpetuate the organization as a whole, regardless of the impact on individual employees, provides justification for most distasteful actions. Every employee should realize they are expendible and are only employed because they are needed for the organization to function as a whole, or because they produce measurable income in excess of their expense. Those seeking job security must realize that this notion is only a delightful illusion. Loyalty has declined to the point where it is often considered a foolish attitude. Owners and managers have pursued their own selfinterest without regard to their employees in highly publicized activities to the extent that nearly all employers tend to be viewed as

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similarly disloyal, although they are definitely not. Leveraged buyouts, breakups and liquidations, excessive executive compensation, divestitures, relocation, and similar events that may benefit the organization as a whole (or those personally in control) are often disastrous for employees. The creation of larger and larger corporations by acquisitions results in management far removed from the employees who are affected by their decisions. It is always easier for executives to eliminate jobs of faceless employees whom they have never known.

The Fallout The disenchantment of employees with large corporations is increasingly evident. The business press is a daily reminder of indiscretions, failures, and management follies so blatant and numerous that every employee should be wary. Employees realizing they are without long-term security cannot justify having loyalty and wisely look after themselves. Attempts by corporations to instill loyalty through ambitious training programs designed to create team spirit and stock options for the chosen few or other “golden handcuffs” rarely have long-term effects. The incentive for employees to remain until retirement age and receive a pension has largely been eliminated through the proliferation of 401K plans primarily designed to control employer costs. One consequence of an employer’s lack of loyalty is a readiness of employees to be receptive to unsolicited job offers or to seek out and accept jobs with other employers. Facilitating employee mobility is a huge industry in and of itself—composed of employment agencies, management search firms, out-placement firms, government agencies, Internet services, and numerous others engaged in assisting employees seeking other employment, having employees believe their jobs are constantly at risk.

The Good News Regardless of the general employment environment, there are thousands of fine employers who have earned and deserve their employees’ loyalty. Unfortunately, forces and events beyond the control of even well-managed companies and compassionate executives do occur, resulting in the termination of dedicated employees. It is your responsibility and in your self-interest to locate an employer who will reciprocate your loyalty and who has a low probability of being adversely affected by uncontrollable events. In this age of

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mega-mergers, the size of the employer is no protection against job loss; the most you can hope for is a low probability of major changes and that you will be a lucky survivor. As an example, in the ExxonMobil merger of 1999, most employees retained their jobs although thousands of employees at all levels were dismissed. Unfortunately you can never assume you are an exception immune from the vicissitudes of the employment scene. Regardless of how comfortable and secure your present employment may appear, conditions may change forcing you to actively evaluate your alternatives and how they would be pursued before an urgent need exists.

A LTERNATIVES

AND

C HANGING J OBS

Right now, you are in the best position to evaluate your present situation, and the alternatives to it, in a systematic and rational manner. This may be difficult, however, because it also involves looking at one’s self objectively, which is always a challenge. Further complicating the task is how to weigh multiple factors affecting your career when some are highly desirable, others repulsive, and others unknown or incomprehensible. If you are employed, start with a systematic evaluation of your current employer, job, and overall situation. You will most likely have access to more information about your present employer than any future employer prior to employment. If unemployed, evaluate your last employer. You need practice to evaluate future employers and study of your present situation provides this. It enables you to objectively compare alternative job situations. Similar to job interviewing in which you become more skilled and relaxed with each interview, you become more perceptive and competent in evaluating employers as you gain experience. Throughout your career you will frequently have the need to evaluate your alternatives, and during the employment process there is an almost continuous requirement. It is helpful to recognize the basic elements involved in the employment system and what occurs when changing employers. These elements are summarized as follows: • • • • • •

An initiating event Resume preparation The job search Interviewing Negotiations and decisions Career transition

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During each of these elements, you will become involved in evaluating employers, jobs, and alternatives. An awareness of the stage you are in will aid in your planning. There can be a very short or a long time between the first and last elements.

An Initiating Event The process of selecting a new job and employer may be initiated by any number of events or combinations of events. Unemployment, the threat of unemployment, dissatisfaction with your present job, career aspirations, family conflicts, or an unanticipated job opportunity may set in motion the process that leads to new employment. Once the initiating event occurs, the need for evaluation of alternatives commences. You will be comparing your present circumstances with other possible opportunities, some of which will be very real and will require immediate decisions, as well as others which represent only vague hopes. Once the initiating event occurs, thoughts on what you want in your career and your responsibilities and obligations take on a new urgency.

Resume Preparation As we all know, a written description of an applicant will eventually be required during the job search so prepare it early. This usually comes in the form of a carefully prepared resume, but it could be an employer’s application form. Some employers require both because they see too many resumes that are flamboyant sales documents, which fail to present a complete or accurate picture. A valuable byproduct of resume writing is that it forces one to consider his or her record in detail and to recognize accomplishments and deficiencies. Resumes are commonly submitted with cover letters written to gain the attention of the prospective employer. The primary purpose of a cover letter is to create sufficient interest in the applicant to warrant further consideration. Employers of any size receive hundreds of resumes and an applicant must find a way to differentiate himself from the others. Knowledge of the employer is essential to composing an effective cover letter because the best letters contain references to specific attributes of the employer as an indication as to why the applicant is interested in the position and qualified for it. The more information the writer has about the employer, the greater is the probability an impressive sincere letter can be written. Of course,

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there is also the possibility that negative information about the employer will emerge and the decision will be made not to send a cover letter and resume at all.

The Job Search If applicants do not have an attractive job offer in hand to evaluate, they must begin contacting prospective employers. They are first faced with the big questions of “who” and “how.” Much has been published on how to conduct job searches, and there are individuals and organizations available to provide advice. Be aware, however, that there are extreme variations in the advice offered, forcing a job seeker to decide what is sensible and will probably work for him or her. Applicants seldom possess unlimited resources of money and time and should begin early to evaluate and select the most attractive employers and screen out the undesirable. In some cases, the need for income may be so severe that a highly selective job search is impractical. The pressure for immediate employment may also affect one’s judgment and the evaluation will be less than objective, glossing over or minimizing serious problems that might be uncovered about the potential employer. This possibility should be recognized and guarded against by every financially pressed job seeker. If you must accept a less than desirable job, start planning your next job move immediately. You should also realize that most employers are perceptive and avoid hiring applicants below their skill and experience level, having learned those they do employ are unlikely to remain.

Interviewing A crucial phase in the employment process is interviewing. For the applicant, interviewing is the opportunity to make a favorable impression, to become informed in depth about the job and the employer, and hopefully to be offered a job. Interviewing for the employer consists of an exchange of information resulting in impressions, opinions, and a decision to withhold or make an offer of employment. During an interview, the prospective employee can confirm information previously acquired and secure answers to remaining questions. Equally important, it is an occasion to observe first hand the people, facilities, and the general work environment. These direct observations provide reliable information that can be acquired no other way. As a general rule, the more important the job

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is to an employer, the lengthier the interview will be. Generally, more interviewers will be involved and a greater number of interviews will be conducted. Repeat interviews are always a good sign to an applicant that he is in contention for the job.

Negotiations Should an employer decide to employ an applicant, a job offer stating compensation, benefits, and the nature of the job is presented. It may or may not be acceptable in the applicant’s eyes. If unacceptable, negotiations to resolve differences may commence. At this stage, the applicant should know how much he or she wants the job and should have a good sense of how much the employer wants the applicant. Usually, by the time an employer makes an actual offer, there has been a framework of information exchanged so that the offer is in an anticipated salary range. The employer has probably disclosed its compensation policies and is aware of the applicant’s compensation history and requirements.

Career Transition Accepting and starting a new job constitutes a career move that is not just another line on your resume. Regardless of whether the job is only temporary or a step of major importance, it is a career move and an experience that will always become part of an individual’s record. Penalties for career mistakes can be severe. Early performance on the job, including assimilation into an employer’s organization, may determine whether the job is a step up or a step down—a success or a failure. The better informed the employee, the better are his chances for success. Having an awareness of the steps of the employment process helps you assess your present stage and determine what has yet to happen before you start a new job. A common mistake is to assume one is further along in the process than is actually the case, and to underestimate the magnitude of the effort and time necessary to find new employment. Of course there are enormous variations, depending on economic conditions, your abilities, and the continuous role of chance or luck in events. By their very nature, chance events cannot be counted on, but you can be certain they will occur. No one ever looks back upon a career without marveling at the role of chance events, observing how it all could have been very different. During a

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career, the challenge is to recognize and quickly evaluate chance events that are opportunities. Accept the inevitable: that instability and chance events will always be prevalent and make the most of what you are presented.

E VALUATION T ECHNIQUES To evaluate an employer and job in a systematic and thorough manner, you should evaluate each element individually. Look at the employer, the job, the management, and so forth, each separately. It is possible to find a wonderful employer who is offering a job you detest or a great job with an unappealing employer. You will find it extremely difficult to have any enthusiasm without feeling positive about both the job and employer. The elements described in the remaining chapters of this book are interrelated, but each should be considered separately. In doing so, it tends to reduce the common problem of a “halo effect” in which enthusiasm or distaste for one aspect may influence your view of all others. As an example, you may believe living in Denver, close to the mountains, would be wonderful and therefore overlook your new boss’s unbearable personality. Separate study of the elements, one by one, is a more manageable approach than attempting to look at the entire job before having all the information available. Keep in mind, however, that no one should spend the time to study each element until he has decided that the job appears to be one he would accept if offered. A systematic study of each element also reduces the chance of overlooking important facts. Eventually, you will have to look at the situation as a whole and weigh the desirable and undesirable features to make a decision. You will never have all the information you might want, but you should make the effort to find as much as possible.

Constructing Your Ideal To evaluate anything, you must have a standard against which to compare. The standard in this case consists of what you believe would be the ideal employer and job for you. It is to your advantage to carefully consider your description of the ideal before you commence the employment process. The ideal for you depends on many factors, including the present stage of your career, your interests and capabilities, family requirements, and a host of other factors peculiar

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to you alone. In constructing your ideal, realism should always be paramount. A description of the ideal employer and job that is an unobtainable fantasy would be of no value and actually detrimental to the entire process. For most, the ideal job would be similar to the following: • The employer is financially strong and has an outstanding reputation; • Ownership is stable and no changes are likely; • The industry is growing and not controversial; • The job is interesting and important, making it a pleasure to go to work every day; • It is an environment and job where one can grow and learn; • Obvious opportunities for promotion exist now or in the near future; • Management is fair and of a level of competence you can respect; • The compensation is equal or better than what others are paid for comparable jobs; and • The job is located in a community that my family and I will enjoy. This ideal description is in very general terms and would be applicable for a person looking for a stable situation, relatively free of risk. For most people, a more detailed ideal would be advisable, recognizing specific needs and personal preferences. While it is improbable that you will find the 100-percent perfect job, having this ideal concept in advance is recommended. Constructing your ideal enables you to identify the elements of importance and those that are secondary or insignificant. It is worth your time to reduce your ideal to writing, but don’t hesitate to modify your description as new information emerges or as actual conditions force compromises. You do not want to be burdened with impossible standards or objectives.

Taking the Long View The primary emphasis in your evaluations will be on your present employer and job and the next ones you are studying. However, you should also be looking to the probable employers and jobs thereafter. Another advantage to early identification of acceptable and undesirable employers is that it enables an applicant to better use resources to pursue only those suitable. Precisely who they will be is probably unknown, but you may have some insight into your logical progression,

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either with your present employer or with one you hope to eventually join. The big question regarding current or future jobs is “Will they be a step forward to finding other jobs consistent with your overall career objectives?” If the answer to this is “yes,” you are on the right path. If you are currently in a financial condition where you must accept whatever job is available, then it is all the more important that you be thinking of your next job and follow the steps recommended in the following chapters.

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TAKING I NVENTORY: K EY Q UESTIONS

TO

A SK

❐ How confident are you that your present or next job will be your last? ❐ What is your level of loyalty toward your employer and his toward you? ❐ What are your current employment alternatives? ❐ What is your present stage in the process of changing jobs? ❐ Have you decided upon the ideal job for you? ❐ Do you have a well thought out plan to obtain information?

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CHAPTER 2

The Employer: General Information How much do you really know about this employer? Many people make the mistake of taking a new job based on the specifics of the position alone or, for that matter, a general “feeling” that they get during the interview process. In doing so, they overlook some of the most critical information for making a good career decision: a full profile of the potential employer. You will need considerable information to properly evaluate an employer prior to accepting a job offer. This information can be categorized into financial and nonfinancial components, and are separated for your convenience into this chapter and the next. The next chapter is devoted exclusively to financial matters and this chapter to nonfinancial topics, but it should be kept in mind that the two are interrelated. Both categories are important and while one may be of more interest to you, neither should be neglected. The subjects covered in each category are not presented in order of importance because this is highly subjective. By identifying and prioritizing your own issues of importance, you are able to review the information you already possess, decide what additional information is needed, and plan how the missing information will be acquired. This procedure will help you answer the question: “Do I have enough information to accept or reject a job offer?” There are critical aspects of the employer for you to explore and understand before you can answer that question. • • • •

Exactly who is the employer. The reputation of the employer. For what is the employer known. The employer’s history. The philosophies and strategies of the employer. 15

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• • • • •

The employer’s organization structures. The state and competitiveness of the employer’s technology. The products and services. The condition and adequacy of the facilities. Identification of any major problems.

W HO I S

THE

E MPLOYER ?

A question you should ask early on is, “Who and what is the employer?” The answer to this is fundamental, not only for you to understand the employer but also to gather information. The employer is essentially the person or institution responsible for your compensation—the entity that can hire and fire you. Your actual paycheck may not come from the employer as is the case with some confidential payrolls (or through the use of subcontracted payroll services), but the employer is the one responsible for providing the funds. Employers come in many legal forms and may not always be what you expect. Some employers are better known for the trade names of their products than their legal name and others are DBAs (doing business as) in which the owners have decided to conduct business under another name. The employer may be a partnership, an individual (as in the case of a sole proprietorship), and more commonly a corporation. Corporations fall into three general categories: public, private, and nonprofit. Public corporations’ shares are usually traded on one of the stock exchanges, and these corporations are required to disclose significant information about their activities, all of which is readily available to the public. Private corporations have shares that are not publicly traded, and their information is often closely guarded and difficult to acquire. Nonprofit corporations do not pay federal income taxes, and profits are dedicated to causes defined by law as socially desirable, usually charitable, or educational. Those in charge of the nonprofits can and often do benefit handsomely from their association through direct compensation, perquisites, and insider business arrangements. The majority of hospitals are nonprofit corporations. Information on nonprofit corporations has to be filed with government agencies and made available to the public. Corporations are permitted to own all or parts of other corporation’s shares, making possible tiers of corporations in which there are numerous layers of corporations between the bottom subsidiary and the parent company. Often it is difficult to find reliable infor-

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mation on a subsidiary of a subsidiary. Even more troublesome is the task of locating information on “divisions” or “groups.” These are terms commonly used to describe business units owned by a corporation but not structured as subsidiaries or legal entities. Divisions are only similar in that they are not legal entities, but their characteristics vary widely and particularly in the level of autonomy granted by the parent. The degree of autonomy should be a matter of extreme concern for any management applicants. Groups are usually formed for convenience in management and consist of several divisions and/or subsidiaries overseen by a group management. If you are considering a job with a subsidiary or division, you definitely should review information on the parent If the parent is a public company you may find revealing formation on business segments required in their annual reports and SEC filings. However, in most cases you will only be able to obtain the information you need during your interviews. Other types of employers are joint ventures, usually in corporate or partnership form, in which there are only a small number of owners who have pooled capital or contributed resources to create the venture. Joint ventures are often of limited duration, created to accomplish a specific project, and many eventually experience disputes among the owners. Another variety of a joint venture is a private corporation with few owners, established to accomplish a specific program where the shareholders believe their combined respective strengths and contributions will be more successful than going it alone. Critical factors for any applicant to consider when evaluating a position in a joint venture is the anticipated duration of the job, identity of the owners, which owner has management responsibility and the presence of any owner conflicts. The question often asked and sometimes argued is whether it is best to work for a public or private company, a for-profit or a nonprofit organization, a partnership or a sole proprietorship, a large company or a small one, or any other combination you wish to compare. The question has no answer, however, because of the enormous diversity of businesses available to you. There are great public corporations to work for and disgraceful ones. There are wonderful private employers and some that no one should work for if they had an alternative. In short, within each category of employers, there is great diversity. Because of this, the other factors discussed throughout this book are generally more important in determining if an employer and job is best for you.

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R EPUTATION The overall reputation of the employer is of importance for obvious reasons; if you become a part of the organization, some of its reputation will rub off on you. You cannot escape it regardless of your job’s significance within the organization or lack thereof. Furthermore, the quality and reputation of your prior employers will be a major factor for future potential employers in their decision to hire or reject you. Your association with past and current employers will influence the opinions of not only employers but also your friends. If you have been an employee of a dynamic, well respected, often admired, innovative, and successful company, others will believe you have special ability even to be selected to be a part of such an organization. Certain employers—General Electric is one of the better known examples—are known for their high standards in the selection, training, and promotion of employees. If you have been an employee of a new company from the beginning that has succeeded, the experience will be looked upon favorably. If, however, you work for a company that is neither highly successful or is failing, but rather is relatively unknown, it is unlikely to enhance or hurt your reputation. Most companies probably fall into this category. Another factor that affects reputation is the type of business your company is engaged in. There are controversial businesses that are perfectly legal, but those opposed to their activities may frown upon your association. Tobacco, liquor, and gaming are the best-known and largest sectors in this controversial category. Any association with companies that are financial failures or where improprieties—such as accounting irregularities, boiler room or other high-pressure marketing tactics, unjustified litigation, stock manipulation or illegal practices— have been exposed will adversely affect your reputation, regardless of your level of personal involvement in these activities. Negative reputations of employers linger for years after management and those directly involved in the disreputable activities have been removed. If the perpetrators of the unsavory practices are still employed, an applicant will be well advised to continue his job search elsewhere. Reputation is an important element in morale. A high level of morale in an organization requires that employees feel they are part of a winning team, and if they are not presently superior in any category, everyone’s objective is to become the best. To be associated with the best employer, management, fellow employees, strategic plans, products, and services—and thus reputation—makes working

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a delight. High levels of morale automatically create enthusiasm and to work with enthusiasm is a pleasure. An employer with an outstanding reputation has the possibility of creating great morale, but an employer with a poor reputation has little chance for fostering enthusiastic employees. The reputation, often referred to as “image,” of an organization is largely a product of perception and is not necessarily supported by the facts. It can also be a mixture of good and bad, as would be the case of an employer who paid his employees exceptionally well while remaining in endless disputes with customers. Regardless of the justification for a reputation, it is what people believe about the organization that you must face. Both good and bad reputations may prove to be understated or unwarranted but they do exist and persist. There may be mitigating circumstances for a particular situation that you should be aware of. A reputation may be embellished if the employer is part of a dynamic industry, even if there is nothing at all dynamic about the individual employer. So too can images be tarnished indirectly, as could result when shareholders not involved in the operation or direction of the business are accused of improprieties that are publicized. Furthermore, businesses controlled by high-profile, controversial public figures tend to acquire the reputation of those in control. Fortunately for you, as the employee, businesses are usually very concerned with preserving or improving their images and have spawned an entire industry, public relations (“PR”), to assist in this activity. PR firms and professionals are so skilled, and the trade and business press so receptive, that one should view everything in the media with some degree of skepticism. Your challenge in selecting a job and employer is how to learn of an employer’s reputation. This can be accomplished through direct questioning, researching the business press, and by inference. If the reputation is well defined and established, this will be relatively easy. Businesses at either extreme are particularly easy to identify. Outstanding employers appear on lists of employers considered to be first rate. In addition, employers with undesirable reputations usually have had their misdeeds and unsavory practices well publicized. However, the reputations of most employers are not immediately known and fall somewhere between the extremes. Start by asking the opinions of people you know who may be familiar with the employer. Ideally, you will be able to ask former employees or existing employees who are not involved in the hiring process. Ask the people who interview you what their perception of how the world views

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the employer and whether they believe the reputation to be fair and accurate. Screen the media files for information about the employer, and you may be able to find sufficient data to make reasonable inferences. A simple and quick test is to ask friends what first comes to mind when they are given the name of the employer. Finally, reputations are based almost totally on events in the past so you need to know the employer’s history.

H ISTORY To understand an employer, and eventually to become an effective employee, you should learn of the employer’s history starting from the time of its founding. Organizations with a long history are usually proud of the fact and often flaunt it in their advertising to imply they are reputable and will continue in business. Employers with short histories are less likely to have detailed printed histories of their founding and activities, but their executives should be willing to describe and discuss the past. Applicants for jobs will usually find that their interviewers are ready and pleased to discuss the organization’s history and their personal involvement and contributions to its success. Questions regarding history are not only proper but also discussions of the past tend to build rapport with the interviewer. Remember that you are entitled to such information. An unwillingness to discuss the past would be a serious warning for any applicant to be wary. Older companies may have their histories written by professional writers and published in hard cover book form. They are often written to commemorate an anniversary of the founding or the tenure of a long-serving founder or executive. Official histories usually place emphasis on the positive aspects and gloss over or omit unsuccessful ventures that an older business is almost certain to have experienced. Failed ventures are usually readily disclosed during interviews when asked because the participants are no longer employed, corrective measures were taken, everyone learned and the organization is better for its experience. Company histories definitely are worth reading but one should never assume that they represent the complete story. The history that will most probably affect your job is what has happened in the past few years, facts that are unlikely to be described in a hard cover book. Regardless of any shortcomings, official company histories are an interesting starting point for prospective employees to gain information.

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M ISSION S TATEMENTS , P HILOSOPHY, AND S TRATEGY It has become quite fashionable for a business to have a formally written mission statement, which describes the purpose of the business and its reason for existing. These statements may be part of an overall written strategic plan but usually is a separate statement. When a business is serious about the content of the statements, it displays the statement prominently in company publications; it may even be framed and hung in the reception areas and throughout the facilities. The statements are usually one-paragraph descriptions of the overall operational philosophy of the business and may include goals and objectives. Mission statements are constructed with great care by controlling management, with every thought, sentence, and word studied, reviewed, and often debated. Their value lies in informing customers, investors, employees, and prospective employees of the overall policies and direction of the business without providing details. From the broad policy, more precise policies and procedures consistent with the overall policy are constructed. As an example, when a mission statement includes a phrase stating the company’s objective is “to produce the highest-quality products in the industry,” the design and quality control responsibilities become obvious. Assume formal mission statements are the gospel until you learn otherwise but you should be alert to the possibility that mission statements are not always taken seriously, become obsolete, are ignored, may disappear and are replaced by unwritten policies. In some organizations, a strategic plan may exist only in the head of the president. However, there has been a growing tendency to develop formal written plans, which describe in considerable detail the direction of the enterprise. Larger organizations may even have planning departments headed by a senior executive who is responsible for drafting, monitoring, and proposing modifications to the plan. You can be certain that if a plan exists, the president and most likely the board of directors will have approved its final form. If you are applying for a senior management position in a company with a strategic plan, you will certainly need to know the plan’s content. This will be the framework within which you will be expected to perform. If the company is public, the plan almost certainly has been disclosed and touted to security analysts and is available in their reports. Most employers do not have formal written mission statements or strategic plans, but they do have overall policies and objectives that

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are just as binding as written ones. It is difficult, if not impossible, for any organization to function in the absence of policies and an operational philosophy that provides order and direction for the enterprise. The functional unwritten policies that are well known throughout the organization, and those that are actually in practice, are more important than a written statement that may or may not be followed. A prospective employee should learn as much as possible about the overall policies and practices in the following major areas: • What are the general policies relative to customer relations? Are customers pampered and treated with great respect or given minimum attention, often resulting in disputes? • What are the general objectives with regards to quality of products and services? What level of quality and quality control presently exist? • What are the general policies and practices with regard to the treatment of employees? Are they competitive, benevolent, strictly business, or what have you? • What is the organization’s attitude toward technology? Does the organization utilize the most advanced technology available, both internally for the operation of the enterprise and externally in products and services available to customers? • What is the grand strategy of the business? Is the business to grow and how will growth be accomplished and at what rate? Is the business expected to remain stable or even decline? Are there specific measurable objectives such as return on investment of revenue growth? Whatever the policies and objectives of the organization, a new employee must recognize and accept the fact that they will constitute the framework within which the job must be performed. They are not about to change for a new employee other than for a new CEO with a mandate for change.

O RGANIZATION

AND

S TRUCTURE

Two types of organization charts will help explain where a job fits within the total enterprise and will provide insight into how the employer will function. The first type is a chart showing the relationship of the business unit in which you may be employed to its

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parent company and the other business units it owns. If the unit were self-contained without a parent or subsidiaries, then a chart of this type would not exist. In this age of massive business concentrations, however, chances are you will need to know where a business unit is located within the total conglomeration of businesses. Charts of this type will identify other controlled companies or significant minority investments that could represent personal opportunity for eventual advancement or ones that could be an embarrassment if it encounters problems that are well publicized. Charts of business units also tend to disclose the relative importance of the unit in which you may be employed to the total group and if it is part of the core business. Core businesses are the ones that those in control believe are critical to their overall strategy and will be supported and retained. Core businesses are usually not candidates for divestiture. Probable divestiture candidates often can be identified on these charts as ones that stand-alone and have little relationship to the other controlled businesses. If you are considering employment in a non-core business, questions relative to the possibility of a change of ownership and information on termination pay policies are appropriate. Most businesses with multiple units have charts of this type printed and available for prospective employees, but if they do not, you can ask to have one sketched out for you. The other type of organization chart more commonly seen illustrates the reporting relationships of individuals and the departments or divisions within the organization in which you may be employed. Charts of this type are invaluable to graphically explain where you would fit into the organization structure. They will help define your scope of authority if you are a manager, as well as to identify your superior and the nature of his or her reporting relationship. The higher up in the organization is the position for which you are a candidate, the more important it becomes to understand the reporting relationships throughout the organization. To function effectively, one must know each manager’s area of responsibility and who are peers and superiors in order to respect their status. Organization charts tend to become outdated and where frequent revisions are indicated, it is wise to inquire of the causes. If an employer does not have a chart, you should ask to have one sketched out, preferably by the individual to whom you will report. A refusal to provide an organization chart, a chart that is incomplete, or one of unconventional structure are all warning signs of a possible unstable organization.

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P RODUCTS

AND

S ERVICES

If you have a strong desire or skills to work with certain products or to provide specific services, special care is required in selecting an employer. Chances are you now can identify some but not all potential employers but your information may be out of date. If this is the case, you could easily apply to an employer who (1) discontinued activity in the areas of your interest, (2) is no longer emphasizing the product lines, or (3) is an employer not in the forefront of technology. Perhaps the greatest risk is with an employer suffering from a declining market share due to superior competitors. You also could find yourself in a situation with an employer engaged in the desired activities, but in which your job would have little or no exposure to what you expected. As an extreme example, in airline companies a small percentage of the employees actually fly, most have jobs on the ground, and some clean the washrooms. You must always learn what your specific job will be and not rely on a business’s name or on outdated information. Names of businesses, and their image as to the products manufactured or services provided, may be misleading. Rarely is this intentional but rather a result of changing circumstances with which public perception has not caught up. Older businesses, in particular, may have well-known names that are extremely valuable for marketing purposes, but through evolving product lines and diversification, the names no longer reflect the activities with which they are associated. Certain high-technology and Internet companies have rapidly evolved into new activities that could also be misleading if one was basing their interest in a business on the name alone. Every organization has employees engaged in support services in which knowledge of the product or service is not as important as other skills. Accounting, human resources, and the many information system jobs are examples. While not involved directly with the products or services, these jobs are more satisfying if the products or services are interesting and even exciting. In nearly all businesses, some knowledge of the basic activities is helpful and often essential to those in support jobs. Cyclical and seasonal businesses have demands and risks of which you should be aware. These industries historically have wide swings in their level of business, usually requiring significant increases or decreases in employment levels. Examples of cyclical businesses would be the construction and petrochemical industries and all of

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their suppliers These periodic fluctuations are usually caused by changes in the overall economy. Few industries are recession proof but these are less so. Cyclical businesses tend to be far more sensitive to the ups and downs of the overall economy than other businesses. Most cyclical businesses try to retain their key and outstanding employees during the low point of a cycle, but the severity and duration of the downturn and the financial resources of the employer will influence how many keep their jobs. As an applicant, you should explore the probability of continued tenure in a company subject to extreme fluctuations in business levels. Start by assuming the business will continue to experience business cycles and don’t be deluded into believing current levels will continue indefinitely. A basic question is what happened to key employees during the last downturn, if the employer has been in business time enough to suffer through a downturn. For newer businesses in cyclical industries the question should concern personnel plans in the event of downturn, but it would be a rare company that had plans other than a termination pay policy. If the employer and job in a cyclical industry are appealing to you, you probably should not be deterred from accepting the job but should, rather, recognize the inherent risk. Seasonal businesses have some of the characteristics of cyclical businesses but for most applicants for permanent jobs, a major question centers around the probable requirement to work very long hours during the peak season. This obligation to exert maximum effort during the peak season is critical to the employer because it is the most profitable time of the year. You must be prepared to work the long seasonal hours if you accept a position in this type of business because any shirking of hours would almost certainly be unacceptable. Retailing is the most obvious example of a seasonal business.

S TATUS

OF

T ECHNOLOGY

The status of the technology offered in an employer’s products and services and the technology used in production and marketing will influence the company’s competitive position and its ability to survive. Technology available today and under development will continue to have such a profound effect upon nearly every business that it should be a key factor in an employer evaluation. Applicants are wise to seek out employers with a policy to utilize or develop state-of-the-art technology because they tend to succeed. Working in such an environment can be exciting and the experience gained can

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facilitate career objectives. Experience with a company known for its technology will be an impressive addition to your resume. Products and services sold to customers that incorporate or utilize state-of-the-art technology are usually advertised with information readily available for your review. The technology used in the production of products and support services may be just as important to the enterprise’s success; however, information about this type of technology in printed form is seldom available. Automation equipment, process systems, and information systems that incorporate the latest technology and are functioning as planned often are the hallmarks of a successful employer. Your interviewers should be pleased to describe the technology because most employees in technologically competitive or advanced companies are proud of what has been accomplished and what is on their horizon. Questions such as, “What new technology has been introduced into your business during the past year?” or “How do you compare your overall level of technology with competitors?” can be used to introduce the subject. The impact of the Internet upon the business must be reviewed and important questions should be asked to learn the employer’s present involvement on the Net, the positive or negative influence of e-commerce on revenues to date, and what the outlook is for the future. All agree that the Internet will produce enormous changes in the conduct of business but what the changes will be and their magnitude is open to much speculation and debate. You will have to reach your own conclusions when evaluating an employer in this department, but here are some basic questions for you to explore: • Is the employer currently selling over the Internet? • If the employer is not selling over the Internet, are there plans to do so? • How does this employer compare with competitors in its use of the Internet? • Are sales being lost to competitors because of their use of the Internet? • Are sales being increased through use of the Internet? • Are purchases being made over the Internet? • How extensive is e-mail used for internal and external communications? • How does management foresee the role of information technology in the business?

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Evaluating technology is not always simple and is often controversial. If you are knowledgeable in technology, then you will have definite opinions and will not require so much advice from others. If you have limited or no knowledge of technology, then you will have to read whatever is available and solicit advice. Keep in mind that nontechnical people can be easily impressed with technical data and can be misled because they do not have the background to ask questions. Technical presenters also tend to have enthusiasm that often proves excessive even if based on their honest opinions.

P HYSICAL A PPEARANCES You can learn much about an employer from close observation of the physical facilities and the organization’s activities. Some conditions of the work environment will be obvious and others only clues, subjects for questions to be pursued during your interviews. Usually, your first opportunity to observe the employer’s facilities will be when you are interviewed. From your observations you should be able to gain insight into a number of basic questions: • If I accept this job, what will my working conditions be? • How prosperous is this business? • What is the status of various departments and individuals? The old adage that “looks can be deceiving” has limited application in selecting an employer and should only be viewed as a warning to verify your observations before reaching conclusions. Chances are you will learn little to contradict your original observations. If you are interviewed in an office building occupied by the employer, observe the quality and age of the building. A good-quality office building indicates at the very least the employer’s desire to have employees working in good conditions. It shows that the employer can pay either the rent or the cost of the building if owned. A poorly maintained building should be a warning of possible financial difficulties. If the building has a directory in the lobby or reception area, look to see how much space the employer occupies and who the other tenants are. The space occupied can give you information as to the employer’s size at this location and the activities conducted there. If there are other tenants, it will be worthwhile to learn who they are and whether they have a relationship with the employer.

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Questions about other tenants during the interview can often lighten the conversation, particularly if they are unusual or prestigious organizations. If they are disreputable or controversial, or are ones that attract large numbers of visitors, you should ask why the employer is there at all and whether relocation is being contemplated. Stand-alone facilities owned by an employer that are part of a complex of buildings occupied by an employer, such as a manufacturing plant, offer their own clues. If you are driving to your interview, take the time to drive around the entire facility to see how well it is maintained, the activity of employees, its size, and the condition of the neighborhood. A well-maintained facility with a full parking lot and substantial truck traffic is associated with an active and growing business. Anything less is often an indication that the business is operating under capacity. Inventory or other equipment stored in substantial quantities outside the buildings may also point to possible problems in the business. Probably no better visual indicator of a business’s activity level exists than the amount of vacant space in both the employees’ and visitors’ parking areas. It is a good sign if you have difficulty with finding a place to park. The general quality of the parked automobiles may also be indicative of compensation policies. The number of automobiles still in the lot into the evening may indicate that employees keep long hours or that there are several shifts, or both. The neighborhood surrounding the facility in which the job is located or based could be ideal or present a difficult situation. The absence of crime and the perception that crime is improbable constitutes the best condition, although there is always the chance that crime and threats to one’s safety could occur anywhere. Not all crime originates in the immediate neighborhood, but the type and appearance of the area often suggests the probability for such activity. Frequently, there is ample visible evidence when crime is a problem because of the presence of uniformed security guards, security patrols, rigidly followed sign-in and identification procedures, and security fences topped with an abundance of barbed wire. You should take the opportunity to ask any security personnel involved in your admittance about their views on the extent of area crimes and when the last crime occurred. During your interviews, you should feel free to inquire about security issues, including those associated with transportation. Ask specifically about the most common problems for employers: theft and drugs. Whether you drive your

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own automobile or take public transportation, you will be concerned with your personal safety and asking questions on this front is certainly legitimate. Once inside the facility, your observations to gain insight into the employer should continue. What you see will be your work environment if you accept a job. Consider the following: • Does it look like the kind of place in which you would like to work? • How well maintained is the facility? • Is the furniture in reasonable condition? • Are all desks, offices, and workstations occupied? Large numbers of vacant desks and offices are usually evidence of a business downturn and possibly of organizational instability. Are the employees actively involved in their work or are many standing about appearing to be doing little? As you pass bulletin boards, read as many of the notices as possible to learn of current activities or policies affecting employees. What is the composition of the workforce, and do they look like people you would enjoy as friends? Be alert to how the employees relate to each other? Are they friendly and cooperative and appear to be working together or is there obvious tension? Your observations are of particular importance because this is the immediate environment in which you will work if you take the position.

M AJOR A SSETS AND P OTENTIAL P ROBLEMS Two primary purposes for reading this book is to help you recognize the positive attributes of an employer that can strengthen your job and to help you avoid employers plagued with problems that could adversely affect you. Attributes, or assets, enable the employer to enjoy distinct advantages over competitors and ensure financial stability. However, problems can be of such severity that the job in question will be eliminated, management so distracted that the basic business is ignored, or the job for which you were employed experiences a drastic change in its responsibilities. Some aspects of a business may prove to be either an asset or problem, depending on its characteristics. There is no better example of this duality than marketing.

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Marketing: A Two-Edged Sword Marketing is the broad category of activities devoted to selling a business’s products and services. There are three basic measures of its success: gross profit, market share, and total sales revenues. Gross profit is the difference between selling price and direct cost to manufacture the product or provide the service. A stable or increasing percent of gross profit indicates competitive pressures are not severe and prices are not discounted to affect sales. An unexplained deteriorating gross profit percentage or a decline in the absence of realistic corrective measures should cause applicants to be wary. Market share is the percent of the total market the company enjoys. A declining market share is indicative of serious problems that must be addressed and frequently involves personnel changes. Total sales revenues are an indicator of the success or failure of marketing that is readily observable with access to the business’s financial statements. Rising or declining sales affect the entire organization, and the causes are a subject of major importance in every employer evaluation. Even when all the indicators are favorable, management rarely is satisfied with their current level of business. The result may be frequent tinkering or even major changes in marketing to improve matters. Rare is the sales executive who is not trying to increase sales and those who fail to do so cannot expect to remain in their positions indefinitely.

Legal or Regulatory Problems Environmental issues can affect the entire nature of a business and even shut it down for extreme violations. Actual shutdowns are uncommon and would rarely occur without repeated warnings from regulatory agencies. However, threats of heavy fines or shutdowns are common if remedial actions are not undertaken to eliminate environmental hazards, and must be taken seriously. In some cases, the cost of remedial work or pollution control equipment may be so large that the business cannot survive or the cost will severely restrict the basic activities of the business. Businesses known to be significant polluters tend to become very controversial, shunned by some potential customers and their employees often rudely treated. Ignoring environmental standards is no longer socially acceptable, and businesses engaged in activities adversely affecting the environment or in disputes with regulatory agencies over remedial measures become pariahs in the eyes of many. Applicants considering employ-

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ment in businesses with poor environmental records should be fully aware of the problems they may encounter if employed. The outcome of legal and regulatory issues can have a positive or negative material effect upon any organization. Chances are good that if there are lawsuits or regulatory issues of such magnitude that they could influence the nature of the business, they are already well publicized, easily identified, and informed speculation exists as to the probable resolution. The settlement of these controversies results in winners, losers, or compromises with your employer in one of these categories. You should attempt to estimate the parameters of the probable outcome and, most important, whether your job could be affected. Nearly all employers of any size are involved in some litigation at some time, but you need only be concerned if the outcome could have a major impact upon the business. Antitrust cases, patent infringement suits, and class action suits are examples of suits that have the potential to change a business. Don’t be shy in asking questions during your interviews when problems appearing significant exist. If the problems are serious, you can be certain your interviewers are knowledgeable because they are personally concerned for their jobs. The stance or policies of an employer toward litigation or the government often demonstrates attitudes held by management that may not be articulated in any other forum. A determination to contest every suit, right or wrong, rather than seek less costly compromise settlements may be good for the ego but not the bottom line. A large volume of unsettled or delayed litigation with the employer as defendant can either be evidence of management intransigence or an inability to absorb the cost of settlement. Substantial numbers of cases with the employer as plaintiff usually indicates an overly aggressive attitude or a serious problem attempting to be controlled with litigation. The higher up in the management structure one is applying for a position, the more important it is to learn the causes of excess litigation.

L OCATING E MPLOYER I NFORMATION Now that you are aware of the types of information to research on prospective employers, how does one find it? Public information is readily available on most employers. Every applicant will find it useful to gather as much information as possible, but it is hardly necessary to conduct an expensive or surreptitious investigation. The

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public information will be of greatest value in preliminary screening and as a basis of questions in eventual interviews. For public companies you will readily find more information than you can possible absorb, but for some closely held, private employers, information may be scarce or nonexistent. The following are sources of information readily available either on the Internet or at a public library.

The Internet The Internet is an enormous and varied source of information, and for many employers there is no need to look further. All reports filed with the Securities and Exchange Commission (SEC) can be found at www.sec.gov. Companies whose shares are publicly traded must file reports quarterly, annually, and whenever unusual events occur with the SEC. The reports are immediately available to the public, and they tend to be written with precision because it is a serious offense to submit false or misleading information in SEC filings. The reports may or may not contain data on the subsidiaries of a public company, but they are worth checking and information on the parent company is always of value. Reading SEC reports covering the last few years can be tedious work because of the style and volume of detail, but it is certainly worth the effort. More current information on public companies is found accompanying the stock prices quoted on the Internet. Summary financial information, recent news releases, trends, and analysis are readily available. If the employer’s stock has had a definite decline or a favorable increase in price, it will probably be mentioned in your interviews. If the stock has had a rapid increase or decrease in price during the month prior to your interview, it is a priority issue for you to learn the cause. The amount of additional information that can be found on the Internet is partly a function of one’s skill in “surfing the Net.” Most employers now have a Web page describing the company and the products and services. Company Web pages are designed to provide information for prospective customers rather than applicants but they may contain helpful information. Most employers seem impressed with their own Web pages so dropping a favorable comment about the home page probably won’t hurt your cause. More skilled “surfers” should be able to locate additional information on the employer and the industry in which it functions. Gossip (albeit of questionable value) found in chat rooms is also a possible source. Other Web addresses you may find helpful in your search are listed below.

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www.corporateinformation.com Corporate Information provides numerous sources of information both domestic and foreign. www.corptech.com Corptech provides information on manufacturers and developers of high-tech products. www.dnb.com Dun & Bradstreet provides reports for a fee. It has been the largest and most reliable provider of credit information to businesses for decades. www.forbes.com/tool/toolbox/private500 Forbes provides information on 500 top private companies. www.companiesonline.com CompaniesOnline provides basic information, such as addresses and telephone numbers of public and private companies. www.bbb.org The Better Business Bureau can provide information on businesses that have been reported for dubious business practices. monstertrak.com Contains information on a limited number of companies. Provides valuable advice to those seeking employment.

Trade Publications Great resources that are often overlooked are trade publications. Almost every industry and profession has one or more trade publications devoted exclusively to that specialty. They contain industry information and statistics, articles on companies and individuals, reports on anything that could favorably or adversely affect the industry, trends, and new developments. The publications are either sold or distributed free to most everyone in an industry, so the probability is high that those who interview you will have read the last issues. Anyone certain of the industry in which they wish to be employed or who has accepted a job would be wise to subscribe to the leading publication in the industry and to request a few back issues. You can learn the name of the leading publication during your interviews and could probably obtain an old copy from which you can secure subscription information. You can also find the name of the leading publication at your public library. Ask for SRDS Business Publication Advertising Source (published by McGraw-Hill) and select the publication with the largest circulation and any others that appeal to you.

Analysts Investment banking firms employ security analysts to study public companies and industries and publish reports on their findings.

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The reports are prepared for financial investors and contain historical information as well as performance forecasts. Most of these reports appear to be of high quality because of the analyst’s skill and access to information not readily available to others. The quality of their reports reflects directly upon the reputation of their investmentbanking firm that takes pride in the research. Research reports are one of their most important marketing tools and should be viewed as such. The basic information is usually reliable but the conclusions and recommendations are suspect. The New York Times reported that out of 8000 reports only 29 had “sell” recommendations. To receive copies of reports, request assistance from a stockbroker. You may find some of the reports through the Internet.

Reference Publications There are a number of common reference books found at the public libraries but how many are available will depend upon the size and nature of the library. Information found in these books may not be as current as data you may have located on the Internet or from other sources because most reference books are published only annually. There may be other reference publications not listed below found in the library and you should ask the librarian for assistance. D&B Million Dollar Directory Lists alphabetically both public and private companies, names and titles of officers, sales, and employee data. D&B Reference Book of Corporate Management Lists sales and number of employees and short biographical sketch of key executives. Wards Business Directory Lists both public and private companies arranged by SIC code. Basic data includes sales, number of employees, and total assets. Thomas Register Designed for purchasing people and contains product descriptions, general size of the business, and names of some executives. Standard & Poor’s Registry of Corporations Volume 1 contains basic information on companies including sales, number of employees, and names of officers and directors. It also indicates if the company is a subsidiary and the name of the parent. Volume 2 lists officers and directors and biographical data on each.

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Thomson/Polk North American Financial Institutions Directory List by geographic area banks and gives a summary description. Data on branch banks is limited. Moody’s They have a series of detailed publications by industry type, industrials, transportation, utilities, and banking and finance. The information is extensive but probably can be located more easily on the Internet. Wall Street Journal Index This master index of all articles published by the newspaper can be searched for the employer you’re considering. The index also provides a brief subject for each article. Directory of Corporate Affiliations-Master Index Contains information on who owns who making it possible to learn the companies owned by a corporation. It is a source to learn the parent company of a company you are evaluating. All information you receive should be treated with some degree of skepticism. The most reliable source will be reports required by the government because of the penalties for providing false information. The least reliable will be newspapers and business and trade magazines because many of the articles are inspired, promoted, or even written by someone who had a purpose in their publication. Even information received orally in your interviews may be slanted because they are “selling you,” or the presenter just has his or her own biases. Gathering information about a prospective employer requires an investment in time and effort that is minuscule compared to the potential risks and rewards. You are about to commit a portion of your career; a portion that never can be recovered and you cannot afford a mistake. The information described in this chapter and the following for you to seek is to help you achieve your career aspirations.

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TAKING I NVENTORY: K EY Q UESTIONS

TO

A SK

❐ Who is the employer? ❐ What is the type of organization and legal structure of the employer? ❐ What is the overall reputation of the employer? ❐ What positive aspects are in the employer’s public image? ❐ What negative aspects are in the employer’s public image? ❐ What is the employer’s history? ❐ Does the employer have a mission statement or operating philosophy? ❐ What are the employer’s policies toward customers? ❐ What are the employer’s policies and objectives relative to quality? ❐ What are the employer’s policies and practices in employee relations? ❐ What are the employer’s policies toward utilizing or developing new technology? ❐ Does the organization have an overall strategic plan? ❐ What is the organization structure and chart of operating units? ❐ What is the organization structure and chart for personnel and internal departments? ❐ What products and services does the organization sell and the percent of total revenues each represents? ❐ What is the employer’s status relative to technology in products and services? ❐ What is the employer’s level of technology used internally to produce products and in information systems? ❐ What is the external and internal appearance of the employer’s facilities? ❐ How does the employer market its products and services? ❐ What is the employer’s record on environmental issues? ❐ Is the employer involved in any significant legal or regulatory disputes?

CHAPTER 3

The Employer: Financial Condition Your job and future with an employer will depend upon the employer’s financial health. The financial condition of an employer will be of intense interest for most, but others may mistakenly treat it as a boring irrelevancy or simply beyond their comprehension. Regardless, it is a matter of great importance to every employee and prospective employee because the financial capability of the employer will influence all aspects of the business. The presence of job openings in and of itself is not evidence of financial health. Adequate financial resources are necessary for your job to continue to exist. A prosperous business can grant wage increases, provide generous employee benefits, training and long-term programs, and a work environment that may be demanding but pleasant and even exciting. The ability of a business to grow is made possible or restrained by the funds generated from business activities, funds within the business or available from outside sources. Growth of a business usually creates job opportunities and possible advancement for you. Insufficient funds will cause a business to stagnate or decline and both conditions are detrimental to employees. Wage freezes and reductions, layoffs (or the threat of layoffs), and a rancorous work atmosphere are the hallmarks of a financially sick company. In their efforts to return to profitability, businesses tend to place unrealistic demands on employees, undergo frequent organization changes, layoff employees and cancel longrange programs popular with employees. There is a basic question for which you need an answer: “Will my job be favorably or adversely affected by the employer’s financial condition?” While the latest reported profit or loss of the employer is of importance, it should not be the only factor in an evaluation unless the 37

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finances are clearly desperate. There are very profitable businesses managed by individuals that treat their employees miserably. There are companies losing money with adequate resources to continue (and that anticipate becoming profitable) who treat their employees generously and constitute exceptional opportunities. The technology companies that are well financed despite losses are obvious examples although they cannot survive indefinitely without becoming profitable. In your search for an answer to the basic question, you should not be quick to draw conclusions before seeking explanations and recognizing exceptions. You do not have to be a financial wizard or expert in forensic accounting to gain a general understanding of the employer’s financial condition. A rudimentary knowledge of accounting will be helpful, but you can attain a reasonable understanding with common sense and a refusal to be intimidated by financial reports. A complete knowledge is impossible for most applicants because they will not have access to detailed supporting data; therefore, a general understanding of the financial condition of a company is what you are after. There are two general categories of subjects to pursue to answer the basic questions: 1. Is this company profitable? 2. Does this company have the funds or access to funds to continue operating and to grow the business? The depth of the research required to find the answers varies from employer to employer, but in all cases it is your responsibility to conduct it; your success is a function of your effort. A limited background in accounting and finance can easily be offset with a willingness to ask assistance from knowledgeable friends. For the unsophisticated in finance, financial issues and statements represent a bewildering maze of terms and mathematics. You should not be deterred, however, because you are only seeking general answers to the basic two questions. Those more skilled in financial analysis and all applicants for management positions should attempt to learn much more from the financial statements than answers to the two basic questions outlined above.

S EEKING I NFORMATION If you are applying for a job in a privately held or a nonprofit business and are not seeking a senior management position, financial

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statements may be withheld from you. Private companies, in particular, are often very secretive with their financial statements and may be reluctant to provide even general information. Anyone applying for a senior management position with profit responsibility must insist upon having access to the financial statements prior to accepting the position in order to evaluate the job and to determine if the employer’s objectives can be achieved. These financial statements should include any current budgets for the segment of the business that will fall within an applicant’s sphere of responsibility. Failure to review financial statements would be a serious mistake on the part of the applicant. Applicants for lesser positions may have to be content with general assurances from interviewers regarding the financial condition of the business. Those who are interviewing applicants may not always have access to the financial statements and may be unable to provide the factual data. Whatever the conditions, an effort should always be made to determine the financial condition of the business with a combination of questions, direct observations, and, ideally, from access to the financial statements. For private companies, you may have to be content with whatever information the employer elects to disclose or that can be gathered by other means. For public companies, all information except the most current is available on the Internet (www.sec.gov), as was discussed in Chapter 2.

Unavailable Financials Problems similar to those described above for privately held businesses may be encountered when applying for positions in subsidiaries or divisions of public companies. The financial reports of the parent company are readily available, but they customarily disclose little or nothing about the performance of individual subsidiaries or divisions. However, the parent must disclose results by “industry segment,” and this data can be particularly revealing when the subsidiary or division is of such size that it constitutes a complete industry segment. Since the management of the parent is compensated to demand results in all segments of the company, one can safely assume a highly profitable segment is supported and given substantial independence in its operations. A segment that is unprofitable or barely profitable will undoubtedly be under pressure to improve, probably have its independence curtailed, and may even be a candidate for divestiture. A rough guide to parent companies management’s opinion of its subsidiaries is the sequence in which they

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appear in the annual reports. The favorites are listed first and the least favorite last, and those without illustrations or photographs or not mentioned at all are in trouble or are often considered insignificant.

Only Part of the Picture You should be aware that financial statements only record history and may or may not provide insight into the future; they are never the whole story. Insight from financial statements has to be supplemented and verified with information gained during interviews and from other sources in order to reach valid conclusions. Supplemental information will often be more important than whatever is found in the financial reports. Financial reports are by their nature out of date when printed and only purport to represent the financial condition on a given date. Annual reports are most commonly given to applicants because they provide financial data and frequently constitute colorful sales brochures describing the company. They also illustrate the problem of out-of-date financial information. Most public companies’ fiscal year is the same as the calendar year ending on December 31, with the annual reports printed and distributed early in the following spring. The result is that if you are given an annual report in the period from October to April, you will have financial data that is nine to fifteen months out of date. Much can happen in that amount of time, and you may need to update your information with quarterly reports, which are also available on the Internet. Since there are legal constraints on public companies releasing selectively financial information, you probably cannot acquire data more current than the most recent quarter, nor is it necessary to do so.

P ROFITS

AND

L OSSES

In our economic system, no business, whether characterized as forprofit or not-for-profit, can survive indefinitely if it does not earn a profit. Exactly what is a profit or loss, and the degree of each, can be confusing and not necessarily an indication of future financial performance. Regardless, the most recent financial report describes the financial foundation for the future, and it is for you to evaluate and use the information. The level of reliability of financial data is indicated in the auditor’s report found at the beginning of the financial statements. Financial statements are prepared by the business’s accountants, and their work is verified and reviewed by independent auditors who

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express an opinion in a letter found in their report. If they find nothing wrong with the business’s accounting, they will so state and give what is called a “clean opinion.” However, if they find a problem of major proportions that cannot be quantified, they will give a “subject to” opinion, indicating that the condition of the company is subject to the outcome of future events that may be good or bad. If the auditors believe the business is in serious trouble, they will give a “going concern” opinion, which indicates that unless drastic changes are effected and new capital is injected into the business, it will be a candidate for bankruptcy. For an applicant, anything other than a clean opinion should be considered a cautionary signal. In privately held companies, there may be statements prepared by auditors described as “Reviewed” or “Compilations.” These may or may not be accurate, seldom contain explanatory footnotes, and are not as reliable as those fully audited.

The P&L Page After reviewing the auditor’s statement, look for the page that will show in a numerical summary the profit or loss of the business. Accounting terminology is not fully standardized and this report can have a variety of headings such as “Income Statement” or “Statement of Operations” or “Profit or Loss Statement” or some other variation. Regardless of the title, the first line with numbers is “Revenues” or “Sales,” which is the amount of money received by the business from all sources, usually customers. The last line is “Net Income or Loss,” which is the profit or loss of the company after paying all expenses, including taxes. The net income or loss amount is a key partial answer to the question of the business’s profitability, but other factors have to be considered. If a loss is reported, you are safe to assume the business lost money because no management enjoys reporting a loss; questions will remain regarding the cause and magnitude. If a profit is reported, there is much more to learn to make the reported amount meaningful. You have yet to learn the accounting methods and policies used to calculate the profit and source of the earnings. You do not know if the profit represents a reasonable return on the shareholders investments or how the profit compares with other comparable companies and competitors. Is the profit an improvement over prior periods or a decline? If it is virtually identical to prior earnings, it may be clever accounting rather than a remarkable coincidence. You also need to know how much of the profit came from operations and how much

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was derived from extraordinary or nonrecurring sources. Any profit is better than a loss, but a low profit or one primarily created by events unlikely to reoccur may be unsatisfactory and signal the onset of conditions common to companies in financial trouble.

Loss Businesses A business losing money may be one to avoid or possibly a great opportunity, depending on the causes, severity of the losses, adequacy of funding, and most critical, the probability of returning to profitability. The company that has been losing money for an extended period of time, is running short of cash, and has little prospect of returning to profitability probably won’t be in existence much longer, at least in its present form. The absence of a logical plan to return to profitability without evidence of adequate funds to implement any plan is a high-risk situation for applicants as well as for present employees. Applicants for positions with losing businesses should be extremely careful to evaluate optimistic scenarios presented by interviewers who are desperate to fill jobs. The interviewers’ own careers are involved and their presentations, probably reflecting their honest convictions, may be clouded by the human tendency to hope for the best.

Losses from Restructuring A business reporting a loss for the first time may be admitting a serious decline that started long before the first loss was reported. This is particularly true when a large loss is announced as part of a restructuring plan. These customarily involve recognition of prior losses by writing down the value of assets, identification of assets, and operations to be discontinued or sold and the establishment of reserves to offset future losses. Losses of this type tend to coincide with the installation of new management not wanting to be saddled with prior management’s errors. Restructuring losses invariably signal the introduction of a new strategic plan, and an applicant should learn how the plan could affect his job. Public companies usually announce restructuring programs with fanfare, in hopes of pacifying their shareholders and encouraging new investors. The publicity releases should be available and studied by applicants. Jobs that are important to the success of a new strategic plan can represent a real opportunity if they are well defined and possible to accomplish.

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Creative Accounting Certainly, a profit reported is better than a loss but more information than is found in financial statements is required to reach conclusions. Accounting language is largely mathematics but it is not as exact a science as physics or chemistry. Management and their accountants have discretion in the methods and policies used to develop financial statements, and while most of these techniques are quite proper and defensible, others have purposes that preclude accurate reporting to shareholders and the Internal Revenue Service. Unfortunately, most applicants or employees will not have been previously involved in overseeing or preparing financial statements and therefore will lack the background or sophistication to recognize accounting that has been manipulated for dubious purposes. Fraud involving improper accounting does occur and is well publicized, but major fraud cases represent only a small percentage of all businesses. Even for those with extensive financial backgrounds, improper accounting may not be apparent or easily detectable. Management incentive plans that reward profit performance are also an incentive for operating managers to deceive the accountants. Applicants’ as well as most employees’ first indication of improprieties may be when the employer publicly announces that the prior year’s earnings are being restated (invariably downward), shareholder suits are filed, a senior executive or the auditors resign, or that there is an SEC action being taken against the company. Once possible accounting irregularities are disclosed, the odds are great the company will be in turmoil and unstable for a long period of time. Applicants for finance, accounting, or senior management positions should have many questions on current accounting philosophy, policies, and the reliability of the statements. Those knowledgeable in accounting should make an effort to ascertain before starting a job if their policy convictions are compatible with the employer’s.

Level of Profitability The level of profitability also has to be considered. Since the actual dollar amount of profits is partially a function of the size of a business, percentages become more important to assess the quality of the financial performance. The most common criteria used to evaluate the adequacy of profits are return on investment (ROI) and benchmark comparisons with comparable companies and competitors. One can assume that for a company enjoying profits that produces a

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superior return on investment and one for which the percentage of profit compares favorably or better than competitors, the company from a financial standpoint is very much worth considering. If the reverse condition prevails, caution and explanations are required. To calculate the return on investment, look on the liability section of the balance sheet near the bottom and, you will find a summary line labeled “Shareholders’ Equity” or “Total Stockholders’ Equity” or “Shareholders’ Investment” or some other variation. Divide the net profit for the year by this amount and you will have the percentage return on investment. As an example, a company with shareholders equity of $10 million that earned in a year $1 million would have a 10 percent ROI. This percentage should be substantially higher than the percentage yield on 30-year government bonds, which is considered the benchmark risk-free investment. How much higher it should be will vary by industry, but in any case it should greatly exceed the benchmark and anything less requires an explanation. Industry comparisons are more difficult to acquire but worth the effort. Your best source is a securities firm that has an analyst who specializes in the industry and has published a current report on either the industry or a company in the industry. Individual company reports frequently contain data on the entire industry or at least the important competitors. If you know a stockbroker, ask for his assistance. If his firm does not have an analyst following the industry, he may be able to provide suggestions. Your banker may also have industry comparison data, which is used to evaluate commercial loans. Large public libraries in their business reference sections often carry publications containing industry comparisons. In addition, trade publications and the Internet are sources not to be overlooked. Industry comparisons of financial statistics readily indicate how the company in which you are interested is performing in relation to competitors. Superior statistics usually are associated with superior companies and substandard data is a major caution sign.

B ALANCE S HEET Another key part of a company’s financial statement is the balance sheet and it is usually labeled as such. The balance sheet consists of two parts; the first lists assets and the second a combination of liabilities and shareholders’ equity. It is a numerical summary statement of the resources and financial health of the company as of a prior date. All sections of the financial statements could be subject to

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extensive analysis with every line questioned, but those not skilled in analysis should concentrate on a few readily understood portions and should primarily be looking to identify problems. A very strong balance sheet would be one with a positive current ratio, no intangible assets, little or no debt, and high shareholders’ equity, whereas a weak one would be deficient in one or more of these areas. The current ratio is simply a means of comparing the assets convertible into cash with the bills to be paid within one year. Partway down the asset side of the balance sheet will be a line labeled “Current Assets,” and in the liability section will be a line entitled “Current Liabilities”; the ratio is calculated by dividing the assets by the liabilities. The higher the number that results the better, but if the number is close to or less than one, the business may be having trouble paying its bills. This is a very rough guideline with many exceptions and explanations possible, but any ratio below one is a serious caution sign for an applicant. It is unpleasant and difficult to work in an environment restricted by a shortage of cash and with the embarrassment of having to continually put off creditors.

Intangible Assets Intangible assets are usually recorded in the assets under “Other Assets” normally found after the current and fixed asset sections of the balance sheet. These are assets with a history worth investigating and often reveal much about the employer. Very large intangible assets in relation to shareholders’ equity should represent a caution signal for applicants. Intangible assets are invisible as their name indicates and they may have current value, but they will have to be written off (amortized) over a period of time and will eventually disappear from the balance sheet. Management often elects to write off intangible assets on an accelerated basis or all at once because many investors believe they are a negative factor in evaluating a company. The most common intangible is goodwill assumed when the employer acquires another business. Goodwill is roughly the difference between the amount paid for the business and the shareholders’ equity of the acquired company. Whether this indicates excess payment for the business or a fair and justifiable purchase price will depend on how well the acquired business performs. Regardless of performance, the goodwill is an invisible asset, worthless if the business is liquidated, and of no value as collateral for financing purposes.

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Other intangible assets may consist of expenses that were capitalized rather than treated as a current expense in the year when incurred. Research and development expenses associated with the development of new products or services, start-up costs and certain costs of acquisitions are examples of expenses that may be capitalized and amortized over a period of time. The effect of capitalization is to increase income in the year the expense occurs. Some expenses are capitalized because of tax law or accounting requirements, but much of it is management exercising its discretion to enhance current income. The presence of substantial intangible assets on the balance sheet is a good subject for any applicant to pursue because of the insight into an employer’s business philosophy gained from explanations of their origin and continued existence.

Debt and Equity The amount of long- and short-term debt should be reviewed to estimate if it is excessive and a difficult burden for the company. Debt will be recorded in the liability section of the balance sheet, with short-term debt reported as a current liability and long-term debt reported separately just before the section usually entitled “Shareholders’ Equity.” Short-term debt is due to be retired within one year, and a business should have plans on how this will be accomplished. If the amount appears unduly large, an applicant should feel free to inquire about the plan. The same question is appropriate when the long-term debt is large in relation to the shareholders’ equity. A key ratio used by financial analysts in evaluating the financial health of a business is the debt-to-equity ratio. Unfortunately for an applicant, there are no precise accepted standards, and opinions vary among analysts as to what is a satisfactory or alarming ratio. As a very rough guideline for nonfinancial applicants, whenever long-term debt exceeds equity, questions are in order as to how the debt will be retired. Shareholders’ equity is the final portion of the liability section of the balance sheet and essentially records the value of the assets after deducting all liabilities. It should not be confused with “market capitalization,” which can be calculated in publicly traded companies by multiplying the number of common shares outstanding by the current market price of each share. A comparison of market capitalization with shareholders’ equity is an indication of what the investing public and security analysts think of the business, its management,

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and future prospects. The greater market capitalization exceeds shareholders’ equity, the higher is their opinion of the company and its future. When market capitalization is about equal or lower than shareholders’ equity, their opinion is dark indeed, and the probability is high that changes in the company are in order. From an applicant’s point of view, seeking job security and potential for advancement, the higher that both the shareholders’ equity and market capitalization are, the better.

C ASH F LOW The third important report in a financial statement relates to cash flow and similar to the profit and loss reports, it comes under a variety of titles. “Statement of Utilization of Funds, Statement of Cash Flows, Source, and Application of Funds” or some other variation may be found heading the reports. Cash flow reports record where the business received and spent its cash during the period the financial statement covers. It usually ends with a summary line, indicating whether the business ended the period with more or less cash than it started. There is a tendency for the less experienced to concentrate their financial valuation on the profit and loss page and balance sheet and to not carefully study the cash flow report. This is a mistake not made by those sophisticated in financial evaluations who give full attention to cash flow. They know the cash flow report can often be the most revealing and important of all the reports. A thorough applicant should do the same because it is impossible to understand fully the financial condition of a business without studying all parts of a financial statement. Every line of the cash flow statement is worth studying because of its potential to reveal critical information about the employer. It is quite possible for a business to be reporting a profit but be near bankruptcy because it is paying out more cash than it is receiving. A common example would be when products or services have been provided to customers and the sales properly recorded as a receivable, but the customers either refuse to pay or are allowed to pay late. Receivable build-ups can be caused by disputes with the customers, overly generous payment terms granted to encourage sales, and accounting practices resulting in income being recognized prematurely. In almost all cases the cause represents management failure. Income can also be misleading when it is of an extraordinary nature that will not occur again. Examples would be the sale of a

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business unit or a major piece of real estate for a profit or the favorable outcome of litigation. Extraordinary income buys time but it does little to build the basic business employees depend upon. The opposite condition may be true with a business reporting a loss but actually having a positive cash flow and not in any immediate financial danger, although it is not a condition that can go on forever. Some of the causes are large depreciation charges associated with start-up costs or major capital expenditures, restructuring charges involving a write down of assets, and reserve for future expenses or the sale of assets. Applicants who study the cash flow statement line by line will acquire insight into the employer’s method of operations and approach to financing the business. The variety of information includes: data on sale of assets, investments in new equipment (capital expenditures), and increases or decreases in receivable and payable accounts that could signal major changes in the business operations. Also reported are borrowings and the retirement of debt, dividend payments, repurchase and sale of stock, and much more revealing how the business received and paid out its cash. Cash flow analysis is particularly important in relatively new companies such as technology companies, Internet companies, and other start-ups. These companies typically have very optimistic founders who are convinced of the validity of their business concept, but the business has yet to become profitable and is hemorrhaging cash. As an applicant you must carefully weigh what appears to be a great opportunity against the reality of the company’s present cash resources, coupled with its ability to raise additional cash and have adequate funds to survive until profitable. Many start-ups have built into their business plans second or third rounds of financing to be derived from private placements or an initial public offering (IPO), but market conditions may change making the financing difficult or impossible. There is no better example than the demise of hundreds of Internet businesses caused be their inability to raise additional capital after the market decline in 2000.You should be extremely wary of any company that can only survive with additional equity financing.

B USINESS P LANS , P RIVATE P LACEMENT M EMORANDUMS , AND B UDGETS There are documents that describe a business in its present condition and plans for the future, and if they exist they should be must reading

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for every applicant. Every plan has a purpose and as an applicant you will want to understand the purpose, its reasonableness, and the chances of success. Their preparation usually involves a major effort on the part of the owners or top management and incorporates much of their concepts and business philosophy. While there is no standard format for these documents, there is a great deal of similarity in the formats. Typically, they include a description of the business, plans for the future, and substantial financial data, including pro forma projections. Business plans reduce to writing the dreams for the business, based on some facts but with some speculation about the future. The proportion of facts to speculation varies greatly but sometimes dreams do come true. They are usually written when an individual or group wants to start a business and investors are being sought. They may also be prepared by relatively new businesses seeking additional capital to expand and grow and in some cases to survive. Business plans have become so commonplace that any efforts by a business to raise money without a well-written plan has little chance of success. Their preparation is now nearly a standard requirement and their format has become virtually standardized. Classes on writing plans are routinely offered in business school curriculums and have contributed to the standardization. Plans start with a summary that provides an overview of the business scheme and needs after which the business and its markets are described in detail and conclude with financial data and projections. Since business plans are usually associated with new businesses, these are high-risk situations but ones that can constitute a great opportunity if they succeed. Private placement memorandums, on the other hand, contain nearly all of the information found in a well-written business plan plus other material written by attorneys or investment bankers. Included will be warnings about the risk of investing in the business that if taken literally in all cases make it seem that only a fool would invest or go to work for the company. The risk warnings are certainly valid, but an applicant should use his own judgment in evaluating the risk. These severe boilerplate warnings are included partially to protect the professionals involved in writing the memorandums but can be frightening to the inexperienced reader. The memorandums usually contain more detailed descriptions of the securities an investor would be receiving and the rights of the security holders than is found in a business plan. The involvement of professionals results in descriptions that are more precise, detailed, and carefully thought out because misled investors have recourse in the courts.

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Budgets are prepared for internal use by more established businesses as opposed to business plans and private placement memorandums that are circulated to nonemployees. They also differ in that they include less narrative and more financial data because the readers are already familiar with the business. Budgets are based on some history and financial data accumulated in prior periods so they have at least a realistic starting point. The purpose of budgets is dual, planning and control. Although some businesses attempt to separate planning from budgeting, planning is an inescapable part of budgeting since budgets attempt to predict the financial performance in substantial detail for the next year or more. Budgets establish the level of acceptable expenses for the coming periods and are used to monitor the performance of executives responsible for the expenditures. Budgets are important tools in the management of any business and if you are considering a job with management responsibility, you will want to review the budgets for your area of responsibility and also learn the nature of the employer’s budgeting process.

F INANCIAL A NALYSIS More extensive financial analysis of a business is possible for the financially sophisticated, and a number of financial reports covering several years are available. For those with limited but some financial experience who want to engage in a more in-depth analysis of the company’s finances, they will find at bookstores or libraries numerous books on the subject. However, it would be unusual, difficult, and unnecessary for most applicants to conduct a financial analysis of the scope performed by competent security analysts or during due diligence investigations. You should also realize that regardless of the depth of your analysis, you are not about to discover anything the employer does not know and probably would have told you if you asked. Employers are unlikely to take the time or be willing to give an applicant detailed background information on every line item in their financial statement. If the business has severe financial problems, they are probably apparent without an in-depth analysis or so cleverly concealed that even their auditors are unaware. A basic purpose of any financial analysis is to predict financial performance and this involves construction of pro forma (future projections) financial statements. Applicants would find it extremely difficult to produce a meaningful pro forma with the constraints they are normally under. A partial alternative is to review trends that frequently are the basis for most projections.

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Trends are discerned by comparing data on financial statements with prior periods to learn if significant changes have occurred. The more financial reports you have, the more obvious are trends and not just one-year aberrations. The next steps are to find the causes and probability of the trend continuing. Then decide if the trend changes or confirms your opinion of the employer. Some trends are obvious, such as sales revenues, pretax profits, and total administrative expenses. Others are important but require simple calculations. The percentage of gross profit trends can be most revealing. Gross profit is the profit that remains after subtracting all direct expenses from the amount received from customers. An increasing gross profit percentage may be due to increased prices, lower costs, or both. A declining percentage can indicate the opposite is happening and may signal that serious problems exist within the company. Effective management is continually striving to increase the gross profit percentage. Footnotes to the financial statements can be most revealing but often require considerable business sophistication to understand. They are written with care and precision to reveal the minimum necessary but no more. Appearing after the three main financial reports in audited financial statements or annual reports, the notes cover a wide variety of subjects the auditors believe necessary for understanding the obligations, financial performance, and condition of the business. Information on indebtedness, status of litigation, accounting principles, cost of acquisitions, leases obligations, taxes due and paid, and compensation plans are all subjects covered in footnotes. As a general rule, the more voluminous the footnotes, the more carefully they should be studied. Extensive footnotes may indicate a company is involved in many activities of a controversial nature with the outcome uncertain and their auditors are determined that all should be disclosed. The importance of your having a general understanding of the financial condition of the employer cannot be overstated. Employers are in business to make money, not just provide jobs, and cannot remain in business unless they are successful. Your job will always be dependent upon the financial resources of the employer as provided and permitted to be retained by the owners.

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TAKING I NVENTORY: K EY Q UESTIONS

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❐ What is the probability your job will be favorably or adversely affected by the employer’s financial condition? ❐ Is the employer profitable and if not, when does it expect to become profitable? ❐ Does the employer have sufficient funds or access to funds to continue operating and grow? ❐ Have you studied and do you understand the employer’s profit and loss statement? ❐ Have you studied and do you understand the employer’s balance sheet? ❐ Have you studied and do you understand the employer’s cash flow statement? ❐ Have you read the accountant’s opinion and all the notes in the financial statement? ❐ If any have been prepared, have you received and studied copies of the employer’s business plan, private placement memorandums, or budgets? ❐ By reviewing the financial history of the employer, what favorable or unfavorable trends are discernible?

CHAPTER 4

Ownership Greed trumps compassion Owners are investors. Our economic and legal system empowers owners and those in control of an organization to determine its fate and the jobs of the employees. Their actions and objectives are motivated by self-interests that hopefully coincide with their employees’ welfare, but disastrous consequences for employees are always possible. Regardless of outcome, the impact upon employees is seldom a primary factor in the major decisions of owners, although most would prefer their employees are not harmed and even benefit. There are owners who occasionally place employee welfare ahead of personal financial gain, but your career decisions will be better if you assume your employer is not the compassionate exception. It is always a mistake to underestimate greed. On rare occasions employee rebellions or concerted action by labor unions can delay an owner’s decisions, but these are usually only delays of the inevitable. Accept the fact that owners have different but very legitimate objectives than employees and nearly any actions are permissible in the name of “enhancing shareholder value.” The primary objective of owners of for-profit businesses is to receive a return on their investment through direct compensation, dividends, perquisites, appreciation of their investment, or any combination of the four. Their fallback objective is to minimize their losses should their investment prove unsuccessful.

M OST E VERYTHING I S

FOR

S ALE

Owners, like most investors, will sell their interests when they believe the price offered is fair. This often means receiving a price they believe is greater than their investment is worth but for the buyer’s purposes the price is reasonable. The valuation of business investments is 53

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a subjective exercise and far from a precise science, giving buyers and sellers the opportunity to have widely varying opinions of value. An owner may have no immediate plans of selling but when an offer at an attractive price is presented, a deal is struck. Most owners do intend to sell eventually, but a valid offer may accelerate their timing. To illustrate investor rationale, consider your own reaction if you had bought 100 shares at $10 dollars of a growth stock that you planned to hold for five years with the expectation that the per share price would grow to $50. If you were then offered $30 dollars six months after your purchase, you may change your plan. Liquidity is another investor objective and owners of large blocks of stock in public companies may be restricted from selling. Owners of private companies are always restricted so when an opportunity is presented to sell, the prospect of liquidity is an added inducement. Investors invest to make money and not lose it but some investments do turn bad, confronting the investor with unpleasant decisions. Should he sell out and take a loss? Should he hold on hoping for improved performance? Should he invest more money to help the business survive and protect the original investment? Venture capital funds are continually confronted with this last question, and the evidence indicates that many are choosing to take their losses and not risk more. If you are evaluating an employer whose major investors are venture capital funds and additional financial support is expected, you should be cautious until you’re certain the support will be forthcoming. Regardless of optimism and rosy projections of a management that has failed to meet their business plan forecasts, investors may lose confidence in management and cease funding. The first responsibilities for those who control nonprofit businesses or institutions are the welfare and perpetuation of the whole organization rather than the careers of individual employees. The self-interests of trustees and directors of nonprofit organizations are served well through personal compensation augmented with public recognition, status, personal satisfaction, and the opportunity to cultivate friendships. There are for-profit businesses with many shareholders, none of which own enough shares to influence the course of the institution that has control characteristics similar to the nonprofits. In these cases, usually an entrenched, generously compensated, and self-perpetuating board of directors controls and makes major decisions. In both profit and nonprofit organizations, the president or CEO, who may or may not be an owner, is charged with representing the best interests of the shareholder owners.

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An ownership change has the potential to drastically modify or even eliminate your job as well as to create exciting new opportunities for you, unthinkable under the previous owners. Owners can grow a business, divest of their ownership, shut down and liquidate the business, replace management, change the direction of the business, relocate the business, or sell the entire business if they choose. Ownership entails the right to select management, set the overall philosophy for conducting operations, and instill a style of conduct. They can provide brilliant direction, benefiting everyone or make good intentioned but foolish decisions that cause failure. In short, they can do whatever they please, restrained only by personal ambitions, market pressures, the legal system, and economics. Most, but not all, owners recognize there is a limit to the amount of cash and other assets that can be extracted without serious damage to the enterprise. As potential employees learn of an employer with research and direct interviews, they are evaluating the result of the prior and current owner’s activities and must decide if it is appealing. Applicants tend to be forced to make their employment decisions largely on the basis of today’s conditions and the persuasiveness of the people they meet. What they may not learn are the present owner’s unannounced objectives, the probability of a change of ownership, and when it will happen. Consequently, an applicant may have to speculate and make informed estimates on the basic ownership question: “How stable is the present ownership and would my job be affected with a change of ownership?”

P RESENT O WNERSHIP

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C ONTROL

To answer the basic ownership question, you must first learn who presently owns or controls the business and what is their level of involvement. Ownership and control are obvious in many businesses but very difficult to determine in others. Owners who are directly involved in the management of the business can easily be identified by employees and during interviews. Their name may even be found in the name of the business, but this is not proof that they are in full control. Generations subsequent to the founder may find their control fragmented or disputed because of family quarrels or dispersal of shares. Founders of a business who remain active in management are easily identified if the business has enjoyed success. They may have

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become public figures subject to frequent media interviews. If the business has experienced prosperity in the past but is now deteriorating, the founder is probably avoiding requests from media for information on the business. Businesses owned by corporations may have several layers of corporations between the employer in which you are interested and the controlling parent and its owners. Partnerships and joint ventures have owners in control and, like all owners, they can be active or relatively passive when satisfied with the results. Nonprofit corporations and foundations may not have individual owners, but in all cases some individual (or a group) is in control that selects a CEO to represent their interests. Your task is to identify those who have ultimate control of the organization and the power structure through which control is exercised. Should you become employed, it is all the more important for you to be aware of the owners who can affect your career. During your interviews, it is quite proper to inquire about the owners and their role in day-to-day operations as well as their known objectives. These are not embarrassing or difficult subjects and most interviewers will welcome the discussion. You can be certain your interviewers are even more intensely interested than you in who controls the business and the probability of change. You may be able to find ownership information in advance of your interview, enabling you to ask more specific questions. Public companies are required to issue with their annual reports to shareholders proxy statements naming major shareholders and the number of shares each owns or controls as well as the names of the directors and officers and their shares. Proxy statements are submitted to the SEC and are available over the Internet. Proxy statements also contain compensation information on officers and directors as well as descriptions of stock option plans and other supplemental benefit programs. Public companies are usually not as quick to give out proxy statements as there are annual reports so you may have to request a copy or use the Internet. This information is essential for anyone applying for a senior position and negotiating a compensation package. Dun & Bradstreet (D&B) reports usually contain accurate information, including brief background material but not compensation data on owners, directors, and officers. The reports contain financial and historical information and are written primarily for credit purposes, but it is all data an applicant should know. D&B reports can be secured directly from the company for a fee or illicitly from friends in businesses or institutions that subscribe to their service.

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T HE O WNER ’ S O BJECTIVE More difficult than identifying owners is the challenge of fathoming their objectives and how your job could be affected. Unless their plans are disclosed publicly, they are obvious because of current actions, or they are willing to confide in you, you may have to settle for your own informed guesses. You should also assume owner’s plans, like everyone’s, are subject to change when new facts or circumstances appear. You have to ask yourself these questions: What difference would any probable changes initiated by the present or future owners matter to me? Would it matter if someone new replaced the owner? If the business is merged or sold, would I be better or worse off? What is the probability for a new owner to have objectives differing from the present owner’s? The questions take on added importance when you realize that if you plan to remain with an employer for an indefinite period of time, the odds are extremely high an ownership change will occur, affecting control of the business.

E XIT S TRATEGY Ownership and control change can result from factors no one can manage or influence such as death, illness, and old age. Some of these involuntary changes are predictable but the timing is seldom certain. Change can also result from fights for control or sale of the business. However, many ownership changes are commonly programmed with the phenomena of “exit strategy.” Every applicant who expects to remain any length of time with an employer should be aware of the potential impact of an exit strategy upon the business. Exit strategy is simply the agreed method and time when owners and investors anticipate selling their interest—cashing out. This can involve taking the business public through an IPO (initial public offering), using internal funds or refinancing to buy out investors, selling the business, or merging with another. Any of these approaches can have a major impact upon the business, and concern for employees are secondary in the process. An exit strategy may be written and precise or only a general understanding, but you can be certain one exists if the business is relatively new or has been financed by venture capitalists,

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investment funds, or similar groups. Business plans proposing new businesses, seeking investors, or supporting requests for private placement funding all contain a proposed exit strategy for the investors. Typically, the projected time for exit is four to seven years with five being the most common. An exit strategy component is essential to interest investors because few, if any, want to see their money tied up indefinitely. Leveraged buyouts (LBOs) are assembled and negotiated with an exit strategy for nearly all of the participants. Leveraged buyouts involve a business borrowing money from financial institutions, funds, and investors to purchase the shares of the existing shareholders. Usually the investors include management. The result is that the investors control the company and the company incurs debt to be retired from future profits and disposition of assets. If all goes according to plan, the debt will be paid off and the investors will own the company for which they invested a relatively small amount, and the company will be sold or taken public at a huge profit. During the period when debt is being retired, the company may be continually short of cash with which to operate because debt repayment terms are too severe. Necessary reinvestment in the company is curtailed, mortgaging the future. A change of ownership and management becomes nearly inevitable. Applicants who learn that the employer has undergone a LBO should be very cautious. Investors or owners exiting can have a wide range of effects upon your job with as many desirable as undesirable. You should attempt to evaluate the probable result because of possibilities varying from no effect to your becoming unemployed. As a general rule, the lower your position in the organization, the less chance your job will be affected. You have a job because the organization needs you to function, and it rarely is in anyone’s interest to destroy the business. Senior positions are at greater risk because they are more exposed to differing styles and philosophies that could result from a change of ownership. The exit of investors and replacement with new owners may have an extremely positive impact upon the organization. The departure of unpopular owners and executives and their unsuccessful programs is welcome unless their replacements prove they are even worse. Debilitating fights for control may finally be resolved. Time consuming second-guessing and demands for information by investors or their director representatives can free management for more productive activity. Obligations to investors may have been a financial drain upon the organization, retarding its growth. The new owners

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may very well have an agenda and the capability to successfully grow the business that could add excitement and opportunity to your job. You may be satisfied and comfortable with your present owners, and under those conditions it is natural to assume a change of ownership would be harmful. Premature conclusions of adversity are a mistake in the absence of alarming evidence, such as if a new owner has a record of stripping companies of their assets or firing personnel indiscriminately.

I NDICATIONS

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P ROBABLE O WNERSHIP C HANGES

There are indicators suggesting a high probability an ownership and management change will occur in the near future. Should you be early in your career and have thoughts of remaining with a company your entire working life, then you should realize there is a near certainty you will experience one or more ownership and management changes. However, your immediate concern is an ownership change prior to a time you plan to change employers. Ideally, throughout your career, you want to be the one deciding when to change jobs and not have this be your employer’s decision. The five indicators listed simply are ones for which the odds are high that an ownership change may occur, but it is uncertain how or when the change will occur and the degree to which your job will be affected, if at all. 1. Owner’s Age. Most new company start-ups have young founders and owners with no intention of managing the business forever. Their objective is to create a successful business, either go public or sell out, and become financially independent in the process. Their plans do not include growing old running the business. At the other end of the spectrum are the older owners into their fifties and sixties who are looking for an opportunity to sell their businesses because they no longer enjoy the activity, want more time for other pursuits, or realize they must begin estate planning. 2. Portfolio Companies. Companies that are only one of many owned or controlled by a parent holding company or an investment fund are always subject to being sold or merged. As a general rule, the more diverse the companies held, the greater is the probability they will be sold. For organizations in control, these companies are investments to be held or sold, similar to the way an individual would look at the stocks he owns. The individuals

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in control are usually so far removed both geographically and personally from the employees of the owned companies that impact of a sale upon employees is irrelevant unless employee reaction in some way could adversely affect a sale. 3. Disputed Control. Whenever there is a conflict in progress or control is threatened, you can assume the business is in an unstable condition. The disputes are primarily for money and power but commonly involve differences on how the business should be operated, retained, or sold. These disputes are usually bitter and the management personnel who sided with the losing faction have little chance of remaining employed. The odds are high the business will undergo major revisions regardless of the outcome, with the winners now in position of having to prove their policies as superior. Usually fights for control become public knowledge and employees, including interviewers, are well aware of the dispute. In public companies, the differences are aired in newspapers and at shareholder meetings at which time one faction may emerge victorious—for another year anyway. 4. Substandard Financial Performance. The owners of businesses losing money or performing financially below others in their industry are unlikely to tolerate the condition indefinitely. At a minimum, management changes are probable and the owner’s control position may be jeopardized in the absence of improvement. In our competitive economic system, substandard performance is unacceptable, and identifying the cause or whoever is to blame will not help employees adversely affected. Companies in or near bankruptcy have such a problematic future that employees or applicants should be realistic and assume all jobs are of short duration. Distressed companies may recover but the turn-around is often painful and a high-risk situation for employees. Recognizing and accepting the risk may be an opportunity worth taking if the potential rewards are promising. Jobs of this type are definitely for younger people or the unemployed without alternatives. 5. Up for Sale or “In Play.” If the business is openly up for sale, you can be fairly certain an ownership change will occur but whether it will be for the better is unknown. During the sale period, operations may become difficult, with present owners concentrating on a sale and not on long-term programs to benefit the business. They may actually engage in activities to strengthen immediate earnings and improve cash flow in an effort to justify

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a higher price, but in doing so they may damage long-term prospects. Unfortunately, unrealistic and overzealous expense reductions may be part of the buyer’s program and this involves elimination of jobs and more turmoil. New owners rarely are content to allow an acquired business continue to function unchanged for an indefinite period of time, often because of debatable convictions that they possess superior management skills. Buyers are usually looking to the period of their ownership as an opportunity to implement their ideas and to grow the business to maximize their return on investment.

P ERQUISITES

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O WNERS

Owners are free to extract whatever funds and benefits they wish from a business and are only restrained by an awareness of the fact that too much can “kill the goose that laid the golden egg.” Unfortunately, some owners do extract too much from the business and if they do not kill the goose, it is severely crippled. Owners want to take as much as possible or what they need from the enterprise in a manner that will keep their tax obligations at a minimum. Tax avoidance or mitigation schemes are so prevalent that they have nearly become standard practice. Removal of funds or charging improper expenses to a business rarely can be accomplished without the assistance of employees who have nothing to gain from their participation other than preservation of their jobs. Many employees have found themselves in serious legal difficulties because of their participation in schemes to transfer assets to owners. Should you be applying for a financial position with an employer engaged in excessive and dubious owner enrichment schemes, you should learn the extent to which you will be expected to participate. You then must evaluate the risk and consequences. You will find it difficult to generate much enthusiasm for any job in businesses controlled by profligate owners and management compensated with outrageous salaries and benefits jeopardizing the health of the enterprise. Even in financially sound businesses, resentment may be present when exorbitant compensation is paid to owners or senior managers. You will be even more irritated with their personal largesse if you believe your compensation is unfair or inadequate. For most employees struggling to make their car payments, it is impossible to be associated with owners or managers receiving extraordinary compensation and to not be offended.

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Employees of highly centralized companies where all material decisions are made at the top can find their jobs extremely frustrating with the decision makers unavailable because they are off enjoying their perquisites. Golf outings, hunting expeditions, and prolonged vacation trips—all at the expense of the business—prevent timely decisions from being made. Almost every job requires decisions and review by superiors, and if decisions are not made or delayed, it is certain you will soon be unhappy with your job. Owners and employees view each other from very different perspectives. Typically, owners look at employees as an expense (if they think of them at all) and believe the business has fulfilled whatever obligations it may have by meeting its payroll. It has been the author’s experience that most owners have an inflated estimation of their employee’s affection toward them. Owners tend to look at the whole business and the benefits derived from ownership. Active owners involved in the day-to-day management of the business will be acquainted with employees and may become respected leaders if their decisions are fair and reflect good business judgment. Poor decisions coupled with an unpleasant personality are conditions employees must accept or resign. Employees want to be treated fairly and have their efforts appreciated by their superiors and peers. As an employee, you must resign yourself at least temporarily to accepting your employer as presently constituted, its owner, and our economic system with all their perceived inequities and faults. Your choices are to be sullen and envious, accept conditions as they are, or look at the bounty of others as a goal for you to achieve.

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❐ What individual, family, fund, or group has control of the employer? ❐ Who owns the employer? ❐ Has the employer been a good investment for the owners? ❐ Is there any indication of an impending ownership change? ❐ How stable is the present ownership? ❐ Could an ownership change affect employee’s jobs and, most important, yours? ❐ Is ownership being contested? ❐ How involved are the owners in management of the organization? ❐ Have any of the owners achieved either favorable or unfavorable public attention? ❐ What is the exit strategy for the owners or major investors? ❐ Is any owner jeopardizing the organizations financial health by extracting assets? ❐ Do any owners enjoy unusual and conspicuous perquisites that are an embarrassment?

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CHAPTER 5

Industry and Company Position The industry and a company’s position may determine the potential of a job opportunity. The industry within which a company operates can be as important to your career decisions as the company you have selected. The evolution, growth, or decline of an industry are dominant factors in determining the future of the individual companies that comprise the industry. Internal trends within an industry, such as technological changes or the emergence of a dominant company, can adversely affect the future of individual companies while the industry as a whole continues to prosper. As an applicant for a position within an industry, it is essential to study the future of the industry in total and the trends and major developments as well as how each employer may be affected. Your interviewers should be happy to discuss industry conditions and voice their opinions. You work within an industry but directly for an individual employer whose success is at least partially determined by industry-wide events and the employer’s response to those events. Your study of an industry may convince you that your seeking employment in the right industry but the wrong employer. Employees tend to become locked into an industry with the experience and knowledge gained on a job becoming of greatest value to other employers within the same industry. Another ingredient of your experience is the contacts and friends acquired, but their relevance will be diminished if you change industries. The more time you spend in an industry, the more difficult it will be to change jobs to another industry where your skills are less attractive. If the industry grows and thrives, your skills relative to the industry become increasingly valuable but if the industry declines, your skills may be of 65

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little value or a detriment to finding a new employer. Your association with an industry will influence the way others view you because of the fallacious tendency of people not in an industry to assume everyone within an industry has similar characteristics. A person with mediocre ability may be carried to great heights in a booming industry while an exceptionally able person may stagnate and never achieve his full potential in a declining industry and market. An able and ambitious person in an exciting and growing industry will have far greater opportunity to use his talents to reach personal goals. Industry evaluation requires a study of the industry and its past, current conditions, trends, demographic factors, and the challenge of attempting to peer into the future. Industries are all undergoing continuous change, some slowly and others with great rapidity, shrinking or growing and in some cases disappearing, but most evolving to confront or take advantage of new conditions. Your task is to find the ideal employer successfully competing in a growing industry.

I NDUSTRY

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Precisely what is an industry defies definition and depends upon the circumstances and similar to “what is fair” may be in the eye of the beholder. Take aviation as an example. For some, all aspects of aviation may be considered the industry but for others, their industry is the air carriers transporting passengers, another, transporting freight, yet others, engine manufacturers or airframe manufacturers and assemblers. The breakdown of subspecialties can continue indefinitely. Perhaps, the only businesses that can be included with certainty in an industry are direct competitors of the employer you are considering. Direct competitors plus alternatives filling the same customer needs should be adequate for your definition of industry. Examples of alternatives are e-mail competing with fax, electric cars superseding the internal combustion engine powered cars, adhesives supplanting mechanical fasteners, and cell phones replacing wired telephones. Another approach to defining an industry is to learn the trade shows an employer attends, the trade associations of which the employer is a member or could be a member, and the trade magazines they subscribe to. While the industry definition may never be precise, you should be able to define an industry for your practical use. There exist a variety of sources to find industry data. (See the list at the end of Chapter 2, The Employer: General Information.) The

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Internet is definitely a good place to start. Trade magazines are excellent and can easily be identified in the reference books found at public libraries. The trade magazines with the largest circulation will be the most helpful and a subscription will be a good investment. You will probably want information promptly so call in your subscription and ask to talk to an editor who probably will be a willing source of information. Almost all industries have trade associations that again can be identified in reference books at your library. Contact the trade associations and they usually will provide or suggest where you can find all the information you need. The major investment banking firms have analysts continually writing reports on industries or individual companies in the industries. Reports on individual companies often contain industry statistics. Investment analysts tend to specialize and monitor all the happenings in their chosen industry and often their reports are an excellent source of current information.

I NDUSTRY E FFECT D URING E MPLOYMENT P ROCESS Industries with which you have been associated will influence the decision of an employer evaluating you as a candidate for employment. Experience in the same industry will usually be looked upon favorably as mutually beneficial. The employer can more easily understand the positions you held and you should be better able to evaluate the employer and job. You should be alert to two potential problems when interviewing an employer who is a competitor of your current or a recent employer: First, you may encounter unscrupulous employers who are more interested in pumping you for information than employing you. Even with honorable people the opportunity to interview a key employee of a competitor is too tempting to resist, even in the absence of any job openings. Possible future job openings can help rationalize the interviews. If a competitor employer is seriously interested in hiring you, they will be more impressed with your discretion in refusing to disclose confidential information rather than witnessing you talk freely about your current employer. An even more common difficulty with employment by competitors may be the existence of confidentiality or noncompetition agreements you have signed. Courts often rule such agreements invalid, but few individuals or future employers have the resources and determination to engage in costly litigation with an uncertain outcome. Employment

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with a competitor could be impossible if your previous employer decides to enforce the agreements. Industry stereotyping is rampant throughout the employment process. It is often irrational and certainly unfair, but it always will exist and every applicant should be aware of the possibility and use it when practical to their advantage. Stereotyping is the automatic attributing of certain traits, behavior, or ability to an applicant because of time employed in an industry where those characteristics are thought to be prevalent. The longer one spends in an industry, the more an employer may believe the characteristics exist. An applicant finds himself in the position of demonstrating he does not possess undesirable industry traits or proving that he has desirable ones because those may be the exact traits desired by the employer. Most industries have an image with the stereotype characteristics of employees prevalent. Bankers are believed to be meticulous with financial statements, conscious of cost control but not overly imaginative. Employees of defense industry companies have no appreciation of the need to make a profit. Employees of high-technology companies are so specialized and enamored with their computers that they cannot function in another environment. Employees from basic industries cannot function in a high-tech environment. Of course, all of these generalizations are nonsense and the ability of individuals transcends the so-called industry characteristics. Still, the stereotype prejudices persist throughout the business world. Industries, like companies and individuals, develop reputations that remain long after they have any validity. Anyone seeking a new position would be wise to initially disregard reported reputations and concentrate on the companies and the possible job openings. Many of the old reputations are not justified either because they never were totally accurate or the industries have undergone enormous changes. Basic industries, such as steel, mining, and automobiles, are thought by many to be stodgy with dull jobs and limited career possibilities. Technology industries are thought to have exciting jobs and “where the action is.” Financial institutions are highly structured and do not encourage imagination. You are morally defective if employed in any of the socially controversial industries such a gaming, liquor, or tobacco. In all industries, their reputations are at least partially undeserved and have many exciting high-potential jobs not requiring a compromise of your principles or career aspirations.

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M ARKET S HARE

Trends in an industry are the best guide to an industry’s future. They are not only indicators of future trends but also are tangible evidence as most trends continue. To be a trend, it must have been in existence for a period of time, making its presence identifiable and almost certainly well known within the industry. Trends have momentum and a part of any evaluation is an estimate of whether the trend is accelerating or slowing. Most industries are experiencing several significant simultaneous trends with the more important one a source of either pride or concern. The more common trends relate to growth or decline in total revenues and profits, technology, consolidations, and global change. You can be certain the management of every company within an industry is well aware of all significant industry trends and spends time planning how to benefit or cope with the trend. Upon identification of the presence of every industry trend, you will want to know the effect upon the employer being evaluated. An applicant who has done his research and is prepared with questions relative to industry trends and the employer’s position will probably surprise and impress interviewers.

Industry Trend Indicators Total sales or revenues changes for an industry represent the accepted statistic on whether or not the industry is growing, shrinking, or remaining steady and stagnant. The rate of change is also important to understand. An industry with revenues growing more than 10 percent a year is definitely enjoying substantial growth and has positive attributes for prospective employees. Demand is increasing for the industry’s services and products, and employers participating in the growth should offer more security and opportunity for their employees. The more rapid the growth, the more jobs are being created in the industry, but growth rate may not be similar for all companies within the industry. A critical question for any applicant is how the employer compares with the industry as a whole. A growth rate that is equal to or greater than the industry average is definitely a positive sign, but falling below the industry average is a warning an applicant should take seriously. Employers who fall under the industry rates of growth have problems to be identified, and whatever the steps being taken

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to improve require evaluation. The most unfavorable situations are where an employer is oblivious to his substandard growth or rationalizes it and plans no remedial action. If an industry records little or negative growth, an applicant should be particularly wary regardless of the performance of an individual employer. An industry in decline is not where you want to be if you are looking for long tenure. Industry profits will usually correlate positively with the revenue growth or decline, but this may not always be the case. Profitability of individual employers can vary widely. Profit trends, often referred to as growing or shrinking margins, indicate changes occurring in the industry that should be studied. The causes of significant margin trends can be extremely varied but you can be certain that executives within the industry are well aware of those applicable. There is also the phenomenon of start-up companies, usually in the technology and information industries that may not plan to be profitable for several years but have excellent job opportunities. Eventually, every company has to be profitable to survive, and you should understand how and when an unprofitable company with great expectations predicts it will be profitable. A comparison of your prospective employer’s percent of profitability, both on sales and at the gross profit level, is informative. (Gross profit is the profit remaining after direct costs and is a standard line item on most profit and loss financial statements.) Employers with percentages consistently better than the industry averages are definitely doing some things well. Employers with substandard profit percentages have problems and without remedial plans, the problems are likely to become worse.

Technological Change Technological change is affecting nearly all industries. There are two broad categories of industries being affected by technology. One is the pure technology company whose primary business is creating and marketing technology, such as computers, software, and invasive medical equipment. The other is the entire spectrum of businesses engaged in selling essentially nontechnical products or services but who rely upon technology to conduct their businesses. Whole new industries are being created and others eliminated through technological developments, and the task is a challenge for an applicant to predict the winners and losers. You want to be in an industry with technology that is causing growth and replacing older technology.

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Any employer being adversely affected by competitive technology that does not have a more advanced solution to regain market share is almost certainly in trouble and applicants are wise to avoid. Employers in the forefront of successfully developing or utilizing innovative technology can provide exciting job opportunities.

Consolidations Consolidations of companies within an industry have become common business practice both on a national and international basis. Consolidations are the acquisition of competing companies or similar businesses in other geographical areas. There are two general categories: 1. Financial Promotion: These are designed for short-term gain by their originators. Those promoting financial consolidations (some are called “roll-ups”) argue they produce efficiencies and cost savings and create stronger businesses better able to compete. Sometimes this is the result, but most of the roll-ups have been essentially financial plays dependent upon an IPO. They greatly benefited their originators but proved unable to produce the earnings forecast and eventually fell out of favor with Wall Street. 2. Strategic Acquisitions: Made by well-established companies within an industry usually to broaden existing product lines or to accelerate the penetration of new markets. Strategic buyers often pay unusually high prices for companies in the belief they will receive economic benefits not available to financial buyers. High prices can create unrealistic performance demands to satisfy return on investment objectives and result in excessive job instability. Whether consolidation trends are financial plays or strategic moves, they tout new efficiencies and that invariably includes terminating employees. An applicant considering a job with an employer in an industry experiencing substantial consolidation activity should recognize the possibility of his job being eliminated. In such cases, it has become common for applicants for important positions to negotiate generous severance benefits in the event of a change in ownership.

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Global Economy The global economy is here and its impact on individual businesses continues to grow. The observable trends should continue and most predict their acceleration with no signs that any will be reversed. Applicants should consider the impact of international business activity on the industry as a whole and the individual employer with two primary questions: 1. Are sales revenues of products or services to international customers increasing or decreasing? 2. Are products or services provided by foreign competitors eroding the business of domestic suppliers? Answers to those broad questions can be critical to any applicant’s future. There is abundant evidence of the impact of foreign trade on domestic businesses with monthly balance of trade data gathered by the U.S. government showing the sheer magnitude. On the anecdotal level, one can go to a department store and read the origin labels on items for sale or visit a port and see the quantity and variety of goods being shipped in and out. An employer’s ownership of foreign operations or participation in joint ventures is part of the global economy issue for an applicant to evaluate because these may constitute future job opportunities.

Market Share Market share is the percent of the total industry market an employer enjoys. The larger the percentage, the more powerful and important the employer is in the industry. To have and retain a significant share of the market in any competitive industry, an employer must have products and services customers prefer. The employer must be doing many things well. If market share data is not readily available elsewhere, an indication can be found in Ward’s Business Directory that ranks companies by sales revenues for most product and service lines. This voluminous multivolume directory is in most large libraries. Increases or decreases in market share are of extreme importance in evaluating employers because this is a tangible measure of how well a business is competing. Employers with growing market share are performing better than their competitors, and the management is probably a more competent and stable, winning team.

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The reverse is true when market share is declining and management changes may be in the offing. Few companies will watch their market share decline without taking remedial steps that may or may not be successful. Market share is such an important statistic in evaluating an employer that every applicant should learn of it and the trend. The job opening you are eyeing may very well be part of the effort to reverse an unfavorable trend.

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What is the employer’s industry? What is the overall reputation of the industry? What are the trends within the industry? Is the employer successfully competing in the industry? What is the employer’s market share? Are there common stereotypes of employees working in the industry? ❐ How are technological changes affecting the industry? ❐ What is the impact of globalization on the industry? ❐ Is this an industry experiencing consolidations? ❐ ❐ ❐ ❐ ❐ ❐

CHAPTER 6

Management Seek a management you can respect and a boss who will be a friend. Management determines the fate of the enterprise and will direct, control, monitor, and evaluate your performance. It has the power to make your job a challenging pleasure, or to make your life miserable. In large corporations, executives you may have only read about in the newspapers and only know you as a statistic on some internal report make major decisions affecting your job. Management, which through its authority and responsibility to assign job duties and evaluate performance, has an immediate influence on your career. Positive recommendations move your career forward, but negative opinions or the more damaging kind that result in discharge may have permanent adverse consequences. It is important to remember that management consists of people with all the normal human failings, who make decisions that may not always be wise or consistently fair, but the great majority they believe prudent and justifiable under the circumstances. As an applicant you must decide how compatible you will be with the managers, both personally and with their policies. The relationship will never be satisfactory unless you find the management team and your boss as individuals to respect and trust; and their decisions, assignments, and expectations must be seen as reasonable. For positive job satisfaction, you must believe your part of a winning team!

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A chief executive officer, or CEO, who is an outstanding leader will invariably strive to head a winning team of managers and employees. The CEO has multiple responsibilities for representing the interests of the owners or shareholders, enhancing shareholder values, overseeing 75

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the operations of the entire organization and motivating the team. Usually, there is little conflict in responsibilities because running a successful business is in the best interest of the owners, but there are times of conflict when owner interests will prevail. For employees the CEO is the ultimate decision maker on all matters, sets overall policies, establishes the direction of the enterprise, and represents the organization to the public. The first responsibility of executives reporting to the CEO is to carry out the wishes of the CEO, and their tenure and careers are as dependent upon the wishes of their superior as every other employee is dependent on his superior. As an applicant you may or may not meet the CEO, but you can be certain the individuals and organization you observe do reflect to some degree the wishes of the CEO. Ask your interviewers to describe the CEO and his style of management, idiosyncrasies, and stated objectives. If the CEO has gained public attention, read all you can find in the trade and business press. The CEO has such power over an organization that his or her characteristics and programs are unavoidably a major part of any employer evaluation. The CEO’s reputation and influence is so profound that in many cases whomever is the CEO will control your decision to accept or reject a job offer. Two extremes illustrate the importance of reputation, accomplishment, and public perception. Mr. Walsh, the retiring CEO of General Electric, has been nearly deified in American business and the company has become a model for others to follow. “Chain saw Al” who was CEO of Sunbeam, until fired, demonstrated the terrible effects a CEO can have upon a corporation whose name and products had been respected throughout the world. With the CEO of such importance to the organization, both past and future tenure should be considered. A CEO who has been in the position for a number of years will have made his impact with policies, programs, and subordinates in place. However, an established, successful CEO has to be planning his succession and will usually make every effort to promote someone from inside the organization to continue present policies. A new CEO, and particularly one employed from outside the organization, will be making numerous changes that have yet to prove their value. Applicants should be cautious about joining an organization with a new CEO with a mandate for radical change. Much of your overall judgment of an employer as an applicant will result from your evaluation of the management. Some members of management you will meet face to face, and others you may only

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have had described or read of their activities. You will have to draw your conclusions based on the management as it is presently constituted plus disclosed changes and those that may appear obvious, such as an executive about to retire or in ill health. However, if you are planning on a long tenure or a career with the employer, you should recognize that management changes are inevitable. You have no guarantee the executives that make the job appealing to you will remain in their present positions with the employer. Each is an individual with goals and aspirations unlikely to be revealed during employment interviews, particularly if they involve possible departure. Should a change in the CEO occur, the odds are high that a new CEO will bring about numerous personnel changes. As an applicant, making estimates on the time executives will be in their present positions and their probable replacements is extremely difficult, but you should at a minimum try to do so for your immediate superior. All managers, regardless of their rank within an organization, have limits and restrictions on their decision-making authority. At the top, the president is constrained to work within the guidelines established by the board of directors, overall market conditions, and the laws and regulations governing the economy. Below the president are various levels of management, performing their duties within the policies established by the organization or by their superiors, and most are aware of the limits of their discretion. Exceeding the limits of one’s authority at any level is rarely tolerated for long, and the offender may soon be seeking other employment. At whatever level you are employed, someone will assign work and evaluate performance, but he will not have unlimited authority to do for you anything you wish. The amount of authority an individual manager has is extremely variable from company to company, with job titles often more misleading than illuminating. As an applicant, knowledge of the scope of your immediate superior’s actual authority as well as your own should be a factor in your employment decision.

M ANAGEMENT O RGANIZATION The management organization or structure is the arrangement of personnel by reporting relationships to establish lines of authority and responsibility for segments of the enterprise. Job titles are used to indicate an individual’s rank in the total structure and the most common basic terms, in descending order of rank, are director, president, vice president, and manager. They often are preceded by terms

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to indicate higher levels of ranking such as senior, group, or executive or followed by descriptive terms to indicate areas of responsibility such as finance, information systems, or engineering. The title “director” can be the most misleading and may be used by someone with powers of a chief executive or another with virtually no authority. In Europe and other parts of the world, the terms “director” and “managing director” usually designate executives of major rank. Applicants will find it helpful to explore what any title entails but particularly in the case of a “director.” Small employers are unlikely to have formal organization charts for review, but it will be obvious and well understood that all authority rests with one or two individuals. In larger organizations, formal organization charts are common and should help an applicant understand where he would fit into the organization. Equally important is to understand where your immediate superior fits into the management structure. If during your interviews the employer does not have a chart available, it is reasonable to ask for one to be sketched out. Organization charts are extremely helpful to understand the organization but they do tend to become out of date and fail to reflect recent changes and informal power relationships. If given an opportunity to review a chart, much can be learned by asking it there are changes not reflected on the chart and why they occurred. Open boxes for which a job is indicated without a named occupant are worthy of a question. Organization charts, whether printed or sketched by hand, never tell the complete story of an organization or fully disclose the actual authority and stature of the jobs or individuals. A chart may show a number of individuals all on the same level reporting to one person, but the odds are high they will have very different degrees of importance. The differences may be attributed to ability, length of service, importance of job performed, or even personal relationships, but whatever the reasons they exit. These differences are particularly important when evaluating a job within a group reporting to your potential boss. You need to know your peers’ areas of responsibility and how you will fit in to be successful on the job. Ideally, you should also learn where your boss ranks with his peers because his stature can influence the potential of your job. Fathoming the informal organization prior to employment may be delicate and difficult but is of particular importance to applicants for management positions. You can be certain you will become aware of it very quickly after starting employment, either to your pleasure or detriment.

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To accomplish the objectives of the enterprise, management constructs organizations both to accommodate the needs and abilities of individuals and to solve perceived problems. Most often the structure has evolved recognizing the skills of available personnel and the needs of the organization rather than being the product of master planning. Applicants should be wary of jobs found in new master-planned organization structures because they often are unproved and unstable. The causes of the reorganization and the executives who promoted the changes should also be identified. Applicants should be concerned with employers who claim to have put in place totally new and innovative structures; they have a low probability of success. While there are endless varieties of organization structures to accommodate employer needs and most work well, there are some basic principles of organization that, if violated, are warning signs to applicants: • Lines of authority should be clear and responsibilities should be identified and not overlap. • An executive can only effectively manage a relatively small number of people. Some argue the maximum number is as low as five or six, and any number over ten except for routine lowlevel jobs may not be practical. You should be particularly concerned if your new boss has an excessive number of employees under his supervision. • Everyone understands the structure and, if kept a secret, you should discover the reasons for this. • Multiple reporting relationships rarely survive long term. An employee assigned to report to two superiors, although one may be described as a “dotted line” relationship, is placed in a very difficult position. • Closely related functions should be grouped together and there is a logic to the overall groupings.

Organization Change Organizations are always in a state of change, some very slowly and others with great rapidity. Increases or decreases in the overall size of the business are the most common causes, but most are also undergoing trends either toward centralization or decentralization of decisionmaking authority. Few employers are totally centralized or decentralized but are evolving in one direction or the other. The simple reason

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for the movement is that management usually finds that in time neither extreme functions well and begins moving in the other direction. The best tangible evidence for larger employer’s present state is the size of the corporate staff. A very small corporate office would indicate a decentralized business while a large staff would constitute a centralized organization attempting to maintain close control and provide services to operating units. Your task as an applicant is to be aware of these highly probable trends and discern how your job and career could be affected. You may not want to be on a corporate staff if the trend is to decentralize or in a subsidiary where you have to check a policy manual or request approval from someone in the corporate office before you can act.

Beware Organizational Fads Organization changes mainly are a healthy recognition and reaction to new conditions or efforts to solve problems and not based on ideology. Beware of organizations undergoing or that have undergone recent radical restructuring as a result of management becoming convinced by consultants to install some fad or because a CEO believes he alone has discovered the ultimate in organization structure. Organization fads come and disappear but usually not before creating instability and considerable damage to the organization and employees’ jobs before more proven structures are restored. The restructuring process can be traumatic to an organization because it invariably involves eliminating jobs and reassigning responsibility without adequate knowledge of the work performed by the incumbents. For an applicant to accept a newly created position in an unorthodox new organization structure is a very risky move indeed.

Turnover Organization structures may have changed little in years or may change frequently, but another form of instability evidenced by constant turnover of executives may exist. Some turnover is bound to occur because of retirements and deaths, and if the business is highly successful executives may be recruited away with lucrative opportunities. One of the best recommendations for any employer is that it has a problem with employees continually being contacted to accept attractive positions with other employers. However, turnover by employees because of “policy differences,” dislike of certain execu-

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tives, or impossible job demands is turnover of the type that is a warning to any applicant. Never assume you will be an exception because you are smarter or more clever than those you are being asked to replace.

Y OUR B OSS The most important executive for you is the executive who will be your immediate superior: your boss. The opinion and impression you have of the individual who will become your boss will be a major factor in your decision to accept employment and the level of enthusiasm you have for the job. Ideally, you want a boss who takes pride in helping subordinates grow, supports their progress in the organization, gives them full credit for their accomplishments, and is not self-promoting to their detriment. Regardless of how much you need a job and how much you like other aspects of the employer, you will find yourself in a most unhappy situation if your boss is personally offensive and has an unbearable style of managing. Your job decision will largely result from information conveyed by people actually met during your interviews, and none is more important than the person you would report to if employed. Information consists of hard facts such as location and salary, but the subjective impressions consisting of your opinion of the people are equally important. You simply want to work with and for people you can respect, learn from, and who are a pleasure to know. If you have the opportunity to ask former or present employees who worked for your prospective boss their opinions, by all means do so. Their insight may be the deciding factor in your decision to accept or reject a job offer. You would like to know how long your boss will remain in his present position, but it is unlikely you will be told and the boss is probably wondering that himself. You may be thrilled when a top executive offers you a job to work under him where you can demonstrate your talent and learn. However, the odds are not good that truly outstanding executives will remain in their present positions for long periods, and you may soon find yourself working for a new boss with whom you must start over developing a rapport. The other extreme is the executive who has been on the same job for years. Your chances for rapid progression are usually limited under this type of manager, but if you are comfortable with a steady job, this may be for you.

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A symbiotic relationship between a boss and subordinates prevails and can greatly benefit both or be harmful. Your superior wants you to fully perform your job assignments in a manner that does not create problems or in any way reflect adversely upon the operations or its management. There should exist an unwritten understanding that in exchange for performing well on the job and doing everything possible to assist your superior, you will receive additional compensation and be recommended for promotions. In short, you should help make your boss a star and he will do the same for you. To help your boss be a star, it is easier if you sincerely believe he is one and can be so viewed in the organization. Unfortunately, most managers are not endowed with unlimited ability and potential for promotion, but it still is in your interest to help them as much as possible. Ideally, your boss will have coattails and a record of promotions and will have brought with him to each new job employees who previously performed well for him. Another form of coattails is where employees are promoted throughout the organization because of the stature of this executive and the weight of his recommendations. Such an outstanding executive takes pride in helping others move ahead and at the same time creates a group of individuals beholden and loyal to their mentor. To assist subordinates, the superior must have stature whereby his ideas and recommendations are seriously considered. From an applicant’s viewpoint, the more stature and clout your boss has, the better. Outstanding executives tend to surround themselves with exceptionally able subordinates, further enhancing the desirability of working for a winning person. Some indications of stature may be evident before employment or a matter of reputation that eventually will be verified or found unwarranted. Perquisites, behavior, and attention received from other executives are indications of an executive’s stature in the organization. The size of an executive’s office, its location, and the quality of its furnishings in comparison to peers are obvious status indicators. Location is important not only from the desirability of the view but proximity to the CEO or other senior officers is a favorable indication of status. If you find your boss has a very low status office, you can safely assume yours will be worse. The desirability of parking assignments can often be a status indicator. In public companies, you can check the proxy statements to learn the compensation of senior executives and stock options granted as an indicator of their relative status. Total compensation, while not 100 percent reliable is the best tangible indicator of an executive’s overall status and rank in the organi-

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zation. Once employed, you can observe with whom your boss eats his lunch. The status of luncheon companions is often an indication of status because individuals of relatively similar rank and status tend to associate. Should there be an executive dining room or cafeteria, the status phenomenon will be obvious. Daily evidence of status is the rank of executives who visit your boss’s office or call your boss to their offices. The interaction between executives where you can observe who receives attention and who is shunned is an excellent indication of current status.

N EPOTISM Nepotism is a common condition to recognize, accept, and adjust to that cannot be categorized as all good or bad. Nepotism is favoritism for relatives and close friends of owners and senior executives and not confined to privately held businesses. If you are a beneficiary of nepotism, then it is a negligible problem other than to demonstrate you can perform your job as well as anyone else. The hallmark of nepotism is the selection of employees for jobs because of their relationship rather than ability as compared to others qualified for the jobs. Of course, many selected through nepotism can perform very well. Not only do they enjoy the advantage of being placed on the job without effort; they will move up in the organization ahead of others and have access to their mentor. The sons or daughters of the owner or CEO clearly have advantages over all others. If nepotism exists in an organization, job applicants should recognize its presence and the fact that it will remain and that there is nothing they can do other than accept it. You have to evaluate how it will affect your ability to perform your job and your opportunity for promotions. Do not have any illusions that you can resist or overcome its effects. Nepotism is most prevalent in family-controlled corporations where there is a son or daughter or very close relative being groomed to take greater responsibility and eventually become CEO. The presence of family members can preclude ambitious and talented employees from ever reaching top jobs, but they can provide stability and continuity that isn’t all bad. Political infighting for a senior position is pointless when it is certain a family member is slated for the position. The effects of nepotism can be extremely varied, and each case has to be considered individually with much depending on the competence of nepotism’s beneficiaries. If you are not concerned

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with promotion to senior positions, then your main concern is that the next generation does not consist of fools. A brilliant young executive being trained by a successful parent to shoulder responsibility may benefit all employees.

T RAINING P ROGRAMS Management training programs present a problem for the applicant in that often at the time of entering the program, the manager to whom you will be assigned after completion of the program cannot be identified with certainty. This is usually a risk well worth taking because your employer will have a significant investment in you that can only be recovered if you remain with the organization. You have been trained because the employer needs you. If you do well during the training program, it will be to the assigned manager’s advantage to help you continue on a “fast track.” Those entering training programs must base their employment decision on an evaluation of the employer, the senior management, and the possible jobs upon completion of the program. Other indicators of a desirable program are the time and money dedicated by the employer to the program and what happened to the prior graduates. If at all possible, you should try to talk with others who have gone through the program.

L IMITED E XPERIENCE M ANAGEMENT Managers with limited or no experience are a serious and continuous problem for both employer and employees. Employers depend upon management to operate the enterprise in the most productive, efficient, and friction-free manner possible, and every owner and employer prefers to have outstanding management. Employees want managers they can respect and admire. Unfortunately, exceptionally competent managers are always in short supply and employers are forced to use many inexperienced and mediocre managers that create difficulties for both the employer and the employees. Management skills and techniques can partially be learned from the many fine books on the subject, courses, and training programs but it takes actual experience in managing people to become proficient in management. Employers seeking managers for open positions accept applicants with a record of managing people. Investors considering investing in an enterprise evaluate the quality and experience of management as a primary criterion for their decisions. Often in start-

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up or relatively new companies investors require experienced senior executives to be employed before they will invest. Larger more mature enterprises recognize the problem and develop means to train and develop inexperienced managers. Formal training programs, continual advice and guidance by proven senior executives, and intervention by human resource professionals to resolve conflicts all contribute to the evolution of inexperienced managers into successful executives. In larger organizations, managers are far more subject to review by superiors and educated on government regulations and organization policies defining employee rights. As an applicant, your chances are probably better in a larger organization of having a reasonably competent superior, but there is no certainty. It is never improper to ask your potential boss about his background and how he learned to be a manager. Starting with the flattering assumption that he is a proven manager, he probable will tell you the story of his life. In smaller businesses, few if any of the management support functions and services found in larger enterprises exist and the odds are much greater of encountering an unbearable boss. The CEO may be a brilliant inventor or the creator of a promising new business concept but has had little or no experience in managing people. Inexperienced managers often become enamored with unorthodox management techniques that only bring turmoil and misery until discarded. Probably the most serious void in management development in small companies is the absence of a review system, leaving management education to the infamous school of hard knocks. Learning what works by trial and error is often costly and an expense new businesses can ill afford. For an applicant evaluating a position in a small company, it is most important to become well acquainted with the owner or management prior to employment. Time spent with management should help you learn of their quirks and strengths and also build the rapport necessary for success if employed.

Consultants The presence of consultants creates questions for both applicants and employees and their influence upon management and the true purpose of their activities is a matter of concern. Your question is, how could the result of their activities affect your job? Consultants are individuals or organizations retained for a limited engagement by senior management to study, investigate, and recommend solutions

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to perceived problems or install new programs and systems. Their presence is evidence that the CEO has been persuaded the organization has problems requiring resolution and there are not internally employees with the necessary skills or time the consultants purport to possess. Occasionally consultants are retained to support predetermined conclusions that management knows will be controversial with employees. Consultant’s recommendations almost always require change and the changes often affect the jobs of employees. Their assignments usually are to provide advice believed to benefit the organization as a whole and the owners with a secondary regard for the impact upon individual employees. Consultants retained for organization studies or strategic planning are of greatest concern for employees because their recommendations, if accepted, have the most probable potential for dislocation of employees and changing the content of existing jobs. Sweeping reorganizations, discontinuance of products, services or entire business units or the starting of new endeavors cannot be accomplished without affecting employees. Some may benefit but more may be unhappy with the changes. Consultants are expensive and they know their cost must be offset by the value of their recommendations. Consultants retained to install new systems and technology usually have the opportunity to affect only the employees and not the entire organization. Consultants providing programs designed to motivate or train employees often are controversial but seldom damaging to an individual’s career unless employees are too vocal with negative opinions. There is no question that consultants have provided valuable management assistance to many organizations but their successes often have not received as much public recognition as their failures and indiscretions. They have been in the forefront of introducing new concepts and theories that proved to be of limited value and are looked back upon as discarded fads. Examples of controversial programs promoted by consultants during the 1990s are reengineering and Internet ventures that at a minimum were premature. Another difficulty is the absence of uniform standards resulting in extreme differences in the competence and professionalism of consultants. Anyone can declare himself or herself to be a consultant and attempt to sell their services. Presenting oneself as a consultant during a period between jobs or while seeking a new job is an activity that has merit if one has marketable skills. Jobs with prominent and respected con-

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sulting firms are well compensated and constitute great training by providing a diversity of experience in a short time. Knowledge of the individual members of the management team and the organization will not only be an important part of your evaluation but will prove to be valuable if you accept employment. Once on the job you need to know who will make decisions, who can not make decisions, who do you need as friends, who must you avoid offending, and the host of other interpersonal factors that are essential to your success. Understanding the management structure will enable you to better evaluate the job.

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❐ What is the overall performance record of the employer’s management team? ❐ Who is the CEO and what is his reputation as an executive and person? ❐ How long has the CEO been on the job? ❐ Is the organization structure relatively orthodox with traditional reporting relationships? ❐ Is the organization becoming more centralized or decentralized? ❐ Who will be your boss and what is his or her background? ❐ What is the status of your boss in the management hierarchy? ❐ Is nepotism prevalent in the organization? ❐ How are employees selected, trained, and groomed for promotion? ❐ Are there members of the management team with very little prior experience in actually managing people? ❐ Is the management team relatively stable or have there been frequent changes and more seem possible?

CHAPTER 7

The Job Learn the precise nature of the job and what will be expected of you. When you accept a new job you are committing to spend a large portion of your waking hours with the job. It is prudent to fully understand in advance how those hours will be spent. In addition to the hours at a work place, you will be devoting time traveling to and from the job and large amounts of time thinking about job-related matters. The time and mental commitment is of a magnitude that you cannot afford to make the mistake of accepting a job that turns out very different than you thought. Nearly everyone is engaged in work because of the necessity or desire for income, but the requirement for income should be satisfied with a job that is a pleasure to perform. There is ample evidence that a job an individual enjoys and is satisfied with is a job providing income the recipient believes is fair and may be near the maximum possible at this stage of his career. There is also evidence that if you are in a job you intensely dislike, you probably are not performing well and you better find a new job before you are asked to do so. You always want to be on a job where the employer is better off with you than without you. The more dependent the employer is upon your services, the greater is your job security and possible compensation, at least in the short term. However, employers who realize an employee is of critical importance tend to begin devising alternatives to reduce reliance upon the employee. Attempts to take advantage of perceived importance will encourage an employer to seek solutions that reduce the bargaining power you temporarily enjoy. Regardless of how important you believe you are to an employer, you must still work within the employer’s rules, policies, and customs. If all others are working long hours, so must you. If heavy travel and entertainment is necessary, you travel and entertain. If employee 89

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meetings are scheduled, you attend. You retain your importance to your employer by performing your job and accepting the system. Don’t be surprised or discouraged if you find it necessary to sort out the precise nature of a job and all its nuances. You may receive varying descriptions of the job from those conducting your interviews, and you must use information from all sources to determine the true nature of the job. Professional “head hunters” and interviewers in the human resources department may possess excellent skills in evaluating applicant’s attributes and shortcomings but very limited or erroneous information on the job requirements and employee characteristics necessary for successful performance. These professionals have inherent conflicts of interest because their performance is graded upon success in recruiting and convincing qualified applicants to accept open jobs. They may believe that persuading an applicant requires positive descriptions of the employer and the job and therefore they neglect or gloss over problem areas. Don’t expect an interviewer to inform you of all the problems and everything wrong with the employer and the job. You will have to discover for yourself through questions and observations if there are conditions in an employer’s organization that would make the job difficult or impossible to perform. In most cases, the best description of a job will come from the person who will be your immediate superior, but you should still evaluate information from all sources. Written job descriptions provide a general description but rarely contain complete information or the many nuances of any job. They can be helpful and a starting point but should not be relied upon. You not only want to learn the precise nature of the job but also the background and personal characteristics an employer is seeking in applicants. It is fair and reasonable early in the interview process to ask an interviewer the characteristics in an applicant being sought. The response may prove extremely enlightening if you learn they are looking for someone exactly like you, or the other extreme, that you do not fit their job criteria in the slightest and everyone is wasting time. In most cases, employers begin recruiting with ideal criteria for an applicant’s characteristics but will compromise if necessary in order to fill the job. As a job search progresses without success, employers begin to question the necessity of all the original applicant specifications. The employer may never find the perfect applicant so don’t be dismayed if the initial applicant characteristics do not fit exactly. You should ask how critical in their selection process are the

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desired characteristics you do not possess. Should their description of desired traits fit you very closely, you will know the probability of a job offer is good and you may have extra bargaining power. During the process of interviewing and learning of the job and its requirement, you should be asking yourself if this is a suitable job for you at this stage of your career. Will your education and experience be fully utilized and constitute a base from which to advance further? Is this a job you are reasonably confident that you can perform? If your answer is “no” to these questions, then recognize your purpose in seeking the job is to earn income until something better comes along.

J OB T ITLES In evaluating any job, you must look beyond the job titles. Job titles can describe succinctly with remarkable accuracy the status level and general duties of a job, be totally misleading, or deliberately designed to conceal a job’s true nature. Some high-status job titles are awarded as a partial alternative to monetary compensation. In all cases, a job title consists of only a few words that never can fully describe every facet of a job. Many job titles are commonly used but the actual jobs to which they are assigned can vary immensely from organization to organization both in content and status. The confusion starts at the top and continues throughout lower-level positions. A “president” may or may not be chief executive officer (CEO) and there is a vast difference. “Vice president” may indicate a position of great responsibility or simply be a job of limited authority with a prestigious title thought to be helpful in dealing with customers. Large banks are famous for having legions of vice presidents. “Manager” is another title that has come to mean very little without explanation. A manager could be in charge of a large enterprise responsible for hundreds of employees but in other organizations few or none. Other titles that are common and usually meaningless are “analyst,” “assistant to,” and “administrative assistant.” Some grandiose titles are given to employees in an effort to make them more credible with customers or others outside the organization but have little other meaning or value. Complicating any reliance upon job titles is the tendency to assume from your past experience what a job might be. Never assume the jobs in another organization are similar to the

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ones you are familiar with just because the titles are identical. Never accept a job solely on the basis of the job title. On the other hand, job titles and the statuses they imply are important for successful job performance. The job title should be commensurate with the responsibilities of the job and a title with status different than the job may be an impediment to performance. Within an organization, employees know the rank that job titles imply and any titles above or below the actual job level create questions and problems. A job title below the job level implies the employee has yet to prove himself and may not have the full confidence of his superiors. Fellow employees and people outside the organization may be cautious in their relations with this employee and not readily grant complete cooperation and respect. A title greater than the job assigned implies to other employees that this employee will not be on the job long before moving to a different higher-rated job. A new employee hired with a job title different than the employee replaced will find other employees will want to know the reason. If you are the new employee, you should be the first to know the reason for the change. Conclusions assumed from job titles may or may not be accurate but the perception of others cannot be ignored. Titles tend to identify rank and status and maintain a caste system within organizations. This is particularly evident in professional and higher education institutions, but it exists to some degree in most organizations. In professional firms, the exalted position is usually “partner” although there may be levels of partnership. Below partner are titles such as manager, senior, and associate, all designating rank. In education, the dean, professor, associate professor, assistant professor, and instructor remain common. Corporations typically have titles headed by president, below that vice–president, and then a wide variety of titles depending on the type and size of the enterprise but still creating a hierarchy of titles. The title of your position is important to you and should be a major factor in evaluating any job. It indicates the level of the job and the importance to the organization. Wrapped in a job title is status within the organization and in your relations outside the organization with your family and friends. It also influences the level of compensation you may expect since most organizations of any size have salary plans with pay ranges for each job classification or job title. Your job title will determine the pay grade into which you are slotted, and to exceed the compensation maximum for the pay grade you must be assigned a new job and title in a higher pay grade.

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J OB D UTIES

AND

O BJECTIVES

Jobs consist of a combination of job duties or specific tasks to be performed and objectives to be accomplished. Lower-level positions consist primarily of assigned tasks with minimal discretion or imagination required. As one moves up the scale of responsibility, the job components become necessary to accomplish desired objectives. At the bottom are jobs with clearly assigned duties that are highly repetitive and frequently involve manual activity. A production line assembler or word processing typist would be examples. At the other end of the spectrum is a president with the task of accomplishing objectives, such as increasing return on investment or developing and implementing a strategic plan for long-term growth. Nearly all jobs fall between the extremes and are a combination of required tasks and objectives with objectives growing in importance for more senior positions. As an example, a salesperson is responsible for regular sales contacts with customers (duties) and may have some sales targets (objectives). A sales manager’s primary activity is building, maintaining, and motivating a sales force and distribution system to accomplish a targeted level of profitable sales (objectives). The sales manager’s duties involve substantial discretion and are not delineated by superiors, but you can be certain the superiors have a voice in the sales level or objectives the sales organization is expected to achieve. The salesperson will be evaluated by superiors primarily on how well assigned duties are performed while the manager will be measured more by the success in accomplishing objectives. Job duties are essential to accomplish objectives and the two are inseparable in job performance. However, they should be separated when attempting to learn a job’s content and during evaluation of the job. Don’t assume excellent performance of the job duties will automatically accomplish the objectives because the objectives may very well be unrealistic. However, you can assume excellent performance of job duties will achieve reasonable objectives if the job duties are appropriate. An example of uncoordinated duties and objectives would be a staff accountant assigned the task of identifying potential cost savings who, without authority, is held responsible for achieving the savings. On the job, you will be evaluated both on how well you perform the job duties and the record of achieving objectives. Over a period of time you cannot expect to succeed by performing well in one category but not the other. A factory manager is not a success if he meets all his production schedules but has a terrible safety record

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and constant labor turmoil. A factory manager with a perfect safety record and happy workforce that fails to meet production schedules is also a failure.

Identify and Clarify Objectives First, learn what are the objectives you are employed to achieve. There are several questions you should be prepared to ask to better understand what is expected and hopefully clearly define the objectives. While seeking answers, remember many jobs have multiple objectives and while not all are formally stated, they nevertheless do exist. Consider the following: • • • •

Are the objectives clear, stated, and well defined? Will you have a voice in establishing the objectives? Are the objectives realistic and attainable? Do you have enough information to know if the objectives can be achieved? • Are the objectives based on factual data, past history, or wishful thinking? • Within what period of time are you expected to achieve the objectives? • What happens to you if the objectives are not achieved? Answers to these questions should provide you with a good estimate of your chance of job success, providing you are honest in assessing your own skills and talent. Since multiple objectives prevail for most jobs, you should make some effort to establish an order of importance but not neglect any. For many jobs, the objectives are well defined and precise, but often they are not clear, obvious, or well thought out. A quality control manager may be told defective parts must be reduced 20 percent within the year. A comptroller is instructed that reliable financial statements must be complete within a set number of days after the end of each month. For others, the objectives do not lend themselves to precise quantification but they do exist in a general way. A person’s objective in a training program is to learn whatever the program has to offer, impress the instructors, and be able to perform on a job utilizing the training. Young professional’s objectives are to perform well on anything assigned without complaining and impress all superiors. Unfortunately, employers often only know there is a

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job to fill and precisely what objectives must be achieved for the employee to be viewed as a success have not been thought out or written. In these cases, an applicant should be alert to differences of opinion within the employer’s organization as to the job content. Candidates for senior positions are commonly asked during the interview process their views on attainable objectives and the time required for accomplishment. Applicant opinions are sought as part of the evaluation process to learn if the candidate is confident he can perform the job. Another reason is that applicants with the experience to qualify for a senior job may have valuable opinions as to what are reasonable objectives. A prudent employer will welcome an applicant’s opinions in finalizing the job content and objectives. An employer adamant in his objectives who has no interest in an applicant’s opinions is usually a good one to avoid. During discussions of objectives, applicants should guard against voicing unqualified opinions as to what can be accomplished because they are unlikely to possess detailed knowledge of the employer’s condition or the operations they would manage. Applicants should be wary of being goaded into accepting impossible objectives in order to receive the job. You should be comfortable with the objectives before accepting any job and convinced they are within your ability to accomplish. One approach to evaluate reasonableness is to determine the origin. Is there some historical data either within the company or other companies to indicate the objectives are possible? Are you entering a situation where the performance level of the person your replacing is known and there are obvious changes you could make to justify higher objectives? Objectives could be troubling when established by a promoted or retired incumbent who was extraordinary in performance and set a difficult standard. Have executives without practical knowledge created impossible objectives with only a vague hope they can be achieved? When objectives appear to you to be unrealistic, you should question them before accepting the job. Once you accept the job, you are accepting the challenge of meeting the objectives. You can expect to be continually evaluated by your superiors and peers on meeting your objectives, particularly if objectives were a major part of your preemployment discussions. Equally important to knowing the objectives is knowing the time period in which they are to be accomplished. Time limits for objectives totally change their nature since many objectives could be achieved if the employee had unlimited time but they would be meaningless and never acceptable. Conversely, objectives become

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impossible if inadequate time is allowed for their completion. A sales person with a sales objective of $100,000 could accomplish the sales without any effort in one year but never sell that amount in a month regardless of the effort exerted. A new president employed to turn around an unprofitable business may have very limited time before the business runs out of cash. For some jobs, a training or break-in period is granted prior to the time when full performance is expected. In other jobs, you will be expected to fully perform immediately. You will definitely want to know the extent of any training or grace period and when you must “hit the ground running.”

Job Duties Job duties are the tasks you will be doing day in and day out to accomplish your employer’s objectives. Learn as many as you can before accepting a job. For lower-level jobs, the precise activities and their sequence for performance will probably be fully defined but the more senior jobs become, the less defined will be the job duties and the sequence largely at the employee’s discretion. Senior employees are expected to know and recognize the problems that first require attention. Most jobs have multiple tasks, making it advisable to identify each task and estimate the percent of your time you will be spending on each. Since some segments of the job will be more interesting and pleasant than others, it is best to know how you will be required to devote your time. Few jobs are 100 percent perfect and nearly all contain some disagreeable aspects, making it important to know in advance the time spent on both the agreeable and unpleasant. In learning all the job duties, you can determine if there are sufficient enjoyable activities and advancement opportunities to make the unpleasant bearable. You also can decide if some of the job duties are simply impossible or beyond your capabilities. Job duties like objectives can be unreasonable. To evaluate objectives, duties, and the entire job you have to consider the degree of stress and pressure to perform. Your willingness and ability to work under stressful conditions must be a consideration in evaluating the stress level of jobs. Stress occurs when jobs require constant close attention and concentration and failure to do so results in material loss or even lives. Aircraft controller is an obvious example of a stress-producing job. Stress also results on jobs with very tight deadlines for completion of assigned tasks as can occur in the media and advertising industries. Stress can result from

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attempts to accomplish difficult or impossible objectives in an unreasonable period of time. Morale and enthusiasm for the job influence the amount of stress employees experience. Enjoying the job and believing you and your associates are engaged in important worthwhile activities will do much to minimize stress. The level of dedication to perform the job should also enter into your thinking. How many of your waking hours are you prepared to devote to the job? Are you willing to give job-related matters priority over personal activities and interests? Senior managers recognize and come to accept that job demands have a very high priority with family affairs and other interest, except in crisis, having a lower priority. Job candidates would do well to consider this issue before accepting a job and finding themselves in constant conflicts between job and family obligations.

L OCATION

AND

W ORKING C ONDITIONS

The job location has an internal and external component. The external is the geographical location of the employer and outside environment that was discussed in Chapter 2, The Employer: General Information. Your internal location is where you are going perform your job. It is the chair, desk, office, room, vehicle, work station, or wherever you will be physically located when on the job, and if at all possible you should view it before accepting the job. It hopefully will be more than suitable, but it could be totally unacceptable or even constitute an insult. The work environment should be pleasant, hopefully not just adequate and conductive for you to perform the job. Your place of work should also be commensurate with those of other employees of similar rank and status and definitely not inferior. In many organizations, job classification and status determine the size, quality, and type of furniture, decorations, and location of an office. This may be formalized in a written policy or simply be the result of custom, which has the same binding effect. Parking spaces may also be assigned on a status basis and should be covered in your preemployment discussions. Any proposals for you to accept accommodations inferior to your status, even temporarily, should be regarded as serious issues in preemployment discussions. The proximity of your office or workstation to senior officers or the CEO is an indication of your status but equally important, it gives you exposure to those who can influence your career. Assuming you are ambitious, your chances of promotion are much better if

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those making the decisions have seen you perform and know you personally. Many talented and deserving employees’ careers have languished because they were in remote locations and senior management little knew them. Of course, not everyone is interested in promotion and change so for them an isolated location is ideal. Working at home has become more prevalent because of the advances in information technology and the growing interest in flexible work schedules. The possibility of working all or part of one’s time at home may have great appeal for some, but it is not always practical and the opportunities more limited than the attention received in the media. Working out of one’s home appears to be more prevalent for the self-employed and individuals working as independent contractors rather than as regular employees. In any homework situation, there are two major problems to confront. One is having a suitable place or room, free from distractions, in which to work. The other is the inevitable lack of direct contact with other employees where issues can be discussed and being deprived of pleasurable social conversation. Of course homework of another variety has always been prevalent and if you are ambitious you too will experience many hours at home reading reports, writing reports, and a myriad of other activities you did not have time for during the day.

H OURS

OF

W ORK

No discussion of job requirements is complete without learning of the hours of work per week demanded by the job. For many the issue of hours required bring into focus basic questions of life style, attitude, diversity of interests, and overall philosophy of the type of life one wishes to live. Only you can evaluate the effect your hours of work will have on your home life, marriage, and activities you enjoy. A determination to work forty hours or less per week will allow time for family and other interests but probably limit income and material assets. Long hours may be necessary for career goals, but they will preclude many other enjoyable activities. You also have to ask yourself if you have the physical and mental stamina to work very long hours regardless of the immediate and potential rewards. It is impossible to argue one approach better than another since the decisions are very personal for each individual. However, most end up with compromises and accommodations in which some but not all

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family life and outside activities are sacrificed. Senior managers know and accept that their hours will be long and irregular, so there is little to learn or discuss during the interview process. If you accept a senior position, you know you must devote whatever hours are required to fulfill your responsibilities. Those unwilling to spend long hours on their job are well advised to forget any aspirations to hold high-level positions. Before accepting any job less than senior management, learn the hours you will be expected to work and realize there are several answers. One is the formal answer involving the official starting and quitting time and hours per week, and the other the actual hours being worked by employees in jobs comparable to yours and the hours worked by the unit to which you will be assigned? Most important are the hours you will be expected to spend on the job. Never harbor any illusions that you will be able to work hours less than your peers or change established practices. You also must be on guard for professional interviewers who do not know the actual hours being worked or claim the present long hours are only temporary in an effort to make the job appear more attractive. There are many fine jobs with relatively short total working hours, less than eight-hour days, four-day and staggered work weeks, and flexible hours designed to attract and hold employees. Employers using these innovations usually have businesses that lend themselves to these practices for many of their employees, but senior managers still work whatever hours necessary to fulfill their responsibilities. Certain industries are infamous for requiring employees to work incredibly long hours. The professions of accounting, law, and investment banking are notorious with seventy and eighty hours per week. Technology companies commonly have employees spending long hours on the job. For the professionals, the long hours are customary and part of the requirements for moving ahead in the profession. It is a test of the stamina and commitment thought necessary to function in the profession, a means to increase hourly billings to cover very high salaries, and part of “paying your dues.” In technology companies, the inducement may be stock options and the possibility of retiring wealthy before age thirty-five. Regardless of the career and financial carrots, to work long hours one must enjoy and be interested in the work. While the above are well known for their long hours, long hours can be the practice in any organization so you must inquire when interviewing for any job.

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An evaluation of the hours to be worked should involve vacations, holidays, time off for personal matters, compensating time off, and weekend work. Consider finding out the following: • Does your employer believe you need time for personal matters, rest, and rejuvenation? • Is the vacation policy generous and are employees actually required to take their vacations with the penalty of forfeiture? • What are the holidays and particularly the days off for the yearend holidays? • Are some employees working on holidays or is the business totally shut down on those days? • Are employees working long hours given adequate time off with pay during normal hours to handle personal matters? • Is there a program to provide compensating time off for hours worked in excess of forty per week? Of particular importance in your questions of hours is Saturday and Sunday work. Some jobs require long hours during the week but weekend work is avoided and rare while others continue throughout the weekend.

T RAVEL Travel presents a special problem in evaluating a job. Before accepting any job, you should clearly understand the travel requirements and employer policies: • What will be the frequency of travel? • Will travel be irregular and unpredictable or a frequent and routine part of the job? • Will trips be to interesting with varied locations or repeatedly to the same ones? • What will be the duration of trips and is weekend travel required? • What is the employer’s policy on travel expense reimbursement and the quality of accommodations permitted? Any overnight travel constitutes hours away from family and friends, but for most modest amounts of travel are enjoyable and a positive aspect of the job. However, some want no travel while others cannot have enough. Some would enjoy travel but their family

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obligations make prolonged travel exceedingly difficult. You must evaluate your attitude toward travel and make your own decision once you understand the job requirements. Is travel for you attractive and desirable, a burden you can handle, or impossible making the job unacceptable?

J OB D URATION Few jobs will last a lifetime and never assume any will. Chapter 1, The Employment Environment described many of the factors that can cause turmoil within an employer, causing jobs to end. However, there are fine jobs that are known to have a limited life and prospective employees are so informed. Often these jobs are very lucrative and are excellent stepping-stones in one’s career. It is common in the construction and defense industries and for foreign assignments for people at all levels to be employed only for the length of a project or a set time. Whenever employment is known in advance to be of limited duration, severance benefits are normally discussed when employed. Employment contracts covering jobs of limited duration routinely specify the length time to be employed as well as compensation, benefits, and termination pay. The severance benefits are commonly substantial and an inducement for the employee to remain until completion of the assignment. Often employees in limited duration positions are assured by their employers that at the end of the assignment, an effort will be made to find them another position but seldom is there a guarantee. Job candidates qualified for positions of limited duration usually are well aware of the situation and ask the right questions. If there is not a set time for termination of the job or even a general estimate, you will have to make your own estimate.

E NTERTAINMENT

AND

S OCIAL D EMANDS

Entertainment of customers, business associates, and others in a position to benefit an employer are a universal practice and custom. For some, it is a great pleasure and a decidedly positive aspect of the job. Others find entertainment to be drudgery to be avoided, but for most modest amounts of entertaining can be an agreeable part of the job. Entertaining commonly involves luncheons, dinners, golf, and recreation at clubs, sporting, and theatrical events that usually occur during one day but may require long and late hours. Hunting, fishing, and other more elaborate entertaining may involve several days or weeks away

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from home. Entertaining often includes spouses who may welcome the opportunity or resist participation making it important to consider their attitude when evaluating the entertainment aspect of a job. Entertainment requirements may be an extremely attractive component of a job for many applicants. The prospect of eating in elegant restaurants and attending expensive events can have great appeal, particularly for those who have had little exposure to the “good life.” However, anything can eventually become old and lose its charm, and in time entertaining simply becomes part of the job to be performed. Another downside to entertainment is that much occurs in the evenings outside of regular working and this is time away from home and family. Furthermore, unless you have extraordinary will power, elegant dining will involve the consumption of food and beverages not considered conducive to good health. To evaluate the entertainment requirements of the job and determine if they are acceptable, you should explore a series of questions: • Who will I be expected to entertain? • What is the frequency of entertaining and how many days or evenings per month will I be involved? • Will any entertaining be out of town? • What will be the type of entertaining? • How do you or your family feel about entertaining members of the opposite sex? It is one thing to take a customer to a fine restaurant and quite another to attend a so-called “gentleman’s club.” You may welcome rowdy entertainment or find it abhorrent, depending on your viewpoint. What will be required of my spouse and what will be my spouse’s attitude? (You better talk it over at home before committing.) Answers to these questions should enable you to evaluate the entertainment obligations of the job.

S UBORDINATES If you are evaluating a job with management responsibilities, you will want to learn of the subordinates for whom you will be responsible. Information received prior to employment describing the individuals and the employees as a team may be unavailable, inadequate, or inaccurate, and one would be wise to withhold your personnel decisions until after you meet the employees. The difficulty occurs

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because senior management tends to look at the success or failure of departments or larger business units as a whole and may have had little or no contact with the employees under the person you may replace. Their opinions of the individual employees will most likely have filtered through and come from the replaced manager whose views may not have been objective. Senior management’s primary contact will have been with the replaced manager and not the employees of the unit, but their evaluation of the replaced manager can influence their opinion of the employees. It is all too easy to draw conclusions with the rationale that a successful manager must have outstanding people while a failed manager could not have done it alone and surrounded himself with bad people. A new manager should listen respectfully to all the opinions on personnel given but reach conclusions only after meeting the employees and observing their performance under his supervision. Employees with performance previously reported as unacceptable may become exceptional, fine team members with new leadership. Every manager, upon assuming responsibility for a segment of an organization, has to be concerned with how the employees will react to his presence. The welcome will largely be determined by events that occurred prior to the manager’s arrival and circumstances not of the manager’s making. The popularity or lack of popularity of the individual replaced will be a factor. Differences in management styles and approaches between the new and old play a role in acceptance. If the new manager took the job with a mandate to make major changes in the unit’s performance, there may be resistance or enthusiastic acceptance. A new manager may have full authority to discharge anyone under his management and even has been advised to “clean house,” but a team has to be fielded until new members are employed, making it essential for a positive level of acceptance from the employees be established. Anyone entering a new management position should learn the extent of his authority in personnel matters: • • • •

Will you have the authority to employ individuals wanted? Can you discharge employees found to be unsatisfactory? Do you have the authority to grant compensation increases? Do you have the authority to change job assignments and promote employees? • Are there employees under your management with special job security or privileges because of nepotism, long tenure, or legal proceedings?

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• What will be the review of your personnel decisions and role of a HR department? When evaluating a job avoid premature conclusions. Just because a job title sounds great, don’t assume the actual job is as you hope. Just because an interviewer gives you a general description of the job, you should not limit your questions. Any inconsistencies between remarks of different interviewers, printed information and your own observations should be resolved before starting a job. It is your career and you need to know precisely the nature of the job including why there is a job opening in the first place.

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TAKING I NVENTORY: K EY Q UESTIONS

TO

A SK

❐ Are the job duties and objectives you are expected to achieve well defined? ❐ Is the content of the job accurately reflected in the job title? ❐ What are the job duties or nature of the job? ❐ What job objectives are you expected to accomplish? ❐ Are the job objectives reasonable and attainable? ❐ Are the facilities in which you would word satisfactory? ❐ What will be the number of hours you will be expected to work each day and week? ❐ What travel does the job require? ❐ Is this a job of limited duration with a known or estimated date of termination? ❐ What entertainment does the job require? ❐ If the job involves management responsibilities, who will your subordinates be? ❐ As a manager, what discretion will you have in personnel matters?

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CHAPTER 8

Why Is This Job Open? A job’s history and reason to be open may influence your success or failure. Learning why a job vacancy exists is an important part of your evaluation and preparation to negotiate employment terms. During your interviews it is reasonable and fair for you to inquire why a job is open and not hesitate to tactfully pursue the subject. What you learn may convince you the job is more desirable than thought or persuade you to seek employment elsewhere. A job becomes available because those in control decide a vacancy exists, certain staffing levels are necessary or an individual with exceptional credentials is available and worth creating a job to take advantage of his talents. However, there are varying levels of urgency to employ anyone, and it is not uncommon for controversy to exist whether someone should be hired from outside the organization. The degree of urgency influences an employer’s willingness to compromise on an applicant’s job qualifications and compensation demands. Controversial job openings tend to be filled whenever possible with highly qualified or overqualified applicants because top performance may be required to silence critics. The employer’s urgency to fill a job for the organization to function smoothly should be evaluated jointly with the question of why is there a job vacancy. Always important is what happened to the last person on the job? There may be a combination of factors and circumstances that created the job vacancy, some of which are complex, others straightforward, and some reluctantly disclosed but all worth studying. Fortunately, most fall into general categories for discussion purposes. • Normal attrition such as illness and retirements. • Vacancies that are new jobs. • Vacancies caused by transfers or promotions. 107

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• Vacancies caused when last employee was fired. • Vacancies caused when an employee voluntarily terminates. The normal attrition vacancies resulting from an incumbent’s disability, illness, retirement, or death require little study other than concern over how employees will accept a replacement. Noncontroversial replacement job openings are a small percent of the total, but when they do occur applicants can devote their time to evaluating other aspects of the employer and job. Complete knowledge of why a job vacancy exists has value in preemployment studies, but may prove to be even more important if you accept the job and start work. Ideally, you will be able to meet and question employees with whom you will work before starting on the job. Employees with knowledge of the job vacancy almost certainly are aware of the major factors that created the vacancy. As a new employee hoping to develop rapport with employees, you will want from their perspective whatever information about the job they possess. It is highly probable they have accumulated more detailed knowledge of the job than your interviewers and have a good understanding of what has constituted acceptable performance. However, employees aware of a vacancy may not be fully informed of how management views the job, its content, and the performance expected of a new employee. If employees are totally unaware of the vacancy or you are being secretly hired to replace an existing employee to be terminated or transferred the day before you start; a very different environment will prevail. It is quite possible fellow employees could be hostile if the person replaced was popular or believed to be treated unfairly, or if a newly created job is viewed as a threat. When a new employee arrives on a job, there is always the potential for conflicts that largely can be avoided if one fully understands the situation. If the opportunity presents itself, inquire of other employee’s knowledge of the job opening and their attitude toward filling the job from outside the organization: Will you be welcomed or resented?

C HANGE

OF

D UTIES

Jobs duties are changed when an employee is replaced with sufficient frequency that an applicant cannot assume with certainty the job will remain identical to the one vacated. Employers find when a vacancy occurs it is a convenient time to make changes in the job

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content and possibly to the organization structure. These may be changes contemplated for some time but only now implemented because of the incumbent’s departure. This is particularly true in cases of retirements. Jobs have assigned duties and responsibilities, but they also take on characteristics that the incumbents acquired through aggressiveness or simply by default. All the personal relationships the incumbent had developed during his tenure are now gone and will have to be reestablished by the new employee. It is the ideal time for an employer to add new functions, reassign others, and end those believed to be unnecessary.

N EW J OBS New jobs tend to be created when a business is growing, contracting, or a need for special expertise is recognized. In growing organizations, new jobs are created when additional personnel are required to manage and produce the work to satisfy customer orders for products or services. For these jobs, there is an obvious and immediate need and little question as to the nature of the job duties or at least the job’s purpose. The jobs are without history, no incumbents are displaced, and the workload is of such magnitude that new employees are welcome. However, new jobs may involve splitting away duties from present employees. Transferring of job duties always has the potential for conflict because many employees, regardless of being overworked and unable to complete all assigned work, are reluctant to surrender any of their job responsibilities. Usually, jobs with a growing organization that anticipates continued growth are desirable because of their high probability of continued employment and the possibility of advancement. Exceptions are employers with cyclical or even seasonal businesses characterized by periodic large influxes of new employees only to be laid-off during the inevitable downturn. New jobs in new businesses resulting from projected personnel requirements rather than customer orders in hand are inherently more risky, but they can be exciting and have exceptional potential for advancement and compensation. Often these jobs are poorly defined and the applicant hired will be given the discretionary authority and responsibility for setting up and establishing the job content. Start-up companies or existing companies with major expansion programs invariably have developed detailed business plans projecting revenues, profits, and the personnel required to accomplish the

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financial objectives. The business plan may also reveal the level of compensation the planners are prepared to pay someone for the job you’re considering. Applicants for key positions called for in the business plan should be permitted to study the plan and draw their own conclusions as to the validity of the concept, financial projections, and probable success. During your study, never forget that statistics indicate over 80 percent of new businesses fail within five years. Of course, those succeeding may enjoy spectacular prosperity. The founders and venture capital investors sincerely believe, at least in the early stages, in the soundness of their plan and use it as a sales tool to convince attractive applicants to accept employment. Applicants for less than senior positions may or may not be given access to the business plan but they should ask. These new jobs are dependent upon the concept described in the business plan being feasible, the financial projections being realistic, and there being adequate capital for the venture to continue until it becomes profitable. Unless you are fully satisfied with all three—feasibility, financial projections, and capital—you should be very cautious in accepting employment. The same caution applies to major expansion plans of well-financed, established corporations because you can assume that if the expansion does not meet projections or worse, fails, it will be shut down and the employees will be terminated.

Training Openings Large established companies often have elaborate programs to employ and train a certain number of recent graduates with bachelors’ or masters’ degrees. The number selected is usually based on demographic studies of the existing workforce, the projected number of vacancies likely to occur over a long period of time, and the amount of funds the employer is willing to invest in personnel that will not immediately be productive. Most of those selected are not employed for an immediate job opening but for jobs the employer is confident that will eventually become open. Considerable care is involved in the selection of these employees and usually only those appearing to have senior management potential are chosen. Employees selected under these programs are pampered, and their performance is carefully monitored by line managers and human resources personnel. They are given extra training and frequently transferred from job to job to acquaint them with as

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much of the entire organization as possible. They are on a “fast track” to rapidly acquire the experience necessary to accept responsibility for management positions. Applicants selected for these programs are fortunate because the potential is so promising, although they often do not know the precise jobs they will work on or who will be their superiors. While gaining experience, they probably will be asked to work on some jobs they find unpleasant, but they can always look forward to their next transfer. These select employees usually enjoy more job security during downturns because they are considered so important for the company’s future. “Fast track” programs are common in companies that have policies requiring job vacancies to be filled by promotion from within the organization if at all possible. An internal promotion policy further adds to the desirability of being selected for a “fast track” program. Internal promotion policies are popular with employees and proof of management’s convictions that they can best “grow their own.” It all works well until there is a downturn or competitors are doing better at which time the policy may be challenged. The large mega-mergers also disrupt the fast track program creating uncertainty for the participants.

Special New Jobs Sporadic job openings do occur in companies reducing their work force or who have recently done so. Management has learned that in most cases when expense reductions are necessary, it is less disruptive to lay off employees than attempt across-the-board wage reductions. However, downsizing programs often results in more employees departing than planned because of the inevitable instability created, controversy over the wisdom and fairness of the program, and refusal of employees to accept transfers to other jobs. In large corporations where generous early retirement packages are offered to all employees based on a formula of age and length of service, those accepting may include key personnel in jobs that must be filled. During and in the aftermath of downsizing programs, job openings occur and the program’s implementation may be a partial but rarely complete explanation of why the job is open. You should not hesitate to look for the full story. New jobs are created when an employer recognizes the need for an individual with special expertise. The most common causes are the cost of outside services, losses incurred by not filling the job, and

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the company has grown to where a full-time job can be justified. Examples of this type of job opening are numerous: safety director, in-house attorney, internal auditor, environmental controls director, regulatory specialist, public relations expert, and psychologist, to name a few of the more common. Senior management, in the belief that employment of a specialist will solve a problem, authorizes jobs of this type. Unfortunately, management’s reasoning in these situations is not always adequately explained to the organization. Individuals employed under these conditions may have difficulty securing the cooperation of other employees in the early stages of their tenure. Recognition of the possibility of employee resistance or minimal cooperation is the first step in planning a program to properly introduce the new employee and service. A new employee may be forced to devise his own program to introduce the services and secure cooperation throughout the organization. Regardless of any temporary acceptance difficulties, these jobs constitute an opportunity for professionals and other experts to utilize their training and establish programs as they believe they should be conducted. In creation of the job opening, management recognized the need and understands the objectives, but the new employee will have broad discretion in how to accomplish the objectives.

J OBS O PEN B ECAUSE OF T RANSFER OR P ROMOTION If you are evaluating a job vacated by a person who remains in the organization, you should meet the person and seek his views of the job. This individual can provide you with more detailed and reliable information relative to the job than anyone. In addition to learning of the job duties and objectives, you want this individual as a friend. Learn what assistance he will provide and the amount of continued involvement he will have, if any. Find out the following: • • • • •

Will he willingly spend time to help you succeed on the job? Will the demands of his new position limit or prevent assistance? Will he be physically located near you? What is his attitude toward you? Has he been promoted to the position of your immediate superior?

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• Did he request to be transferred from the job? • If transfer was at his request, what did he not like about the job? You will want the answers to these and other questions because this person has critical background information for your decision to accept or reject the job and can influence your success or failure if you do accept the position. The person you replace is probably thought well of in the organization and has established friendships with executives who value his opinion. If he interviewed you prior to employment, you can be certain he was asked his opinion and his views may have been decisive in the decision to make you an offer. You also can be certain that if he disapproved of you, there would have been no job offer. You can also assume that once employed, this person will openly or casually monitor your performance. A recommendation to hire is a continuing test of the judgment of individuals who advocated your employment, giving them a personal stake in your success. Those with the greatest influence have the most at stake and you repay their recommendations by succeeding on the job. The person you replace is usually in a position to assist you so recognize the possible mutual benefits and make the most of the relationship. When you replace a person promoted, you must assume their performance was satisfactory and possibly set a high standard for you to equal or exceed. If the promotion is to a position to become your boss, you must have a clear understanding as to what is expected. Some argue attempting to fill a job under these circumstances can be extremely difficult and challenging, and in many cases they are correct. Your boss will at least initially know your job better than you and tend to believe the way the job was performed in the past was the best way. Whatever opportunities you see for innovation or improvement will require tact in their implementation to avoid conflict or embarrassing your boss. The new boss may have held your job for a long period of time and forgot the time necessary to become proficient. While you are learning your new job, your boss is learning of the responsibilities and problems with the management position. He may be enjoying the status and compensation but struggling with the job. The demands of his job may leave little time for assistance to you and may create unreasonable performance requirements that may be difficult to accomplish. A small risk is also present that the promoted person may not like the new job and request to return to his old job,

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displacing you. The importance of thoroughly discussing the job vacancy created and relationship with the individual promoted to become your boss cannot be stressed strongly enough. Much depends upon the type of person the manager is and recognition by both parties of potential difficulties but what could be a very desirable relationship. A desirable feature of a job from which the last occupant was promoted is its record as a stepping-stone for promotions. The job may be considered excellent training and preparation for advanced positions or has a high-profile for senior executives to observe the occupant and know personally, or hopefully have both characteristics. You will want to learn if management views the job as a prerequisite for promotion to senior positions or simply a desirable job to be in when employees are being evaluated for promotion. Jobs from which employees are frequently promoted may not be formally designated as stepping-stones but if they have the record, it is reasonable to assume they possess this attribute. Discovering that others, and especially executives holding senior positions, have been promoted from the job or similar jobs should make the job even more attractive. When this is the case, your interviewers may emphasize the promotional aspects of the job with applicants for the position because of their perceived ability to move up in the organization. Question your interviewers as to: • How many holding the job have been promoted? • What is the usual period of time spent on the job? • What jobs do those who previously held the job now hold? You will want to know how long you are likely to remain on the job prior to a possible promotion. For some large organizations, the actual job is not as important as its status as a stepping-stone. Spending time in a particular department, at a key subsidiary, or on foreign assignment may in some organizations be as important for promotion as the actual job.

J OBS O PEN B ECAUSE

OF

D ISCHARGE

Don’t be misled by the common assumption that replacing someone who has been fired is the ideal situation because your performance is certain to appear better. Job vacancies created when an

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employee is fired have characteristics that may affect the replacement. In a perverse and irrational manner, there may be employees who believed the discharge to be unfair and partially blame the uninvolved and innocent replacement. You should assume, prior to employment, that you will only learn the employer’s view of why the unsatisfactory employee was fired, and direct efforts to learn the employees’ side could be frowned upon and jeopardize your chances of employment. Efforts to learn additional details may be viewed as questioning the veracity of your interviewers. Under these circumstances, you have little choice but to fully accept the employer’s reasons and recognize the same standards are applicable for you. There are often mitigating circumstances and factors that made the discharge difficult and controversial, but you are not likely to learn details until after you’ve been hired. Firings are never pleasant and the participants often prefer to forget and not discuss the incident.

Types of Discharge There are essentially two categories of discharge. One is commonly referred to as “discharge for cause” for egregious offenses. Theft, dishonesty, violent acts, illegal activity, disloyalty, contract violations, repeated substance abuse, and open defiance of employer’s policies or directives are examples of reasons for “discharge for cause.” The other type of discharge is for unsatisfactory performance, which is not as clear-cut and often involves management’s judgment over a period of time rather than the awareness of a specific offense. Unsatisfactory performance is a very broad category and not limited to failure to meet job objectives or production quotas. It can include personality conflicts with managers and fellow employees, unacceptable or unpopular activities outside of working hours, religious proselytizing, sexual improprieties, and any other characteristic, activity, or practice management disapproves. Frequently, there are multiple reasons for the discharge and while no one reason would have resulted in discharge, the sum total became more than management could tolerate. These discharges are usually justified and often occur only after management has accumulated a written record of effort to encourage the employee to change. However, some unsatisfactory performance discharges are controversial, and the reasons given to the discharged and other employees may not be the full story. It is not uncommon for the propriety of these discharges to be settled

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through litigation. On occasion, discharges occur with the parties agreeing to never disclose the reasons. The employee “resigns” and disappears and all the replacement applicant will learn is that the resignation was by mutual agreement.

Discharges for Cause Replacing someone discharged for cause, regardless of how justified the discharge, does not guarantee a cordial welcome for the new employee. Most employees understand the employer has little choice but to discharge when an employee commits a blatant offense, although some may argue for “another chance” or lesser punishment. Fellow employees may have known of the discharge offenses long before management and are relieved that management took action and approved of the firing. However, you have to question the degree to which other employees were aware of the offenses and possibly involved. You should be particularly skeptical if only the discharged was blamed when the offense was theft, dishonesty, or other acts that had serious financial impact on the business. It is very difficult for any employee to be involved in improprieties over a long period of time without other employees at least having some suspicion. As examples, financial executives may be fired for “cooking the books” and serve as scapegoats, but others almost certainly knew and condoned the activity. Or, a controversial design incorporated into a finished product that results in accidents was surely obvious to others. You can assume that in cases where other unidentified employees were involved, they will not be pleased to greet the replacement. Fortunately, these situations are rare and usually when an employee is discharged for cause, other employees are pleased to see the offender gone and to welcome the replacement.

Unsatisfactory Performance Unsatisfactory performance discharges can be for a wide variety of causes and it is in a replacement applicant’s interest to learn as much of the circumstances and management’s reasoning as possible. By listening to management’s explanation of the events, you will be able to learn much of the philosophy of the managers and the organization. For instance:

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• Do they attempt to be fair and not quick to terminate employees? • Do they make an effort to improve and warn an employee before giving up? • Does management accept part of the blame for the failure or place all of it on the employee? • Were transfers to more suitable jobs offered or severance benefits paid? A discharge may have been proper and possibly long overdue in everyone’s opinion, creating the question of why management delayed. Some may not be for obvious causes and the justification may be controversial but probably less so when all facts are known. The worst cases are management’s failures, starting with employment of a person unsuited for the job or by demanding impossible performance. Any applicant who learns that the last two or more holders of the job were fired for unsatisfactory performance, regardless of the seemingly logical reasons given, should assume his chances of success on the job are minimal. An exception could be when management recognized much of the failure was theirs and vowed to change, but even under these conditions the risk is high. Any reluctance by your interviewers to fully explain the circumstances of a discharge when applying for the vacancy should also be a cause for concern. Conditions may be such that if hired you would be the next to be fired.

Problems After a Discharge Employees fired, regardless of the reasons, are usually asked to leave the premises immediately. They may not even be allowed to clean out personal items from their desks and are escorted to the door. The replacement is confronted with taking over the job without the benefit of the prior occupant explaining the details of the job. In employment discussions, prior to starting, you should learn who would provide you with basic information to perform the job. It is not uncommon for a job and the work environment to be in disarray because of the last occupant’s performance and attitude. You may find yourself busy cleaning up problems created by the person fired, including such tasks as mending relations with customers and other parties outside the organization. It is also quite possible you will be the one explaining to other employees and outsiders why the last person was

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terminated. This may require discretion, tact, or just silence if the discharge remains controversial and litigation is a possibility.

J OBS O PEN B ECAUSE OF V OLUNTARY T ERMINATION Whenever a job vacancy occurs because an employee quits, you will want to understand the reasons before accepting the job. The reasons for quitting may encourage you to accept the job or continue your job search. If you discover a succession of resignations from the job or frequent resignations and high turnover in the organization, you should be extremely wary. Never assume you will be an exception or immune from the conditions that have created past turnover unless you’re convinced the employer has faced the problems and taken corrective action. Ideally, before acceptance, you will be able to meet the person departing and hear his reasons and if you do start he will remain long enough to provide assistance. This is ideal but in many cases impossible because the employee has already departed or the employer may prefer a clean break without any contact. Some employers try to hasten the departure of employees after their resignation without concern for the notice they have given, believing their presence will somehow contaminate the remainder of the workforce. There is the irrational phenomenon that occurs all too frequently of when an employee with perfectly satisfactory performance resigns, management becomes very critical and the employee is disparaged. The fact that the employee decided he was better off elsewhere and was leaving the team can cause resentment regardless of the circumstances. A job vacancy creates extra work for the managers who must train the replacement and shuffle job assignments to cover the job until the new employee starts. Someone must devote time to recruiting the replacement. Most managers have plenty to accomplish every day and do not welcome the added tasks associated with recruiting and training replacements. Every employee who resigns should be prepared for the possibility of a change of attitude by his superior and fellow employees. No one can ever be certain of the reaction upon resignation that can range from hostility to displays of affection heretofore never revealed. Applicants should be wary of the validity of negative comments critical of departed employees but they are not in a position to question the criticism nor would it be prudent to do so. Unfortunately the practice of “knocking the dead” and “blaming past management” will continue.

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Quitting to accept a better job made possible because of the experience gained with the present employer speaks well for the job. The fact that another employer recognized the job as a stepping-stone indicates that the job could do the same for you. Possibly other factors contributed to the employer’s decision, but the last or present job is always a key element in employment decisions and frequently the most important. A very attractive job in a company with an outstanding reputation can augment your resume and allow you to repeat the progress of the person you replace. Some resignations are caused by conditions unrelated to the job and are often submitted with great reluctance. Resignations because of family considerations such as relocation of a spouse, the need to attend a sick family member, or remain home with children are examples. However, most resignations are job related and the causes highlight problems the replacement will confront and should evaluate before starting: • Compensation Issues: If the employee who resigned was dissatisfied with the compensation and was able to find a better paying position for the same type of work, you can assume the employer’s compensation policies are not competitive. This may be due to philosophy or inability to pay more, but it tells you there is a problem and possibly you could do better with another employer. An employee’s resignation, or more impressively multiple resignations because of noncompetitive compensation, can motivate an employer to change pay policies, but you better find out before starting. • Promotional Opportunities: A resignation may occur when an employee concludes there are no promotional opportunities in the foreseeable future and seeks employment where the opportunity is greater. This is no fault of the employer if employees who appear unlikely to depart for any reason occupied all the jobs to which promotion would be logical. A new employee will face the same promotional ceiling as the last person. • Hours of Work: Many employees eventually become dissatisfied with long hours of work and resign. They may be extremely well compensated and see a clear path for advancement but conclude they have other priorities and interests of importance to them. Their replacement will undoubtedly be expected to work the same long hours. • Management Folly: Don’t expect to hear in your interviews that the vacancy was caused because the employee would no longer

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tolerate mistreatment by bad management. Management tends to protect its own and is not likely to reveal they have one or more problem executives. Poor management is undoubtedly the leading contributing cause of turnover and not limited to an employee’s immediate superior. An employee may be happy with his superior but see other executives in the organization whose actions are offensive. Discovering bad managers prior to employment is difficult without questioning the person who left the job and comparing his comments with those of your interviewers. Both the former employee and your interviewers may be reluctant or unwilling to discuss the reasons for the departure. An indication of probable bad management is when an interviewer voices negative comments about an employee that voluntarily resigned after years of service. Another indicator is simply a high level of turnover. • Working Conditions: This is a broad category of causes that may have been the direct or contributing causes for the resignation. No list would ever be complete but it would include the physical work environment the employee found inadequate or even offensive. The tools for the job, including information systems, were inadequate and made job performance difficult. Fellow employees were cantankerous and uncooperative. These are only a few examples of unsatisfactory working conditions. High turnover of employees in any organization should be a warning to management as well as to applicants of internal problems that require attention. For management, the questions are whether they can identify the problems and do they have the will and capability to take corrective measures. For the applicant, the questions are whether the desirable features of the job offset the identified problems and how valid are management assurances the problems have or will be eliminated. As an applicant, you will want to learn where the employees who voluntarily resigned are accepting employment. You may want to add these employers to your list of prospects.

P ROBLEM OF THE E MBITTERED B YPASSED E MPLOYEE Whenever you are applying for a position above the bottom entry level, you must assume the possibility of someone within the organization who believed he was qualified for the job was passed over.

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When applying for any senior positions, you should inquire as to the reasoning for filling the job from outside and if there are any employees who applied for the opening. Not only should you be concerned with those making formal requests but those who made only casual requests or employees that said nothing but were nearly qualified. Should you accept the job, most of these employees will be disappointed but not embittered to the point of refusing to fully cooperate or engage in activity to discredit you. However, there may be a passed-over employee who is furious because you received the job and will make an effort to discredit you to prove your employment a mistake. You should be skeptical of any of your employer’s assurance of, “We talked to him and he is all right” or “He will understand.” In organizations that have pursued vigorously a policy of promotion from within, it is all the more important to be sensitive to possible resentment when management concludes employment from the outside is necessary. If the outsider is bringing special skills and knowledge that no one in the organization possesses, there should be no difficulty with acceptance. However, many skills such as those associated with managing people and planning are not immediately apparent, but the new employee must quickly demonstrate tact in dealing with employees while being wary. If there is a passed-over disgruntled employee, it is certainly best for the new employee to promptly discuss the situation direct with the unhappy individual and hopefully begin a healthy relationship. In an applicant’s enthusiasm for a new job it is all too easy to overlook or ignore the reasons why the job is open. The causes of the job opening will only be one of many factors in the evaluation of an employer and job and seldom the paramount one in the decision to accept or reject a job. However, the reason for the vacancy is important and may become even more critical to your success if you accept the job. Upon starting a new job you want to find yourself welcome with everyone rooting for your success and not in an hostile environment.

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TAKING I NVENTORY: K EY Q UESTIONS

TO

A SK

❐ What is the employer’s level of urgency to fill the job? ❐ Are the job duties and responsibilities changed from those of the employee replaced? ❐ Do you believe fellow employees will welcome or resent your arrival? ❐ Is this a new job being filled for the first time? ❐ If this job is a vacancy caused by the promotion or transfer of another employer, what happened and where is the employee? ❐ If this job is open because the last employee was fired, what caused the discharge? ❐ If this job is open because the last employee quit, why did he or she leave? ❐ Is there a bitter employee that was bypassed who believes he should have had the job?

CHAPTER 9

Cultural Factors Ignore at your peril the importance of cultural factors and the necessity to be compatible. They won’t change for you. Recognition and evaluation of the culture in an employer’s organization and community is essential for career decisions to be based on reality. Cultural factors that define the work environment may be innocuous, delicate to discuss, ignored, unrecognized, the product of strong convictions, ignorance, or chance, but they exist and work to your advantage or peril. Some are subtle while others obvious. Most are perfectly proper, contributing to the organization’s orderly function, and of minimal importance to an applicant or possibly very appealing, while others are sinister and persist despite their blatant illegality. Management’s intrusion into the personal lives of employees and discriminatory practices are not as open or prevalent as in the past, but only the naive ignores their possible presence. The job culture extends beyond the workplace where activities engaged in off the job may be encouraged, not tolerated, or of no interest to an employer. Avoiding cultural conflicts is a challenge for both the applicant and the employer. The stakes are high because cultural conflicts are a major cause of employee turnover. An applicant wants to know of the presence of cultural factors that are attractive and any that are intolerable. The employer wants to select applicants who can perform the job and fit into the workforce and not be in conflict with management or employees. Both parties have similar objectives but communication may be difficult. The employer is constrained by antidiscrimination regulations and regardless of the prevalence of improper or excessive practices must maintain that none exists. Should an applicant ask if reports are true that you must be a Baptist or a Republican to be promoted within the organization, the interviewer must deny the report’s accuracy regardless of the facts. Furthermore, an employer cannot confirm an applicant’s age or 123

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racial background, although both may be fairly obvious. The applicant is hardly in a position to ask if the CEO is a tyrant who micromanages all aspects of the organization, and the employer’s interviewers are unlikely to ask the applicant how well an extreme, authoritarian management will be accepted by him or her. The result is that applicants and employers rely on clues and indirect comments to learn the desired information. For every aspect of the culture, expect adherents within the organization who are vigorous advocates who would resent any change. True believers of extreme cultural practices are absolutely convinced of the wisdom of their convictions, and those who disagree are wrongheaded fools deserving little consideration. A zealot’s opinion of you, whether from a superior or peer, will likely be colored by your position on their favorite issues. The reverse is also true. If you harbor views others would consider extreme, it is doubtful you can be fair and objective with those holding opinions contrary to yours. Management styles and philosophies have a profound influence upon an organization’s culture affecting the jobs of all employees. The result may be applauded or controversial but it is management that creates, approves, and condones the culture an employee must accept. Management’s efforts to revise or modify a culture with policies and edicts are found easier to issue than to actually change employee thinking. Cultural change requires long periods of time for prejudices to disappear, and the victims become accepted as illustrated by attitudes that once prevailed toward the Irish in America and still persists for Blacks. You will be wise to select your employer on the basis of conditions as they exist and give minimal credence to promises or hope of change. Holding convictions and prejudices consistent with management’s views are usually beneficial for one’s career while open disagreement is definitely hazardous. An employee not in sympathy with any aspect of a job’s culture is faced with sullen compliance or finding a new employer. If you are in an organization that conducts its activities with integrity and you concur with the importance of ethical conduct, you will be right at home. If you are in an organization engaged in ruthless and dubious activities, fraught with discriminatory practices but all consistent with your moral standards and prejudices, you again will be right at home. An organization’s culture is the sum of numerous factors most of which are positive or at least benign. Organizations of any size rarely are culturally homogeneous and your primary concern must be with the unit where the job is located. Cultural diversity within an organ-

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ization increases with size and you cannot rely on a business’s parent company’s policies and pronouncements as indicative of conditions in all subsidiaries or divisions. Furthermore, your immediate superior’s virtues and prejudices will influence your job and career in spite of overall company policies and objectives.

D ISCOVERING

THE

C ULTURE

You learn of an organization’s culture by observation, questioning, and reading published material, but unless you understand the importance of cultural factors and are alert to their presence, they may easily be overlooked prior to employment. Some factors are obvious, such as racial or ethnic composition and dress codes, but most are not and direct questions become necessary. Even what appears obvious should be verified with questions. You are not constrained by laws and regulations in the pursuit of information as are employers who cannot lawfully inquire about age, race, and religion. Responses to your questions may consist of satisfactory explanations, obfuscation, verification, or denial from which you must make decisions. Those in control of an organization may realize cultural imbalances have developed and employment criteria are modified to correct conditions. The most common is too large a proportion of one race, religion, age group, or sex. If this recognition is voluntary and management solidly supports corrective measures, change over time will likely occur. Involuntary change required by government actions or litigation may occur but with less enthusiasm and probably less support. Any applicant considering a position under these circumstances should extensively discuss with the employer possible internal opposition that could adversely affect job success. These situations may constitute a fine opportunity, an extremely difficult work environment, or both. Employer efforts to modify imbalances are now complicated by the possibility of backlash litigation.

N ORMAL C ULTURAL E NVIRONMENT Every work environment has a culture of its own. The elements of the culture are largely innocuous and none individually of great importance to nearly all employees but in total they may constitute a problem for some. Cultural factors that you may not even notice may be of significance to others. An extremely informal work environment may have appeal for most but not all. A very formal workplace may

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be thought necessary and desirable, but it can be stifling for some employees. Each has its own dress code including hair styles, which may be in written policies or just understood with variations frowned upon by fellow employees and management. Even body weight specifications and physical fitness may formally or informally become part of the culture with all expected to use the employer’s exercise facilities and even participate in 10K runs. Work pace, interpersonal relationships including romances between employees, traditions of the institution such as after-work drinks, and informal parties all contribute to the culture. How employees relate to each other can often be observed. One might observe the following: • Do they appear friendly or sullen and withdrawn? • Are they outgoing and enthused about their work and employer? • Do they seem to be working as a team? • Would you enjoy being a member of this team and the environment in which they work?

E XTREME FACTORS Identification of cultural extremes is a primary task during the employer selection process. Most cultural factors will be within a normal range and of no particular interest, and ideally you will not encounter any of the extremes. However, you must be alert for cultural extremes because your compatibility will directly affect your job success and future. Never forget, whatever appears extreme to you, must be thought sensible by others or it would not exist. Every aspect of a job except one may be pleasing to you but that one can be so troublesome that the job would be impossible. You should also guard against selecting an employer solely because of one appealing extreme factor while ignoring other conditions. An example would be accepting a job with an active “Christian” employer because of one’s religious convictions if it pays low and is about to fail. There are certain common cultural factors with a history of becoming extreme, usually supported by determined advocates. The line between normal and extreme is seldom clear and applicants must draw the line based on their perceptions. Only you can decide to enthusiastically accept or be repulsed by a deviant condition. You may also decide the attributes of the job outweigh the undesirable. In any case, you will decide what is and is not extreme. There is no

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order of importance in a list of possible extreme cultural factors and any organization may exhibit several. The opportunity for extremism to exist is undoubtedly greater in privately held businesses than in public ones subject to more external scrutiny, but extremism can thrive anywhere. Factors addressed below should be viewed as either warnings or advantages and not as advice to accept or reject a specific job.

Management Excesses The normal cultural environment in most businesses exists because it’s accepted, functions well, and contributes to the success of the enterprise. Beware of those proudly claiming to have discovered and introduced innovative or totally new concepts of management. Extreme deviations from proven practices seldom survive long term, but they can cause endless turmoil prior to their demise. Applicants should view jobs with these companies as career moves without a high probability of a long tenure. All businesses are essentially dictatorships with employees permitted varying degrees of freedom to act and speak without fear of penalty. The extremes are at the ends of the freedom spectrum with one having total authoritarian management making nearly all decisions at the top, issuing voluminous policy edicts and manuals, intolerant of any dissent, and micro-managing all aspects of the enterprise. The other extreme is the democratic or entrepreneurial approach in which employees are given great discretion to achieve nebulous objectives. While few would want or thrive in either extreme, some will. See Chapter 5, Management, for more information.

Internal Competition A certain amount of competition among employees for promotions, compensation, and advantageous working conditions is normal and to be expected in most organizations. The competition is usually restrained, civil and not a constant concern of employees. However in some organizations competition is intense and an integral part of management’s system to extract maximum effort from employees and eliminate those unwilling or unable to demonstrate total commitment to the organization. For these employers competition pervades throughout the organization and is a major motivating factor with the possible rewards for superior performance well known and

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the fate of underachievers equally understood. Extreme performance requirements in an intensely competitive environment become the dominant cultural factor. Comparisons of employees at all levels are continuously being made using both subjective and when available objective criteria. New hires entering training programs are evaluated and compared. Operations supervised by department heads and managers are compared using financial or production statistics distributed for all to inspect and as motivation for the laggards. As examples, in professional service firms the number of hours billed to clients is a critical statistic. For employees involved in selling, the volume sold compared to others and in prior periods is all-important. Large employers with highly competitive cultures commonly hire more entry-level employees for training and fast-track executive development programs than can possibly be promoted. Organization structures are roughly in the shape of a pyramids and the closer to the top, the fewer the jobs remain to which employees can be promoted. The employers know many will eventually find the employer’s demands intolerable and quit although what was expected was fully explained during the employment process. Others the employer will find unsatisfactory despite great care taken in their initial selection. Some of the best will be recruited away by other employers leaving only a few survivors. During your interviews, you will find it enlightening to learn how many survivors remain and their present jobs hired five years ago into programs similar to the one your applying. With any employer you will want to know how you will be evaluated but in intensely competitive enterprises, it is of particular importance. You will have to accept the employer’s system although the probability is high the employer is dissatisfied with their methods and have plans for modification or replacement. Accurate and fair evaluation of employees has been one of management’s most perplexing challenges and there are no uniform or accepted approaches. Presently popular methods of forced ranking of employees either in a straight line or into a bell curve (cynically referred to as “rank and yank” systems) have their critics and are becoming the subject of litigation. If you are interviewing for a job in an intensely competitive company where a forced ranking system is in place, you will want to know the fate of those ranked at the top and bottom. Assume you could end up in one category or the other. Some thrive in an intensely competitive culture where employees are essentially pitted against one another but many conclude it is not for them.

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Religion Any business controlled and managed solely by members of one religious faith or businesses permitting and encouraging religious activities in the workplace may be difficult for those of other faiths or beliefs. If you are of the same faith, you should have little problem with the environment. Whenever the owners and managers are all active practitioners of the same faith, it is reasonable to assume religious beliefs were a factor in their selection and this will continue to be a factor in future promotions and employee relations. Since religious beliefs can be so strong, for some it may be impossible to work for an employer dominated by one religion despite the employer’s efforts to be tolerant and considerate. Religious activities sanctioned by management in the workplace may be welcome by the devout of the same faith but can be extremely offensive to others. Meetings conducted by the devout will include believers as well as possible reluctant attendees, fearing for their jobs but offending those who do not participate. Proselytism in the workplace, in whatever form it takes, can be a constant irritant to the unreceptive and therefore disruptive to the organization. It can also be frustrating to those promoting the religion to find unwilling or hostile candidates for their religious arguments. Intense religious activity, whenever openly encouraged and supported by management, exists because key executives believe it is proper and desirable. There may be displayed icons, religious pictures, and even statues revealing the intensity of their beliefs. Persistent religious activity in the workplace by other employees, if neither endorsed or condoned by management, can be troublesome but usually will not affect your career or job. If your beliefs are so strong and you continue to engage in religious activities in your workplace contrary to management policies, then assume you are on a path to unemployment martyrdom.

Racism Despite claims by nearly all employers to be “equal opportunity employers,” racism still exists to varying degrees and it is not just a black and white problem. Substantial progress has been made in reducing decisions influenced by race affecting employment, promotions, and job content but race remains a factor. Your first suspicion that the employer may not be “equal opportunity” will come from observing the employees you meet and in the workplace. A preponderance of

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employees of one race inconsistent with community percentages will not have occurred by chance. If you are not of the majority race observed, you will be well advised to discuss the matter with your potential employer. Most of the attention has been given to the employer’s conduct, which is important for any applicant to evaluate. However, the applicant’s attitude toward associating with members of other races is equally important in the employment decision. You not only must consider how the employer and other employees will treat you but your own prejudices and whether they can be overcome. Do you want to work with members of other races?

Sex Enormous changes have occurred in the workplace with jobs for women now open at all levels and sexual harassment laws being enforced. However, anecdotal evidence supported by abundant statistics demonstrates that equality in the workplace is far from universal. Sexual discrimination is generally thought of in terms of women being treated unfairly and every female applicant should question the conditions under which she will work. What is the employer’s record on equal pay, advancement, the “glass ceiling” phenomenon, pregnancy leave policy, sexual harassment suits and if any, how were they resolved. Male applicants must ask themselves how they feel about working for a woman or even working with women as equals. The presence of women in management positions at all levels is the best evidence of desirable conditions for women and their absence a warning. A preponderance of men or women in management positions should cause members of the minority sex to question their chances for advancement.

Politics If you have strong political convictions and are active in political campaigns and fund-raising, attend political meetings, and discuss politics at every opportunity, you better be certain your activities and views are acceptable to your employer. An employer with strong political views similar to yours may be delighted to have you as an employee. However, an employer may object to political activism in the belief that such activities interfere with job performance or antagonize other employees with contrary political beliefs. Owners or managers with political persuasions different from yours are not

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likely to approve of activities they find offensive. Those controlling a business and contributing to a candidate will not enjoy seeing one of their employees on TV at an opponent’s rally. Some employers encourage political participation and accept a diversity of opinions and respect an employee’s rights off the job, but don’t assume this to be the case without ample confirmation. Management and owners often are active political supporters of candidates and causes, making company and personal financial contributions. The contributions may be motivated by a desire for good government but more likely as an investment to promote or protect the organization’s interests and as a means to gain access to politicians. New senior managers may be expected to participate with personal contributions or by arranging company contributions that may not always be proper. Lesser employees may be asked to contribute to political action committees or “volunteer” their time to help candidates. Applicants should explore the unwritten obligations they may incur before joining an organization known for its political involvement. Equally important is how compatible are an applicant’s beliefs with those who control the organization. Imagine how distasteful you would find being pressured by your employer into making financial contributions to a candidate you detest. Devotion to social causes and emotional political issues can be particularly troublesome in the workplace. Abortion, school prayer, and gun control are currently hot issues that raise passions for some beyond the level of rational argument. Convictions can become so strong that there is little tolerance for those who disagree. Many employers will discretely attempt to screen out and not employ individuals with such strong views that they become disruptive on the job. Owners or managers, harboring such strong views on these issues that they are motivated to actively participate in organizations promoting their viewpoint, may be a problem for unsympathetic employees.

Charity and Volunteerism Charitable contributions and volunteering to benefit causes and the unfortunate is accepted and popular with most people. In many businesses, volunteering for charitable activities can provide both great personal satisfaction and a way to meet and impress peers and superiors. Unfortunately, some employers create an environment in which employees feel compelled to donate excessive amounts of cash or time to charitable causes advocated by the employer. All too frequently, the

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employer’s favorite charity may not be the employees. Involuntary monetary contributions to charitable causes are tantamount to a pay reduction. Volunteer time can become a burden when one prefers to spend time in other activities or is not enthused about the cause. Senior managers may be coerced to spend excessive time with charities supported by chief executives or their wives. Conspicuous and demanding programs benefiting others in the community are difficult for employees to accept and viewed as hypocritical when the employer fails to be fair and generous with his own employees. Applicants with strong opinions regarding their right to make their own decisions to contribute and volunteer may experience difficulty with employers who have very active programs.

Age Differences Generation gaps have always existed and most people prefer associating with their own age group. When selecting an employer, you should look at the ages of those you will be associating with on a daily basis at all levels of the organization. Are their ages roughly comparable to yours and if not will you be comfortable with that generation? How will you feel about working for someone much younger or older than you? Compared to the ages of other employees, will your age be an advantage or disadvantage in job assignments and promotions? These are questions you will have to ask yourself and expect little advice from the employer. Age discrimination is against the law and a prudent employer will claim age is not a factor in any decisions, although it often is a major consideration. Age discrimination after employment is a concern for older applicants but their first challenge is to be hired and get past the door. Discrimination may very well have occurred before employment but supported only by an applicant’s suspicions of being denied employment for false reasons other than age. Once in an organization, the employer’s true policies and practices toward older employees, both formal or unwritten, become obvious. An older employee should not count on being an exception to prevailing discriminatory practices.

Paternalism and Recreation Some employers establish extensive recreation facilities and programs for their employees. Physical fitness and training facilities, day

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care, parks, hunting and fishing camps, tours, and preventive medicine programs are some of the benefits provided today. Extra vacations and sabbaticals, generous maternity leaves, and bonuses are increasingly common. For most employees, all of the benefits offered are appreciated and utilized. For many applicants, the benefits constitute an inducement to seek employment in the organization. The facilities and events represent an opportunity to meet and become better acquainted with fellow employees at all levels. The problem comes for those preferring more privacy who are unwilling to participate. If you are not interested in all of the benefits offered, you should learn how compulsory their utilization is before accepting the job.

College or University Preference An important criterion for employment and promotion in some organizations is the college or university attended. Graduates of a specific school or of a group of schools such as the Ivy League may be given preference regardless of the qualifications of other applicants. School discrimination usually occurs because of the extreme loyalty an owner or controlling executive has for the school he attended and honestly believes the graduates are superior. Once there is a preponderance of graduates from one school in an organization, the discrimination tends to perpetuate itself. This variety of discrimination often is well known or will become obvious to an applicant. Of course, if you’re from the “right” school, you have the advantage.

The cultural factors described in detail are by no means all inclusive and every applicant should be alert to whatever he or she believes extreme. Once employed, you must contend with company-supported policies and practices and individuals whose beliefs you find to be nonsense or perhaps with whom you agree. It is much easier to learn of an organization’s culture than the ardent beliefs of employees you never met before starting the job. The person sitting closest to you may believe in astrology, the occult, and unconventional therapies and will be excited about your concurrence or can’t understand your reluctance to agree. You can learn to your satisfaction of the organization’s overall culture but probably can only hope for the best in fellow employees. However, the odds are they will be more like you than not.

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❐ How would you characterize the management style for the employer? ❐ Does management display any techniques, fads, or idiosyncrasies that are not mainstream or would be considered unorthodox by most observers? ❐ Is religion a factor in hiring and promotions? ❐ Is there evidence of racism in the composition of the workforce? ❐ Is there any evidence of sex discrimination? ❐ Will political preference and activity affect your employment? ❐ What contributions and participation in charitable activities will be expected? ❐ Will your age be a factor in how well you fit in with fellow employees? ❐ Will your opportunity for promotion be influence by the college you attended? ❐ Does the employer manage and promote intense internal competition?

CHAPTER 10

The Employment Process Never forget that your employment depends upon an employer’s need for you and not your need for a job. During job interviews your task is twofold: learn about the employer and promote yourself as a well-qualified applicant. Interviews are your best and probably last chance to confirm information you possess and to gather answers to remaining questions. The purpose of every meeting with an employee or representative of an employer is to create the opportunity for both parties to gather information. Regardless of the circumstances, the formality or informality of the occasion, all preemployment meetings influence the eventual decisions of the participants. Interviews may be at the employer’s offices, job site, casual luncheons and dinners, or entertainment events, but you can be certain the interview process is incessant and the evaluations continuous. Assume everyone you meet will give an opinion of you. Achieving a positive rapport with your interviewers is definitely desirable and should increase the chances of their issuing a favorable opinion. You are simultaneously evaluated on two interrelated subjects: 1. Your ability to perform the job 2. Your personality characteristics Remember, during your interviews, an interviewer’s obligation is to the employer and their opinions will be of your probable job performance if employed and not necessarily how fond they are of you personally. Regardless of how much you like and have confidence in an interviewer, never disclose information you do not want to become part of the employer’s evaluation. An equally important reason for developing a positive rapport is to increase the probability of your interviewers being more candid and forthcoming with information on subjects you find troublesome. 135

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Every interview is an opportunity to accumulate information. During your interviews, remember that while you are talking you learn nothing, and your challenge and task is to encourage the interviewer to talk throughout the interview and not just ask you questions. You should strive for a two-way conversation and not one in which you simply respond to the interviewer’s questions. Most interviewers want a broad conversation and will not be impressed if you simply respond and do not introduce subjects important to you. Brief precise answers to an interviewer’s questions may be accurate but interviewers expect more. Your preparation for every interview should include identifying remaining questions that are essential for your evaluation. Rank them in order of importance because you may not have the time or opportunity to obtain all the answers. Make a written list if necessary but it will be more impressive during interviews to ask your questions from memory rather than to pull out a list. Presenting questions, indicating you have made an effort to learn as much as possible about the employer, will impress your interviewers. Casually working your questions into a general conversation is not only pleasurable for the parties but is also more effective in securing answers. Interviewers, like everyone else, enjoy talking about themselves and their organization so encourage them to do so. A good productive interview for both parties should be a friendly chat. Every interviewer is a representative of the company and indicative of the type of employee found acceptable to the employer. A critical part of your evaluation concerns whether or not you want to be associated with the type of representatives you meet prior to employment. To know someone, you must engage him or her in conversation. It may happen that your opinions of interviewers will be uniformly good or bad but more probably you will encounter a mixture; some you will like very much while others of whom you will have a lesser opinion. Don’t be too hasty in drawing conclusions because good employers with wonderful job openings and opportunities may not have their best and most effective employees conducting interviews. You may encounter a weird interviewer or have a strange interview, but if other interviews with employees of the same employer are satisfactory, tactfully inquire about the aberration and then evaluate the situation. If you tactfully describe the individual as “unusual” or “certainly has strong opinions,” you will most likely receive a prompt explanation because they will know exactly what you’re talking about.

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I NTERVIEWING : A N A CQUIRED S KILL Similar to any other activity, interviewing is an acquired skill that improves with practice but remains a subjective exercise. It requires observation and the accumulation of information, judgment in evaluating the data, and eventually a prediction of human performance and behavior. During most interviews, the emphasis is on personality characteristics rather than background because prescreening has already established that the applicant possessed the minimum education and prior experience for the job. Predictions of failure entail little personal risk for the interviewer because the applicant is either rejected or declines employment, leaving the validity of the decision untested. Predictions of success are tested in the performance of the employed and the judgment of those who recommended employment is confirmed or questioned. Displaying good judgment in selecting employees is always a valued trait for executives and failure to do so can have a negative effect upon their careers. Applicants evaluating alternatives must also display judgment and in time they will be able to review their decisions with satisfaction or regret. Predictions of failure by both applicants and employer are probably more reliable than those of success, but in either case there never is complete certainty.

E MPLOYMENT P ROCEDURES Very early in your discussions with a prospective employer you will want to learn the nature of their employment procedures and the stage they are in at present. You may find their procedures and timing coincide very well with your plans or contain unacceptable aspects and everyone is wasting their time. It is also possible their employment procedures include elements and techniques you believe to be offensive and unacceptable. You should attempt to discern the degree of flexibility in any procedures important to you. Answers to these questions will give you further insight into the employer’s methods and philosophy.

Employer’s Timing Consider determining the following: • When does the employer plan to fill the job? • Is this job open immediately to be filled as soon as a suitable applicant is found?

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• Is there an urgency to fill the job and only applicants who can start promptly considered? • Is the job to be filled at some future date with the exact time influenced by events that first must occur? • If the job opening is dependent upon other events, what are the events and their probability of occurring? • Is the starting date determined by the commencement of a training class, opening of a new facility, start of a major project, or some other event with a predetermined schedule? • Is there wide latitude for starting or a general period of time that would be acceptable as may be the case when college graduates are recruited for fast-track management programs? Every applicant should learn during the employment process when he or she could or must start and why. Learning of the employer’s timing enables an applicant to decide if the employer’s timing fits his or her personal needs and plans. Understanding the level of urgency to fill a job also provides insight helpful in subsequent negotiations over compensation.

Status of Employment Procedure An employer seeking to fill a job may be engaged in an extensive search for applicants and intends to interview a number before making a decision. These searches may involve a first round of preliminary screening of prospects with the finalists brought in for more intensive interviews. Searches of this type can consume months and you will want to know their present stage. You will want to know two key points: 1. Are they just starting or near the conclusion? 2. When does the employer expect to make a final decision?

Employment Procedure Who are the people you must meet before an offer of employment can be made? Should your first interview conclude with the interviewer with an indication that further discussions are desired, it is reasonable to ask the names of future interviewers, their titles, their role in the employment process, and when and where the meetings will occur. Often, but not always, the number of employees or em-

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ployer representatives you meet is an indication of the employer’s view of the job’s importance. Applicants for low-level positions may only meet their potential supervisor and possibly a screening interviewer. Applicants for senior positions may have numerous interviews with various executives and members of the board of directors. Applicants chosen for their promotion potential as well as specific positions can expect to encounter numerous interviewers. From the applicant’s position, the more interviews the better because each is another opportunity to learn of the employer.

Employment Obstacles Are job offers made conditionally subject to checks and tests? Certain preemployment obstacles are routine and generally accepted such as medical examinations and reference checks but some are highly intrusive. It is wise to inquire of their nature if you have incidents in your background preferred forgotten or philosophical objections to the procedures. These more intrusive obstacles can include private investigators checking your life in detail, interviews with your spouse and neighbors, credit checks, criminal checks, and psychological testing. The extent of psychological testing can vary widely, ranging from simple paper and pencil tests of intelligence and interests to wideranging interviews with psychologists or psychiatrists. Employers who engage in the more intrusive investigations are convinced of their value and an applicant’s choice is to accept the obstacles or seek employment elsewhere. Applicants should learn at what stage of the employment process the obstacles will be encountered.

Employment Decisions Who will make the decision to employ or reject you? How will the decision be made? Everyone you meet will express an opinion of you and in some instances the employment decision will be by committee, but usually someone with authority will make the all-important final decision. The resulting job offer will also require compensation decisions and a reaffirmation that the job is still open. It is not uncommon for an employer’s circumstances to change either in the form of job vacancies being canceled or an applicant being asked to accept a job other than the one originally discussed. The ultimate decision maker may or may not be someone you meet. Trouble occurs when the executive has limited availability or procrastinates

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in making personnel decisions. It does not speak well for an employer who is slow in making personnel decisions and delays or fails to respond to applicants after their interviews.

W HO Y OU M AY M EET During the employment process, you may encounter a variety of employees, consultants, and professionals from whom you can gather information useful in your evaluation of the employer. They are focused on their task of evaluating you and may not realize you have your own evaluation program. Understanding their role and probable authority should help your presentations as a candidate and enable you to request information from those most likely to have the answers. There are wide differences among employers as to the people involved in their employment process and as an applicant you may not encounter every category described or confront altogether different ones. The information provided here is to introduce you to the most probable people you will meet and what to expect to take advantage of every meeting.

Little People Throughout the process, it is inevitable you will casually meet people in positions of less stature than those conducting the interviews. They may be security personnel, receptionists, clerks, secretaries, or various assistants and although your exposure will be limited, they will still form an opinion of you and if they have or take the opportunity, to voice their opinion. If you have to wait a short time for an interviewer in the presence of his secretary, you should assume her opinion would eventually be voiced. It is to your advantage to treat all the “little people” with great courtesy and respect and engage them in friendly conversation as you would your neighbor. Not only will treating these people as equals be proper and possibly help your cause, they can be a great source of information. They may have facts and a perspective on the organization that you will not gain from your interviewers. Without providing any details or secrets of the employer, they may convey genuine enthusiasm for their jobs and the employer or converse in a guarded manner that you should interpret as a warning.

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Screening Interviewers and Salespersons On the front line of the employment processes are individuals responsible for identifying applicants and initially screening them, and presenting a positive description of the employer to them. They will be an applicant’s first substantive contact with the employer. In this general category are human resource department recruiters and interviewers, college recruiters, management search personnel (headhunters), and employment agency personnel. They have a dual role of screening applicants and selling or persuading applicants that the employer is desirable. Their role is to produce attractive applicants for others to interview, which often results in glowing, exaggerated descriptions of the employer. Few are authorized to make job offers but they wield great power over applicants because they have the power to reject. In their role as gatekeepers, they can decide if an applicant is unsuitable and effectively reject the applicant by not arranging additional interviews. Should the interviewer decide that an applicant is suitable and channel him or her into the system for others to meet, he can influence the outcome by the level of enthusiasm displayed for the applicant. They usually are working from a set of criteria developed by the employer that lists the characteristics desired in an applicant and are not in a position to question the appropriateness of the criteria.

Your Prospective Boss After preliminary interviews, you will be introduced to the individual who will be your immediate supervisor if employed. This will be your most important interview and the best opportunity to learn of the actual job and job environment. Prior interviewers likely have given the potential boss favorable comments and any reservations they have regarding your suitability along with your resume or application. You may be confronted directly with the reservations in the discussions or have to discern their presence from clues in the conversation and do your best to satisfy any concerns. Few managers are highly trained in interview techniques but that doesn’t undermine their confidence or place less weight on their opinions. Many managers have one or two favorite interview questions and place extra significance upon the responses. These pet questions are usually recognizable because they tend to be unrelated to the actual job. A manager’s primary job is to

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effectively oversee all or a segment of the employer’s total operations and selecting subordinates is important but a peripheral part of the job. Interviewing may be an unwelcome distraction from activities the manager believes require immediate attention, resulting in brief meetings that can be unsatisfactory for both parties. Management criteria are: Can you perform the job and not create problems? Are you the best available candidate? The nearly similar applicant’s criteria are: Can the job be performed? Are these people with whom I would like to associate? The more time you can spend with your potential boss thoroughly discussing the job and becoming acquainted, the greater will be the odds that neither one makes a mistake.

Your Boss’s Superiors In some organizations it is customary for senior executives to interview applicants for positions reporting to their subordinates. Often interviews of this type indicate that the applicant is a finalist under consideration and about to receive a job offer unless the senior executive decides against it. Others in the organization are not about to arrange the interview unless they are recommending the applicant and believe the applicant will be acceptable. In cases when the applicant is particularly attractive to the employer and is suspected to have other job alternatives, the primary purpose of the interview with the senior executive may be to impress and “sell” the applicant. Whatever the employer’s reasons, interviews with senior executives are an opportunity to learn of the organization and observe the caliber of people at the top.

Other Executives and Directors You may be asked to meet executives or others that are neither human resource department interviewers or in areas in which you would work if employed. In some cases, the employer has established a committee responsible for recruiting or for searches with all members interviewing candidates. Committees are common in professional organizations seeking promising college graduates and when an employer is searching for a very senior executive. Another type of interviewer is an individual whose role is to evaluate your technical competence if applying for a technical position. Interviews of this type are a particularly valuable opportunity for the applicant to learn the state of the employer’s technology. It is not unreasonable for an

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applicant to inquire of the role and position of any interviewer. With this knowledge, the applicant is in a better position to ask questions of the interviewer and continue the evaluation of the employer.

Psychologists The use of professional psychologists to evaluate applicants remains a common practice and also controversial. The controversy and basic problem that exists is that psychologists may be excellent at identifying personality characteristics and intelligence levels, but the precise job requirements for success are often not fully known or are speculative at best. They are much better at predicting failure than superior performance but it is argued the obvious failures should have been screened out before meeting a psychologist. Should an employer request you undergo one of their interviews, you have little choice but to do so or forget the employer. Employers utilizing professional psychologists are totally convinced of their value and place great weight upon their opinions. Often employers inform applicants uneasy with the procedure that the psychological examination is only one of many factors in their employment process and not to be concerned. This is generally nonsense. A positive factor in being asked to meet a psychologist is a strong indication you are seriously being considered for employment. Psychological assessments are expensive and not used for preliminary screening. Many employers evaluate applicants utilizing paper and pencil psychometric tests and you have little choice but to submit. In either case, you may as well appear willing and enthusiastic taking the tests presented if you want the job. The practice is widespread and can be encountered in any industry.

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Someone during the employment process will be your point of contact. This is the person responsible for arranging your interviews, introducing you to executives, scheduling tests and other employment obstacles, approving travel expenses when applicable, keeping you informed of the status of your application, probably discussing compensation with you, and notifying you of acceptance or rejection. This may be one person throughout the process or change as the process progresses. If this person and his role are not obvious, you should inquire as to whom is looking after your application.

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As part of the employment process, you may encounter executives or interviewers to whom you will have little or no exposure if employed. They may be individuals of great charm and status or people you find distasteful, but if they will not be involved directly with you or can influence your career once employed, you should not give them much weight in your evaluation of the employer. Individuals involved in screening and initial interviews often disappear or are not involved with those employed after they fulfill their role. Very senior executives, semiretired “elder statesmen,” prominent directors, and individuals with “celebrity” status may be utilized to impress highly sought after applicants; you should enjoy the meetings, learn all you can, and question their continued role as it relates to you.

E VALUATING I NTERVIEWS Quietly assimilating all you learn and see without judgmental comments during your interviews will aid in your employer evaluation. Compliments will never hurt your cause, but unfavorable impressions and conclusions regarding your interviews should largely be kept to yourself. An employer’s representatives and employees are either acting in a manner they believe proper or it is the best they can be under the circumstances. Poor interview questions and techniques by employer representatives reflect badly on the employer but may be due to inexperience and do not necessarily reflect upon the job you are seeking. Negative observations from you will not be welcome and you certainly do not want to cause anyone embarrassment. Skepticism is appropriate during the employment process but it is best concealed. An applicant will be wise to appear to accept whatever is presented as fact. Your objective is to evaluate and impress the employer to offer you a job and to participate in arguments will not help. Should you find yourself in an argument, regardless of how valid your position, assume your chances of a job offer are slim. As an applicant, you are entitled to courteous treatment and respect. The degree to which you are properly treated is a strong indication of the quality of the employer and becomes an important part of your evaluation, but you must maintain your perspective. Events and incidents during the employment process tend to be given disproportionate weight in an evaluation because you are personally and directly involved as opposed to reviewing at your leisure a financial statement that actually may be far more important. Royal treat-

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ment during the employment process can impress an applicant and tend to mitigate concerns about other serious problems of the employer. Highly sought-after applicants should remember that after the courtship and if they accept the job, they will be expected to perform in a very different environment. Shabby treatment will discourage an applicant regardless of many other attractive features of the employer. An ideal employment process that reflects well upon the employer would include the following features: • Organized: Your time with the employer for interviews would be totally planned prior to your visit, with interviews and employment obstacles all scheduled. You should be informed prior to the day whom you will meet and why. • No Delays: When scheduled to be interviewed by an executive at a certain time, the interview will commence at that time. You will not be forced to spend large amounts of time just waiting so they can “work you in.” • Interviewers Informed: Your interviewers are informed prior to the interview of your qualifications and background and know of the job for which you are applying. • Interviewer Attitude: Your interviewers are openly enthusiastic and convey a positive impression of the job and employer. The level of enthusiasm displayed is often an excellent indicator of the level of morale throughout the organization. Every applicant is treated with respect and made to feel important regardless of the outcome. • Prompt Responses: Throughout the employment process, the employer is open with you as to your application’s status and responds quickly without prodding. Additional interviews are timely scheduled and offers or rejections are given without delays. When delays occur at any stage of the employment process, the reasons are explained to the applicant. During the course of the employment process, evaluate the role and status of the human resources (HR) department in the organization. In the past, this department was named “industrial relations” or “personnel” and some employers still use the archaic names although human resources is currently fashionable. Typically, the HR department is responsible for recruiting, wage and salary administration, benefit administration, safety and medical, security, training, labor relations, and dispute resolution involving employees. Not all

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HR departments have every function listed above and some have others, but as you progress through the employment process it is worth your time to learn of HR’s responsibilities and to attempt to evaluate its stature in the organization. Prior to employment, will HR be involved in deciding your compensation? After employment, will HR intervene if you are treated improperly? The answers will depend to some degree upon the status of HR in the organization. Status can vary widely from real power and authority to make decisions that are respected down to little authority and largely a housekeeping or clerical function. One of the best indicators of status is to whom the head of HR reports. Reporting to anyone less than the senior executive at the location where you will be employed is an indication of limited authority and you probably can expect minimal service or assistance from HR. The location and condition of HR offices compared to other departments can be another indication of the status afforded HR. In the HR department, you may encounter professional or highly skilled interviewers who can assess very well your potential and personality. However, they often do not know the characteristics and attributes essential for the job, creating a knowledge gap and a tendency to rely on stereotypes for their criteria. “He must be an aggressive extrovert to sell.” “He must be a strong willed, dominant person to manage.” “She must be a tough and able to pound the table to negotiate.” However, many individuals that do not fit the stereotypes can perform the jobs very well but if you do not fit, you should be prepared to explain your approach to the job. Throughout the employment process, you will meet a variety of individuals for the first time. All are trying to do their jobs in the best way possible, but they have interests and problems more pressing than decisions regarding you. Some will be like you, looking for a job, and others may be thinking they should but they are presently on the employer’s team and will conceal their doubts and concerns. Recognition of the fact that your interviewers are only human too will help you have more successful interviews.

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❐ Are you organized to gather additional information during your interviews? ❐ What is the employer’s timing to fill the job? ❐ What are the employer’s employment procedures and what is the present stage? ❐ Who must interview you before an offer of employment is made? ❐ What employment obstacles must you pass, such as a physical examination or psychological tests? ❐ Who will make the decision to employ or reject you? ❐ What is the role and authority of everyone you meet prior to receiving an offer? ❐ Throughout the employment process, were you treated well and did you like what you saw?

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CHAPTER 11

Personal Objectives The constant conflict between career aspirations and available alternatives. Equating your short- and long-term career objectives with possible job alternatives is a continuous challenge for every individual throughout his or her working lives. The challenge presents itself in the form of questions requiring answers: • • • •

Should I accept this job offer? Should I look for a new job? How secure is my present job? How does my present job contribute to my long-term career goals? • What are the chances of finding a job better than the one I presently have? • How do I reconcile my job and career aspirations with my family responsibilities and other interests? • How can I explore other job opportunities without jeopardizing my present job? The answers will always depend upon the circumstances and your particular interests and wishes at the time. In the final analysis, you are best qualified to decide upon the answers because you should have the most facts and will experience the benefits or harm from your decisions. The foundation of your employment security is education, experience, and ability and all are attributes you take with you. Gather all the advice available but in the end, you alone must make the important decisions in your career. Make your decisions and don’t look back.

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Complicating your career decisions is the absence of certainty and absolutes. A healthy recognition of this fact is essential for evaluating alternatives and your eventual decisions. In the absence of certainty, accept the premise that your first objective is to improve the odds for decisions that result in favorable outcomes. The most one can hope for is to improve his odds because there are far too many variables to assimilate and the future remains unpredictable. However, the simple process of avoiding the obviously undesirable is a major step toward improving your odds. Also accept the possibility that despite your best efforts and care in evaluating your personal situation and selecting employers, your decisions may prove to be wrong for totally unforeseeable reasons. At any time you may be faced with unanticipated, unplanned, welcome, or unwelcome career decisions. Your employer may be sold or merged, resulting in your job being eliminated or greatly expanded, which may in turn improve your outlook. Even in organizations believed to be relatively stable, you should not be too troubled or surprised if your present job has duties added or deleted or a new job contains aspects you did not expect. The unexpected encompasses not only the undesirable but also windfalls and great opportunities, and you should have the flexibility to respond. Out of the blue, you may be offered a promotion or a great new job. Unexpected good things do happen. You have to take some chances and accepting a new job always involves uncertainty. Often doing nothing and remaining on your present job is the greater risk. Being comfortable in one’s present job where you know the job duties, are meeting objectives, and receiving regular paychecks can be a grand illusion with an inertia that is difficult to overcome. For all the reasons described in prior chapters, your job may change or be eliminated and overnight the illusion of comfort and security disappears to be replaced with the hard reality of seeking new employment. The illusion also contributes to the tendency to wait too long before finding another employer although it is obvious there is no future in one’s present job. Further complicating job moves are irrational fears of the unknown whereupon changing jobs, you must meet and associate with new people in a different environment. Recognizing that you must take some chances and the probable presence of illusions, inertia, and dark fears should make your job changes easier.

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C AREER P LANNING Establishing career goals and interim objectives is a commendable activity but fraught with problems and all too often bordering on fantasy. Career planning by its nature must be devised at the start of a career based upon available information that describes conditions as they presently exist; however, no one knows with any certainty what the future will bring. Any career plans other than the most general almost certainly will either be greatly modified or discarded, if not forgotten, because of the vicissitudes of the job market and change in the needs and interests of the individual. The job you aspire to ten years hence may not even exist at that time and others that do not exist today may emerge and be more attractive. Very broad and general career objectives do have some value, but rigid objectives whereby one expects at a specific age to be in certain position at a minimum compensation level can only lead to unnecessary frustration. Explicit and rigid objectives constructed at the start of a career will almost certainly become totally unrealistic as the career progresses. If you decide to develop a career plan with objectives, it must consist of both short- and long-term plans with the short-term objectives representing steps to achieve the long-term goals. Your goal may be to become president of a significant business but your emphasis must be on the steps to reach your goal and little on what you would do once you arrive. It is unlikely you will be able to identify every step in advance, but you should be able to recognize opportunities as they occur as desirable steps in your career. With a long-term plan, it should definitely be possible to avoid purported job openings that would not constitute forward steps. Avoiding jobs you find inconsistent with your career plans and recognizing jobs as such is an important part of any career planning. For any career planning, you should realize you are now on the first step. If unemployed, you should be seeking a job that constitutes a step up. If employed, you should be deciding what your logical next step is either with your present employer or with another. If pressed for immediate income, you may have to compromise and temporarily get off your career ladder with the expectation of eventually resuming your climb. Many successful people enjoying jobs of great status and prestige never had their present positions as an objective at the start of their careers. They were educated in areas of interest like marketing, engineering, or finance; they started at beginning jobs and progressed

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from there. They performed well and enjoyed every job as they progressed, and through a combination of their abilities, chance events, and available job openings arrived at their present positions. They never had a master career plan but they knew their preferred field, performed well on every job, and as job openings of increased responsibility became available with their present or other employers, they accepted the new opportunities. They illustrate the fact that if you are ambitious, you can have great success by performing well on your present job and not hesitating to accept opportunities while not bound to a specific career plan. The opportunistic approach also requires a sense of when it is time to move on and actively seek desirable alternatives.

It’s Your Choice Job opportunities and objectives have to be evaluated and equated with individual interests and how one wants to spend their time on and off the job. Some are determined to devote whatever time and effort is required to further their career aspirations and to make the sacrifices necessary to maximize their income. Many simply want a secure job that provides an income adequate for minimal needs and with hours of forty or less per week and plenty of time for varied interests. Some seek a balance by refusing to become workaholics but willing to periodically devote extra time and effort to their jobs. No one can say which lifestyle is best or superior and if a particular selection is right or wrong. However, all involve trade-offs that rapidly become apparent. The ambitious career-minded people find they have limited time for their families or outside interests, rationalizing more time will be devoted to these interests once they succeed and are wealthy. They also may very well enjoy every minute of their jobs and prefer it to any other activity. The individual who works only enough to get by realizes he will forgo job status and material luxuries, rationalizing that they are unimportant compared to his freedom and other interests. The balanced life advocate develops a compromise and in doing so enjoys a reasonably good life but knows the very top jobs are out of reach. The challenge is to find a job you thoroughly enjoy and that you can perform consistent with the lifestyle you prefer. To have one without the other is an unhappy condition to be avoided.

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F OCUS

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Regardless of your short- or long-term career plans and dreams, you have no choice but to focus on your present job (if unemployed, your job consists of seeking employment) and your next job. Here, the basic need for immediate income is satisfied but every job should be further evaluated for its characteristics as preparation for future positions. Before acceptance, you will automatically evaluate a job on the basis of the fairness and adequacy of the compensation, but how it will influence your next job prospects should not be overlooked. The employer may be financially sound and stable and the job considered “permanent” but never forget it is most unlikely the job will be your last. Critical criteria for evaluating your present job or a new job are these two questions: 1. How does the job influence my chances of finding another job— a better job? 2. Is this job preparation for a promotion with this employer or another? In Chapter 1, you were advised to construct your concept of the ideal job for use as a standard against which to evaluate job opportunities. Career and lifestyle preferences, coupled with recognition of the fact that any job you hold can affect your chances of finding another job, should influence your thoughts for an ideal job. If you are employed, a comprehensive study of your alternatives requires an evaluation of your employer and job. Unless you are in a temporary or menial position you are certain to leave, it is possible that remaining with your present employer is your best alternative. Start by using this book to evaluate your employer as though you would a new employer. Emphasis should be on how desirable, stable, and secure your present job is and what the chances of promotion are for you. You already know how well you like or dislike your job and with a systematic review of the employer, you should be able to estimate the probability of the employer remaining attractive. Promotions will depend upon your qualifications and positions actually coming open or being created to which you could be promoted. You may be perfectly qualified for a promotion but if there are no openings, nothing will happen. It is also possible you are the logical candidate for promotion to a position you covet but you find

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the time to wait for it to open is too long. You may have been promised or given hints that you would eventually receive a promotion, but you always have to question how realistic this is and whether the person making the promise can deliver. You should be able to determine for yourself the internal advancement opportunities with your employer upon reviewing your probable next steps. You must include in your assessment of chances for promotion the possibility of competition from others for the job or any tendencies of the employer to hire “new blood” from the outside. You may also be faced with traditional requirements of the employer that must be accomplished before filling senior positions such as graduate level education or assignments overseas. Should you conclude that your present employer and job is not an alternative for you, you have a number of decisions relative to your departure.

Parting Ways Upon concluding that your best alternative requires leaving your present employer for another, you must begin planning how to accomplish your termination. Circumstances are so varied that the most that can be provided in advice is to describe an optimum objective and issues you must confront. Your objective should be to leave as gracefully as possible with minimal disruption to the employer’s operations and remain on good terms with everyone. If you had come to dislike your employer or job, you have absolutely nothing to gain by speaking your mind upon departure and best remain silent. Careful planning and recognition that some compromises may become necessary should help you create a graceful departure. Usually, you are more attractive to other employers if still employed so your first problem is how to devote the time to find another job yet fulfill obligations to the present employer. An immediate issue is what your employer’s reaction will be if it becomes known that you are seeking another employer. Some insight is possible by reviewing what the employer’s reaction has been when others have resigned. Also consider: • What shall be my timing for finding another job? • Do I have projects I want to complete before leaving or should I leave as soon as I find a suitable job? • How much termination notice should I give my employer?

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Once you decide to find another employer or give notice of termination, you can expect your attitude toward your job to change. Chances are that whatever enthusiasm you had for your job will disappear and you will just be putting in your time. Don’t be surprised if the employer’s attitude towards you also undergoes drastic change. You will never be certain of your employer’s reaction until you actually resign.

Your Record Your greatest employment security will be derived from the education, skills, experience, and employment record you have accumulated. The stronger and more impressive your record, the less dependent you become upon any one employer and the more attractive you are to others. The knowledge that you could readily find another job equal to or better than you presently have is the optimal form of job security. Employers evaluating applicants place great weight upon jobs previously held and the level of performance, making it prudent for those evaluating their present job or seeking a new job to consider how future employers will view past experience. What potential employers will be looking for in your experience record is exactly the same as what you should be seeking in your present or next job. Upon entering the job market after completing your education, employers will look closely at your education and activities during that period of your life. Grades, academic honors, and extra-curricular activities of which you are justly proud will favorably impress employers. However, academic achievements rapidly decline in importance to employers and the jobs you hold and your accomplishments as an employee become dominant factors. Your academic record will help you land your first job and possibly influence your second but expect little mileage thereafter. The decline in importance of an academic record argues well for those with a mediocre record as successful performance on jobs takes precedence on their resume. Knowledge resulting from training and experience while holding a job is a key element weighed by employers in employment and promotion decisions. The knowledge factor is of such importance that employees are confronted with some difficult questions: • What can I still learn on my present job? • What can I expect to learn on the job I have been offered or are seeking?

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• Is this knowledge that will be valuable and attractive to other employers? These are fundamental questions for you to ponder. Marketable job knowledge is not limited to technical information but encompasses management skills, customer and client skills, and the entire spectrum of personal relationships. During the early phases of job tenure, an employee is usually learning and gaining new experience, but at some point there is little new to be learned and the experience becomes repetitious. Is this a time to move on to another job or coast along in one’s present position? This again is a matter of individual choice without a right or wrong answer.

H OW L ONG

TO

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J OB ?

How long one should expect to remain on a job is a question without a general or universal answer, but individuals can consider all the factors and circumstances applicable to make informed estimates. Foremost is the question of the probable duration of the position and if there is a known end, is there any advantage to remaining until the end. Accepting a job for a specific period of time or a job with predetermined termination date forces an applicant to begin immediately thinking of future jobs and how they will be landed. Jobs of known duration need not be avoided if they provide satisfactory income and enhance one’s resume. However, most jobs do not have a precise termination date, placing the responsibility upon the jobholder to decide when to accept or seek another position. Unless one has made a terrible mistake in selecting a job and recognizes promptly the mistake and terminates, there is a minimum length of time necessary to hold a job to convince other employers you acquired valuable experience and proved you could successfully perform the job. Whether this minimum is months or years depends upon the circumstances and your ability to satisfy future employers that the time was adequate, you successfully performed the job duties and you are justified in accepting another job. Employers tend to avoid applicants who repeatedly appear too quick to change jobs.

Job Satisfaction A key factor in deciding how long to remain on a job is how well you enjoy the job. If you dislike the employer or job, it is definitely

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time to move on but if you thoroughly enjoy your work and associates, you have either no decision or the most difficult decision to make. The difficult decision comes when you realize that remaining on the job conflicts with long-range career aspirations or you are offered a much better job either with your present or another employer. Further complicating the decision may be the belief that there remains much to be learned on the job or a desire to complete projects already underway. The decisions can also be influenced by the timing of bonus payments, deferred compensation, stock options, and other benefits offered by employers with provisions designed to discourage employees from leaving. You are continually confronted with the question of how long will this job I enjoy so much last. Will it end or the associates that make the job a pleasure move elsewhere before I am ready to move? There are some conditions that when prevalent employees should seriously and actively begin seeking other employment. One is when the job is too easy and totally lacking in any challenge and provides no job satisfaction. The job may have been poorly thought out or has just evolved to a point where the employee can perform all the job requirements in far less time than a full day. Another condition is when it becomes apparent the job is not important to the employer and the employer could easily do without the job. A third is when the employer clearly is in financial trouble or must reduce employment levels. In these cases, the employee should begin seeking employment elsewhere before being forced to do so. You can not expect illogical or unnecessary jobs to continue indefinitely.

Dead End Jobs Some jobs are dead ends. These are jobs from which there is little chance of promotion or to jobs if promotion occurred would have limited appeal. Attractive jobs that would be desirable promotions may be held by veteran employees who are ensconced in their positions and unlikely to move anywhere. A dead-end job may be so because it is specialized and the experience prepares one for no other job. Jobs in isolated locations tend to become dead ends because the employee is not exposed to executives who could influence promotions. Often jobs in isolated locations are difficult to fill and employers find it easier to leave a promotable employee at the location rather than seek a replacement. From the employee’s perspective, an isolated location may be away from active job markets, which makes

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changing jobs difficult. Dead-end jobs are not always easy to identify but clues can be found by asking what happened to others who held the job or similar ones. Should you accept or discover you are on a dead-end job, unless happy and complacent, you will be wise to begin planning your next move. Ask yourself what you expect to accomplish and what you will learn on your next job. Is it a job you would be delighted to remain on indefinitely or is it only a step on your career ladder, or both? If you are determined to advance as far as possible, remember you cannot accept any jobs that are a step backward and lateral moves are to be avoided. An employer has the responsibility to decide if you are suitable for a job, but you also have the obligation to evaluate a job and decline if the job is not right for you.

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TAKING I NVENTORY: K EY Q UESTIONS

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A SK

❐ Do you have short- and long-term career objectives? ❐ Is the job under consideration a step up on your career ladder? ❐ What are your chances of promotion with your present employer? ❐ Does the job you are considering have promotional potential? ❐ How long do you plan to remain on your present job or the next?

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CHAPTER 12

Relocation: Considering Community Factors When accepting a job, you also accept the community and the cost of residency. Community factors can make a desirable job even more attractive or impossible to accept. Even in the most demanding of jobs, you will spend time in the community and your family will spend much more. The degree to which your standard of living will be affected should be calculated before accepting a job located in another community. Increases in cost of living, housing, and transportation costs could easily offset much of what appeared to be a substantial salary improvement. Noneconomic quality of life activities and conditions are as important as economic factors and for many become critical in relocation decisions. Moving to an area with recreational opportunities you enjoy or leaving a community you detest can be as important to your decision as views of the employer and job. Accepting a new job in a different community can be traumatic for you and your family if important community features are overlooked in the excitement of taking a new job. Community studies, similar to employer and job studies, require balanced judgment because you cannot expect to find the perfect community. Personal and family preferences and interests will play a large part in sorting out the desirable and undesirable features of a community. A comprehensive evaluation of an employer and job requiring relocation is incomplete without a study of the community. Your standard for comparisons and evaluation of a community will be the characteristics of the community in which you presently reside coupled with any you are seeking or wish to avoid. The standards are personal and what is best or adequate for you may be meaningless for someone else. Your evaluation will be selective in 161

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that you only need to evaluate characteristics that are applicable to you. A single person will not be concerned with the quality of the grade schools but may have great interest in recreational opportunities. The level of property taxes will be of lesser importance and unknown to an apartment renter although taxes will be included in the rent. You should sort out community characteristics by their degree of importance to you and your family. The quality and availability of medical care may be of critical importance to a family with serious health problems but cultural institutions such as museums of minimal interest. Cost of living is not a major issue with a single person, particularly if the job requires substantial travel but it is very significant for married people with large families. You will be wise to evaluate a community with the assumption that you will reside there for years and possibly the rest of your life. Conditions can always change and promises of another relocation by the employer may evaporate or thoughts of retirement in your dream community never materialize. A long-term view requires you to review community characteristics not presently of concern but may become important in the future. If you have infant children or no children and plan to have a family, schools are not an immediate concern but their quality and location will eventually become of paramount importance. If you plan to first rent a residence and then buy a home, real estate costs and property taxes are issues to study. Once you are in the new community, you and your family will find better acceptance by the community if you conduct yourselves as permanent members and not as transients regardless of the possibility of further relocation. Family attitudes, needs, and preferences are inescapable factors to be considered in any community evaluation. Family members are usually far more attached to their present community than the careerminded breadwinner is focused on the next job. If both husband and wife are employed, a major problem can emerge as to what happens to the spouse’s job or career upon relocation. Are similar jobs available in the new community or must other types of employment or activities be found? Under these circumstances could the marriage be jeopardized? The proximity of parents may become a major factor particularly if they are aging and require care. Children prior to high school age tend to accept relocation without serious resistance or adjustment problems but there can be exceptions. Family reaction can create conflicts that should be recognized early and quickly resolved

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or compromised to make relocation a success. While the problems are easily identified, the solutions may be difficult.

S OURCES

OF

I NFORMATION

To conduct a community evaluation, you must have information and there are numerous sources readily available. Whatever difficulty you encounter may come from the volume of information and the task of sorting out the relevant.

Your New Employer The employer who makes you a job offer involving relocation has decided that a significant investment in you is justified. Protection of the investment will be aided with a trouble-free move and rapid assimilation into the community. The employer should be able to provide you with most of the information you want. Your interviewers, new boss, and fellow employees live in the same community and should have more detailed information than any other sources.

Friends Friends who reside in the community or have previously lived there will be a reliable source of information. However, caution is advised with past residents because their information, while well intentioned, may be out of date.

The Chamber of Commerce Almost every city of any size has a Chamber of Commerce that distributes prepared material describing the community. A visit to their office or a phone call requesting their publications should result in your promptly receiving community information. They usually have very experienced staff workers available for more detailed questions.

The Internet All the states and most major communities have Web sites providing information about their areas. Important institutions within the community may also have sites worth review. Through the Internet,

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you can receive information from the Bureau of Labor Statistics on cost of living, employment, and other statistics of interest.

Publications The Yellow Pages telephone directory is a great source of information on local institutions all arranged by type. You can quickly learn the schools, both public and private, the churches, medical facilities, and so forth. The Morgan Quitno Press has a variety of excellent publications containing detailed statistical data on states and cities, which provide comparisons and rankings. If the publications are not found in your library, they can be purchased. The Morgan Quitno web site is www.statestats.com.

E CONOMIC FACTORS There are two general categories of community factors, economic and quality of life, to be addressed in this chapter. The economic factors will determine how much money an individual will retain after meeting basic needs and if the compensation offered for the job is a real improvement or inadequate to offset new expenses. Economic factors are just as likely to make a compensation offer even more attractive as discouraging, but it will take a careful study to learn the true conditions. Care should be taken to avoid conclusions based on broad generalizations of individuals wanting to be helpful that may be wrong or only partially true and not fully supported by the facts. You cannot rely on statements such as, “Our taxes are lower” or “Housing is very expensive” without some study to determine how these expenses would impact you. It is also critical to look at all economic factors to calculate the net effect because the most probable condition is that some will prove favorable and others unfavorable. Attempting to place a dollar value on the economic factors is essential for a realistic evaluation and calculation of the net effect. All of the factors described below can affect you to varying degrees, depending on your style of living, and must be evaluated on an individual basis. A critical cost item or expense for one may be unimportant for another.

Taxes The individual components of the total taxes paid within a community may vary substantially from community to community and

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from state to state, while total taxes paid may differ very little. There are exceptions, with Alaska the most notable. State and local governments require a certain level of funding to provide basic services and if taxes are not received from one source, they will be derived from another. Don’t be misled if a particular tax seems unusually high or low because there is likely to be another tax that offsets what appears to be a tax advantage or disadvantage. Furthermore, the amount and quality of government services are made possible by the taxes collected, causing the type of services you will receive from your government to be a factor in your evaluation. As an example, you may enjoy a low tax rate and have inferior schools or a relatively high rate and excellent schools. You may find that not all taxes are applicable, as would be the case if you did not own real estate. Other taxes can be mitigated by where you reside, such as in a large metropolitan area it may be advantageous to live outside the city limits in a suburb. To determine your tax obligation and make comparisons, you have to estimate each tax separately to arrive at a total and it is this total that is most important. A good place to start is to estimate in these five categories: 1. State Income Taxes: There are such substantial differences between the states for rates, deductions, and provisions in their income tax laws that careful review is necessary. Securing a copy of the tax law will be helpful but roughing out last years tax form gives a simple quick estimate of your obligation. Never assume the taxes in the state your moving into will be identical to the state you are leaving. Include in your calculations the benefit you receive from having state taxes deductible on your federal return. 2. Municipal Income Taxes: Most large cities are struggling to have tax revenues be adequate for the demand for services and a few have installed city income taxes. These taxes may be due if you reside in the city or live outside the city but your place of employment is in the city. 3. Property [ad valorem] Taxes: Although real estate is the most valuable asset taxed, any other personal property may be taxed under these laws if the state elects to do so. To estimate your property tax obligation, you must learn the rate of taxation, the assets included and excluded, and what deductions if any are provided. Once you know the provisions of the law, you should review assets you have or expect to acquire that are taxable. Pay

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particular attention to the inclusion or exclusion under these laws of valuable assets such as automobiles, boats, and computer equipment. Ad valorem taxes engender continual controversies over the value of assets and the methods of collection and enforcement, all of which are subjects worth reviewing. 4. Sales Taxes: Sales taxes can be stealth taxes in that they are collected in small amounts and you may not realize the total paid during the course of one year. The total can be a very large number. Sales taxes vary from state to state and can vary within a state, making it necessary for you to learn the tax rates in the community in which you will reside. In making comparisons and estimates, you need to know the items that may be excluded from sales taxes, such as certain food items, medical care, or any other categories. Some sales taxes can be avoided with out of state purchases or on the Internet, but one should not assume these options will continue indefinitely. 5. Specialty Taxes: There are other possible specialty taxes that are troublesome but probably too small to influence your job decision. Gasoline taxes vary substantially from state to state. Automobile licensing fees can be expensive and there may be large fees for reregistering your automobile in the state.

Housing Costs Your cost of housing will be determined by the combination of residential costs in the area, availability of housing, and your personal housing requirements. Personal needs and preferences will predominately influence the type of residence and location within the community. Your present residence will probably establish the minimum quality home that is acceptable since few would be willing to relocate only to suffer a reduction in their style of living. The location and type of home you select within a community will largely influence the cost. As a result of the wide variations in prices between locations within a community, most statistical data on a metropolitan area as a whole will prove to be of limited value. You may find a job in a small town where residence costs are generally less but where the choice of available housing is also less. It is far more probable that your job will be in a metropolitan area where choices are broad. Often during relocation the new employee is under family pressure to quickly find a home but the demands of the job leave limited time for “house hunting.” The search can be expedited if the basic

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decisions are made such as whether to lease or buy, what the size of home should be, and what are acceptable school districts. Then a professional realtor should be assigned the task of finding residences to inspect that meet your specifications. Remember, realtors represent the seller and themselves and some are more able than others, making it imperative that a competent individual provides you assistance. A recommendation from the employer is helpful and the realtor should have more incentive to perform if the employer is seen as a source of continuing referrals. It is wise to seek the advice of as many individuals as you can prevail upon for their opinions on every aspect of housing. In all communities, you will find housing and transportation costs closely linked. As a general rule with many exceptions, the further you live from your job, the less will be your housing costs but the greater your transportation expenses.

Transportation Costs Transportation costs to and from your job should be evaluated both in terms of actual cost and time involved. Costs may include personal automobile expenses, train or bus commuting costs, and parking fees. Time is how many minutes or hours will be spent in one form of commuting or another. Costs are relatively simple to calculate but the value placed on time lost commuting is up to each individual and requires decisions on the lifestyle that one is prepared to accept.

Cost of Living Determining whether your cost of living will increase or decline after relocation requires a review of statistical data, anecdotal evidence, and judgment. With the best of information, you are unlikely to end up with a precise answer but should have a general indication. Statistical data on the region may be of some value and will provide an overall view. However, four major cost of living components— food, housing, transportation, and medical costs—are best evaluated separately because their importance varies so much with each individual. Food cost statistics can be confirmed or questioned by a few visits to the supermarkets by the family member who normally shops for groceries. In metropolitan areas where competition is intense, food costs will usually be found to be lower than in small communities. Your cost of living can be affected by items that are easy to overlook. Insurance costs and particularly automobile premiums have

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significantly large variations between communities. The difference between automobile insurance premiums in a small town and a large city can be staggering. Property insurance premiums also vary and in some areas flood insurance is a prudent investment. Utility costs can present a surprise when you receive your first bill. Charges are based on local rate structures and the amount of service provided, which is affected by climate. Heating and air conditioning expenses will usually be the largest items. Automobile expenses for fuel, servicing, and repairs will eventually be encountered and may be reasonable or a shock but unlikely to affect a relocation decision.

Medical You should first be concerned with the quality of medical care available and then the expense. An employer willing to relocate you is almost certain to have a health insurance program, and your task is to study the plan to learn of exclusions, deductions, limitations, and omission of any family members. Whatever is not covered could become your expense. Should you or any members of your family have serious preexisting medical conditions with the potential of requiring expensive care, you should disclose the information to your employer and verify you will have coverage. Unfortunately, if you or a family member has medical conditions with a high probability of creating major claims, some employers may reconsider their job offer. You would be wise to make your disclosure before you move. The quality and availability of medical care becomes a critical issue if you have preexisting conditions or as you advance in age. For the patient, selecting a care provider is a gamble and never with 100 percent certainty a cure will result, the condition mitigated, or no mistakes made regardless of whom you select. However, your odds for receiving optimum care are much better with some physicians and institutions than others but it is a challenge to identify the best. The variation in the quality of medical care available is quite large. Some of the variation can be attributable to the competence of the caregivers and some to economic factors. Not every institution can justify or afford all the expensive diagnostic equipment available today. The best medical specialists congregate where there are a sufficient number of patients needing their attention and where other specialists of stature practice. If you or your family requires specialized care, you will want to make contact with a source before relo-

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cating. If you do not have an urgent problem, you should not delay after relocating the identification of a quality caregiver and becoming a patient. Convenience of care is also a factor to consider, particularly if you reside in a remote area. The time involved in travel to your caregiver in emergencies or for treatment of ailments requiring frequent visits cannot be overlooked. The proximity to a teaching hospital can be important because the most advanced therapies are offered there for serious and chronic medical problems.

Q UALITY

OF

L IFE I SSUES

The quality of life issues described are not all inclusive but they are the ones most commonly found important. These are community institutions and activities not related to your employment in which you or family members might participate. The presence of high-quality institutions or activities in which one is intensely interested can make relocation a joy but the opposite can rapidly sour or even prevent a move. Usually, your new employer will initially be a source of information on these subjects after which you should make direct inquiries.

Climate Whether or not the climate of the community one is leaving or to which one may move is a factor in the job decision is totally an individual matter. Some prefer warm climates free from winter storms and others just love winter weather. Some prefer dry climates while others have no problems with rainy communities. The change of seasons is important to many but others could care less. Climate has a major effect on the type and availability of outside activities. In any contemplated move to a new community, don’t overlook climate in your decision.

Education If you have an interest in continuing your education, then the availability of local courses can be an attractive but usually not a deciding factor in your job decision. If married with school age children, then the availability of suitable public or private schools becomes a critical factor. Regardless of how desirable the job, few would be willing to relocate their children to schools inferior to

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where they are presently enrolled. In a small community, there will be little or no choice of schools, but in a metropolitan area there are wide choices but narrowed by the neighborhood in which you select a residence. Schooling is of such importance that it is common to first select the schools and then a residence in order to qualify for admittance. If you elect to have your children attend private schools, residence is still important because of the necessity of transporting children to and from school. The choice between public, private, or home schooling constitutes a major decision for the parents. A combination of parent’s finances, education, philosophy, religious convictions, and greatly by what is available locally, influences choices. Enrolling in superior private schools may be difficult because of entrance requirements and long waiting lists. Evaluating schools involves asking the opinions of everyone who may have knowledge, but your evaluation cannot be considered complete without an actual visit to the schools. A college or university located in the community offers many opportunities to residents who are not full-time students. Most have programs of continuing education, with both credit and not-credit courses, for local residents and convenient evening and Saturday course schedules. Colleges have found a demand for courses that also constitutes a profitable utilization of facilities and faculty. The institutions are sources of entertainment with sporting events, theatrical productions, and seminars. Every employer in the community should have information on the programs offered and may present the information as an added inducement to applicants.

Religion The role religion plays in your life will determine its importance in the relocation process. Individuals who are very active in practicing their religion may want to promptly establish an affiliation with a local institution, but for most it will not be a matter requiring an immediate decision. You can take whatever time you want to make your selection as opposed to with schools, where you must make immediate decisions if you have school age children. If you are moving to a community of substantial size and are active in one of the mainstream religions, you will probably have several choices of where to attend. Selection is usually made on the basis of preference for a large or small congregation and how well one likes the people

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you meet during visits. Joining a church, even for those without strong religious convictions, continues as one of the best ways to make new friends and assimilate into the community. Religious preference can become a problem if you are not a believer, are active in a more obscure sect, or the community is overwhelmingly dominated by a religion other than yours. If your religious beliefs are not considered mainstream, you may have difficulty finding likeminded people with whom to associate. You may even find yourself shunned in the community if you are too vociferous with your views. The more common problem is relocating to a community in which the preponderance of the population is of a religion other than yours, although yours would generally be viewed as mainstream. If this condition exists and particularly if you have a family, this may become a critical factor in your decision to accept or reject the job. Prior to accepting the job, try to identify others of your faith and learn of their experiences in the community and to the extent, if any, that discrimination or intolerance manifests itself. Failing to identify someone with identical convictions, you should not hesitate to explore the issue with your interviewers. As much as most would like it to be, this is not a perfect world free of religious intolerance. If it is a problem in the community, identical problems may exist within the employer’s organization. See Chapter 9, Cultural Factors.

The Arts and Intellectual Activities The presence of cultural institutions dedicated to the performing arts or general intellectual improvement of the community can be attractive assets not only to attend but also for participating in. Relocating to a new community involves severing frequent contact with old friends and the time and effort to make new friends. Attending theater and visiting libraries, museums, and zoos are for most an enjoyable time-consuming experience, and these institutions usually welcome volunteers, presenting the newcomer with an opportunity to make new friends with similar interests. Most communities have discussion group organizations that can be fun and serve as another opportunity to assimilate into the community.

Recreation Facilities and opportunities for recreation are numerous in most areas but their attractiveness depends totally on your interests. Geography

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and climate greatly influence the type of convenient recreational activities, but with the mobility and transportation options available today few are totally excluded from any variety. The demands of a new job and stress of relocating will probably preclude extensive recreational activities for some time after your move, but you should know your options once you do have time. The factors of how much time you can make available for recreational pursuits and the intensity of your interest should enter into your evaluation of recreation. A person may enjoy hunting and fishing but would not want to be involved every week. One may like hiking but not every day.

Environment and Climate The community environment may be important for two primary reasons, health and overall concern or philosophy. If you or family members have any medical conditions aggravated by air pollution, then relocating to a metropolitan area with high levels of pollution such as Houston, Los Angeles, or other large cities may be impossible to consider, regardless of the appeal of the job. Climate can also aggravate or improve medical conditions directly affecting the job decisions. The chances are high that anyone with a medical condition seriously affected by the environment or climate is well aware of the problem and it will be a major factor in any relocation decisions. Individuals with strong views on environmental issues or are active in any of the environmental movements would be wise to learn of both their employer’s views and conduct before relocating.

Similar Interests After relocating, you will want to associate with people of similar interests. Obviously, the larger the metropolitan area, the greater will be the probability people with similar interests are present, but that does not necessarily mean they can be readily identified and friendships follow. However, with a little effort, identification should not be difficult. Many private and for-profit organizations exist for single people to meet and develop relationships. Clubs and organizations flourish for those interested in special activities and there is an endless variety, sports teams, bridge and other card clubs, ski clubs, travel clubs, book clubs, discussion groups, volunteer service organizations, and political groups, to name only a few.

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The economic importance and reputation of the employer in the community can influence your reception into the community. A small- or medium-size employer in a large metropolitan area attracts little attention and probably remains largely unknown unless the organization or its owners become involved in well-publicized activities, usually improprieties of some sort. Only the largest of employers and their most senior executives receive public attention in major metropolitan areas. However, in small communities where the employer is dominant and the area’s economic health is dependent upon the fortunes of the employer, the community takes an interest in all of the employer’s activities. If the business enjoys good relations with the community, new management personnel and their families relocated from another area may be greeted as celebrities and welcomed into the community. If community relations are not positive or major changes in the business are contemplated that would reduce employment levels, the newcomers may receive a chilly reception. Anyone relocating with an employer dominant in a small community should realize that if the employment relationship proves unsatisfactory, finding a different job will almost certainly involve another relocation. Other suitable job openings are unlikely to exist locally, but if they did your prior experience with the dominant employer may preclude you as a candidate. If the community is not near a major metropolitan area, just seeking another job will be more difficult because of the travel requirements. Every major employer can site examples where employment decisions were effected by community factors. Applicants readily accepted jobs because of the community or declined because of the community. Employees quit to accept jobs in another more attractive community. The most disturbing and costly for all involved is when an applicant accepts the job and relocates only to conclude within months he or his family could not adjust. Usually the undesirable aspects of the community were well know in advance but the applicant or his family rationalized the problems could be overcome but it did not happen. Never underestimate community problems in your enthusiasm for a job offer.

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TAKING I NVENTORY: K EY Q UESTIONS

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❐ Overall, how do you compare your present community with the one to which you are considering relocating? ❐ What is your family’s attitude toward relocating to a new community? ❐ What taxes are you subject to and how do they compare with those you presently pay? ❐ How do housing costs compare? ❐ What will be your method of transportation and cost? ❐ How does cost of living compare? ❐ What is the availability of quality medical care? ❐ What is the quality of available schools? ❐ Is a religious institution of your faith available? ❐ What cultural opportunities exist? ❐ What are the recreational opportunities? ❐ Is the climate and environment suitable for you and all family members? ❐ What is the overall reputation and status of your employer in the community?

CHAPTER 13

Compensation Never count on gratitude. It may happen, should happen, and does happen but never count on it. The compensation first offered is an indication of what the employer believes is adequate to attract a qualified applicant. You may find an initial offer to be acceptable, deficient, or unacceptable, leaving you a choice of accepting the offer, rejecting it and seeking another employer, or attempting to negotiate improvements. Whatever is first offered reveals the employer’s attitude and general philosophy regarding compensation and is the amount the employer prefers to pay. A very low offer may be evidence that the employer’s entire wage structure is not competitive. Negotiated improvements to a first offer can satisfy your personal requirements, but there may be an unwelcome price to pay in the form of continuing resentment, minimal pay increases or demands for extraordinary performance. Whenever an employer is forced to increase an offer, more is being paid than someone had originally planned. An applicant desiring to improve an offer can be most effective by providing the employer with a rational as to why the offer should be increased, not just taking the position of, “I want more.” Elaboration on past accomplishments and expressing confidence in meeting job objectives can become impressive arguments. As examples; “I have a following of customers and always exceeded my sales targets. While yours are a challenge, I see no problems.” “I have always managed within my budgets both in expense control and meeting production schedules.” An important part of your evaluation of an employer is gaining an understanding of why you were offered whatever you were offered and the degree of flexibility the employer has in its compensation system. When you accept an employer’s offer, you are also accepting the employer’s system of compensation, which may prove to be the ladder to prosperity or a financial straitjacket. To conduct your evaluation, 175

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you require insight into how the employer thinks and basic information on the entire compensation system.

C OMPENSATION P HILOSOPHY Every employer has a general compensation philosophy that is reflected in hiring practices throughout the organization. This may be a formalized written policy or unwritten but with everyone aware of management attitudes. For a short time, an employer may not have a policy or a policy is undergoing revision as may occur during an ownership change or with a new chief executive, but this is a chaotic situation that will not endure indefinitely. Most compensation plans are keyed to what an employer believes is competitive with competitive or “going rates” determined by reviewing surveys of what other employers pay, anecdotal evidence such as rates that applicants request, or the demand of current employees to remain with the company. It does not take long for an employer to realize a problem exists when employees are leaving for higher-paying jobs or applicants are rejecting offers as too low. Compensation adequate to attract and hold employees is a far more important factor in an employer’s decisions than the ability to pay. Should an employer claim ability to pay is limiting an offer, you had better review the financial viability of the organization before making a final decision. However, claims of inability to pay usually refer to conflicts with what current employees are paid rather than with the overall financial health of the organization. An employer’s philosophy may be to provide compensation higher than competitive rates in the belief that higher rates will attract a higher caliber of employee and costly turnover will be minimized. Other employers may believe paying at a competitive level constitutes fair compensation for their employees, and as long as they can staff their operations without difficulty they will simply equal the labor market competition. A few employers will attempt to compensate employees at levels below competition, but this practice usually cannot be sustained. Some employers will bypass their established compensation plan and pay whatever is required to employ a particularly attractive applicant or someone who has desperately needed skills. Usually, the employer goes to great lengths to keep the compensation for the highly paid employees a secret for fear of irritating other employees. Most employers have learned the internal relationships differentiating levels of compensation can create more conflicts

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than the actual amounts paid. A simplified example of the importance of internal relationships would be for you to imagine your reaction if you learned a fellow employee working next to you performing essentially the same job was paid 25 percent more than you. The larger the employer, the more likely the employer will have a comprehensive compensation program with limited exceptions possible. However, in even the largest of corporations with formal salary administration systems, enterprising managers can usually find some means to accommodate the needs of valuable employees or equitably handle unforeseen special situations. Small employers and new companies without a formal compensation system tend to have flexibility to develop unusual compensation agreements when necessary to attract desired employees. As a general rule, the more senior the position, the more flexible the employer is in negotiating compensation. An employer attempting to employ a new vice president will probably be very flexible when negotiating with a coveted applicant and mainly be restricted by concerns over how the compensation will compare with other senior executives. Applicants for lower-level positions easy for the employer to fill will find employers have little inclination to negotiate and the compensation is predetermined by the established system. Employers tend to view compensation costs in their entirety and not just the individual components. Employees and applicants should also look at total compensation but most place too much emphasis on the wage portion. A dollar spent for employee health insurance has the same impact on profitability as a dollar spent on wages. However, a dollar committed to be spent on wages is a more certain obligation than a dollar that may be earned under a bonus plan, payable only if certain performance goals are achieved. For an employer, there are two types of compensation costs. One is certain, such as wages, and the other is variable, such as commissions, stock options, and bonuses. The result is that an employer must make fundamental policy decisions regarding the portion of all compensation costs allocated to fixed and variable cost items. Variable costs can only be estimated in advance but they are usually structured so that if the employee fairs well, the employer does extremely well. The employer’s decisions will be influenced by a variety of factors but the most important will be overall compensation philosophy, internal relationships, and what it expects to be accomplished. An offer made to you will be a good indication of the overall compensation decisions and policies of the employer.

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S ALARY S TRUCTURE Established employers will have developed a wage and salary plan ranking jobs by order of importance. While there is much similarity in employer ranking, they are by no means uniform. Associated with the plans are salary administration procedures and policies that will largely govern your compensation should you become an employee. In most organizations that have a human resources department, this department will be assigned the responsibility for creating and administering the compensation programs. Knowledge of the employer’s plan will not only help explain the logic of any offer received but also provide insight into the probability, amount, and timing of wage increases once employed. Salary structures are created by first identifying all the jobs and job vacancies in the organization and assigning a title to each. Job titles identify the jobs, but as was explained in Chapter 7, The Job, an identical job title may describe a very different job in another organization. Job titles and actual job duties could be similar in different organizations but responsibility and compensation very different, as would be the case with a comptroller in a small business as opposed to one in a very large business. It is common in most formal plans for a general description of the job duties and responsibilities to be written for a permanent record. If a job changes sufficiently, a new description will be written and possibly reassigned in the rate structure. Relatively similar jobs would have the same titles such as salesperson, accountant, or computer programmer at the entry level but as more senior jobs such as comptroller, sales manager, or chief engineer are described, they only refer to the job of one person. After the jobs are identified, they are ranked in order of importance and slotted into classification levels (sometimes referred to as CLs or labor grades) that set the minimum and maximum amount of salary the employer will pay for a job. Equitable ranking and slotting of jobs is a challenge for any management and always remains to some degree a subjective exercise regardless of efforts to create systematic evaluations. Numerous job evaluation plans have been devised in an attempt to quantify and award points for such factors as education required, complexity of the job, and overall responsibility, with the total scores used to determine the ranking and slotting into the classification level. While well-constructed formal evaluation plans are far better than arbitrary management assign-

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ment, they do have problems. The most troubling is competitive market conditions that force payment of salaries above what the job is deemed to be worth under the evaluation system. Conflicts of this type are most common in the employment of college graduates, information systems professionals, and others with scarce skills. Efforts to preserve the wage structures yet attract these people are being made with supplemental compensation payments such as signing bonuses, extravagant relocation allowances, and stock options. While the ranking of jobs and their assignment to a classification level remains stable, the rate structure can and does change because of competitive pressures, market conditions, and living costs. The minimum and maximum for each classification level is established with the minimum of a classification level, the lowest wage the employer will pay for a job ranked into that classification level, and the maximum the highest. Numerous classification levels are created, continuing an upward progression until salary ranges for senior executives are delineated, although the formal structure in some organizations may stop before the senior level. It is common for a midpoint of each classification range to be established and often restrictions are placed on exceeding the midpoint. The midpoint may have added significance when management believes it to be a fair (in their mind) competitive wage and only superior performance deserves higher pay. While the general concept described above is nearly universal, standardization of plans is nonexistent and each employer has its own. The number of classification levels, the degree of overlap of the classification levels, and breadth of each range between minimum and maximum are at management’s discretion. Armed with a general knowledge of salary structures and possible administrative policies, you are in a position to ask a series of questions the answers of which will be helpful in your evaluation: • What will be my job title and to what classification level is it assigned? • Where does the job offer fall within the rate ranges for my classification level? If near the minimum, there should be room for wage increases even if you remain on the same job. However, if you have aggressively negotiated and have an offer near the maximum for the classification level, wage increases may be rare and difficult unless you are promoted to a higher-level job. As an example, if you are offered a starting salary of $3500 per

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month and the classification level to which the job is assigned has a range from $2900 to $3700 per month, you can readily see your only hope for major improvement in wages is through a promotion. What is the usual period of time before and between salary reviews? At the time you receive a job offer, you will want to know how long you must wait before your performance will be reviewed and you will be eligible for a wage increase. Many employers volunteer this information with their offer, but if they do not you should ask. Employers most commonly review salaries annually but may have more frequent reviews for new employees. Some attempt to separate performance reviews from salary reviews, but programs of this type rarely have long-term success. Does the employer have policies restricting the amount and frequency of wage increases? If an employer restricts wage increases to a designated percent of present salary, you can easily calculate the maximum wages you could receive at a future date if you also know the policy for frequency of increases. Some employers may have policies that differ for new employees or employees below the midpoint of their classification range. Just how formal and rigid are the employer’s compensation policies? As an applicant, you are unlikely to receive a complete answer to this question, and the employer may not know until confronted with the choice of deviating from policies or losing an important employee. Only after you have been employed will more information become available either to your delight or dismay. Detailed written policies may exist but through customs and changing conditions the policies may be superseded. Not all employers will have formal salary administration programs, but you can be certain unwritten policies must exist that are generally followed. A good question to ask when compensation policies are described to you is, “How often are exceptions made?” What are the employer’s approval procedures for wage increases? If employed, information on the discretion and authority your immediate supervisor has to grant or withhold wage increases will give you an indication of your chances of receiving increases. For most employers, an immediate superior’s recommendation of wage increases is mandatory but how many others must then approve is the issue.

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W HAT W ILL H E OR S HE C OST ?— T HE E MPLOYER ’ S R ATIONALE In one form or another this is the question management continually asks. You are likely to learn one answer in the form of a job offer but will not be participating in similar questions unless you became part of the employer’s management. A primary responsibility of the management of every organization, both profit and nonprofit, is to conserve the assets and control costs. Compensation of employees is an expense to be controlled with managers at all levels sharing in the responsibility. Managers are praised and their promotion chances influenced for controlling expenses of which wages is usually a significant item; they are not given bouquets for overpaying employees. However, wide variations may exist within an organization as to the zeal with which individual managers work to contain compensation costs. All managers are involved with each regulating the compensation of their subordinates and the irony of the situation is that the cost control obligation also limits the compensation of those exercising control over others. (Cost control enthusiasm seems to stop somewhere below the most senior executive level as evidenced by the explosion in executive compensation for CEOs.) Managers are motivated to control compensation of subordinates by the wellestablished principle that subordinates should be paid less than their boss. While the amount of differential may vary among organizations, the principle affects everyone. Starting at the top, the CEO makes certain all reporting to him are paid less and they in turn approve a lower level of compensation for their subordinates and the practice continues on down through first-level supervisors. A few CEOs effectively influence all wages by keeping the salary portion of their compensation relatively low. If the employer is a public company, you can look in the proxy statement and learn exactly the compensation of the officers. The range between the minimum and maximum wage rates for each classification level typically are narrow for the lower classifications and then progressively become wider with the widest for the senior executives. Consequently, the room for a manager to drive a hard bargain and negotiate a low starting wage with an applicant for a lower-level position is limited. The manager making offers to applicants for entry-level positions may have no discretion in starting wages, with an unvarying starting wage predetermined by others.

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However, applicants for more senior positions will find the employer has discretion to negotiate compensation and that discretion or flexibility increases with the importance of the job. Eventually, the employer’s target negotiated offer for a highly sought after applicant may be characterized as ranging between “paying the least the applicant will accept” to “paying whatever it takes.” Once an employer decides to make an offer to an experienced applicant the basic question of, “What will he or she cost?” is heard. There are two primary factors that will be considered to answer the question: 1. The applicant’s compensation history with emphasis on the compensation for his last or present job 2. How an offer would compare with the compensation of employees with similar job status already employed If you wonder how an employer arrived at an offer made to you or you are involved in negotiating a compensation package, you should assume the above two questions largely influenced the employer’s positions. The level of compensation you have achieved in your present or last job will greatly influence the thinking of employers in formulating offers. It would be an unusual and imprudent employer who made an offer to an experienced employee without knowing his past and present compensation. Employers realize they cannot expect to entice an employed individual into accepting a job offer unless the offer provides compensation greater than presently earned. Employers also believe that an unemployed person anxious to find a job may accept an offer less than paid on his last job, but the probability is high he will not remain long on the job. The precise amount of compensation that must be offered over and above an applicant’s present compensation to be attractive is a judgment call without guidelines. The level of increase necessary may be debated within the employer’s management group, and the applicant may eventually be queried as to his requirements. An applicant can find himself in a difficult position when asked of his compensation needs because the employer already knows what he would prefer to pay. If the applicant’s request is lower than the amount the employer is prepared to pay, the employer accepts. If the applicant’s request is higher, the employer can attempt to negotiate a lower compensation package. Either way, the applicant loses. A

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good response for an applicant is to request compensation comparable to what others in the organization of similar status and responsibility are paid. As an applicant, it is unlikely you will be aware of what other employees are earning that are on a level comparable to the job you are evaluating. However, the employer is very much aware of everyone’s compensation and the necessity of compensating a new employee at a level consistent with what established, proven employees are paid. Few actions could offend present employees more than to learn a new employee of similar rank was employed at a higher rate. Under no conditions will a new employee be employed at a rate greater than paid his immediate superior. The internal relationships are of such importance that an employer may find it impossible to employ a desirable applicant. Should this be the case, the sooner both the employer and applicant recognize there is no solution and go their own ways, the better.

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The following is a list of the more common elements of compensation for use in evaluating a job offer. The list serves as a checklist of compensation benefits. If any are omitted from a job offer, you should inquire of the employer’s policies, which may separately describe benefits. Evaluating an offer involves looking at the offer in its entirety and not just the wage portion or some other attractive or distasteful feature. Along with this list are supplemental explanations and questions, but whenever possible you should request written descriptions of the plans or benefits. Some plans are complex and you should never be shy in seeking an explanation. As an example, it is not enough to know a benefit plan exists, such as health insurance or a pension plan, because in the details either plan may prove to be generous or minimal and of little value. The list only covers the more common methods of compensation and benefits and does not purport to be all-inclusive. You can be certain that if an employer has a unique benefit program or programs that are extremely generous, you will learn of them during the employment process. Wages: The amount received in periodic payments of cash is for nearly all employees the most important part of their compensation. Usually as long as you are employed, you will continue to

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receive a base wage. Knowing the starting wage is important but you also should learn when increases are promised or likely to be granted and under what conditions or guidelines. Bonuses: Bonuses are payments in addition to wages when the employee, a unit of the organization, or the entire organization accomplishes designated objectives. The amounts may be calculated with a predetermined formula or simply at the discretion of management. Some are just calculated and paid as a matter of custom, such as year-end or Christmas bonuses. If included in your job offer is a promise of a bonus, you should definitely inquire as to the amount you could receive and the employer’s past history of bonus payments. Commissions: Commissions are payments based on individual performance with the level of performance directly affecting the employee’s compensation. They usually are amounts paid for the sale of products or services of the business. Employees eligible for commissions may receive a base wage or a draw (a draw is essentially a loan to be paid off from commissions as earned) or their compensation may be limited to commissions. The success of any commission plan will be dependent upon both the ability of the employee and the attractiveness of the products or services for sale. Overtime Pay: Senior executives and managers expect to work whatever hours are necessary without overtime payments and are exempt from overtime pay. Employees in less skilled and responsible jobs must receive overtime pay at the rate of one and onehalf their hourly rate for hours worked in excess of forty hours per week. The federal wage and hour law precisely defines this obligation. However, many employers provide overtime payments to employees although not required by law to do so, and these payments can become a significant part of an employee’s compensation. Some employers do not make cash payments to exempt employees but allow the employees to accumulate “comp time,” which is simply time off equivalent to the overtime hours worked. Applicants should never assume overtime hours and payments will continue indefinitely. Vacations: Vacations are paid time off for rest and rejuvenation. At least that is the theory but how much rest occurs is problematical. The amount of vacation granted is based on length of service, and as an applicant you will want to know when you will be eligible for a vacation and the amount. You will also want to know the employer’s requirement for taking vacation and if vacation time not taken is reimbursed or can be accumulated from year to year.

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Health Insurance: The provisions of an employer’s health insurance program should be carefully reviewed to determined if you believe the coverage is adequate for you and your family. The amount of benefits in any plan is a direct function of the amount of premiums paid, and health insurance costs are of a magnitude that they can present a serious problem for an employer. In addition to evaluating the benefits, you will want to know as a new employee when the coverage becomes effective. What coverage is provided for dependents? What portion and the monthly amount, if any, of the premium are employees required to pay? Life Insurance: Life insurance provided by an employer will be term insurance that you will lose if you leave the employer. There probably will be provisions to convert the insurance to your personal ownership upon termination but it will be with a much-increased premium. Sick Leave: Sick leave benefits continue your wages when you are unable to work because of illness. Many employers have formal policies granting a specific number of days allowed per year that may or may not be accumulated from year to year. Sick leave plans may be dovetailed with insurance disability benefits that become payable for long-term illnesses or in the event of permanent disability. Pensions: Pension are monthly benefits usually payable for life, commencing upon retirement, and are structured as a reward for long service with the employer. Pension plans with defined benefits usually have the benefits payable calculated with a formula, incorporating years of service and wage level. If you intend to remain with the employer until retirement, you should obtain a copy of the employer’s plan and study it carefully. The plans are often complex and you may need assistance from your employer or an independent expert to explain possible benefits and limiting provisions that may prevent you from receiving benefits. Assuming current trends continue, any plan you study today is almost certain to be revised or supplemented by another before you retire. 401k Plans: These plans have become increasingly popular often replacing more traditional defined benefit pension plans. Under a 401k plan, each employee has an individual account to which both the employee and employer can contribute. The money in each account is pooled into an account controlled and invested by a trust. Employers like the plans because they know exactly what their costs are and employees like the plans because they accumulate a nest egg

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they can take with them if they change employers. Employees have considerable discretion as to the amount they wish to contribute to the plan. They will be wise to decide upon their contribution level after they review the investment performance and credentials of the trustees investing their money. The plan provisions and administrative practices governing withdrawals of funds also should be studied because withdrawals are often restricted. Most 401k money is invested in the stock market with results varying widely. Some of the enthusiasm for 401K plans diminished when employees learned upon receiving their year 2000 statements it was true that the stock market could go down as well as up. Stock Purchase Plans: Many employers that are public companies have employee stock purchase plans permitting employees to buy stock, usually through payroll deductions, of the employer without using and paying a broker and sometimes at a discount from the market price. The stock is fully registered and becomes immediately the property of the employee who can sell it anytime. Assuming the employer is a strong company with a promising future, stock purchase plans can be an excellent benefit for employees. ESOP Plans: Employee stock ownership plans, ESOPs, are plans established under government regulations for employees to purchase or earn shares of their employer’s stock. In most cases, the employer is not a public company, making it nearly impossible for an employee to sell any shares accumulated in the open market. The regulations emphasize the plans must be for the benefit of the employees but the motivation to establish an ESOP plan is almost always to benefit a large shareholder of the company. Under an ESOP plan, a trust is created that purchases a block of stock with borrowed funds repayment of which is guaranteed by the company. The company is then permitted to make annual contributions to the trust as a pretax expense to use to retire the loan. The shares eventually can be distributed to employees. Employees to receive value for the shares must sell the shares back to the trust or hope the company is sold. No one evaluating an offer of employment should place much value on an ESOP plan without substantial investigation. Profit Sharing: Profit sharing involves allocating a portion of the enterprise’s profits to employees. If you are told you will participate and receive a share of the profits, it is fair to ask what this would have amounted to in prior years. Profit sharing is subject to management discretion, including the amount shared, who participates, and the formula for allocation of funds.

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Automobiles: An automobile or an equivalent automobile allowance can be a valuable part of a compensation offer. Because of possible tax difficulties for the employer when an automobile is furnished, many simply provide an allowance and let the employee purchase an automobile and deal with the IRS. In some businesses, the type of automobile furnished is dependent upon the status of the employee. Parking: If you will be working in an area where parking space is scarce and fees are charged, you better learn before accepting if you will have a parking space and who pays the fees. Relocation Expenses: Most large employers have relocation policies that all or partially cover the expense of relocation. These expenses can be formidable, including such items as moving costs, sale of real estate, and living expenses until relocated. Smaller employers may not have a well-developed policy making it necessary for you to negotiate the expenses to be reimbursed. Signing Bonuses: If you possess scarce skills in great demand, you probably are well aware of the practice of employers paying a bonus for others with similar skills to join their organization. The amount of bonus and the terms of payment can vary from employer to employer. Stock Options: Stock options are the rights to purchase a certain number of your employer’s shares at some point in the future. When the options are granted, they are assigned a price per share that is above the current market price and will only have value if the market price becomes greater than the option price. If the employer is not public, its board of directors can approve a reasonable price they believe would be the present market price. Determination of the market price in a private company is a subjective exercise and often controversial. If the employer is private and plans an initial public offering (IPO) and fails to do so, the options will probably become worthless unless the employer is sold. The option holder is prohibited from exercising his options for a set period of time and must exercise the options by a set future date. As an example, an option holder may be prohibited from exercising his options for two years but must exercise them within four years. Stock option plans are complex documents written by attorneys that must be approved by the shareholders. Nearly all plans contain provisions that should an employee terminate prior to his options becoming exercisable, he will lose the options. Another

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standard provision is if the employer is acquired, all options can be exercised. Wide variations can exist in the plans and familiarity with a certain plan does not make you knowledgeable about another plan. There is little chance to negotiate over the text of the plan but the number of shares and time limits often can be negotiated. Many have made large fortunes through stock option programs but many that you hear little of have been disappointed to learn their options were worthless. The company’s shares have to appreciate substantially for the options to have real value and such appreciation may not occur. The tax consequences also have to be considered. If you exercise your options and promptly sell the shares for a profit, the income is taxed as regular income, the same as your wages. To receive the capital gains rate, you would have to hold the shares the required length of time and that may be both risky and impractical. Maternity Leave and Benefits: The extent of maternity benefits and leave provided can be a deciding factor in accepting employment for women who wish to have children. In addition to health insurance benefits, the issues of time away from the job with pay and without pay that is permitted must be evaluated. Pregnancy leave policies vary widely and it is prudent to request a copy of the policy. Termination Pay: Termination payments, if any, for employees terminated from entry level or mid-level jobs probably are described in a written company policy. Under normal conditions, it is hardly appropriate for applicants to request information on separation pay. However, when applying for jobs of limited duration, when employment contracts are required or in high-risk situations, separation benefits should be discussed and included in the offer presented. If the employer is a candidate for sale or merger, anyone considering a senior management position should know the separation benefits to be received in the event of a change of control. Training: Training in all its forms is a type of compensation that in many instances may prove to be the most valuable received. Training expenses represent an investment for the employer and there is only a return if the result is a more productive employee. As an employee, training once experienced can never be taken away and constitutes an asset for present or future employers. Don’t limit your thinking of training to tuition reimbursement programs and leaves-of-absences for academic studies. Training of great value may be received on the job or multiple jobs as is the case with fasttrack management training programs. Job experience is of excep-

COMPENSATION

189

tional value when the employer has a reputation for excellence and you have the opportunity to associate with individuals who are experts. Training can be in formal classroom settings on the employer’s property and taught by instructors who may or may not be employees. However, training received every day on the job from an outstanding supervisor and associates can be superior. Keep in mind training prepares you to perform and after you complete your training when you will be evaluated on your performance and accomplishments and not on the amount of training you experienced. All Factors Important: Compensation is the subject of the last chapter, not to diminish its importance but to emphasize the other factors to be considered when selecting an employer. All too many make the mistake of drawing conclusions about a job opportunity primarily upon their understanding of the initial compensation level. An unusually high paying job may be of short duration, involve unacceptable objectives, impossible working conditions, or turn out to be a wonderful opportunity. A disappointing wage offer may only be opening the door to many other forms of compensation and an opportunity to begin climbing a promising career ladder. You must look at the complete picture when evaluating employers and jobs and only you can reach conclusions and make decisions.

190

SELECTING YOUR EMPLOYER

TAKING I NVENTORY: K EY Q UESTIONS

TO

A SK

❐ What appears to be the compensation philosophy and policies of the employer? ❐ Where is your job title assigned in the employer’s salary structure? ❐ What is the rate range minimum and maximum for your job? ❐ Where does the job offer fall within the rate range for the job? ❐ How often are salaries reviewed? ❐ How many of the common compensation elements are applicable and included in the employer’s offer? • Wages • Bonuses • Commissions • Overtime Pay • Vacations • Health Insurance • Life Insurance • Sick Leave • Pensions • 401k Plans • Stock Purchase Plans • ESOP Plans • Profit Sharing • Automobiles • Parking • Relocation Expenses • Signing Bonuses • Stock Options • Maternity Leave Benefits • Termination Pay • Training

Index

Benchmark comparisons, 43 Benefits compensation issues, 175–190. See also Compensation vs. wages, 177 Better Business Bureau. See BBB (Better Business Bureau) Bonuses, 184, 187 Budgets, 48–50 Building maintenance, 27–28 Business cycles, 3 Business environments, 2–3 Business plans, 48–50 Bypassed employees, 120–121

Numbers 401K plans, 185–186 A Ad valorem (property) taxes, 165–166 Age-related issues, 132 Allowances, automobile, 187 Amortized expenses, 45–46 Analysts as information sources, 33–34 Annual reports, 40 Antidiscriminatory legislation, 123–124 Assets, employer current, 29–31, 45 intangible, 45–46 Auditor’s statements, 41 Automobile expenses and allowances, 168, 187

C Capitalized expenses, 46 Careers planning of, 151–152 transitions in, 9–10 Cash flow analyses and statements, 47–48 Casual interview contacts (“little people”), 140 Cause discharges, 116 CEOs (chief executive officers), 75–77, 83–86, 181 Chambers of Commerce, 163 Change of duties, 108–109 Charity and volunteerism, 131–132 Chief executive officers. See CEOs (chief executive officers) Classification levels. See CLs (classification levels) vs. job titles

B Balance sheets assets, current, 45 assets, intangible, 45–46 components of, 44–45 debt, long-term, 46–47 description of, 44–45 equity, shareholders’, 44–47 expenses, amortized and capitalized, 45–46 goodwill, 45 liabilities, current, 45 market capitalization, 47 ratios, current, 45 BBB (Better Business Bureau), 33

191

192

INDEX

Climate-related and geographic issues, 169–172 CLs (classification levels) vs. job titles, 92, 178–179 College or university preferences, employer, 133 Commissions, 177, 184 Community-related factors. See Relocation and communityrelated factors Company position (employer). See Industry and position (employer) Comparisons, corporate benchmark, 43 industry, 44 Compensation description of, ix–xi, 175–176 elements of 401K plans, 185–186 all factors, importance of, 189 automobiles and automobile allowances, 187 bonuses, 184, 187 commissions, 184 description of, 183–189 ESOPs (employee stock ownership plans), 186 insurance, health and life, 185 leaves, maternity, 188 leaves, sick, 185 leaves, vacation, 183–184 overtime pay, 184 parking, 187 pensions, 185 profit sharing plans, 186 relocation expenses, 187 signing bonuses, 187 stock options, 187–188 stock purchase plans, 186 termination pay, 188 training benefits and opportunities, 188–189 vacations, 184–185 wages, 183–184 employee costs to employers CEOs (chief executive officers) compensation and, 181 description, 181–183

employee salary histories and, 182–183 public vs. private corporations, 181 senior vs. junior positions, 182 employer flexibility and, 175–176 first offers vs. negotiated compensation, 175–176 key questions about, 190 philosophies of commissions, 177 competitive (“going”) vs. below market rate, 176–177 comprehensive programs, 177 description of, 176–177 fixed vs. variable costs, 177 formal salary administration programs, 177 performance-based programs, 177 wages vs. benefits, 177 salary structures administration policies and, 179 approval procedures and, 180 basic questions about, 179–180 CLs (classification levels), 178–179 description of, 178–180 increase frequencies and, 180 ranking plans, 178–179 reviews and, 180 Competition, internal, 127–128 Competitive (“going”) vs. below market rate compensation, 176–177 Comprehensive compensation programs, 177 Consolidations, corporate, 71–72 Consultants, 85–87 Corporate histories as information sources, 20 Corporation positions (employer). See Industry and position (employer) Cost of living, 167–168 Creative accounting, 43 Cultural factors antidiscriminatory legislation and, 123–124 description of, ix–xi, 123–124

INDEX

discovering, 125 extreme factors age-related issues, 132 charity and volunteerism, 131–132 college or university preferences, 133 description of, 126–127 glass ceilings, 130 harassment and discrimination, 129–130, 132 internal competition, 127–128 management excesses, 127 paternalism, 132–133 politics, 130–131 racism, 129–130 recreational issues, 132–133 religion and religious activities, 129 sexual-related issues, 130 immediate supervisor influences, 125 importance of, 133 interpersonal relationships, employee, 126 key questions about, 134 management style and philosophies, 124 normal work environments, 125–126 organizational size, 124–125 traditions, 126 work pace, 126 Current assets, liabilities, and ratios, 45 Cycles, business, 3 D D&B (Dun & Bradstreet) reports, 56 D&B Million Dollar Directory, 34 D&B Reference Book of Corporate Management, 34 Dead end jobs, 157–158 Debt, short-term vs. long-term, 46–47 Decline of loyalty. See Loyalty, decline of Directory of Corporate Affiliations (Master Index), 35 Discharge job openings cause discharges, 116 description of, 114–118 discharge types, 115–116

193

problems associated with, 117–118 unsatisfactory performance discharges, 116–117 Discrimination and harassment, 129–130, 132 Disenchantment, employee, 5 Duration, job, 101 Duties and objectives, jobs change of, 108–109 comparisons of, 93 description of, 93–97 evaluation of, 96–97 identifications and clarification of, 94–96 specific tasks, 96–97 E Employees costs to employers CEO (chief executive officer) compensation and, 181 compensation, 175–190. See also Compensation description, 181–183 employee salary histories and, 182–183 public vs. private corporations, 181 senior vs. junior positions, 182 disenchantment of, 5 employer-employee reciprocal relationships, ix–x mobility of, 5 personality characteristics of, 135 stock ownership plans for. See ESOPs (employee stock ownership plans) Employer information description of, ix–xi employment environments, 1–13. See also Employment environments financial condition, 37–52. See also Financial condition (employer) full profiles, importance of, 15–16 general information, 15–36. See also General information (employer)

194

Employer-employee reciprocal relationships, ix–x Employment environments alternatives, evaluation of career transitions, 9–10 description of, 6–7 elements of, 6 initiating events, 7 job search, 7 negotiations, 9 resume preparation, 7 business cycles, 3 business environments, 2–3 change, nature of, 1–2 description of, ix–xi, 1 evaluation techniques, 10–12 Federal Reserve Bank system, 3 free markets, 3 frequent employment changes, 3 governmental regulation, 3 job stability vs. instability, 1–2 key questions about, 13 loyalty, decline of description of, 4–6 employee disenchantment and, 5 employee mobility and, 5 mergers and, 6 positive aspects of, 5–6 training programs and, 5 turnover rates, 4 market economic system, 2–3 short term vs. long term goals and objectives, 10–12 Employment process description of, ix–xi, 135–136 employment procedures description of, 137 employer’s timing, 137–138 employment decisions and, 139–140 employment obstacles and, 139 specifics of, 138–139 status of, 138 interview evaluation description of, 144–146 good vs. poor treatment and, 144–145 ideal employment process and, 145

INDEX

importance of, 146 negative observations and, 144 poor interview questions and techniques and, 144 prompt responses and, 145 schedule delays and, 145 interview process, 137 interviewers casual contacts (“little people”) as, 140 description of, 140 executive and directors as, 142–143 knowledge of, 143 prospective superiors as, 142 prospective supervisor as, 141–142 psychologists as, 143 salespersons as, 141 screening interviewers, 141 job performance ability and, 135 key questions about, 147 personality characteristics and, 135 points of contact, 143–144 Employment records, 155–156 Entertainment and social demands, 101–102 Environments business, 2–3 employment. See Employment environments work space, 29 working conditions, 120–121 Equity, shareholders’, 44–47 ESOPs (employee stock ownership plans), 186 Evaluation techniques, 10–12 Excesses, management, 127 Executive and directors as interviewers, 142–143 Exit strategies, corporate description of, 56–57 IPOs (initial public offerings), 57–58 LBOs (leveraged buyouts), 58–59 Expenses amortized, 45–46 automobile, 168, 187 capitalized, 46

INDEX

Extreme cultural factors age-related issues, 132 charity and volunteerism, 131–132 college or university preferences, 133 description of, 126–127 glass ceilings, 130 harassment and discrimination, 129–130, 132 internal competition, 127–128 management excesses, 127 paternalism, 132–133 politics, 130–131 racism, 129–130 recreational issues, 132–133 religion and religious activities, 129 sexual-related issues, 130 F Fads, management, 85–86 Fast tracks, 84 Federal Reserve Bank system, 3 Financial analyses, 50–51 Financial condition (employer) auditor’s statements, 41 balance sheets assets, current, 45 assets, intangible, 45–46 components of, 44–45 debt, short term vs. long-term, 46–47 description of, 44–45 equity, shareholders’, 44–47 expenses, amortized and capitalized, 45–46 goodwill, 45 liabilities, current, 45 market capitalization, 47 ratios, current, 45 budgets, 48–50 business plans, 48–50 cash flow analyses and statements, 47–48 description of, ix–xi, 37–38 financial analyses, 50–51 information sources about annual reports, 40 description of, 38–39 financial statements, 38–40

195

Internet sources, 39 libraries, business reference sections, 44 nonprofit corporations, 38–39 privately held corporations, 38–39 public corporations, 38 sales brochures, 40 subsidiaries and divisions vs. parent corporations, 39–40 unavailable financials and, 39–40 key questions about, 38, 52 vs. nonfinancial information, 15 private placement memorandums, 48–50 profit-and-loss statements comparisons, benchmark, 43 comparisons, industry, 44 creative accounting, 43 description of, 40–41 loss businesses, 42 numerical summaries, 41–42 profitability levels, 43–44 restructuring losses, 42–43 ROIs (return on investments), 43–44 supporting data and, 38 workplace and employee issues and, 37 Financial promotions, employer, 71 Financial statements, 38–40 Financial vs. nonfinancial employer information, 15 First offers vs. negotiated compensation, 175–176 Fixed vs. variable compensation costs, 177 Formal salary administration programs, 177 Founders vs. current owners, 55–56 Free markets, 3 Frequent employment changes, 3 Furniture and work spaces, 29 G General information (employer) assets, 29–31 description of, ix–xi, 15–16 financial vs. nonfinancial components, 15

196

General information (employer) cont. histories, 20 image and reputation, 18–20 key questions about, 15–16, 36 mission statements, 21–22 organization and structure, 22–23 philosophies, 21–22 physical facilities building maintenance, 27–28 description of, 27–29 furniture and work spaces, 29 parking and transportation, 28–29 stand-alone facilities vs. tenant facilities, 28 vacant space, 28 work environment, 29 policies and practices, 21–22 potential problems description of, 29 gross profits, 30 legal issues, 30–31 market share, 30 marketing, 20 regulatory issues, 30–31 total sales revenues, 30 products and services, 24–25 sources of analysts, 33–34 BBB (Better Business Bureau), 33 description of, 31–32 importance of, 34 Internet, 32–33 publications, reference, 34–35 publications, trade, 33 SEC (Securities and Exchange Commission), 32 strategic plans, 21–22 technology, status of, 25–27 types of employers description, 16–17 divisions and subsidiaries, 16–17 joint ventures, 17 profit vs. nonprofit corporations, 16 public vs. private corporations, 16–17 Geographic issues, 171–172 Glass ceilings, 130

INDEX

Global economy, impact of, 72 Goals and objectives, long term vs. short term, 10–12 “Going” (competitive) vs. below market rate compensation, 176–177 Good vs. poor interview treatment, 144–145 Governmental regulation, 3 Gross profits, 30 H Harassment and discrimination, 129–130, 132 Health insurance, 185 Histories, corporate, 20 Hours of work, 98–100, 119 I Image and reputation, employer, 18–20 Immediate supervisor as interviewer, 141–142 influences of, 125 Income taxes, state and municipal, 165 Industry and position (employer) definition of, ix–xi, 66–67 description of, 65–66 industries comparisons of, 44 definition of, 66–67 impact on employment process, 67–69 key questions about, 74 trends and market shares consolidations, impact of, 71–72 definition of, 30, 72–73 description of, 30, 69 financial promotions, impact of, 71 global economy, impact of, 72 indicators of, 69–70 strategic acquisitions, impact of, 71 technological changes, impact of, 25–27, 70–71 Industry comparisons, 44 Information sources analysts, 33–34 annual reports, 40

INDEX

BBB (Better Business Bureau), 33 Chambers of Commerce, 163 D&B (Dun & Bradstreet) reports, 56 D&B Million Dollar Directory, 34 D&B Reference Book of Corporate Management, 34 description of, 31–32, 38–39, 163 Directory of Corporate Affiliations (Master Index), 35 financial statements, 38–40 friends, 163 Internet, 32–33, 39 libraries, business reference sections, 44 Moody’s, 35 nonprofit corporations, 38–39 privately held corporations, 38–39 public corporations, 38 publications reference, 34–35, 164 trade, 33, 164 sales brochures, 40 SEC (Securities and Exchange Commission), 32 Standard & Poors Registry of Corporations, 34 statistical data, 167–168 subsidiaries and divisions vs. parent corporations, 39–40 Thomas Register, 34 Thompson/Polk North American Financial Institutions Directory, 35 unavailable financials and, 39–40 Wall Street Journal Index, 35 Wards Business Directory, 34 Initial public offerings. See IPOs (initial public offerings) Instability vs. stability, job, 1–2 Insurance costs of, 167–168 health, 185 life, 185 Intangible assets, 45–46 Internal competition, 127–128 Internet information sources, 32–33, 39 ventures, 86

197

Interpersonal relationships, employee, 126 Interviewers attitudes of, 145 casual contacts (“little people”) as, 140 description of, 140 executive and directors as, 142–143 knowledge, 143 prospective immediate supervisor as, 141–142 prospective superiors as, 142 psychologists as, 143 salespersons as, 141 screening of, 141 Interviews evaluation of description of, 144–146 good vs. poor treatment and, 144–145 ideal employment process and, 145 importance of, 146 interviewer attitude and knowledge of, 143, 145. See also Interviewers negative observations and, 144 poor interview questions and techniques and, 144 prompt responses and, 145 schedule delays and, 145 process of, 137 employment process and. See Employment process points of contact, 143–144 IPOs (initial public offerings), 57–58 J Job characteristics and nature description of, ix–xi, 89–91 duties and objectives comparisons of, 93 description of, 93–97 evaluation of, 96–97 identifications and clarification of, 94–96 specific duties and tasks, 96–97 hours of work, 98–100 job duration, 101

198

Job characteristics and nature cont. job history and. See Job history job titles assumptions about, 91–92 classifications vs. titles, 92 description of, 91–92 ranks vs. titles, 92 status vs. titles, 91–92 wages and salary and, 92 key questions about, 105 location, 97–98 management responsibilities, 102–104 premature conclusions and, 104 social demands and entertainment, 101–102 subordinates, 102–104 travel, 100–101 working conditions, 97–98 Job history bypassed employees and, 120–121 change of duties, 108–109 controversial vs. noncontroversial job openings, 108 description of, ix–xi, 107–108 discharge openings cause discharges, 116 description of, 114–118 discharge types, 115–116 problems associated with, 117–118 unsatisfactory performance discharges, 116–117 key questions about, 122 new job openings description of, 109–112 special new jobs, 111–112 training openings, 110–111 promotion and transfer openings, 112–114 voluntary termination openings (resignations) compensation issues and, 119 description of, 118–120 hours of work and, 119 management problems and, 119–120 promotional opportunities and, 119

INDEX

turnover rates and, 121 working conditions and, 120–121 Junior vs. senior positions, compensation, 182 K Key questions about compensation, 190 about cultural factors, 134 about employer financial condition, 38, 52 about employment environments, 13 about employment processes and procedures, 147 about general employer information, 15–16, 36 about industry and position, 74 about job characteristics and nature, 105 about management, 88 about personal objectives, 149, 159 L Large vs. small corporations, 85 LBOs (leveraged buyouts), 58–59 Leaves maternity, 188 sick, 185 vacations, 184–185 Legal issues and legislation, 30–31, 123–124 Leveraged buyouts. See LBOs (leveraged buyouts) Liabilities, current, 45 Libraries, business reference sections, 44 Life insurance, 185 Limited experience, management consultants, presence of, 85–87 description of, 84–85 education and, 85 fads and, 85–86 Internet ventures and, 86 large vs. small corporations, 85 organizational studies and, 86 problems associated with, 84–85 reengineering and, 86 review systems, lack of, 85 strategic planning and, 86 Liquidity, 54

INDEX

“Little people” (casual interview contacts), 140 Long-term vs. short-term debt, 46–47 Long term vs. short term goals and objectives, 10–12, 149, 151–153 Loss businesses, 42 Loyalty, decline of description of, 4–6 employee disenchantment and, 5 employee mobility and, 5 mergers and, 6 positive aspects of, 5–6 training programs and, 5 turnover rates, 4 M Management (employer) benefits of understanding, 87 CEOs (chief executive officers), 75–77, 83–86 description of, ix–xi, 75 excesses of, 127 fast tracks and, 84 key questions about, 88 limited experience of consultants, presence of, 85–87 description of, 84–85 education and, 85 fads and, 85–86 Internet ventures and, 86 large vs. small corporations, 85 organizational studies and, 86 problems associated with, 84–85 reengineering and, 86 review systems, lack of, 85 strategic planning and, 86 nepotism and, 83–84 organization (structure) of assumptions about, 81 changes and, 79–80 description of, 77–79 organizational fads and, 80 turnover and, 80–81 style and philosophies of, 124 training programs and, 84 your immediate supervisor behavior of, 82–83 current position, length of time in, 81

199

description of, 81 facts vs. opinions and impressions about, 81 management styles of, 81 perquisites, 82–83 status of, 82–83 symbiotic relationships and, 82 Market shares and trends capitalization vs. shareholders’ equity, 47 consolidations, impact of, 71–72 definition of, 30, 72–73 description of, 30, 69 financial promotions, impact of, 71 global economy, impact of, 72 indicators of, 69–70 market economic system, 2–3 strategic acquisitions, impact of, 71 technological changes, impact of, 25–27, 70–71 Marketing and sales, 20 Maternity leaves and benefits, 188 Memorandums, private placement, 48–50 Mergers, 6 Mission statements, 21–22 Mobility, employee, 5 Moody’s, 35 Municipal income taxes, 165 N Nature of change, 1–2 Negative interview observations, 144 Negotiated compensation vs. first offers, 9, 175–176 Nepotism, 83–84 New job openings description of, 109–112 special new jobs, 111–112 training openings, 110–111 Nonfinancial vs. financial employer information, 15 Nonprofit vs. profit corporations, 16 Numerical summaries, 41–42 O Objectives, personal. See Personal objectives Organizational charts, 22–23

200

INDEX

Organizational size, 124–125 Organizational studies, 86 Overtime pay, 184 Ownership (employer) changes of description of, 55 disputed control and, 60 indications of, 59–61 owners’ ages and, 59 portfolio corporations and, 59–60 substandard financial performance and, 60 up for sale vs. in play, 60–61 current ownership and control, 55–56 D&B (Dun & Bradstreet) reports and, 56 description of, ix–xi, 53 vs. employees, 62 exit strategies description of, 56–57 IPOs (initial public offerings), 57–58 LBOs (leveraged buyouts), 58–59 founders vs. current owners, 55–56 Internet resources about, 56 objectives of, 57 perquisites of, 61–62 proxy statements and, 56 sale objectives description of, 53–54 for-profit vs. nonprofit corporations, 54 liquidity, 54 venture capital and, 54 valuation of business investments, 53–54 P Pace of work, 126 Parent corporations vs. subsidiaries and divisions, 39–40 Parking and transportation issues benefits and availability, 187 employer facilities, 28–29 Paternalism, 132–133 Payment. See Compensation Pensions, 185 Performance, employee performance ability, 135

performance-based compensation programs, 177 performance-based discharges, 116–117 Personal objectives career planning description of, 151–152 goals and objectives, 151–152 job opportunities and objectives, 152 description of, ix–xi, 149 employment records, 155–156 focus on the present, 153–156 job duration issues career goals and objectives, 158 dead end jobs, 157–158 description of, 156 job satisfaction, 156–157 job security, 155–156 key questions about, 149, 159 leaving the current job, 154–155 short term vs. long terms goals and objectives, 149, 151–153 uncertainty vs. certainty and, 150 Personality characteristics, 135 Physical facilities building maintenance, 27–28 description of, 27–29 furniture and work spaces, 29 parking and transportation, 28–29 stand-alone facilities vs. tenant facilities, 28 vacant space and, 28 work environment, 29 Points of contact, interview process, 143–144 Policies and practices, employer, 21–22 Politics, 130–131 Poor interview questions and techniques, 144 Poor vs. good interview treatment, 144–145 Private placement memorandums, 48–50 Private vs. public corporations, 16–17 Procedures, employment description of, 137 employer’s timing, 137–138 employment decisions and, 139–140

INDEX

employment obstacles and, 139 employment process and, 135–147. See also Employment process specifics of, 138–139 status of, 138 Process of employment. See Employment process Products and services, 24–25 Profit sharing plans, 186 Profit vs. nonprofit corporations, 16 Profit-and-loss statements comparisons, benchmark, 43 comparisons, industry, 44 creative accounting, 43 description of, 40–41 loss businesses, 42 numerical summaries, 41–42 profitability levels, 43–44 restructuring losses, 42–43 ROIs (return on investments), 43–44 Profitability levels, 43–44 Promotion and transfer job openings, 112–114 Property (ad valorem) taxes, 165–166 Prospective boss and superiors, 141–142 Proxy statements, 56 Psychologists as interviewers, 143 Public vs. private corporations, 16–17, 181 Publications. See Information sources Q Quality of life issues, 167–172 R Racism, 129–130 Ranking plans, wage and salary, 178–179 Ranks vs. job titles, 92 Ratios, current, 45 Reciprocal relationships employeremployee, ix–x Recreational issues, 132–133 Recreational opportunities, 171–172 Reengineering, 86 Reference information. See Information sources Regulatory issues, 3, 30–31

201

Religion and religious activities, 129 Relocation and community-related factors comparisons to current community, 161–162 description of, ix–xi, 161–162 economic factors automobile expenses, 168 cost of living, 167–168 description of, 164 food costs, 167 housing costs, 166–168 insurance costs, 167–168 taxes, 164–166. See also Taxes transportation availability, time, and costs, 167 utility costs, 168 information sources Chambers of Commerce, 163 description of, 163 friends, 163 publications, reference and trade, 164 statistical data, 167–168 key questions about, 174 local status of employer, 173 medical care, 168–169 quality of life issues climate, 169–172 community environment, 172 cultural and intellectual activities, 171 description of, 169 geographic issues, 171–172 recreational opportunities, 171–172 religion and religious activities, 170–171 similar interests, 172 school districts, 167, 169–170 Relocation expenses, 187 Resignations. See Voluntary termination job openings (resignations) Resources, informational. See Information sources Restructuring losses, 42–43 Resume preparation, 7 Return on investments. See ROIs (return on investments)

202

INDEX

Review systems, lack of, 85 ROIs (return on investments), 43–44 S Salary and wages compensation and benefit issues, 175–190. See also Compensation employee salary histories, 182–183 formal administration programs, 177 salary structures administration policies and, 179 approval procedures and, 180 basic questions about, 179–180 CLs (classification levels), 178–179 compensation issues and. See Compensation description of, 178–180 reviews and, 180 wage and salary job ranking plans, 178–179 wage increase frequencies and, 180 Sales, corporate brochures as information sources, 40 taxes, 166 total revenues, 30 Salespersons as interviewers, 141 Schedule delays, interview, 145 Screening interviewers, 141 Senior vs. junior positions, compensation and, 182 Services and products, 24–25 Sexual-related issues, 130 Shareholders’ equity vs. market capitalization, 44–47 Short term vs. long term goals and objectives, 10–12, 149, 151–152 Sick leaves, 185 Signing bonuses, 187 Size, organizational, 124–125 Small vs. large corporations, 85 Social demands and entertainment, 101–102 Sources of information. See Information sources Special new job openings, 111–112 Specialty taxes, 166

Stability vs. instability, job, 1–2 Stand-alone facilities vs. tenant facilities, employer, 28 Standard & Poors Registry of Corporations, 34 State income taxes, 165 Status vs. job titles, 91–92 Stocks options, 187–188 purchase plans, 186 Strategic acquisitions, 71 Strategic plans, 21–22, 86 Subordinates, 102–104 Subsidiaries and divisions vs. parent corporations, 39–40 Supervisors immediate supervisor influences, 125 interviews with, 141–142 superiors of, 142 Symbiotic relationships with supervisors, 82 T Taxes description of, 164–165 income (municipal and state), 165 property (ad valorem), 165–166 sales, 166 specialty, 166 Technological changes, impact of, 25–27, 70–71 Termination pay, 188 Thomas Register, 34 Thompson/Polk North American Financial Institutions Directory, 35 Titles (job) assumptions about, 91–92 classifications vs. titles, 92 description of, 91–92 ranks vs. titles, 92 status vs. titles, 91–92 wages and salary and, 92 Total sales revenues, 30 Traditions, corporate, 126 Training issues benefits and programs, 5, 188–189 job openings, training-related, 110–111

INDEX

training-related job openings, 110–111 Transfer job openings, 112–114 Transportation and parking, employer facilities, 28–29 Travel requirements, 100–101 Trends and market shares consolidations, impact of, 71–72 definition of, 30, 72–73 description of, 30, 69 financial promotions, impact of, 71 global economy, impact of, 72 indicators of, 69–70 strategic acquisitions, impact of, 71 technological changes, impact of, 25–27, 70–71 Turnover rates, 4, 80–81, 121 U Unavailable financials, 39–40 University or college preferences, employer, 133 Unsatisfactory performance discharges, 116–117 V Vacant space, employer facilities, 28 Vacations, 184–185

203

Venture capital, 54 Voluntary termination job openings (resignations) compensation issues and, 119 description of, 118–120 hours of work and, 119 management problems and, 119–120 promotional opportunities and, 119 turnover rates and, 121 working conditions and, 120–121 Volunteerism and charity, 131–132 W Wages, salary, and benefits. See Compensation Wall Street Journal Index, 35 Wards Business Directory, 34 Web sources, 39 Work environments employee issues and, 37 furniture and work spaces, 29 normal, 125–126 work pace, 126 working conditions, 120–121